GMO Trust Obtains Dismissal of Lawsuit for Lack of Personal Jurisdiction

Cleary Gottlieb represented GMO-Z.com Trust Company Inc. (GMO Trust) in obtaining dismissal of a lawsuit in the Superior Court of California, County of San Francisco for lack of personal jurisdiction.

GMO Trust is the New York-based issuer of a stablecoin called GYEN that is tied to the value of the Japanese yen. Plaintiffs alleged that they suffered damages when the value of GYEN on the digital asset trading platform Coinbase broke parity from the yen.

On February 14, 2023, Judge Curtis E.A. Karnow granted GMO Trust’s motion to quash service of summons for lack of personal jurisdiction. The court held that the lawsuit had no relevant connection to California because GMO Trust did not exploit a market in California and its few contacts with California did not relate to the claims in the case. The court rejected plaintiffs’ argument that GYEN’s listing on Coinbase gave rise to jurisdiction in California, analogizing to established case law holding that listing on New York-based stock exchanges does not alone give rise to jurisdiction in New York.