Wednesday, October 5, 2022
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US Ninth Circuit denies PlayUp’s Mintas restraining order appeal

PlayUp has seen its appeal on a lower court’s decision to throw out a temporary restraining order imposed on Dr Laila Mintas denied by the US Ninth Circuit Court of Appeals

The verdict stated that, due to the district court’s assessment of the evidence at the time it considered the motion, there was “no possibility of PlayUp establishing that it was entitled to a preliminary injunction”. 

The decision from the US Court of Appeals follows an ongoing legal dispute that stemmed from the online betting and gaming provider citing breach of contract claims, alleging that Mintas had attempted to damage the firm and “engaged in conduct directly in violation” of contractual terms in causing the collapse of a proposed sale. 

If overturned, the injunction would have prevented Mintas from “engaging in any form of conduct or making statements or representations that disparage, portray in a negative light or otherwise impair the reputation or commercial interest of plaintiff PlayUp”. 

The US Ninth Circuit Court of Appeal reviewed the denial of a preliminary injunction for abuse of discretion, in which it looks at if a district court abuses its discretion when its decision is based on “an erroneous legal standard or clearly erroneous finding of facts”. 

As part of its appeal, PlayUp needed to establish that it is likely to succeed on the merits that it is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in its favour, and that an injunction is in the public interest. 

Moreover, the Court of Appeal could have applied a “sliding scale” approach, which would allow a stronger showing of one element to offset a weaker showing of another. 

However, the court concluded that PlayUp “had not met the first of the Winter factors, the likelihood of success on merits”, stating that the determination was “not clearly erroneous”.

Furthermore, the court disagreed on PlayUp’s claim that the denial of relief was erroneous because it had failed to discuss whether the company raised “serious questions going to the merit”. 

The Court of Appeal stated that if the district court had commented specifically on PlayUp’s argument under the alternative standard, its review “might have been simpler”, however, the  decision stated that it was “clear” from the court’s discussion that it concluded that PlayUp “did not make the showing necessary under the alternative standard either”.

Additionally, the district court expressly stated its view, based on the record at the time, that it appeared “more likely” that Mintas had properly “exercised her executive responsibility and that she was turned into a scapegoat” for the failed deal. 

On the aforementioned points, the Court of Appeal claimed that, on the district court’s assessment of the evidence at the time it considered the motion, there was “no possibility of PlayUp establishing that it was entitled to a preliminary injunction” under the sliding-scale standard. 

The decision from the appeal will now uphold Judge Gloria Navarro’s original judgement to deny the motion in January of this year, in which she stated Mintas’ defence had successfully demonstrated “that it was just as likely or more likely that the actions of Daniel Simic are the ones that caused the negotiations to cease irreparably”. 

The alleged collapse of a proposed acquisition by cryptocurrency exchange FTX saw Mintas’ defence claim that Daniel Simic, PlayUp Global’s CEO, “became greedy” and caused the deal to fall through. 

Citing an email from November 9, 2021, a prior filing claimed that Simic disclosed to Dr Mintas that he wanted to require FTX to acquire a company purportedly unrelated to PlayUp, PlayChip, for an additional $105m, and the group to pay a $65m incentive to Australian “key staff”, including $25m for himself, which increased the total acquisition price to an additional $170m.

Concluding the Court of Appeal verdict, it emphasised that its decision was not ruling on merits of the case itself, but reaffirmed that the lower court was acting accordingly when it previously ruled on its decision to uphold the decision to throw out Mintas’ PlayUp restraining order. 

The court concluded: “To be clear, we do not hold that one party or the other will necessarily prevail on the merits if this case proceeds to trial. In terms of preliminary relief, however, the district court’s denial of the motion for preliminary injunction was not an abuse of discretion.”

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