Crypto Asset Fund, LLC et al v. Medcredits, Inc. et al

Filing 40

ORDER Denying Plaintiff's Application for Leave to File Motion for Reconsideration (Dkt. 33 ). Signed by Chief Judge Larry Alan Burns on 10/13/2020. (jdt)

Case 3:19-cv-01869-LAB-DEB Document 40 Filed 10/13/20 PageID.432 Page 1 of 3

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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CRYPTO ASSET FUND, LLC, et
al.,

Case No. 19-cv-1869-LAB-MDD

Plaintiff,
vs.

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MEDCREDITS, INC., et al.,

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ORDER DENYING PLAINTIFF’S
APPLICATION FOR LEAVE TO
FILE MOTION FOR
RECONSIDERATION [Dkt. 33]

Defendants.

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The Court’s March 30, 2020 Order granted Defendants’ Motion to

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Compel Arbitration and stayed the case. Dkt. 23. Plaintiffs Crypto Asset

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Funds, LLC, Timothy Enneking, and Kyle Chaykowski filed an Application for

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Leave to File a Motion for Reconsideration of that Order based on

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purportedly new evidence. Dkt. 33. For the reasons stated below, the Court

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DENIES the Motion.

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Motions for reconsideration “are disfavored and will be summarily

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denied” unless the moving party can point to new evidence, a change in

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controlling law, or a clear error in the Court’s earlier ruling. Standing Order in

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Civil Cases § 3(e). Plaintiffs’ Application contends reconsideration is

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warranted by new evidence: Defendants, who previously argued that the
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Case 3:19-cv-01869-LAB-DEB Document 40 Filed 10/13/20 PageID.433 Page 2 of 3

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Court should compel arbitration, now take contrary positions before the

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arbitrator. Dkt. 33 at 3-6.

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Defendants’ change of position isn’t new evidence that warrants

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reconsideration. New evidence may affect the factual premises of an order,

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but the same can’t be said of a changed litigation strategy. Here, the Motion

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to Compel was granted because the language of the Seed Round Agreement

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binds the parties to arbitration in case of a dispute, even as to questions of

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arbitrability. See Dkt. 23 at 7-11. This is still the case, even if Defendants are

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singing a different tune than they were before.

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Certainly, equitable concerns arise when a party successfully

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persuades one tribunal to adopt a position and then reverses course before

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a subsequent tribunal. See, e.g., New Hampshire v. Maine, 121 S. Ct. 1808,

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1814 (2001) (describing doctrine of judicial estoppel). But when that

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happens, the solution isn’t to set aside the prior order. Instead, the second

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tribunal decides whether the positions are inconsistent and whether the

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litigant should be held to its original position. See id.

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The Court DENIES the Application for Leave to File a Motion for

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Reconsideration. Nevertheless, the Court takes the opportunity to clarify its

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Order in one respect. Plaintiffs misunderstand that the Order required the

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Plaintiffs to commence a new arbitration proceeding, separate from the

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proceeding that was underway when Plaintiffs initiated this litigation. The

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Order recognized that the Seed Round Agreement gave the arbitrator the

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Case 3:19-cv-01869-LAB-DEB Document 40 Filed 10/13/20 PageID.434 Page 3 of 3

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“exclusive authority and jurisdiction to make all procedural and substantive

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decisions regarding a dispute.” Dkt. 23 at 9. Disputes over the joinder of

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claims fall within the scope of this arbitration provision.

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IT IS SO ORDERED.

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Dated: October 13, 2020
____________________________
HON. LARRY ALAN BURNS
United States District Judge

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