23-184-cv

Louis Oberlander v. Coinbase Global Inc.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY 

ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF 

APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER 

IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN 

ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY 

ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. 

At a stated term of the United States Court of Appeals for the Second Circuit, held at 

the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, 

on the 5th day of April, two thousand twenty-four. 

PRESENT: 

PIERRE N. LEVAL, 

REENA RAGGI, 

JOSEPH F. BIANCO,

Circuit Judges. 

_____________________________________ 

LOUIS OBERLANDER, on behalf of himself and 

all others similarly situated, CHRISTOPHER 

UNDERWOOD, on behalf of himself and all others 

similarly situated, HENRY RODRIGUEZ, 

Plaintiffs-Appellants, 

 

ZENEYDA PATIN, on behalf of themselves 

and all others similarly situated,

 

 Plaintiff, 

v. 23-184-cv

COINBASE GLOBAL INC., COINBASE, INC., 

BRIAN ARMSTRONG,

Defendants-Appellees. 

_____________________________________ 
2 

FOR PLAINTIFFS-APPELLANTS: JORDAN A. GOLDSTEIN, Selendy Gay PLLC,

New York, New York (Steven L. Bloch, Silver 

Golub & Teitell LLP, Stamford, Connecticut, on 

the brief). 

FOR DEFENDANTS-APPELLEES: LARA A. FLATH (Jay B. Kasner, Alexander C. 

Drylewski, and Abigail E. Davis, on the brief),

Skadden, Arps, Slate, Meagher & Flom LLP, 

New York, New York. 

Appeal from a judgment of the United States District Court for the Southern District of 

New York (Paul A. Engelmayer, Judge). 

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND 

DECREED that the judgment, entered on February 1, 2023, is REVERSED in part and

AFFIRMED in part. 

Plaintiffs-Appellants Louis Oberlander, Christopher Underwood, and Henry Rodriguez

(collectively, “Plaintiffs”) appeal from a judgment dismissing their amended complaint, pursuant 

to Rule 12(b)(6) of the Federal Rules of Civil Procedure, against Defendants-Appellees Coinbase 

Global, Inc., Coinbase, Inc., and Brian Armstrong (collectively, “Coinbase”). Coinbase operates 

online trading platforms where users can buy and sell cryptocurrencies, also known as cryptoassets. The amended complaint asserts federal claims under Sections 5, 12(a)(1), and 15 of the 

Securities Act of 1933 (the “Securities Act”), 15 U.S.C. §§ 77e(a), 77e(c), 77l(a)(1), 77o(a); and 

Sections 5, 15(a)(1), 20(a), and 29(b) of the Securities Exchange Act of 1934 (the “Exchange 

Act”), 15 U.S.C. §§ 78e, 78o(a)(1), 78t(a), 78cc(b), on behalf of a nationwide class consisting of 

all persons or entities who bought or sold certain crypto-assets (the “Tokens”) on the Coinbase 

trading platforms between October 8, 2019 and the filing of the amended complaint on March 11, 
3 

2022. The amended complaint also asserts state law claims under the securities laws of California, 

Florida, and New Jersey on behalf of subclasses of citizens of those three states. We review a 

dismissal under Rule 12(b)(6) de novo, accepting all factual allegations in the complaint as true, 

and drawing all reasonable inferences in the plaintiff’s favor. ATSI Commc’ns, Inc. v. Shaar Fund, 

Ltd., 493 F.3d 87, 98 (2d Cir. 2007). In doing so, we assume the parties’ familiarity with the 

underlying facts, the procedural history of the case, and the issues on appeal, which we reference 

only as necessary to explain our decision. 

The amended complaint asserts two claims under the Securities Act: one against Coinbase 

Global, Inc. and Coinbase, Inc., for the offer and sale of unregistered securities under Sections 5 

and 12(a)(1) of the Securities Act; and one against Coinbase Global, Inc. and Brian Armstrong, 

for control-person liability under Section 15 of the Securities Act, based on the violations in Count 

One. Section 12(a)(1) of the Securities Act provides that “[a]ny person who[] offers or sells a 

security in violation of [Section 5 of the Securities Act] . . . shall be liable . . . to the person 

purchasing such security from him, who may sue either at law or in equity in any court of 

competent jurisdiction, to recover the consideration paid for such security with interest thereon 

. . . .”1

 15 U.S.C. § 77l(a)(1). Section 5(c) provides that “[i]t shall be unlawful for any person, 

directly or indirectly, to make use of any means or instruments of transportation or communication 

in interstate commerce or of the mails to offer to sell or offer to buy . . . any security, unless a 

registration statement has been filed as to such security . . . .” Id. § 77e(c). Importantly, “the list 

1

 Coinbase does not contest for purposes of the motion to dismiss that the Tokens are “securities” under 

the Securities Act, as well as the Exchange Act, but reserves the right (as it did in the district court) to 

address that issue should Plaintiffs’ claims survive the motion to dismiss. 
4 

of potential defendants in a [S]ection 12(a)([1]) case is governed by a judicial interpretation of 

[S]ection 12 known as the ‘statutory seller’ requirement.” In re Morgan Stanley Info. Fund Sec. 

Litig., 592 F.3d 347, 359 (2d Cir. 2010).2 Under the Supreme Court’s decision in Pinter v. Dahl, 

486 U.S. 622 (1988), a defendant is a “statutory seller” governed by Section 12(a)(1) if it either

(1) “passed title, or other interest in the security, to the buyer for value,” id. at 642 (analogizing 

the contemplated “buyer-seller relationship” to “traditional contractual privity”), or (2) 

“successfully solicit[ed] the purchase [of a security], motivated at least in part by a desire to serve 

[its] own financial interests or those of the securities[’] owner,” id. at 647. 

Here, the district court relied on the initial complaint and the December 2021 version of 

the Coinbase User Agreement (the “December 2021 User Agreement”)3 to find that Coinbase did 

not hold title to the Tokens that Plaintiffs purchased and, thus, was not a statutory seller subject to 

liability under prong one of Pinter. See Underwood v. Coinbase Glob., Inc., 654 F. Supp. 3d 224, 

236–38 (S.D.N.Y. 2023). More specifically, although the amended complaint does not reference 

any user agreement—and specifically alleges that privity was solely between Coinbase and 

Plaintiffs, and that Coinbase held title to the Tokens that were the subject of the transactions at 

issue—the district court “decline[d] to credit the [amended complaint’s] allegations as to privity 

and title” because it found that those allegations contradicted certain allegations in the initial 

complaint and provisions of the December 2021 User Agreement, which the district court found

2

 Although the Morgan Stanley decision analyzed Section 12(a)(2) of the Securities Act, we have also 

applied the statutory seller requirement to claims arising under Section 12(a)(1). See Cortec Indus., Inc. v. 

Sum Holding L.P., 949 F.2d 42, 49 (2d Cir. 1991). 

3

 The parties agree that the district court relied upon the December 2021 version of the user agreement 

when it erroneously referred to the December 2020 version as the relevant agreement. 
5 

was incorporated by reference in the initial complaint. Id. at 238. Concluding that Plaintiffs 

likewise failed to allege solicitation under prong two of Pinter, the district court dismissed the 

Securities Act claims.4 

The district court similarly relied in part on the allegations in the initial complaint and the 

December 2021 User Agreement in dismissing the Exchange Act claims against Coinbase Global, 

Inc. and Coinbase, Inc. As relevant here, Section 29(b) provides that “[e]very contract made in 

violation of any provision of this chapter or of any rule or regulation thereunder, and every contract

. . . the performance of which involves the violation of, or the continuance of any relationship or 

practice in violation of, any provision of this chapter or any rule or regulation thereunder, shall be 

void . . . .” 15 U.S.C. § 78cc(b). Plaintiffs alleged that each transaction involving the purchase or 

sale of any Token constituted a separate contract for purposes of Section 29(b). After finding that

the amended complaint did not “identify any transaction-specific contract,” Underwood, 654 F. 

Supp. 3d at 241, the district court concluded that Plaintiffs’ initial complaint precluded them, in 

any event, from pursuing this theory: 

As pled, the only contract capable of rescission here under Section 29(b) is the User 

Agreement. Plaintiffs’ initial Complaint is again telling on this point, on its own 

terms and insofar as it incorporates by reference the User Agreement, as reviewed 

above. The Complaint expressly alleges that “Coinbase entered into contracts via 

the Coinbase User Agreement, with Plaintiffs and the members of the Class and 

Subclasses, pursuant to which Plaintiffs purchased Digital Asset Securities through 

Coinbase and paid Coinbase fees for the use of its securities exchanges.” Compl. 

¶ 273 (emphasis added). This allegation destroys the [amended complaint’s]

Exchange Act claims, insofar as it tracks, virtually verbatim, the statutory standard. 

It is again no escape for plaintiffs to have filed an Amended Complaint that excises 

all references to the User Agreement, for the reasons above[.] By stripping away 

all references to the User Agreement, the [amended complaint] is able to add 

4

 Because of the dismissal of Plaintiffs’ claims under Sections 5 and 12(a)(1), the district court also 

dismissed the Section 15 claim for control-person liability, which was premised upon the alleged primary 

violation. 
6 

Exchange Act claims permitting rescission. But once plaintiffs’ earlier allegations 

in the Complaint as to the same transactions regarding the Tokens are treated as 

cognizable, the [amended complaint’s] bid to pursue claims for rescission based on 

a course of dealings not involving the User Agreement becomes unsustainable. 

Underwood, 654 F. Supp. 3d at 241–42.5

On appeal, as a threshold matter, Plaintiffs argue that the district court erred in relying on 

allegations in the initial complaint and provisions in the December 2021 User Agreement to 

dismiss their federal claims because, on a motion to dismiss, a district court must “look only to the 

allegations in [the plaintiff’s] most recent complaint as it is well established that an amended 

complaint ordinarily supersedes the original, and renders it of no legal effect.” Dluhos v. Floating 

and Abandoned Vessel, Known as New York, 162 F.3d 63, 68 (2d Cir. 1998) (internal quotation 

marks and citations omitted). While Coinbase contends that the district court properly discredited 

the allegations in the amended complaint that contradicted the initial complaint and the December 

2021 User Agreement incorporated therein, Plaintiffs argue that the district court possesses no 

such discretion under our precedents. 

As to the district court’s reliance on allegations in the initial complaint, we have long held 

that an allegation in a superseded pleading “ceases to be a conclusive judicial admission,” even as 

it may remain “competent evidence” for submission to the factfinder. Kunglig Jarnvagsstyrelsen 

v. Dexter & Carpenter, Inc., 32 F.2d 195, 198 (2d Cir. 1929); see Tho Dinh Tran v. Alphonse Hotel 

Corp., 281 F.3d 23, 32 (2d Cir. 2002) (explaining that “[a] statement in a withdrawn complaint 

that is superseded by an amended complaint without the statement is no longer a conclusive 

judicial admission,” although “the factfinder may very well find that such a contradictory 

5

 Because of a lack of a primary violation under the Exchange Act, the district court similarly dismissed 

the Section 20 claim for control-person liability. 
7 

statement reduces the credibility of the witness”), overruled in part on other grounds by Slayton 

v. Am. Express Co., 460 F.3d 215 (2d Cir. 2006).6 This principle obtains even where an amended 

pleading is inconsistent with the original. See McCray v. Lee, 963 F.3d 110, 119 (2d Cir. 2020)

(“[E]ven if plaintiff’s statements in an earlier complaint are determined to be inconsistent with 

allegations in the superseding complaint, if not repeated they are not part of the operative 

complaint. Though the prior statements may be admissible against the plaintiff in later stages of 

the proceedings as admissions, consideration of a motion under Rule 12(b)(6) is limited to the 

contents of the operative complaint and documents attached to it or incorporated into it by 

reference.” (citations omitted)).

As to the December 2021 User Agreement, Coinbase argues that it was properly considered 

because, inter alia, it was integral to the amended complaint. See Chambers v. Time Warner, Inc., 

282 F.3d 147, 152–53 (2d Cir. 2002) (“[T]he complaint is deemed to include any written 

instrument attached to it as an exhibit or any statements or documents incorporated in it by 

reference. Even where a document is not incorporated by reference, the court may nevertheless 

consider it where the complaint relies heavily upon its terms and effect, which renders the 

document integral to the complaint.” (internal quotation marks and citations omitted)). Plaintiffs 

point out, however, that “[t]he [a]mended [c]omplaint does not mention, attach, or refer to any 

version of the user agreement.” Appellants’ Br. at 37. Plaintiffs further argue that no version of 

6

 Several of our sister circuits and leading commentators agree. See, e.g., West Run Student Hous. Assocs., 

LLC v. Huntington Nat’l Bank, 712 F.3d 165, 171 (3d Cir. 2013); InterGen N.V. v. Grina, 344 F.3d 134, 

145 (1st Cir. 2003); 188 LLC v. Trinity Inds., Inc., 300 F.3d 730, 736 (7th Cir. 2002); Shell v. Parrish, 448 

F.2d 528, 530 (6th Cir. 1971); see also Wright & Miller, Federal Practice and Procedure § 1476 (3d ed.) 

(“[A]llegations in a pleading that has been withdrawn may be allowed into evidence as an admission of the 

party, but ordinarily must be offered in evidence if they are to be used for this purpose.”).
8 

the user agreement is integral to the amended complaint because they did not rely upon the terms 

and effect of any user agreement in support of their claims. 

We need not resolve this threshold issue because we conclude that, even assuming 

arguendo that any user agreement was properly considered by the district court on the motion to 

dismiss, the district court did not properly assess which version of the user agreement would be 

applicable to Plaintiffs’ claims, and the differing language in the various user agreements that 

plausibly apply to Plaintiffs’ claims precludes resolution of the title and privity issues on a motion 

to dismiss. See DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010) (emphasizing 

that “even if a document is integral to the complaint, it must be clear on the record that no dispute 

exists regarding the authenticity or accuracy of the document” and “[i]t must also be clear that 

there exist no material disputed issues of fact regarding the relevance of the document” (internal 

quotation marks and citation omitted)); see also Goel v. Bunge, Ltd., 820 F.3d 554, 560 (2d Cir. 

2016) (cautioning against “the improper transformation of the Rule 12(b)(6) inquiry into a 

summary-judgment proceeding—one featuring a bespoke factual record, tailor-made to suit the 

needs of [the movants]”). 

The district court acknowledged that Coinbase “periodically updated and revised the user 

agreement,” but considered only the December 2021 version because it was “in effect during the 

Class Period” and “contain[ed] substantially similar relevant language” to the other versions. 

Underwood, 654 F. Supp. 3d at 236 n.5. However, other versions of the user agreement in effect 

during the class period in fact contained materially different language. For example, the district 

court relied in part on language in Section 3.2 of the December 2021 User Agreement, stating, 

“[w]hen you purchase (buy) or sell Digital Currency on the Coinbase Site, you are not buying 
9 

Digital Currency from Coinbase or selling Digital Currency to Coinbase.” Underwood, 654 F. 

Supp. 3d at 237. However, different language in the same section of the version in effect at the

beginning of the class period suggested the opposite. See App’x at 661 (October 2019 User 

Agreement) (“When you purchase (buy) Digital Currency from Coinbase . . . this transaction is 

intended to effect a sale of Digital Currency.” (emphasis added)); see also id. at 702 (December 

2019 User Agreement). In light of the varying language in different versions of the user agreement

in effect during the class period, the district court could not treat the December 2021 version as 

conclusive for purposes of evaluating the legal sufficiency of the amended complaint. In short, 

based on the allegations in the amended complaint, Plaintiffs have plausibly alleged claims under 

Section 12(a)(1) that survive a motion to dismiss under prong one of Pinter and we conclude that 

the district court erred in dismissing those claims.7

We reach a different conclusion, however, with respect to the Exchange Act claims. The 

district court correctly determined that the amended complaint failed to “identify any transactionspecific contract” capable of rescission under Section 29. Underwood, 654 F. Supp. 3d at 241. 

The amended complaint only included a variable fee schedule and stated generally that class 

members purchased various tokens on “one or more occasions.” App’x at 812. Plaintiffs suggest 

that the absence of any allegations regarding the date or material terms of any transaction-specific 

7

 Plaintiffs also note that we have held that “privity [is] a legal conclusion” and argue that, even if the 

December 2021 User Agreement is the applicable contract, its language is not controlling as to legal issues 

such as title and privity at this stage. See Amalgamated Sugar Co. v. NL Indus., Inc., 825 F.2d 634, 640 

(2d Cir. 1987) (internal quotation marks and citation omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 

(2009) (“[T]he tenet that a court must accept as true all of the allegations contained in a complaint is 

inapplicable to legal conclusions.”). We need not resolve this question given our conclusion that Plaintiffs 

adequately pled that Coinbase was a statutory seller under prong one of Pinter. Nor do we reach Plaintiffs’ 

argument that the district court further erred in finding that the amended complaint failed to plead 

adequately that Coinbase was a statutory seller under prong two of Pinter. 
10 

contract is not fatal to their Section 29 claims because the terms are “evident” from the amended 

complaint’s allegations that Plaintiffs “paid money to Coinbase in exchange for the Tokens.” 

Appellants’ Reply at 27. We disagree. The repetitive, conclusory allegations that Plaintiffs “had 

one or more losing transactions” in various Tokens are insufficient to plausibly allege a contract 

that gives rise to rescission under Section 29. App’x at 811 ¶ 85 (1INCH), 812 ¶ 90 (AAVE), 813 

¶ 95 (ACH), 822 ¶ 135 (AGLD), 828 ¶ 163 (ALGO), 835 ¶ 179 (AMP), 836 ¶ 184 (ANKR), 837 

¶ 189 (ARPA) et alia; see also Kirschner v. JP Morgan Chase Bank, N.A., 79 F.4th 290, 303 (2d 

Cir. 2023) (“[C]onclusory allegations are not entitled to the assumption of truth, and a complaint 

will not survive a motion to dismiss unless it contains sufficient factual matter, accepted as true, 

to state a claim that is plausible on its face.” (internal quotation marks and citation omitted)). 

Accordingly, the district court properly dismissed the Section 29 claims.8

 

Finally, with respect to the state law claims, the district court erred in dismissing those 

claims under the discretionary doctrine of supplemental jurisdiction under 28 U.S.C. § 1367(c)(3). 

The amended complaint does not invoke supplemental jurisdiction for the state law claims, but 

rather properly pled original diversity jurisdiction under the Class Action Fairness Act of 2005, 28 

U.S.C. § 1332(d)(2). See L.S. v. Webloyalty.com, Inc., 954 F.3d 110, 117 (2d Cir. 2020) (holding 

it was error to dismiss a state law claim for lack of subject matter jurisdiction, after declining to 

exercise supplemental jurisdiction, where the complaint adequately pled an alternative basis for 

8

 Because of a lack of a primary violation under the Exchange Act, the district court properly dismissed 

the Section 20 claim for control-person liability. See Ark. Pub. Emps. Ret. Sys. v. Bristol-Myers Squibb 

Co., 28 F.4th 343, 356 (2d Cir. 2022) (“To state a claim under Sections 20(a) and 20A of the Exchange Act, 

a plaintiff must allege a primary violation . . . .”). We also conclude that the district court properly denied 

leave to amend with respect to the Exchange Act claims because Plaintiffs did not demonstrate “that the 

complaint’s defects can be cured.” Porat v. Lincoln Towers Cmty. Ass’n, 464 F.3d 274, 276 (2d Cir. 2006)

(per curiam). 
11 

original jurisdiction under the Class Action Fairness Act). Indeed, Coinbase concedes that the 

district court had original jurisdiction to consider Plaintiffs’ state law claims.9 Because the district 

court had original jurisdiction over Plaintiffs’ state law claims, it should consider them in the first 

instance on remand. 

* * * 

We have considered the parties’ remaining arguments and find them to be without merit. 

Accordingly, we REVERSE in part and AFFIRM in part the judgment of the district court 

and REMAND for further proceedings consistent with this order. 

FOR THE COURT:

Catherine O’Hagan Wolfe, Clerk of Court 

9

 Coinbase nevertheless argues that we should affirm the dismissal of the state claims because, “like Section 

29(b), each relevant state statute requires contractual privity,” and, “[p]ursuant to the terms of the [User 

Agreement], users transact with each other and not with [Coinbase].” Appellees’ Br. at 56-57. But “[i]t is 

our general policy that the trial court should consider arguments—and weigh relevant evidence—in the first 

instance.” Ark. Tchr. Ret. Sys. v. Goldman Sachs Grp., Inc., 11 F.4th 138, 143 (2d Cir. 2021) (internal 

quotation marks omitted).