Ropes & Gray Litigation Team Wins Dismissal with Prejudice for Sequoia Capital and Kleiner Perkins
A Ropes & Gray litigation team representing Sequoia Capital and Kleiner Perkins Caufield & Byers won the dismissal with prejudice of a widely-publicized lawsuit brought by Think Computer Corporation against 11 venture capital firms and 14 of their leading Internet portfolio companies, including Facebook, Airbnb, and Dwolla and their investors. The suit alleged that, in violation of state and federal money transmission laws, these Internet companies hold and transmit funds on behalf of third parties without a license, and that a certain group of these companies’ investors willfully ignored the violations.
The Ropes & Gray motion to dismiss argued that there were insufficient allegations upon which to infer that any of the defendants had violated state and federal money transmission laws, that the plaintiff had not suffered a competitive injury, and that the federal court did not have subject matter jurisdiction over the claims, which were principally predicated on state law.
The United States District Court for the Northern District of California dismissed the case against all defendants without leave to amend, adopting the arguments advanced in the Ropes & Gray brief. The court was persuaded that the plaintiff had not alleged a cognizable injury and that there was no federal jurisdiction over the state law portions of the complaint.
The Ropes & Gray team included business and litigation partner Rocky Tsai (San Francisco).