‘Factual Support’ Lacking in Locust’s Fraud Complaint vs. JMBT: Reply Memorandum

Investor Locust Group doesn’t have “factual support for a single element of its claim” that JMBT Live and CEO Michael Russell “engaged in fraud,” said the reply memorandum Monday (docket 1:23-cv-04203) of JMBT and Russell in U.S. District Court for Southern New York in Manhattan in support of their Aug. 8 motion to dismiss (see 2308090041). Locust alleges Russell and JMBT, owner of the Tilt entertainment platform, “misrepresented” the status of their contracts and negotiations with prospective content partners to investors. Locust’s Aug. 21 opposition to the motion to dismiss (see 2308230036) claims the defendants “ignore the well-pleaded allegations” in the complaint, said the reply memorandum. But “the truth is there is nothing to ignore,” it said. Locust spends the bulk of its opposition “trying to recast its entirely conclusory allegations as factual allegations and claiming that such allegations must be taken as true” for the purposes of the motion to dismiss, it said. But that “tactic” doesn’t work, it said. Courts will only take non-conclusory allegations as true under Rule 12(b)(6), and Locust doesn’t offer any, it said. The court has “routinely rejected” the “boilerplate” allegations that Locust offers as “insufficient to survive a motion to dismiss,” it said: “So its fraud claim fails.”