Azad v Jenner and the Common Enterprise Pleading Question in Memecoin Class Actions
A federal dismissal on Howey's common enterprise element and what it leaves standing for memecoin class actions
A federal judge has dismissed the federal securities claims arising from Caitlyn Jenner’s JENNER memecoin. Public reporting on the order indicates that the complaint failed at the ‘common enterprise’ stage of the Howey analysis. The ruling matters less for Jenner than for the pleading architecture of memecoin class actions. The court’s reasoning and what it declined to decide, will shape the next wave of memecoin litigation.
The JENNER memecoin was launched on Solana on 26 May 2024 and on Ethereum in late May and early June of that year. Promotion ran through Caitlyn Jenner’s social channels, including posts on X using AI-generated imagery that suggested profit potential. The Solana token peaked at a market capitalisation of around $43 million and collapsed within weeks. The Ethereum version repeated the pattern on a smaller scale. Purchasers brought a putative class action in November 2024, pleading that the offerings were unregistered securities under Sections 5 and 12(a)(1) of the Securities Act 1933 and seeking rescission and damages. The Second Amended Complaint was the pleading before Blumenfeld J on the motion to dismiss. The action sits in a first wave of federal securities class actions against celebrity-promoted memecoin launches, alongside the pending Hawk Tuah action in the Eastern District of New York.
The ruling
In Naeem Azad et al v Caitlyn Jenner et al,1 Judge Stanley Blumenfeld Jr of the US District Court for the Central District of California entered an order granting in part the defendants’ motion to dismiss the Second Amended Complaint and a separate final judgment on 16 April 2026. Federal securities claims under Sections 5(a), 5(c) and 12(a)(1) of the Securities Act were dismissed with prejudice as to the lead plaintiff, Lee Greenfield. The court declined to exercise supplemental jurisdiction over the common-law fraud and quasi-contract claims, which were dismissed without prejudice. The case was terminated the same day.
The class action had been commenced in November 2024 following the launch of JENNER on Solana on 26 May 2024 and the subsequent Ethereum launch in late May and early June 2024, followed by a collapse in market price. The plaintiffs relied on Jenner’s promotional activity across X, a 3% transaction tax on the Ethereum-based token and promised buyback and exchange-listing efforts.
The doctrinal move
The court’s reasoning is disciplined. Public reporting on the order indicates that Blumenfeld held the Second Amended Complaint failed to plead horizontal commonality under SEC v W J Howey Co.2 The pleaded features, celebrity promotion, AI-generated imagery, a 3% transaction tax and buyback and listing promises, did not show investors had agreed to split profits. Because common enterprise was not made out, the court did not need to consider whether profits were expected from the efforts of others.
The ruling turns on Howey, not on the SEC staff statement of 27 February 2025.3 That statement is expressly non-binding by its own terms, and Commissioner Crenshaw publicly contested its analytical basis the same day.4 What Blumenfeld has done is apply the doctrine and the order will travel beyond the case for that reason.
The contrast with the Hawk Tuah litigation is instructive.5 That action, pending in the Eastern District of New York, alleges a pre-sale, airdrops and whitelists, a 17% strategic allocation routed through an offshore structure and the use of pooled funds for development and marketing. Those allegations present a more elaborate distribution structure than the allegations in Azad v Jenner and will be analysed on different facts. Common enterprise may be pleaded differently where purchasers’ contributions are said to have been pooled for a common purpose beyond the act of purchase.
The comparators and what survives
Under Regulation (EU) 2023/1114 (MiCA), crypto-assets without an identifiable issuer fall outside the Title II white paper obligations.6 Crypto-asset service providers handling distribution remain regulated under Title V. MiCA supplies a taxonomy of asset-referenced tokens, e-money tokens and other crypto-assets. Which category a given memecoin falls into turns on the token’s features and its manner of offer and sale, not on branding.
In the UK, financial promotions for qualifying cryptoassets are already within scope of the financial promotion regime.7 The wider UK cryptoasset regulatory regime is expected to activate on 25 October 2027, with the Consumer Duty extending to authorised cryptoasset firms.8 The FCA’s January 2026 Consumer Duty consultation and associated materials focus on clearer risk communication and appropriateness testing for the sector as a whole.
The narrower proposition is the right one. Azad v Jenner makes common enterprise a more visible pleading vulnerability in celebrity memecoin cases. It does not foreclose different outcomes on different records and differently structured token sales will be analysed on their own facts. What survives across the class action docket is state consumer protection, common law fraud and untested arguments over arbitration clauses embedded in custody and wallet terms. Memecoin litigation will migrate rather than disappear.
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Footnotes
1. Naeem Azad et al v Caitlyn Jenner et al, Case No. 2:24-cv-09768-SB-JC (CD Cal), Final Judgment, 16 April 2026 (Blumenfeld J). The final judgment records that a same-day order was entered dismissing the federal securities claims and declining supplemental jurisdiction over the common-law fraud and quasi-contract claims.
2. SEC v W J Howey Co, 328 US 293 (1946).
3. SEC Division of Corporation Finance, Staff Statement on Meme Coins (27 February 2025). The statement records that its view is not dispositive and that determinations depend on the specific facts and the manner of offer and sale.
4. Commissioner Caroline A Crenshaw, Response to Staff Statement on Meme Coins: What Does it Meme? (27 February 2025).
5. See class action complaint against the promoters of $HAWK, pending in the Eastern District of New York (commenced December 2024). Pleading detail drawn from public case materials and firm disclosures.
6. Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets; ESMA Questions and Answers on MiCA (February 2026).
7. FCA Policy Statement PS23/6 and subsequent supervisory materials on the financial promotion regime for qualifying cryptoassets.
8. Financial Conduct Authority, A new regime for cryptoasset regulation; statutory instrument laid before Parliament on 4 February 2026; regime expected to activate on 25 October 2027. FCA consultation papers on the Consumer Duty for cryptoasset firms published in January 2026.