Judge Orrick Rules A Decentralized Autonomous Organization May Be Sued As An Unincorporated Association

Gertrude Stein is famously quoted as having written, "There is no there there".  Although Ms. Stein intended a different meaning to the expression, the same statement might be used to describe a "decentralized autonomous organization" or DAO.   According to the Securities and Exchange Commission, a DAO is a "term used to describe a 'virtual' organization embodied in computer code and executed on a distributed ledger or blockchain"See Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO
In a recent ruling, Judge William H. Orrick considered whether it is possible to sue and serve a DAO.  Commodity Futures Trading Comm'n v. Ooki DAO, 2022 WL 17822445.  The case involves a complaint filed by the Commodity Futures Trading Commission alleging that Ooki DAO violated the Commodity Exchange Act by enabling users to engage in retail commodity transactions without abiding by CEA requirements, including registering its "platform' and conducting certain customer due diligence.  The CFTC contends that Ooki DAO was structured intentionally to render its activities "enforcement proof," including by erecting significant obstacles to traditional service of process.  According to Judge Orrick, "Several amici represented by national law firms claim that the CFTC cannot serve Ooki DAO, and if it can, has not done so properly". 
Judge Orrick disagreed, finding that the CFTC had sufficiently alleged that Ooki DAO was an unincorporated association under California law.  Section 18305(a) of the California Corporations Code defines an unincorporated association as "an unincorporated group of two or more persons joined by mutual consent for common lawful purpose, whether organized for profit or not".   He found that for purposes of the statute, the token holders were "persons", that the token holders were joined by mutual consent, and that voting or not voting constitute a lawful purpose.  
Attentive readers may recall that I have devoted several posts over the years to California's Unincorporated Associations Law, including: