Lee v. HDR Global Trading Limited

Background

Drew Lee sued HDR Global Trading Limited and other defendants, alleging claims under the Commodities Exchange Act based on trading in Bitcoin and Ethereum derivative products on BitMEX. The case was brought as a proposed class action. Brett Messieh had previously been a named plaintiff, but he was later dismissed, leaving Lee as the only named plaintiff.

Lee moved under Federal Rules of Civil Procedure 15, 20, and 21 to add Felix Lufkin as another named plaintiff and representative of the proposed class and to file a Proposed Third Amended Complaint. Lufkin had contacted interim class counsel in July 2024 and signed an engagement letter in September 2024. The defendants opposed the motion, arguing that Lee had not shown good cause to amend the case-management schedule and that adding Lufkin would prejudice them.

Court’s analysis

The court applied Rule 15’s standard for amending pleadings, which generally allows amendments when justice requires, along with Rule 20’s standard for permissive joinder. The court found good cause because Messieh had sought dismissal after the case-management plan was entered, and Lee promptly filed the motion after Lufkin engaged interim class counsel.

The court also found that Lufkin’s claims were substantially similar to Lee’s. Both allegedly purchased Bitcoin and Ethereum derivative products on BitMEX, suffered losses during the proposed class period, and experienced liquidations that they claimed resulted from deceptive practices and price manipulation. The court determined that the claims involved common questions of law and fact and were sufficiently connected to be resolved in one action.

The court rejected the defendants’ claimed prejudice. It reasoned that the need for additional discovery and responsive pleadings did not, by itself, justify denying amendment, and that the proposed pleading largely removed references to Messieh, added references to Lufkin, and adjusted certain allegations. The court also noted that the issue of the proper end date for the class period was not before it.

Disposition

The court stated that Lee’s motion was GRANTED IN PART and DENIED IN PART. It granted Lee leave to file the Third Amended Complaint by October 11, 2024, add Lufkin as a plaintiff, and revise the proposed class-period language so that the end date would be determined by the court rather than identified as “the present.” The defendants were ordered to answer within 30 days after the filing.

The court further ordered that the defendants’ earlier document requests and interrogatories would be treated as served on Lufkin as of October 3, 2024, with his responses and objections due 21 days later; that his initial disclosures include specified email and trading-account information; and that the September 11, 2024 discovery order apply to him.