SAN FRANCISCO  — The pioneering securities class action litigation over the Tezos blockchain project looks like it will be split into two separate proceedings, after a federal judge ruled that one of the cases should be sent back to state court.

U.S. District Judge Richard Seeborg of the Northern District of California, in an order Thursday evening, agreed with San Diego securities lawyer James Taylor-Copeland that his case—the first to be filed against Tezos over its $232 million initial coin offering—belongs back in San Francisco Superior Court.

Seeborg acknowledged that remanding the case “creates the risk that parallel state and federal proceedings could produce inconsistent (and even contradictory) conclusions regarding key questions of fact and law.” But the judge said he was bound to that result in light of the U.S. Supreme Court's ruling in Cyan v. Beaver County Employees Retirement Fund.

In Cyan, the high court held last month that state courts maintain jurisdiction over class actions brought under the federal Securities Act of 1933. Taylor-Copeland's case on behalf of an investor named Andrew Baker was filed in state court under that statute last fall.

The attorneys selected by Seeborg to lead a set of federal securities class actions against Tezos' founders and the foundation they established in Switzerland had objected to the case being divided, and alleged that Taylor-Copeland was working behind the scenes with other law firms who wanted to “hedge” their litigation positions.

Lead counsel LTL Attorneys and Hung G. Ta aren't giving up their fight to keep control over the litigation yet. A day prior to Seeborg's order, they filed a motion in his court to stay the state court proceeding under the All Writs Act and other statutes.

“A ship cannot have two captains,” they wrote, adding that the control they have been given under the Private Securities Litigation Reform Act ”would be frustrated if plaintiff Baker were
allowed to hijack the rudder and proceed with the Baker action in state court. ”

Neither Taylor-Copeland nor LTL Attorneys partner Enoch Liang immediately responded to emails seeking further comment Friday morning.