It’s been a while since I’ve published any articles on the current Tezos litigation in federal district court (last update can be found here if you want to get caught up) and that’s because there has not been any new significant movement in the case. Rest assured, I am actively tracking the case and if there is any new significant movement in the case, I will write about it and include my legal analysis of what it means. The two most recent actions (one from today) are clerk’s notices that set a date for the next Court date.

(11–26–19; all this did was just push the Court date scheduled on December 12, 2019 back to February 6, 2020.)

(This is from the federal court online docket system; Pacer. This was the last event which was filed on November 7, 2019. All “case management” means is to get the parties together to let the Court know where the case stands and it helps all parties get on the same page along with an expectation of timing of events to come. We will know more on (February 6, 2020).

As many of my followers know by now, I write these articles to share information, specifically the facts of what is playing out in court. My goal has never been to tell you how to think or what to believe, but just to present you the facts and arm you with the necessary knowledge to make your own decision. Critical self-thinking is the goal, and always the goal, whereas indoctrination should always be shunned. This is akin to an exercise of fighting F.U.D. (Fear, Uncertainty, and Doubt)

So, what is this article about today? Well, this article is about 2 things today:

1. Setting the record straight on the California State Court litigation that people are confusing for the federal district court litigation

2. Update you on the federal litigation case

With that said, let’s jump into it.

Issue #1: People in many communication platforms (Telegram and Twitter)have been spreading the narrative that this article found here: https://www.davispolk.com/files/mvp_davis_polks_neal_potischman.pdf and coming to the conclusion that it means that the federal litigation is over. Even though that would certainly be great news for the Tezos community, unfortunately, that’s not true. (Whether it’s good news or bad news, we will try to set the record straight with facts.)

(This screen shot is from the California Superior Court online docket system.)

To explain why the above is not true, I have to give you a quick primer on understanding the U.S. legal system at hand. In the U.S. legal system, you have federal courts and you have state courts. We start with the U.S. Constitution as the supreme law of the land in the United States. Through the constitution, it creates a federal system of government in which power is shared between the federal government and the state governments (which in the above link, is about a case in California State Court as opposed to the federal litigation which is also being litigated in the State of California, but in the federal system). Because of federalism, both the federal government and each of the state governments (like California) have their own court systems. Stated differently, the above link is about state court litigation, and not about the federal court litigation.

(This is the federal court online docket system. Note: Pro Hac Vice means an attorney from another jurisdiction that isn’t licensed in the state where the case is being litigated and is asking the Court to grant him a special limited exception to practice before the Court without having to take that state’s respective bar examination.)

Another way to show the difference, just look at the case numbers of each case. The above link (state court litigation) has a case number of: CJC-18–004978. To look up this case go here and type in the case number. https://www.sfsuperiorcourt.org/online-services

The federal court litigation’s master file case number is: 17-CV-06779-RS, docket case number: 3:17-CV-06779. To access this case, you need to go here and type in the case number. https://www.pacer.gov/findcase.html

(This is the federal case. Notice how it the title says “United States District Court” as the heading as opposed to picture before this one starting with a title “Superior Court of California”. The title of the header is another signifier of what court system you are litigating in: state v. federal.)

The State Court litigation that dismissed the Tezos Foundation was over the legal basis of lack of personal jurisdiction over Tezos Foundation (a Swiss Non-Profit Entity). I don’t want to devolve this article to what personal jurisdiction means, but to simply describe it, personal jurisdiction refers to the power that a court has to make a decision regarding the party being sued in a case. Before a court can exercise power over a party, the U.S. Constitution requires that the party has certain minimum contacts with the forum in which the court sits. See International Shoe v. Washington, 326 US 310 (1945). Stated differently, the State Court of California dismissed the claim against Tezos Foundation because it did not find the basis for asserting power over Tezos Foundation. In other words, the Californian state court did not find a proper basis to assert jurisdiction over a Swiss entity.

(As you can see, in the State court litigation, the plaintiffs are asking the state court judge to do the same thing that the federal court judge did, but because they’re separate court systems, the California state court judge declined to do so under California law.)

Does the state court litigation have any impact on the federal court litigation? Short answer is no because as explained above, they’re completely separate systems. (see above)

Issue #2: Update on the federal court litigation. There is no significant new movement on this litigation. As I have explained to some on telegram, we are moving towards the holidays and this is when all courts (both state and federal) start to wind-down for the year due to the many days off. When they’re winding down for the year, they do not like to take up issues/matters that require heavy-lifting or complex litigation because of the potential holiday breaks interrupting the session before it’s fully finished.

As I have said above, rest-assured my loyal readers that if there is any significant movement in the federal litigation, I WILL write about it immediately and give you my analysis.

As always, stay tuned for more!

(PS: I am working on an academic article on security regulations and decentralization that’s currently being peer reviewed and when it’s finished, I will be sharing it with the community. It’s taking a little longer than expected, but it’s moving along. I appreciate y’alls patience!)

By: Alexander Liu, Esq., licensed to practice law in the State of Louisiana (Civil Law) and the State of Missouri (Common Law).