The court also rejected vertical commonality. “Because Greenfield does not plausibly allege either horizontal or vertical commonality, he has not alleged the existence of a common enterprise,” Blumenfeld wrote.

That finding let the court avoid Howey’s third prong. “The Court therefore need not determine whether he has plausibly alleged the third prong of the Howey test—whether investors expected profits solely from Jenner’s efforts.” In practical terms, the order suggests that allegations of hype and marketing alone may not carry a federal securities claim if the complaint cannot tie tokenholders together through commonality.

What the Plaintiff Alleged: $40K+ Losses, Celebrity Promotion, Solana vs. Ethereum Buys

Greenfield alleged he lost more than $40,000 investing in $JENNER and argued the launch amounted to an unregistered securities sale. He claimed Jenner used her celebrity status to “hype the token and suggested that her promotion efforts would cause its value to rise.”

The case’s timeline matters because it spans chains. Greenfield said he first bought $JENNER on Solana in May 2024, then bought it on Ethereum a few days later. The order’s discussion centers on the Ethereum-based token’s security status, which makes it risky for traders to overgeneralize the ruling across chain deployments without seeing how later filings treat the Solana version.

The lawsuit was initially filed at the end of 2024 against Jenner and her manager, Sophia Hutchins, who died in July 2025. Defendants argued the Ethereum-based $JENNER token was not a security and also argued Hutchins was “not a statutory seller.”

The order referenced Jenner’s X posts as part of the allegations, including one with an AI-generated image of Jenner in a “JENNER ETH” T-shirt and a crowd sign reading “LETS MAKE EVERYONE RICH!”

Signals Traders Should Track After the $JENNER Howey Ruling

The next market-relevant question is whether the plaintiff can re-plead. Watch for any attempt to amend again, refile, or appeal with new allegations aimed at horizontal or vertical commonality, along with any deadlines that follow from the order.

The litigation overhang is also not cleanly gone. The judge said remaining non-federal claims can be resolved in state court, so traders should track any state-court filings or rulings that keep reputational or financial pressure on the defendants even after the federal securities theory was rejected.

Chain-specific clarity is another open variable. Subsequent filings may need to address whether the Solana-based $JENNER is treated the same as the Ethereum-based token in this dispute, especially given the complaint’s cross-chain purchase timeline.

Finally, watch for copycat celebrity-memecoin complaints that cite or try to distinguish this “common enterprise” reasoning. If plaintiffs start drafting around commonality from day one, the pleading-stage advantage seen here may narrow.

Marcus Hale’s Take: What This Pleading-Stage Howey Win Does (and Doesn’t) Change for Memecoins

This is a defense win on the Howey “common enterprise” prong, and it matters because it ends the federal securities theory without the court ever stress-testing the promotional-efforts narrative. That’s a reminder that celebrity hype is not automatically a securities hook if the complaint can’t connect holders through horizontal or vertical commonality.

The threshold that matters is whether future plaintiffs can plead a tighter enterprise theory, or whether this becomes a repeat pattern where the federal claim dies early and the fight shifts to state court. If that dynamic holds, the setup starts to look structural rather than narrative-driven, and the practical impact is a narrower federal pathway for suing celebrity memecoins unless commonality can be credibly alleged.

Sources

• U.S. District Court (C.D. Cal.), order excerpts quoted in coverage