California Court Allows Cryptocurrency Theft Victim to Pursue Early Discovery in Lawsuit
On Monday, April 8, 2024, the US District Court for the Central District of California granted in part a plaintiff’s request for expedited discovery in a case involving the theft of cryptocurrency.
Damien Sabella filed a lawsuit last year against Doe defendants for unauthorized access to his Coinbase account and the conversion of funds into Bitcoin. According to court documents, Sabella is unable to determine the identities of the individuals responsible for stealing cryptocurrency from his account. He hired private investigators, but they were also unable to ascertain the identities.
To move the case forward, Sabella filed an ex parte application seeking early discovery to obtain information from third parties like Coinbase, Binance, and communications companies. He needed the court’s approval because discovery is usually not permitted until after the parties hold an initial conference.
Sabella argued expedited relief was necessary because the deadline to identify and serve the Doe defendants was approaching. If they remained unidentified, the court would dismiss the case. Judge Maria Audero agreed Sabella did not cause the need for ex parte relief and would be prejudiced by normal motion procedures due to time constraints.
In her ruling, Judge Audero evaluated four factors to determine if “good cause” existed for early discovery. She found Sabella sufficiently identified the Doe defendants, recounted his previous investigative steps, showed the complaint could withstand a motion to dismiss, and subpoenas targeted at electronic records would likely reveal identifying information.
The judge granted Sabella’s requests to issue subpoenas to companies that may have records like IP addresses, Bitcoin wallet information, and phone numbers connected to the theft. However, she disallowed one request seeking bank account information, finding it was not necessary to identify defendants at this stage.
The next step for Sabella is to serve the approved subpoenas and file status reports on the results every 60 days. If he uncovers identifying details, it could allow him to name and serve the actual individuals responsible for the cryptocurrency theft.
Please contact BlockTribune for access to a copy of this filing.
