[00:00:09] Speaker 06: Welcome back. [00:00:10] Speaker 06: We'll now hear argument in number 2315363, Cox versus CoinMarketCap, LLC et al. [00:00:19] Speaker 06: Mr. Schmidt. [00:00:20] Speaker 06: Thank you. [00:00:21] Speaker 06: Good morning, Your Honors. [00:00:23] Speaker 04: CoinMarketCap and its affiliates engaged in a scheme to manipulate the price of the cryptocurrency called Hex. [00:00:34] Speaker 04: And in doing so, they violated the Commodity Exchange Act, which contains a nationwide [00:00:40] Speaker 04: jurisdictional provision very similar to those contained in the Exchange Act of 34 as well as the Clayton Act. [00:00:47] Speaker 04: The district court below in a limited holding, only finding not personal jurisdiction, on the issue of that provision simply distinguished the authorities before it on the grounds that they were interpreting other statutes, the Clayton Act and the Exchange Act. [00:01:05] Speaker 04: The language there is almost identical to that engage that's included in the CEA, the Commodity Exchange Act. [00:01:12] Speaker 04: And there is no reason that it should be interpreted differently that has been placed either before the court or I think has been argued by my adversaries or the district court had presented. [00:01:24] Speaker 00: So… Mr. Schmidt, let's assume we agree with you that there is – this is a nationwide jurisdiction statute. [00:01:33] Speaker 00: Tell me what we do in this case. [00:01:36] Speaker 04: Well, in this case, you would reverse and remand with the instructions that would the district court proceed accordingly and then it would then roll on the merits, which it did not reach. [00:01:47] Speaker 00: Well, it would rule on the merits of the jurisdictional claim under a nationwide service [00:01:51] Speaker 04: Um, it would analyze that. [00:01:53] Speaker 04: Did not, there was an issue raised below about, um, whether service was proper, but the district court did not reach that. [00:01:59] Speaker 00: Just on the, on the in personam jurisdiction issue, the district court never addressed whether or not under a nationwide jurisdictional statute, these defendants were properly in front of it. [00:02:13] Speaker 04: Correct. [00:02:14] Speaker 04: Correct. [00:02:14] Speaker 04: It only analyzed a specific jurisdiction and it dismissed the CEA nationwide jurisdiction argument solely on the grounds that it just did not apply. [00:02:24] Speaker 01: So there would be a, it seems to me there would be a bunch of issues at that point. [00:02:31] Speaker 01: One is whether there was nationwide jurisdiction over, there would be nationwide jurisdiction over the [00:02:41] Speaker 01: United States defendant, but over the foreign defendants, whether there was nationwide jurisdiction and on a minimum contacts basis would be a question. [00:02:50] Speaker 04: Uh, exactly. [00:02:51] Speaker 04: There would need to be a judge Berzon, minimum contacts with the United States at least. [00:02:55] Speaker 01: Right. [00:02:55] Speaker 01: With the United States as a whole. [00:02:57] Speaker 00: Correct. [00:02:57] Speaker 00: That's plainly true for the US corporate defendants, is it not? [00:03:01] Speaker 00: Uh, yes, Rob. [00:03:01] Speaker 00: Because there's jurisdiction over them in any state in which they're incorporated or have their principle. [00:03:06] Speaker 00: Well, anyway, general jurisdiction over them in states where they're incorporated. [00:03:10] Speaker 04: Exactly, Your Honor. [00:03:12] Speaker 01: Is there then a venue question also? [00:03:14] Speaker 00: Thank you. [00:03:15] Speaker 00: Me too. [00:03:16] Speaker 04: I don't think there is, Your Honor. [00:03:18] Speaker 04: Why? [00:03:19] Speaker 04: Under the Nationwide Service provision, the jurisdiction exists separate from whether the venue is satisfied. [00:03:25] Speaker 01: I understand that. [00:03:26] Speaker 01: But is there a venue question, a separate venue question? [00:03:29] Speaker 04: Whether jurisdiction exists and then there is a venue that was raised. [00:03:33] Speaker 00: The venue's provision seems to me to be a lot like [00:03:40] Speaker 00: minimum contacts with the state, doesn't it? [00:03:44] Speaker 00: It says, may be brought in any judicial district where the defendant is found, resides or transacts business, or in the judicial district where in any act or transaction constituting the violation occurs. [00:04:00] Speaker 00: So let's assume that under the second sentence, there's impersonal jurisdiction over these defendants in the District of Arizona. [00:04:10] Speaker 00: Why, maybe it's not in front of us, but why is there venue? [00:04:15] Speaker 04: Uh, exactly. [00:04:15] Speaker 04: First of all, I do, I don't think that's in front of you, but I can certainly address it. [00:04:19] Speaker 04: Um, I think the, the act did occur in Arizona because the website was viewed in Arizona and affected Arizona. [00:04:26] Speaker 04: It's an interactive website as we discuss. [00:04:28] Speaker 01: So then that raises another question, which is that the 2000, the 2011 amendment to the venue provision to 1391 has a, [00:04:40] Speaker 01: phrase about for all venue purposes. [00:04:43] Speaker 01: Um, and it seems to say that for all venue purposes, if there's personal jurisdiction, there is venue. [00:04:50] Speaker 01: Um, and your opponents seem to be relying on that language. [00:04:54] Speaker 01: Does that mean that the venue part of, um, the commodities exchange act is no longer operative and we just, if there's personal jurisdiction, now there's venue? [00:05:05] Speaker 04: Um, I think it's, [00:05:07] Speaker 04: I'm not sure in all cases, but I think in this case, and I think at least in most cases, there would be, because I interpret that as the purpose of nationwide jurisdiction, where the manipulation is causing an effect such as here in Arizona. [00:05:20] Speaker 01: But it would come from the 2011 amendment. [00:05:22] Speaker 01: I mean, that would be a whole separate legal question that really hasn't been litigated here much. [00:05:26] Speaker 04: Correct. [00:05:27] Speaker 01: All right. [00:05:27] Speaker 01: Then there's a third, then another question. [00:05:30] Speaker 01: As I understand it, you don't have the personal jurisdiction unless you have at least a colorable [00:05:37] Speaker 01: claim. [00:05:38] Speaker 01: So do we decide whether there's a colorable claim or does that get remanded too? [00:05:44] Speaker 04: I don't think it, I can address that. [00:05:46] Speaker 04: I don't think it is before this court because the court below did not address the colorableness or any aspect of the merits of the CA. [00:05:54] Speaker 04: They simply analyzed the minimum contacts and they dismissed the nationwide jurisdiction without further analysis. [00:06:01] Speaker 04: So I do not think that's before the court. [00:06:03] Speaker 00: Your friends are telling us that [00:06:06] Speaker 00: whether you have a colorable claim is something we can determine from the face of the complaint, and you don't. [00:06:13] Speaker 00: Let's assume, and I take your point, that we're not required to address that. [00:06:17] Speaker 00: We could ask the district court to address it in the first instance, but tell me why you have a colorable claim. [00:06:23] Speaker 04: Of course. [00:06:23] Speaker 04: I think it is colorable. [00:06:24] Speaker 04: And under the rule for colorable here, it's not the same as a motion-dismissed standard. [00:06:28] Speaker 04: It's simply that there's no basis for the claim. [00:06:32] Speaker 04: And here, in short, its coin market cap had [00:06:35] Speaker 04: manipulate the price via the fact that, and I have the elements here in my brief, which I'll go through in a moment, they had changed the price by misstating what the market cap was of the hex coin. [00:06:50] Speaker 04: And for, I think, any cryptocurrency and nearly any asset, traders do make decisions based on what the market capitalization is. [00:06:59] Speaker 04: And I know my opponents in places have portrayed our position as [00:07:04] Speaker 04: that it was required to list things in a certain way or so forth. [00:07:07] Speaker 04: But our argument is that they had affirmatively represented that they were listing these coins by market cap. [00:07:14] Speaker 04: So by not doing so, they had violated that. [00:07:17] Speaker 04: So on page 12 of my reply brief, we talk about that, that the fence had an ability to influence the market prices, which they did by their this leading website, which states the market capitalization of various coins. [00:07:31] Speaker 04: And then they caused an artificial price to exist. [00:07:33] Speaker 04: They caused the price to be falsely deflated by instead of listing it at the current correct price, they listed at, I believe, 200 first in market cap, which caused the price to go down from there. [00:07:47] Speaker 04: And there was a specific intent. [00:07:49] Speaker 04: As we talk about in our papers, although it wasn't, I think, in the decision below, the defendants had a competing coin, two hex, which was [00:07:58] Speaker 04: we allege the intent of why that they engaged in this manipulation. [00:08:05] Speaker 01: And then the last thing, theoretically, would be to reach the merits of the motion to dismiss, which I gather you would suggest we don't. [00:08:14] Speaker 04: Is that right? [00:08:16] Speaker 04: I think we should, of course, prevail a motion to dismiss, but the district court very specifically did not reach the merits. [00:08:22] Speaker 04: I'm on the motion dismissed, rolling only on [00:08:25] Speaker 04: on the jurisdictional question. [00:08:26] Speaker 04: So I think that if the court does, as I believe it should, find the jurisdiction existed, the district court should then... But the colorable question is part of the jurisdictional question. [00:08:35] Speaker 04: The colorable, yes. [00:08:36] Speaker 04: But the colorable is, as I understand it, a lower bar than whether we survive... And the minimum context is also a part of the jurisdictional question. [00:08:43] Speaker 06: So it's actually just the first part of the personal jurisdictional question you want us to address. [00:08:49] Speaker 04: Well, I think the minimum context, especially with the United States, is certainly relevant. [00:08:53] Speaker 04: to the nationwide jurisdiction. [00:08:54] Speaker 06: Well, what do we do with the foreign defendants? [00:08:58] Speaker 04: Well, the court can, of course, determine whether there are minimum contacts with the United States. [00:09:02] Speaker 01: Do you want to talk a little about that question with regard to the non-U.S. [00:09:07] Speaker 01: defendants? [00:09:08] Speaker 04: Of course. [00:09:09] Speaker 04: So all of the defendants have, they're involved in the similar scheme, as we allege, involving the CoinMarketCap website, in which through the various [00:09:22] Speaker 04: corporate defendants it's BAM directs certain people or customers to the CoinMarketCap website and the CoinMarketCap website in turn when users click the buy button it directs them to BCM's website. [00:09:37] Speaker 04: So the corporate defendants are all interlinked in that way. [00:09:42] Speaker 04: And then the individual defendants in the rules as officers of BCM and BAM through that and given the [00:09:50] Speaker 04: an intentional nature of the scheme and their high level in that they had a sufficient role that they were purposely directing activities towards. [00:10:00] Speaker 01: Right. [00:10:00] Speaker 01: Finance capital has been banned from being in the United States since 2019. [00:10:04] Speaker 04: That's correct, Your Honor. [00:10:06] Speaker 01: So your minimum contacts argument relies on something like an alter ego claim, does it not? [00:10:14] Speaker 04: Well, I would say, I don't know if it necessarily needs to fulfill the technicalities of an Altrigo claim, it's acting through a third party to then reach the United States, even if they're not sure it's acting business. [00:10:28] Speaker 04: They're acting through it. [00:10:30] Speaker 06: And what are, I guess, in terms of your assertions and complaint, do you say much more than that it's not clear where one begins and the other ends? [00:10:43] Speaker 04: Yes, Your Honor, and intentionally on their part. [00:10:46] Speaker 04: The entities make a point of, for purposes of where customers view these websites, that they seem to be closely connected and essentially are one whole, which I think would then lead to the situation in which they are purposely directing their activities towards the United States. [00:11:04] Speaker 01: If we thought the current allegations were inadequate. [00:11:07] Speaker 04: I'm sorry, Your Honor. [00:11:08] Speaker 01: If we thought the current allegations as to this acting through notion, [00:11:12] Speaker 01: were inadequate, do you have other allegations that would be worth amending the complaint to add? [00:11:22] Speaker 04: We could, Your Honor. [00:11:24] Speaker 04: Forgive me, I can't think of specifics at the moment, but there was no chance to amend in this situation. [00:11:29] Speaker 01: I understand, but whether we should specifically allude to the possibility of amendment might depend on whether we thought there was any usefulness to the amendment. [00:11:41] Speaker 04: Of course, Your Honor. [00:11:42] Speaker 04: I would say that the general, certainly all the aspects of the scheme are, I think, laid out in the complaint. [00:11:48] Speaker 04: There's not a large different fact, which I would allege. [00:11:52] Speaker 01: But the problem, on a specific question of whether the, I get their names mixed up, but the company that has been banned from the United States is not directly operating in the United States and the individuals who are all principals of that company, as I understand it. [00:12:11] Speaker 01: have minimum contacts in the United States despite the fact that they're not operating directly. [00:12:20] Speaker 01: Because the complaint is rather vague about this operating through notion. [00:12:26] Speaker 01: So either as to other contacts or as to the operating through notion, is there anything useful to be done in terms of amendments? [00:12:35] Speaker 04: For them, I would say no, Your Honor. [00:12:37] Speaker 04: Honestly, we could clarify them because I feel that there's certain aspects perhaps we've explained better in the papers than perhaps were in the complaint. [00:12:45] Speaker 04: But in terms of separate contacts beyond what I've described today, I don't believe there are, Your Honor. [00:12:53] Speaker 06: Do you want to reserve some time for rebuttal? [00:12:55] Speaker 04: I would like to reserve their main time for rebuttal, Your Honor. [00:12:57] Speaker 04: Okay. [00:12:57] Speaker 06: Thank you, Mr. Schmidt. [00:13:02] Speaker 06: Ms. [00:13:03] Speaker 06: King, good morning. [00:13:04] Speaker 02: Good morning. [00:13:05] Speaker 02: May it please the Court? [00:13:07] Speaker 02: I'm Karen King, and I represent CoinMarketCap, the website at issue here. [00:13:11] Speaker 02: I'm going to be addressing the arguments that are common to all of the defendants, namely personal jurisdiction, the CEA's special venue and service provision, as well as the pleading deficiencies of the complaint. [00:13:24] Speaker 02: And counsel for the other defendants will then speak after me and address some of the issues that are unique to their clients. [00:13:31] Speaker 00: May I ask you a question? [00:13:32] Speaker 00: This is directed only to the jurisdictional issue. [00:13:35] Speaker 00: which is the one that you're addressing for everyone. [00:13:37] Speaker 00: Of course. [00:13:38] Speaker 00: The district court dismissed the complaint with prejudice after finding no personal jurisdiction. [00:13:45] Speaker 00: Isn't that wrong? [00:13:47] Speaker 02: No, Your Honor, because I think that there's no way, given what the plaintiffs have pleaded to establish and admitted to establish personal jurisdiction in this case. [00:13:56] Speaker 00: But a dismissal with prejudice is an adjudication on the merits. [00:14:00] Speaker 00: So it couldn't be brought again someplace with jurisdiction. [00:14:05] Speaker 00: So many district courts write that you have to find a district in the United States where it could be brought. [00:14:11] Speaker 00: And what this would do is prevent it from being brought anywhere. [00:14:15] Speaker 00: Shouldn't it have been a dismissal without prejudice? [00:14:17] Speaker 02: I see. [00:14:17] Speaker 02: With respect to certain defendants, you're right that they could find a different venue where they could try to establish their... For example, for the U.S. [00:14:25] Speaker 02: corporate defendants... Which is my client's coin market cap. [00:14:28] Speaker 00: You're right on that. [00:14:30] Speaker 00: They're probably insuable somewhere in the United States. [00:14:32] Speaker 00: Yes, Your Honor. [00:14:33] Speaker 00: So the claims against them should have been dismissed without prejudice, should they not? [00:14:36] Speaker 02: You're right, that they could be brought in a form where there is actually personal jurisdiction. [00:14:42] Speaker 01: Could you explain why, despite the other cases under the Securities and Exchange Act and the Clayton Act, with almost strategical language, the court has held that the district court's way of proceeding was incorrect. [00:14:58] Speaker 01: It was correct under these circumstances. [00:15:00] Speaker 01: And you're still arguing that, and I don't understand. [00:15:03] Speaker 02: Well, there are cases across the nation that have struggled with this issue, this CEA special. [00:15:10] Speaker 01: I understand, but we have precedent on almost the exact same language under two other statutes. [00:15:16] Speaker 01: Why would we decide anything else here? [00:15:18] Speaker 02: Well, first of all, those pertain, as you say, to different statutes, statutes that included this language in a different time period under different circumstances. [00:15:27] Speaker 01: Actually, it's about the same time period, is my understanding. [00:15:29] Speaker 02: Well, the Clayton Act, for example, which I think is what the... I know, but the Securities Act was in the 30s and this was in the 30s, so it's back approximately the same period. [00:15:37] Speaker 02: Actually, the section that we're dealing with here, Section 25C, wasn't added until 1992. [00:15:42] Speaker 02: So you're dealing with an 80-year time difference and 1391. [00:15:47] Speaker 01: So that's what we're supposed to say about why we're not following our own presidents. [00:15:50] Speaker 01: because it's a different time period. [00:15:52] Speaker 02: Well, I think it's notable that there are different statutes that congressional intent at those time periods might have been different. [00:15:58] Speaker 02: The 1391 itself has changed dramatically in that 80-year time period. [00:16:03] Speaker 02: The statute, as we know it, the venue statute didn't really come into play until 1948. [00:16:07] Speaker 02: It gets expanded again in the 80s, and then you have the venue clarification act. [00:16:12] Speaker 00: But we're still – I'm still stuck with this problem, so I need you to address it. [00:16:16] Speaker 02: Yeah. [00:16:17] Speaker 00: Those statutes all have very similar [00:16:21] Speaker 00: Correct? [00:16:22] Speaker 02: Correct. [00:16:22] Speaker 02: Similar, not exact. [00:16:23] Speaker 00: Not exact, but hard to distinguish. [00:16:26] Speaker 00: And we read that language as saying, there's really two provisions here. [00:16:32] Speaker 00: There's a venue provision and there's a personal jurisdiction provision. [00:16:37] Speaker 00: And we read the personal jurisdiction provision as controlling the issue of personal jurisdiction and the venue provision controlling the issue of venue. [00:16:46] Speaker 00: So I understand they were enacted at different times and Congress [00:16:51] Speaker 00: might have had something different, things in mind. [00:16:54] Speaker 00: But on what basis would you give us today to say we shouldn't apply the reading of the language in those statutes in the same way here? [00:17:04] Speaker 02: The underlying facts and circumstances of those cases are also distinguishable. [00:17:08] Speaker 00: Yeah, but those are jurisdictional. [00:17:10] Speaker 00: We didn't say in those cases, the holding that gives you trouble today, if you will, is our holding in those cases that [00:17:18] Speaker 00: The jurist nationwide jurisdictional provision is independent from the venue provision. [00:17:24] Speaker 00: One is not dependent on the other. [00:17:27] Speaker 00: And that was the rule of law. [00:17:28] Speaker 00: I think the rule of those cases. [00:17:30] Speaker 00: So if that is what those cases decided, why should we probably aside from the facts of those cases, why should we interpret the language in this act differently? [00:17:40] Speaker 02: So for example, go video, which I think is probably troubling you the most. [00:17:43] Speaker 02: It's a ninth circuit case 35 years ago, Clayton act. [00:17:47] Speaker 02: That case did, on the textual interpretation point, say that those were distinct clauses. [00:17:53] Speaker 02: I understand that. [00:17:55] Speaker 02: That case was animated by this concept that the Clayton Act's venue and service special provision could not have been intended to be more narrow, right? [00:18:06] Speaker 02: That the purpose behind Congress putting that in was to provide people with more flexibility, more venue options. [00:18:13] Speaker 02: And so it decided that case in order to allow the alien defendants in that case, the foreign defendants, to be sued under the alien. [00:18:22] Speaker 01: But you're assuming that when this court decides something as to what it thinks the statute means, it has ulterior motives. [00:18:34] Speaker 02: Um, I don't think it necessarily means that. [00:18:37] Speaker 02: I think it was reading into the time period and what the, uh, 1391 or the venue general venue statue. [00:18:44] Speaker 01: They then took the, we also have securities and exchange act cases saying the same thing. [00:18:51] Speaker 02: Right. [00:18:51] Speaker 02: So, so I understand that that on the textual point, there is case law that reads similar statutes, not identical differently. [00:18:59] Speaker 02: And like I said, I do think that is still a critical difference, but there's a second point I wanted to make. [00:19:04] Speaker 01: So if you were to succeed, you'd have to, it seems to me, be able to show there's something about the language that's different that matters. [00:19:12] Speaker 01: What is it? [00:19:12] Speaker 02: Well, we think that the Clayton Act when passed intended for venue to be broader, but not to be completely broader. [00:19:19] Speaker 01: But you say the language is not exact. [00:19:22] Speaker 01: Is there anything about the language that differs that makes a difference? [00:19:25] Speaker 02: Well, the Clayton Act has language about not only in the judicial district, but also in any other districts. [00:19:32] Speaker 02: It seems to intend to be a little bit broader. [00:19:35] Speaker 02: What about the Securities and Exchange Act? [00:19:37] Speaker 01: It doesn't have that language. [00:19:38] Speaker 02: It doesn't. [00:19:39] Speaker 02: None of those statutes, by the way, the Securities Acts or the Clayton Act, they don't have the word reside in it, for example. [00:19:45] Speaker 02: That's one of the definitional terms that gets amended through the Venue Clarification Act. [00:19:50] Speaker 00: Let's assume we had no precedent at all for a moment. [00:19:53] Speaker ?: OK. [00:19:54] Speaker 00: I'm still struck as, I don't want to turn all Brian Garner on you, but as soon as it was a matter of statutory construction, aren't you reading the nationwide service process provision out of the statute? [00:20:09] Speaker 02: No. [00:20:10] Speaker 02: I think from a textual point, our interpretation of what we think is the plain language is that there has to be venue as a threshold question before you get nationwide service. [00:20:20] Speaker 00: Well, but you don't need that. [00:20:21] Speaker 00: There's nothing of course that requires that a defendant [00:20:24] Speaker 00: be served in a state if there are minimum contacts over the defendant. [00:20:28] Speaker 02: Well, you can serve the defendant anywhere in the world. [00:20:31] Speaker 02: It's a matter of, does that mean you have jurisdiction anywhere in the world? [00:20:34] Speaker 01: Well, but that, we have case law that goes, that's much deeper than just those cases. [00:20:38] Speaker 01: Our case law, as I understand it, is that in general, wherever you have service of process, that means there's personal jurisdiction. [00:20:45] Speaker 01: Service is a triggering factor for the assertion of jurisdiction. [00:20:50] Speaker 01: We have sentences and opinions that say, which are not [00:20:54] Speaker 01: quotes from other opinions, not these particular ones, that if there is a provision for service of process and process is proper, then there's personal jurisdiction in general. [00:21:06] Speaker 02: I agree that in general, service is tied to the notion of jurisdiction. [00:21:10] Speaker 00: So what does this add here? [00:21:12] Speaker 00: See, that's my difficulty. [00:21:14] Speaker 02: So our point is that it can't be that [00:21:16] Speaker 02: the nationwide service was meant to read out the venue provision entirely. [00:21:20] Speaker 02: So taking your point- No, and I don't think it was. [00:21:23] Speaker 00: I still think you have to independently establish venue. [00:21:26] Speaker 02: Right. [00:21:26] Speaker 02: Which came first, right? [00:21:28] Speaker 00: It's the other way. [00:21:29] Speaker 00: The other way that troubles me, which is that- And I understand- What does it add? [00:21:32] Speaker 00: I mean, if all that happened here, that you were just subject to the general rules of jurisdiction in the district court, the district court can exercise jurisdiction over you if you're not served in the state. [00:21:46] Speaker 00: as long as you committed an act that gave rise to the action in the state. [00:21:50] Speaker 00: So if you're a New York corporation, that service or process can be made on you in New York, even if there's only statewide jurisdiction. [00:21:59] Speaker 00: So I'm having difficulty figuring out what the nationwide service or process adds in your view, if it's not a jurisdictional provision. [00:22:07] Speaker 02: I mean, I think this gets to the mix and match arguments and the [00:22:12] Speaker 02: the need for a plaintiff to choose to either go with the special venue and special service provisions under the CEA or any other act, or go under traditional. [00:22:24] Speaker 01: I understand that GoDaddy, if that's the name of the case, did say that you can bounce out of 1391 for venue purposes, but are you making a venue argument separately? [00:22:35] Speaker 02: Venue was made as a subset of jurisdiction. [00:22:38] Speaker 01: Right, so are you arguing that if there was jurisdiction? [00:22:42] Speaker 01: Yeah, absolutely. [00:22:43] Speaker 01: Excuse me, excuse me. [00:22:45] Speaker 01: Are you arguing that if there was jurisdiction by virtue of the nationwide services process that there wasn't venue? [00:22:51] Speaker 01: Yes. [00:22:51] Speaker 01: Do you have a separate argument? [00:22:53] Speaker 02: Yes, that's what the district court found. [00:22:55] Speaker 01: No, the district court found it in the other direction. [00:22:58] Speaker 02: Well, the district court found that there was no jurisdiction because there was no venue. [00:23:01] Speaker 01: I'm asking you whether you have argued separately. [00:23:04] Speaker 01: independently that there is no venue. [00:23:08] Speaker 02: We have not argued it as a separate grounds. [00:23:10] Speaker 01: So the question of whether the venue provision is applicable or whether 1391 is applicable or whether the language in the new amendment from 2011 resides for all venue purposes and applies to the [00:23:32] Speaker 01: All of those issues are really not before us because there is no independent venue issue before us. [00:23:38] Speaker 01: Is that correct? [00:23:38] Speaker 02: I think they are before you and they were before the district court as the district court acknowledged because the plaintiff raised them in opposing our motion to dismiss. [00:23:47] Speaker 00: But she didn't rule on those issues. [00:23:48] Speaker 02: She ruled that there was no jurisdiction because there was no venue. [00:23:52] Speaker 02: I agree with that. [00:23:53] Speaker 02: But implicit in that is there's no venue under 25C. [00:23:56] Speaker 01: In other words, you're assuming your argument rests on the notion [00:24:01] Speaker 01: that the problem is that 1391 shouldn't be applicable. [00:24:07] Speaker 01: Well, that really is what you're standing on. [00:24:10] Speaker 01: And certainly the case law, I mean, it's kind of a, in GoDad it was kind of a separate point that despite the venue provision in the CEA, 1391 is applicable. [00:24:27] Speaker 01: But that's not really where we are at this point, in this case. [00:24:30] Speaker 02: In this case, we're closer to, and I would point this court to Judge Wood's decision from the Seventh Circuit in Cannes Enterprises, which is the most recent circuit court that has dealt with this enterprise. [00:24:41] Speaker 01: We understand it, but we have contrary case law as the problem. [00:24:44] Speaker 02: Right. [00:24:45] Speaker 02: That case has dealt with, in I think a very clear manner, the history and the competing considerations. [00:24:51] Speaker 01: So then you can file a non-bank petition, and hopefully you can and you can and you should. [00:24:57] Speaker 01: But in terms of this three-judge panel, how can we follow Judge Wood instead of her? [00:25:02] Speaker 01: I mean, she was deciding under which statute? [00:25:06] Speaker 01: The Clayton Act. [00:25:07] Speaker 01: Right. [00:25:07] Speaker 01: So we can't say we prefer her version of the Clayton Act to our version of the Clayton Act. [00:25:11] Speaker 01: No, not at all. [00:25:11] Speaker 02: And I wasn't suggesting that it's binding or that this court has to adopt that. [00:25:14] Speaker 02: But Go Video is narrowly confined to the textual reading in a particular circumstance, which you may agree or not agree with. [00:25:24] Speaker 02: But the point about needing to pick a lane [00:25:26] Speaker 02: and needing to pick either the special venue and service statute clauses or going back to 1391. [00:25:33] Speaker 01: But as I'm saying, the venue question is really not before us. [00:25:38] Speaker 01: So the question of which venue supplies, the one in CEA or 1391, is really not our problem. [00:25:45] Speaker 02: Well, that comes back to what the plaintiff has argued is the basis for jurisdiction. [00:25:49] Speaker 02: They have said that they're invoking [00:25:54] Speaker 02: 25C in order to get jurisdiction. [00:25:57] Speaker 01: So they're arguing that the nationwide service of process statute applies as written. [00:26:04] Speaker 01: I don't know that you're the ones who are trying to drag the venue provision in and they're saying, no, never mind about that. [00:26:12] Speaker 02: Fair enough. [00:26:12] Speaker 02: I think they're conflating these notions, which is why we bring up, and we were trying to understand what their argument is. [00:26:19] Speaker 01: So assuming that we're not going to overrule our own case law. [00:26:24] Speaker 01: On a similar line to what we asked your opponent, what can we decide and should we decide now? [00:26:32] Speaker 01: That is, if we thought there was nationwide service of process, do we decide the minimum context issue with regard to the foreign defendants? [00:26:43] Speaker 01: Do we decide the question of whether there's a colorable merits claim? [00:26:50] Speaker 01: Do we decide whether the motion to dismiss was proper? [00:26:54] Speaker 02: I think you certainly have the authority to decide to affirm on any of the grounds that were presented, including... So do you want to argue it when your time is up, but do you want to make any arguments? [00:27:02] Speaker 02: I absolutely do. [00:27:03] Speaker 02: We jumped right into CEA. [00:27:04] Speaker 02: I do want to confirm that we agree that there's no supplemental, I'm sorry, there's no specific jurisdiction under traditional notions of personal jurisdiction, which I think the District Court laid out in very clear, methodical way. [00:27:19] Speaker 02: As to Arizona, but nationwide. [00:27:21] Speaker 02: As to Arizona. [00:27:22] Speaker 01: Um, and then in terms of the merits and in terms of the threshold question nationwide, nationwide, do you have an argument that there is? [00:27:30] Speaker 02: Well, not for my client. [00:27:31] Speaker 02: I think I should leave that to my co-defendants. [00:27:34] Speaker 02: Um, but with respect to the actual claim itself. [00:27:37] Speaker 02: We do strongly believe that the nature of their CEA claim is fundamentally untenable, that they are asserting that CMC had some obligation to include only market cap as the only factor for its ranking system. [00:27:53] Speaker 02: It is not true that it was advertised as a market cap ranking. [00:27:57] Speaker 02: Quite to the contrary, they didn't dispute that below. [00:27:59] Speaker 02: The website is very clear that there are multiple qualitative factors, including price verification, volume, [00:28:07] Speaker 00: So this is an argument in favor of the motion to dismiss, right? [00:28:11] Speaker 02: Yes, but it also goes to whether or not there's a callable claim. [00:28:14] Speaker 02: The suggestion that you're manipulating the market by providing the market with more information, all going to risk factors that are pro-consumer, that's sort of fundamentally antithetical to the CEA. [00:28:26] Speaker 02: I don't see how that claim has any legs to stand on, not to mention the pleas. [00:28:30] Speaker 00: Since the district court didn't address, you agree, didn't [00:28:33] Speaker 00: address or resolve those claims just as a matter of the way we normally operate, why shouldn't we send it back to the district court to do those in the first instance? [00:28:42] Speaker 00: I know you'd prefer to wait here right away, but that's always the answer. [00:28:46] Speaker 00: Tell us why in terms of judicial efficiency this is the right thing to do. [00:28:50] Speaker 02: Yes, it's spatially deficient as a matter of judicial efficiency when it's apparent on the face that there is no claim [00:28:57] Speaker 02: then you lose subject matter jurisdiction, you have no basis for personal jurisdiction, and you lose pendant jurisdiction. [00:29:03] Speaker 02: And that is, I think, the easiest way to cabin this. [00:29:06] Speaker 02: You don't need to reach the issue of trying to interpret the CEA's special service and venue provisions. [00:29:15] Speaker 06: If there are no further questions, thank you, Ms. [00:29:17] Speaker 06: King. [00:29:17] Speaker 02: Thank you. [00:29:21] Speaker 06: Mr. Gonzalez? [00:29:32] Speaker 05: If it may please the court, my name is Roberto Gonzalez. [00:29:34] Speaker 05: I represent the foreign defendants in this matter. [00:29:37] Speaker 05: So specifically, that's Finance Capital Management, or BCM. [00:29:41] Speaker 05: BCM is a foreign investment company that's incorporated in the British Virgin Islands. [00:29:47] Speaker 05: I also represent the individual defendants who are also foreign. [00:29:52] Speaker 05: I will just jump in, if it's OK, to the question of minimum contacts with the United States. [00:29:57] Speaker 05: I think as the plaintiff concedes and as the panel [00:30:02] Speaker 05: recognizes that even if there is, even if the reading of the CEA is correct that the plaintiff is putting forward, the foreign defendants should still be dismissed. [00:30:14] Speaker 06: Why shouldn't we allow the district court to reach that in the first instance? [00:30:18] Speaker 05: Well, we think that the record is quite ample here, and I think a lot of the district court reasoning applies to show that there are no minimum contacts between the foreign defendants and the United States. [00:30:30] Speaker 01: The record is a complaint. [00:30:32] Speaker 05: Yes. [00:30:33] Speaker 05: Yeah. [00:30:34] Speaker 05: Yeah. [00:30:35] Speaker 05: And it's really the same allegations that the district court already analyzed in deciding that there were no minimum contacts between the foreign defendants and Arizona. [00:30:44] Speaker 05: There are no other additional contacts at issue here in the complaint. [00:30:48] Speaker 05: So we think there's ample reason for you, whatever you do to the other defendants, to affirm as to the foreign defendants. [00:30:56] Speaker 05: And just to be clear about the facts, BCM is a foreign investment company. [00:31:02] Speaker 05: There's no well-pled allegation that it had any involvement in the rankings here, that it has any operations in the United States, any employees in the United States. [00:31:10] Speaker 01: Well, their allegation is something like an alter ego, i.e. [00:31:15] Speaker 01: this is all a front. [00:31:17] Speaker 01: This corporation, this foreign corporation, is simply another name for the United States. [00:31:25] Speaker 05: Yes, Your Honor, you're correct. [00:31:27] Speaker 05: The only allegation is a bare allegation that [00:31:30] Speaker 05: we're not aware of any court that has ever upheld an allegation like this, that it's sufficient for jurisdiction. [00:31:36] Speaker 05: They operated through another company. [00:31:39] Speaker 05: And on appeal, however, the plaintiff makes no effort to go through all the factors of the alter ego analysis. [00:31:47] Speaker 05: It's a high bar, as you know. [00:31:48] Speaker 05: The Ninth Circuit in Ronza, for example, is a great example of that. [00:31:52] Speaker 05: The district court went through the alter ego analysis, and the plaintiff does not do so on appeal. [00:31:57] Speaker 05: I think that's abandoned. [00:31:58] Speaker 05: I don't think there's any other, there's no other allegation that would come anywhere close to supporting alter ego. [00:32:05] Speaker 05: And as the district court also found, there's also case law under the fiduciary shield doctrine that says, if you're trying to tag a foreign officer who's with jurisdiction because of their link to a corporation, you have to have, you know, well-planned allegations that they were a primary [00:32:25] Speaker 05: participant in the wrongdoing, and there's absolutely no allegations to that effect. [00:32:29] Speaker 05: The complaint paragraphs they cite really just describe the roles or former roles of the individual defendants, by the way, with the wrong company, finance holdings versus finance capital management. [00:32:40] Speaker 05: But those bare allegations, even if you buy that conflation, is not enough to establish jurisdiction. [00:32:47] Speaker 05: And very importantly, I think you heard the plaintiff correctly concede that there are no other allegations that he would add to an amended complaint [00:32:54] Speaker 05: that would bolster the jurisdictional allegations here for the foreign defendants. [00:32:59] Speaker 05: So I, sorry. [00:33:01] Speaker 06: Well, I just ask you to close unless my colleagues have any other questions. [00:33:05] Speaker 05: Sure. [00:33:06] Speaker 05: No, I think I will leave it there. [00:33:09] Speaker 05: Thank you. [00:33:09] Speaker 06: Thank you, Mr. Gonzalez. [00:33:12] Speaker 06: Mr. Gleason. [00:33:23] Speaker 03: Good morning, and may it please the court. [00:33:25] Speaker 03: Michael Gleason and I represent BAM Trading Services, doing businesses, Binance.us. [00:33:31] Speaker 00: So just so that I can keep all the participants straight in this, BAM Trading Services Inc. [00:33:37] Speaker 00: is the United States corporation? [00:33:39] Speaker 03: Correct. [00:33:40] Speaker 00: OK. [00:33:40] Speaker 00: And so what argument do you have different than the domestic defendant that Ms. [00:33:49] Speaker 00: King represents? [00:33:50] Speaker 03: The only other argument I would add is some specific allegations against my client that make it not a colorable CEA claim. [00:33:59] Speaker 03: That is, this case alleges artificial ranking of a hex. [00:34:05] Speaker 03: My client, BAM, is not alleged to have ranked hex. [00:34:10] Speaker 03: plaintiff is not alleged to have used BAM. [00:34:14] Speaker 03: BAM doesn't even offer HEX. [00:34:16] Speaker 03: And BAM did not even make any representations about HEX. [00:34:20] Speaker 03: So the only allegation directed at BAM is that there was a website representation directing users to coin market cap for objective information. [00:34:32] Speaker 03: But if you look at the complaint, even that website representation is not made by BAM. [00:34:37] Speaker 03: It's made by Binance.com. [00:34:41] Speaker 03: So Binance holdings is the foreign entity that has the crypto platform. [00:34:50] Speaker 03: It doesn't operate in the U.S. [00:34:52] Speaker 03: BAM is Binance.us which operates in the U.S. [00:34:56] Speaker 01: So BAM is sending people to the Binance.com website even though it's not operating in the United States. [00:35:01] Speaker 03: No, no, no. [00:35:02] Speaker 03: So what I'm saying is the website that they cut out and say, hey, there's a representation to go to CoinMarketCap for objective information, that's not BAM's website. [00:35:12] Speaker 03: That's Binance.com's website. [00:35:15] Speaker 03: And that's at paragraph 62, 65, and 66. [00:35:18] Speaker 01: So I thought Binance.com is not operating in the United States. [00:35:23] Speaker 03: It does not. [00:35:23] Speaker 03: So you can't. [00:35:24] Speaker 01: Well, how can you get to the website then? [00:35:27] Speaker 03: That I don't know. [00:35:28] Speaker 03: They have a snippet on their complaint, so I'm going by what they've alleged and the allegations are. [00:35:34] Speaker 03: I don't know if you can access the website out there, but it's not BAM's website, but even if you want to accept that BAM made that representation, you'd have to accept the allegation that some unknown user went and looked at that representation, then they went to [00:35:54] Speaker 03: coin market cap and looked at the rankings and bought some other currency when they otherwise would have bought hacks. [00:36:01] Speaker 03: It's just too attenuated. [00:36:03] Speaker 03: So for that reason, [00:36:05] Speaker 03: There's no colorable claim that BAM, under the CA, you need to show that BAM caused an artificial price in HEX, and BAM intended to cause that artificial price in HEX. [00:36:16] Speaker 03: Based on the allegations against BAM, even if there was a website representation about objective information, that's not sufficient to state a colorable claim. [00:36:26] Speaker 03: And those are the specific facts against my claim. [00:36:27] Speaker 06: Thank you, Mr. Gleason. [00:36:28] Speaker 03: Thank you. [00:36:31] Speaker 06: Mr. Schmidt? [00:36:33] Speaker 06: We'll give you two minutes for rebuttal. [00:36:39] Speaker 04: Just briefly, Your Honors, I do agree with Judge Hurwitz that at a minimum, of course, we should be allowed to re-bring this into another jurisdiction. [00:36:47] Speaker 00: But, of course, I do think that there is... Well, I didn't say at minimum you should be allowed to bring it into another jurisdiction. [00:36:52] Speaker 00: All I said was that there may not be venue in Arizona. [00:36:57] Speaker 04: I did not mean to put words in your mouth, Your Honor, but I felt the need to say that. [00:37:01] Speaker 04: But I do, of course, believe that we do have nationwide jurisdiction in there. [00:37:07] Speaker 04: On the point of... [00:37:09] Speaker 04: Ms. [00:37:09] Speaker 04: King's comment about CoinMarketCap not making the representations as to MarketCap, we plead around paragraph 85 of our complaint that does, at least in some view of the website, list currencies by MarketCap. [00:37:25] Speaker 04: So there is that allegation. [00:37:28] Speaker 01: Quite about the last point that was made about how you're reaching Binance.com. [00:37:34] Speaker 04: Yes, and we plead actually around in paragraph 53 of our complaint that when a user clicks on the coin market cap, the buy button on the website, they are directed to what we call Binance's website in the complaint, but we are calling BCM here. [00:37:53] Speaker 04: So there's a connection there to Binance. [00:37:55] Speaker 01: But he says it's not, but you're, he said that it actually is not that website, it's actually the BAM website. [00:38:04] Speaker 01: But you say that's in the complaint anyway, so that's the end of the story. [00:38:08] Speaker 04: Well, I'm not, you know, saying that factual allegations are weird, but there's, you know, first of all, there's not been evidence showing, of course, of that, of where the websites go. [00:38:18] Speaker 01: But the complaint says that it's the American company's website. [00:38:23] Speaker 04: Yes, I believe the complaint says that BAM, the American company, directs people to the CoinMarketCap website. [00:38:31] Speaker 04: which is a subsidiary, is owned by BCM. [00:38:35] Speaker 01: Which number of the, which paragraph is that? [00:38:38] Speaker 04: I believe that's around paragraph 53 of the complaint, Your Honor. [00:38:44] Speaker 04: And that's where we discussed the buy button there. [00:38:51] Speaker 00: I just want to be clear about something you said before. [00:38:54] Speaker 04: Yes, Your Honor. [00:38:55] Speaker 00: You said you don't think you can make any different jurisdictional allegations in this case, so you're willing to stand on the complaint as it now stands. [00:39:05] Speaker 00: But if we were to address the motion to dismiss, are there allegations that you might, are there allegations you might make in an amended complaint to address the motion to dismiss? [00:39:19] Speaker 04: There are not [00:39:22] Speaker 04: But for failure to state a claim. [00:39:24] Speaker 04: Correct. [00:39:24] Speaker 04: There's not new material facts. [00:39:26] Speaker 04: Um, there's, you know, we could clarify, we could state things. [00:39:28] Speaker 00: Okay. [00:39:29] Speaker 04: I just wanted to see what things go. [00:39:30] Speaker 00: Okay. [00:39:31] Speaker 00: Thank you. [00:39:31] Speaker 00: That's, I wanted to make sure what, what you were talking about when you said you didn't think you could allege more material facts. [00:39:37] Speaker 04: Yeah. [00:39:38] Speaker 04: And I believe, I'm sorry, your honor. [00:39:39] Speaker 04: I believe I was addressing the jurisdiction on that point, but as, as you say, you say the same thing as to the motion. [00:39:45] Speaker 01: Okay. [00:39:46] Speaker 01: As to paragraph 53. [00:39:49] Speaker 01: The complaint seems to be using Binance as a foreign company and Binance.us as the American company. [00:39:56] Speaker 01: So when you say that it was directed to the Binance companies, it seems you may be right that you are referring to a foreign company. [00:40:07] Speaker 04: Yes, I believe that's right, Your Honor. [00:40:08] Speaker 04: I believe in the complaint we used Binance as a foreign company, which we're calling now BCM. [00:40:14] Speaker 04: And then Binance.us is the US company, which we're now calling BAM. [00:40:17] Speaker 01: So the question is, how is Binance [00:40:19] Speaker 01: Tied into all this in the complaint. [00:40:22] Speaker 04: Binance US, and forgive me, I'm looking where it is in the complaint, I believe we allege that it does direct users to the CoinMarketCap website. [00:40:36] Speaker 01: But that's what I'm asking you, because 53 says users who click on the buy button are directed to either blockchain.com or Binance's website. [00:40:47] Speaker 04: That's correct, Your Honor. [00:40:48] Speaker 04: My recollection is that BAM, the U.S. [00:40:52] Speaker 01: company, directs users to CoinMarketCap and then CoinMarketCap... But in this complaint, when you say Binance, when you meant the U.S. [00:41:00] Speaker 01: company, you said Binance.us. [00:41:04] Speaker 01: So it appears that Binance seems to be a foreign company in the complaint. [00:41:10] Speaker 04: That's correct, Your Honor, yes. [00:41:11] Speaker 01: So therefore, you don't seem to have any allegations [00:41:14] Speaker 01: that binance.us had anything to do with this? [00:41:18] Speaker 04: We don't allege that when you click the buy button, it directs you to Binance US. [00:41:23] Speaker 04: Again, I do believe we allege that Binance US separately directs users to coinmarketcap.com, but forgive me, I'm not seeing it. [00:41:30] Speaker 01: Somewhere other than in paragraph 53. [00:41:32] Speaker 04: I'm sorry? [00:41:33] Speaker 01: Somewhere other than in paragraph 53. [00:41:36] Speaker 04: Yes, Your Honor, I'm just looking for where that is. [00:41:49] Speaker 01: But if we couldn't find that, there would be nothing in the complaint. [00:41:53] Speaker 04: Thank you. [00:41:53] Speaker 04: I do believe we address it in our opening brief on page 13. [00:42:23] Speaker 04: But I'm not finding that specific direction at the moment, Your Honor. [00:42:27] Speaker 04: So I see a amount of time, so unless Your Honor has further questions, I will rest my papers. [00:42:32] Speaker 06: Thank you, Mr. Schmidt. [00:42:33] Speaker 06: Thank you. [00:42:42] Speaker 06: Okay, give us a sentence. [00:43:10] Speaker 06: Okay. [00:43:14] Speaker 06: Thank you. [00:43:14] Speaker 06: We'll take a few semicolons to make that into one sentence, but we'll submit the case. [00:43:18] Speaker 06: Thank you. [00:43:19] Speaker 06: Thanks to Council for your arguments and presentations.