Opinion, In re Coinbase Global, Inc. Securities Litigation, No. 2:22-cv-04915 (D.N.J.), Doc. 118 (April 8, 2025)

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Opinion of the United States District Court for the District of New Jersey in In re Coinbase Global, Inc. Securities Litigation, Case No. 2:22-cv-04915 (BRM) (LDW), Doc. 118, filed April 8, 2025, by District Judge Martinotti. The Court addresses Defendants' Motion for Reconsideration (ECF No. 89) of its Order (ECF No. 85) issued on September 5, 2024, which Defendants filed on September 19, 2024. Defendants move on the grounds that the Court overlooked their argument that Plaintiffs failed to plead falsity under any pleading standard. The Court finds it did not overlook any legal or factual issue, and the Motion for Reconsideration is DENIED.

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Case 2:22-cv-04915-BRM-LDW             Document 118        Filed 04/08/25       Page 1 of 7 PageID:
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 NOT FOR PUBLICATION

                            UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF NEW JERSEY



                                                      Case No. 2:22-cv-04915 (BRM) (LDW)
  IN RE COINBASE GLOBAL, INC.
  SECURITIES LITIGATION
                                                                     OPINION



 MARTINOTTI, DISTRICT JUDGE

        Before this Court is Defendants’ Coinbase Global, Inc. (“Coinbase”), Brian Armstrong,

 Alesia J. Haas, Emilie Choi, Paul Grewal, Jennifer Jones, Marc Andreessen, Frederick Ernest

 Ehrsam III, Kathryn Haun, Kelly Kramer, Gokul Rajaram, and Fred Wilson’s (the “Individual

 Defendants”) (together with Coinbase, “Defendants”) Motion for Reconsideration (“Motion”)

 (ECF No. 89) of the Court’s Order (“Order”) (ECF No. 85) issued on September 5, 2024.

 Defendants filed this Motion on September 19, 2024 (ECF No. 89), and Plaintiffs filed an

 Opposition on October 7, 2024 (ECF No. 90). Having reviewed the parties’ submissions filed in

 connection with this motion and having declined to hold oral argument pursuant to Federal Rule

 of Civil Procedure 78(b), for the reasons set forth below and for good cause having been shown,

 Defendants’ Motion for Reconsideration (ECF No. 89) is DENIED.

   I.   BACKGROUND

        The factual and procedural background of this matter are well known to the parties and

 were previously detailed in the Court’s Opinion on September 5, 2024. (See ECF No. 84.)

 Accordingly, the Court will only briefly recount such information relevant to this Motion.

        This case is a federal securities putative class action on behalf of persons and entities that

 purchased or otherwise acquired: (i) Coinbase common stock from April 14, 2021, through June
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 5, 2023, inclusive (the “Class Period”), and were damaged thereby; and (ii) Coinbase common

 stock in or traceable to Coinbase’s Registration Statement and/or Prospectus (collectively, the

 “Offering Materials”). (ECF No. 68 at 1.) Generally, Plaintiffs allege Defendants misrepresented,

 concealed, and/or omitted significant, material aspects of Coinbase’s business during the Class

 Period which enabled Defendants to reap financial benefits such as cashing out existing shares at

 inflated values following Coinbase’s public listing. (See generally, id.) The Court previously

 granted in part and denied in part Defendants’ Motion to Dismiss. (ECF No. 78.) The Court granted

 that Motion partly by dismissing “[t]he portions . . . of Count I, to the extent it is premised upon

 the Proprietary Trading Statements and the Bankruptcy Statements that tout customers’ trust in

 Coinbase,” while denying the remaining portions. (ECF No. 85.)

  II.   LEGAL STANDARD

        While not expressly authorized by the Federal Rules of Civil Procedure, motions for

 reconsideration are proper pursuant to this District’s Local Civil Rule 7.1(i). See Dunn v. Reed

 Grp., Inc., Civ. No. 08–1632, 2010 WL 174861, at *1 (D.N.J. Jan 13, 2010). The comments to that

 Rule make clear, however, that “reconsideration is an extraordinary remedy that is granted ‘very

 sparingly.’” L. Civ. R. 7.1(i) cmt. 6(d) (quoting Brackett v. Ashcroft, Civ. No. 03-3988, 2003 WL

 22303078, *2 (D.N.J. Oct. 7, 2003)); see also Langan Eng’g & Env’t Servs., Inc. v. Greenwich

 Ins. Co., Civ. No. 07–2983, 2008 WL 4330048, at *1 (D.N.J. Sept. 17, 2008) (explaining that a

 motion for reconsideration under Rule 7.1(i) is “‘an extremely limited procedural vehicle,’ and

 requests pursuant to th[is] rule[] are to be granted ‘sparingly’”) (internal citation omitted); Fellenz

 v. Lombard Inv. Corp., 400 F. Supp. 2d 681, 683 (D.N.J. 2005).

        A motion for reconsideration “may not be used to re-litigate old matters, nor to raise

 arguments or present evidence that could have been raised prior to the entry of judgment.” P.



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 Schoenfeld Asset Mgmt., LLC v. Cendant Corp., 161 F. Supp. 2d 349, 352 (D.N.J. 2001). Instead,

 Rule 7.1(i) directs a party seeking reconsideration to file a brief “setting forth concisely the matter

 or controlling decisions which the party believes the Judge has overlooked.” L. Civ. R. 7.1(i); see

 also Bowers v. Nat’l Collegiate Athletic Ass’n, 130 F. Supp. 2d 610, 612 (D.N.J. 2001) (“The word

 ‘overlooked’ is the operative term in the Rule.”).

        To prevail on a motion for reconsideration, the moving party must file the motion within

 14 days of the entry of order or judgment showing at least one of the following grounds: “(1) an

 intervening change in the controlling law; (2) the availability of new evidence that was not

 available when the court [made its initial decision]; or (3) the need to correct a clear error of law

 or fact or to prevent manifest injustice.” Max’s Seafood Cafe v. Quinteros, 176 F.3d 669, 677 (3d

 Cir. 1999); see also N. River Ins. Co. v. CIGNA Reinsurance, Co., 52 F.3d 1194, 1218 (3d Cir.

 1995) (internal quotations omitted). A court commits clear error of law “only if the record cannot

 support the findings that led to the ruling.” ABS Brokerage Servs. v. Penson Fin. Servs., Inc., No.

 09–4590, 2010 WL 3257992, at *6 (D.N.J. Aug. 16, 2010) (citing United States v. Grape, 549

 F.3d 591, 603–04 (3d Cir. 2008). “Thus, a party must . . . demonstrate that (1) the holdings on

 which it bases its request were without support in the record, or (2) would result in ‘manifest

 injustice’ if not addressed.” Id. Moreover, when the assertion is that the Court overlooked

 something, the movant must point to some dispositive factual or legal matter that was presented to

 the Court. See L. Civ. R. 7.1(i).

        In short, “[m]ere ‘disagreement with the Court’s decision’ does not suffice.” ABS

 Brokerage Servs., 2010 WL 3257992, at *6 (quoting P. Schoenfeld, 161 F. Supp. 2d at 353); see

 also United States v. Compaction Sys. Corp., 88 F. Supp. 2d 339, 345 (D.N.J. 1999) (“Mere

 disagreement with a court’s decision normally should be raised through the appellate process and



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 is inappropriate on a motion for [reconsideration].”); Florham Park Chevron, Inc. v. Chevron

 U.S.A., Inc., 680 F. Supp. 159, 163 (D.N.J. 1988); Schiano v. MBNA Corp., Civ. No. 05–1771,

 2006 WL 3831225, at *2 (D.N.J. Dec. 28, 2006) (“Mere disagreement with the Court will not

 suffice to show that the Court overlooked relevant facts or controlling law, . . . and should be dealt

 with through the normal appellate process . . . .”) (citations omitted).

 III.   DECISION

        Defendants move for reconsideration of the Court’s Order on the grounds this Court

 “overlooked Defendants’ argument that Plaintiffs failed to plead falsity under any pleading

 standard” when dismissing the Exchange Act claims pursuant to a contemporaneous falsity

 argument but not dismissing the Securities Act claims. (ECF No. 89 at 4.) Specifically, Defendants

 claim “[t]he logic of the Court’s contemporaneous falsity analysis requires that the Securities Act

 proprietary trading claims be dismissed.” (Id. at 5.) Defendants contend the Court overlooked their

 argument that the Securities Act claims fail to satisfy Rule 8’s pleading standard and insist they

 successfully demonstrated Plaintiffs failed to properly allege contemporaneous falsity under both

 Rule 8 and Rule 9(b). (Id. at 10, 12.) Ultimately, Defendants believe dismissal of the Securities

 Act claims is necessary “[b]ecause the contemporaneous falsity ground the Court identified as

 warranting dismissal of the Exchange Act proprietary trading claims applies with equal force under

 Rule 8, [meaning] the proprietary trading claims should be dismissed no matter the pleading

 standard and no matter whether challenged under the Exchange Act or Securities Act.” (Id. at 6.)

        In contrast, Plaintiffs argue this Motion is an attempt by Defendants to circumvent their

 failure to properly raise arguments as to whether “Plaintiffs’ proprietary trading allegations do not

 satisfy Rule 8.” (ECF No. 90 at 2.) Plaintiffs state Defendants’ Motion to Dismiss (ECF No. 78)

 and subsequent Reply (ECF No. 80) “failed to address this issue” and include “none of the cases



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 Defendants now rely on for th[is] argument.” (ECF No. 90 at 2.) Plaintiffs argue this Court “did

 not ‘overlook’ the conclusory and vague one-line references to which [Defendants] now point.

 Quite the contrary, in discussing the holding at issue here, the Court cited and quoted the precise

 language Defendants claim that it ‘overlooked.’” (Id. (quoting ECF No. 84 at 45, n.30 (quoting

 ECF Nos. 78 at 46; 80 at 18)).) Plaintiffs assert “Defendants . . . fail to show that the Court

 committed any error sufficient to justify reconsideration.” (Id. at 3.)

        The Court finds it did not overlook any legal or factual issue in its September 5, 2024

 Order. The term “overlooked” in L. Civ. R. 7.1(i) “has been consistently interpreted as referring

 only to facts and legal arguments that might have reasonably resulted in a different conclusion had

 they been considered.” Summerfield v. Equifax, 264 F.R.D. 133, 145 (D.N.J. 2009); see also

 Schiano, 2016 WL 5340508, at *1 (“[W]hen the assertion is that the Court overlooked something,

 the Court must have overlooked some dispositive factual or legal matter that was presented to it.”)

 (citing L. Civ. R. 7.1(i)). The Court previously reviewed all of Defendants’ and Plaintiffs’

 submissions and acknowledged what was and was not argued or alleged by both parties. (See ECF

 Nos. 84–85.) In particular, the Court highlighted neither party submitted proper arguments on

 whether the allegations were sufficiently pled under the Rule 8 standard. The Court previously

 determined:

                The parties relied in large part upon their arguments detailed above,
                supra Section III.A; therefore, the Court does not make lengthy
                findings here. (ECF No. 78-1 at 46 (“Plaintiffs’ allegations fail to
                show that Defendants made any material false statements, see supra
                Section I.A., and therefore should be dismissed for the same reasons
                as the Exchange Act [C]laims.” (citations omitted)); ECF No. 79 at
                47 (“[F]or the reasons set forth in Sections I.A.1–3 supra, the
                Complaint pleads that Defendants made material statements under
                either standard.”); ECF No. 80 at 18 (“[U]nder either Rule 8 or 9(b),
                Plaintiffs fail to plead falsity. Supra Section I.A.”).) Even if the
                Court applied Rule 9(b)’s heightened pleading standard, Plaintiffs’
                claims premised upon the Securities Act Defendants’ omission of

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                risks associated with Coinbase’s ability to safeguard its customers’
                crypto assets would survive. See supra Section III.A.1.i. As to the
                Proprietary Trading Statements, the Court held Plaintiffs’ relevant
                allegations did not satisfy the heightened pleading standard
                applicable for Section 10(b) claims under the Exchange. See supra
                Section III.A.1.ii. However, the parties did not address whether
                Plaintiffs’ allegations that the Offering Materials omitted material
                facts as to Coinbase’s involvement in proprietary trading of
                cryptocurrency on its own exchange adequately support the
                Securities Act Claims under the liberal pleading standard of Rule 8.
                Therefore, the Court does not address this theory of recovery here.

 (ECF No. 84 at 45, n.30). The Court made explicit its acknowledgement of Defendants’ passing

 references to Rule 8 or any other standard but stated “the parties did not address . . . the liberal

 pleading standard of Rule 8.” (Id.). The Court gave appropriate and careful attention to what

 Defendants provided in their Motion to Dismiss; thus, reconsideration is not warranted. See Rich

 v. State, 294 F. Supp. 3d 266, 277 (D.N.J. 2018) (denying motion for reconsideration because the

 “Court did not overlook” an argument, but “specifically referenced” it “in its . . . Opinion”); see

 also Cafaro v. HMC Int’l, LLC, Civ. A. No. 07–2793, 2009 WL 2382247, at *1 (D.N.J. July 30,

 2009) (stating when case law is not presented in moving papers, it is not overlooked by court).

        Additionally, “new arguments cannot serve as a basis for the Court’s reconsideration of its

 prior [Order],” Estate of Harrison v. Trump Plaza Hotel & Casino, Civ. A. No. 12-6683, 2015 WL

 3754996, at *2 (D.N.J. June 16, 2015), nor can Defendants “revive [their] previous motion to

 dismiss with a more detailed argument that was not raised in the first instance.” Barbee v. Amira

 Nature Foods, Ltd., Civ. A. No. 21-12894, 2024 WL 626302, at *11 (D.N.J. Feb. 14, 2024). See

 Shanahan v. Diocese of Camden, Civ. A. No. 12-2898, 2014 WL 1217859, at *3 (D.N.J. Mar. 21,

 2014) (“The purpose of the [reconsideration] rule . . . is to encourage parties to present their

 positions as completely as possible, and to prevent parties from filing a second motion, with the

 hindsight provided by the court's analysis, covering issues that should have been raised in the first

 set of motions.”) (internal citation omitted); Red Roof Franchising v. AA Hosp. Northshore, 937
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 F. Supp. 2d 537, 543 (D.N.J. 2013) (stating a motion for reconsideration is not “an opportunity for

 a litigant to raise new arguments or present evidence that could have been raised prior to the initial

 judgment”); Tischio v. Bontex, Inc., 16 F. Supp. 2d 511, 532 (D.N.J. 1998) (holding “[a] motion

 for reconsideration should not provide the parties with an opportunity for a second bite at the

 apple”); see also Polizzi Meats, Inc. v. Aetna Life & Casualty Co., 931 F. Supp. 328, 339

 (D.N.J.1996) (stating L. Civ. R. 7.1(i) “explicitly invites counsel to draw the court's attention to

 decisions which may have been overlooked by the court, not those which were overlooked by

 counsel”). Plaintiffs are correct that Defendants have now provided more robust arguments and

 multiple case cites in support of their arguments, neither of which were part of their Motion to

 Dismiss or subsequent Reply, and which is not allowed when arguing this Motion. (See ECF Nos.

 78, 80, 89–90.)

        Accordingly, Defendants’ Motion for Reconsideration is DENIED.

 IV.    CONCLUSION

        For the reasons set forth above, and for good cause appearing, Defendants’ Motion for

 Reconsideration (ECF No. 89) is DENIED. An appropriate order follows.




 Date: April 08, 2025                                   /s/ Brian R. Martinotti
                                                        HON. BRIAN R. MARTINOTTI
                                                        UNITED STATES DISTRICT JUDGE




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