Hexin Global Limited v. Singularity Future Technology, Ltd.

Background

The order concerns three related actions:

- Hexin Global Limited et al. v. Singularity Future Technology, Ltd. et al., No. 22-cv-08160; - Jinhe Capital Limited v. Singularity Future Technology, Ltd., No. 22-cv-08538; and - St. Hudson Group LLC et al. v. Singularity Future Technology, Ltd. et al., No. 22-cv-10290.

At an initial pretrial conference on January 5, 2023, the parties consented to consolidation. The court consolidated the actions under Rule 42(a) of the Federal Rules of Civil Procedure and directed that the file be maintained under master file 22-cv-08160.

Stay in the Securities Actions

The defendants in Hexin Global and St. Hudson Group notified the court that they intended to move to dismiss the complaints. Because those actions asserted claims under the Securities Exchange Act of 1934, the court held that the Private Securities Litigation Reform Act required discovery and other proceedings to be stayed while the motions to dismiss were pending.

The court stated that the automatic stay included documents that either party had already produced to third parties, including government regulators. The court also noted that a party seeking to lift the stay must submit a motion explaining why the particular discovery is necessary to preserve evidence or prevent undue prejudice.

Jinhe Capital Scheduling Order

The court held that the Private Securities Litigation Reform Act did not apply to Jinhe Capital because that action involved claims for breach of the covenant of good faith and fair dealing, unjust enrichment, conversion, and quantum meruit. The court therefore found that no automatic stay applied to proceedings or discovery in Jinhe Capital, while noting that the defendant could move for a stay or protective order.

For Jinhe Capital, the court ordered that:

- Motions to amend or join additional parties be filed by February 6, 2023; - Initial disclosures under Rule 26(a)(1) be completed by January 19, 2023; - Initial document-production requests be served by January 27, 2023; and - Interrogatories under Local Rule 33.3(a) be served by January 27, 2023.

The court ordered that fact discovery in Jinhe Capital be completed no later than 180 days after any ruling sustaining, in whole or in part, the operative complaint alleging federal securities fraud in response to a motion to dismiss.

Ruling

The court consolidated the three actions, imposed the statutory stay on proceedings and discovery in the Hexin Global and St. Hudson Group actions, declined to apply that automatic stay to Jinhe Capital, and entered the stated scheduling deadlines. The court also ordered that any motions to dismiss in the three actions be filed by February 10, 2023, and directed the parties to submit a proposed schedule for briefing opposition and reply papers. Judge Lewis J. Liman signed the order.