Moody Response to Order to Show Cause — MDL No. 2989, Dkt. 114

Summary

A response brief filed March 1, 2021 by plaintiffs David Moody and Julie Moody (Moody, et al. v. Robinhood Financial, LLC, et al., Case No. 3:21-cv-00861-JCS, N.D. Cal.) before the United States Judicial Panel on Multidistrict Litigation in In re: January 2021 Short Squeeze Trading Litigation, MDL No. 2989 (Document 114, 5 pages). Responding under Panel Rule 8.1(c) to the Panel's order to show cause, the plaintiffs support transfer and centralization under 28 U.S.C. § 1407 in the Northern District of California, counting at least 42 actions involving similar claims, at least 14 of them pending there. The brief is submitted by Roy T. Willey IV of Anastopoulo Law Firm, LLC, Charleston, South Carolina, as counsel for the plaintiffs and the proposed class.

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            Case MDL No. 2989 Document 114 Filed 03/01/21 Page 1 of 5




                        BEFORE THE UNITED STATES JUDICIAL
                        PANEL ON MULTIDISTRICT LITIGATION

 IN RE: JANUARY 2021 SHORT                            MDL No. 2989
 SQUEEZE TRADING LITIGATION

  PLAINTIFFS DAVID MOODY AND JULIE MOODY’S RESPONSE TO ORDER TO
 SHOW CAUSE IN SUPPORT OF TRANSFER AND CENTRALIZATION PURSUANT
                         TO 28 U.S.C. § 1407

       Pursuant to Panel Rule 8.1(c) of the Rules of Procedure of the Judicial Panel on

Multidistrict Litigation, Plaintiffs David Moody and Julie Moody (“Plaintiffs”) in the Moody, et

al. v. Robinhood Financial, LLC, et al., Case No. 3:21-cv-00861-JCS (N.D. Cal.) action, by and

through undersigned counsel, respectfully submit this response brief in support of transfer and

coordination pursuant to 28 U.S.C. § 1407.

                                        INTRODUCTION

       Plaintiffs allege that Robinhood Financial, LLC, Robinhood Markets, LLC, Robinhood

Securities, LLC, Citadel Securities, LLC and Citadel Enterprise Americas, LLC (collectively,

“Defendants”) manipulated the open-market by creating a one-way buy-sell situation by which the

only option of retail investors who had already purchased the securities GameStop (“GME”),

American Airlines Group, Inc. (“AAL”), AMC Entertainment Holdings (“AMC”), Bed Bath &

Beyond, Inc. (“BBBY”), BlackBerry, Ltd. (“BB”), Castor Maritime, Inc. (“CTRM”), Express, Inc.

(EXPR”), Koss Corp. (“KOSS”), Naked Brand Group Ltd. (“NAKD”), Nokia Corp. (“NOK”),

Sundial Growers, Inc. (“SNDL”), Tootsie Roll Industries, Inc. (“TR”), or Trivago N.V. (TRVG”)

was to sell/liquidate their holdings. In so doing, Defendant created a situation in which the only

entities which were permitted to purchase these equities were equity firm insiders and hedge fund

operators, many of whom were leveraged heavily “short” against the equities and had a vested

interest in seeing the equity prices depressed so they could cover their short sales at a lower cost.



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              Case MDL No. 2989 Document 114 Filed 03/01/21 Page 2 of 5




         The actions of Defendants resulted in at least 42 cases involving similar claims related to

the restriction of the above listed securities. The largest concentration of filings have occurred in

the Northern District of California1: Cezana v. Robinhood Financial LLC et al., Case No. 5:21-cv-

00759; Cheng et al. v. Ally Financial Inc. et al., Case No. 3:21-cv-00781; Curiel-Ruth v.

Robinhood Securities LLC et al., Case No. 3:21-cv-00829; Dalton v. Robinhood Securities, LLC

et al., Case No. 4:21-cv-00697; 3:21-cv-00697; Days v. Robinhood Markets, Inc. et al., Case No.

3:21-cv-00696; 4:21-cv-00696; Feeney et al. v. Robinhood Financial, LLC et al., Case No. 5:21-

cv-00833; Gossett et al. v. Robinhood Financial, LLC et al., Case No. 2:21-cv-00833; Kayali et

al. v. Robinhood Financial et al., Case No. 2:21-cv-00835; Krasowski et al. v. Robinhood Financial

LLC et al., Case No. 3:21-cv-00758; Krumenacker v. Robinhood Financial, LLC, et al., Case No.

3:21-cv-00838; 4:21-cv-00838; Levi Cobos v. Robinhood Financial, LLC, et al., Case No. 2:21-

cv-00843; Moody, et al. v. Robinhood Financial, LLC, et al., 3:21-cv-00861; Nordeen et al. v.

Robinhood Financial, LLC, et al., Case No. 3:21-cv-00167; Wieg v. Robinhood Financial, LLC,

et al., Case No. 5:21-cv-00693. All 42 actions are in their early stages and are apt for centralization

and coordination.

                                                 ARGUMENT

I.       Centralization and Consolidation of this Litigation is Appropriate Due to Common
         Issues Related to the Cases.

         The Panel should centralize and consolidate these matters to “promote the just and

efficient” of the actions of the actions for the benefit of the parties and witnesses, court, and also

to significantly reduce litigation costs. 28 U.S.C. § 1407. All of the actions before this Panel

involve common questions of fact concerning Defendants’ manipulation of the open market by



1
 The Northern District of California is the Judicial District home to the largest number of U.S.-headquartered
Defendants.


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              Case MDL No. 2989 Document 114 Filed 03/01/21 Page 3 of 5




common scheme or conspiracy to fix, suppress, maintain or stabilize the prices of the above listed

securities.

        “Antitrust actions present a category of actions that the Panel almost inevitably orders

transferred if there are multiple actions pending in different districts.” Multidistrict Litigation

Manual, § 5:14 (West 2014). Additionally, “[t]he Panel has regularly ordered transfer of class

actions involving potentially overlapping or conflicting class definitions.” Id.

        The Northern District of California is the Most Appropriate Venue for this Litigation.

        The Panel will generally take into consideration “where the largest number of cases is

pending, where discovery has occurred, where cases have progressed furthest, the site of the

occurrence of the common facts, where the cost and inconvenience will be minimized, and the

experience, skill, and caseloads of available judges.” Multidistrict Litigation Manual (Fourth) §

20.131 (2004). These factors support a centralization and consolidation in the Northern District

of California.

        The Northern District of California has the desired judicial experience, capacity and

resources to manage MDL proceedings in general and complex antitrust class actions in particular.

In re Int’l Air transp. Surcharge Antitrust Litig., 460 F. Supp. 2d 1377, 1379 (J.P.M.L. 2006)

(noting that the Northern District of California is “well equipped with the resources that this

complex antitrust docket is likely to require.”)

        At least, 14 of the 42 cases are currently pending in the Northern District of California and

this District is home to the largest group of Defendants, among which include Robinhood

Financial, LLC and Robinhood Markets, Inc. This will provide for a “geographically convenient

forum for this nationwide litigation.” In re Mirena IUS Levonorgestrel-Related Prod. Liab. Litig.

(No. II), 249 F. Supp. 3s 1357 (J.P.M.L. 2017). Given the location of the Robinhood Defendants,




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            Case MDL No. 2989 Document 114 Filed 03/01/21 Page 4 of 5




there are a large number of discoverable documents and witnesses that exist in California, notably,

Defendants’ high-ranking executives. See In re Online DVD Rental Antitrust Litig., 609 F. Supp.

2d 1376-77 (J.P.M.L. 2009) (transferring cases to a district because “two of the defendant are

headquartered in that district and, accordingly, relevant documents and witnesses are likely located

there”).   As a result, litigating the case in proximity to these Defendants will reduce litigation

costs, and enhance the efficiencies of the parties, counsel, and the court. Furthermore, the

Robinhood Terms and Conditions include a choice of law clause selecting the State of California

to be governing law.

II.     28 U.S.C. § 1404 Is Not Adequate Under the Circumstances and Will Inhibit the
        Efficiency it is Intended to Provide

        Currently there are more than a dozen different districts / courts with similar cases pending.

To transfer these cases under § 1404 would require parties to undertake litigation in each of these

different districts, with potentially varying outcomes in a way that does not serve the courts or

parties. For this reason § 1407 was created, and is a perfect fit for this particular litigation and set

of circustmances as the Panel has the ability to ensure efficiency through consolidation into a

multidistrict litigation, and move the cases forward without the delay of litigation under § 1404.

                                          CONCLUSION

        For the aforementioned reasons, Plaintiffs David Moody and Julie Moody respectfully

submit that the Panel transfer the In Re January 2021 Short Squeeze Trading Litigation to the

United States District Court for the Northern District of California for coordination or

consolidation pursuant to 28 U.S.C. § 1407.




                                    [signature on following page]



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           Case MDL No. 2989 Document 114 Filed 03/01/21 Page 5 of 5




                                    Respectfully submitted,

                              By:   /s/ Roy T. Willey IV
                                    Roy T. Willey, IV
                                    Fed ID Number: 11664
                                    ANASTOPOULO LAW FIRM, LLC
                                    32 Ann Street
                                    Charleston, SC 29403
                                    (843) 614-8888
                                    roy@akimlawfirm.com

                                    Counsel for Plaintiffs David Moody and Julie
                                    Moody and the Proposed Class


Charleston, South Carolina
March 1, 2021




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