Screengrab of Tezos website

SAN FRANCISCO — A state court judge on Monday called a temporary halt to discovery in one of the lawsuits targeting the entities behind the troubled Tezos initial coin offering with claims that they sold unregistered securities.

San Francisco Superior Court Judge Harold Kahn granted a motion to stay discovery brought by  California-based Dynamic Ledger Solutions, a company started by the husband and wife behind Tezos, Arthur and Kathleen Breitman. But Kahn said at a hearing Monday that the plaintiff could ask to lift the stay as the case is coordinated with another state court suit filed in San Mateo Superior Court.

“Why does it make sense to have what I’m assuming is the same case in three different courthouses?” asked Kahn, referring to the two state court cases and a third that’s proceeding in federal court before U.S. District Judge Richard Seeborg of the Northern District of California.

Tezos, the first blockchain company to be hit with civil claims alleging it issued unregistered securities, raised some $232 million in other cryptocurrency. But its ICO has been bogged down in technical delays. According to Coindesk, the Tezos blockchain finally launched in beta testing in late June.

At Monday’s hearing, Lucas Olts of Robbins Geller Rudman & Dowd said client Andrew Baker’s state court suit was the first against the Breitmans and other Tezos backers, but that it was “improperly removed” to federal court, resulting in more than a year of delays. Seeborg remanded Baker’s case to state court after the U.S. Supreme Court’s ruled in Cyan v. Beaver County Employees Retirement Fund that state courts maintain jurisdiction over class actions brought under the federal Securities Act of 1933.

“He’s pursued his case as vigorously as he can,” Olts said.

But Kahn replied, “The fact that Mr. Baker has done nothing wrong doesn’t mean that he has a right at this point to have his discovery responded to.”

Representing the Tezos defendants, Cooley’s Patrick Gibbs said that Baker’s lawyers were looking for “a back door to get discovery that they can’t get in the federal court.”

“We have three cases in three separate courts asserting the same claims based on the same facts,” said Gibbs, adding that his client didn’t want to negotiate the same discovery issues three times over.

Said Gibbs, “It’s not free to file responses. It costs money.”