Ripple Wins Minor Victory in
US Securities Class Action Lawsuit
A judge has actually ruled that a continuous class action lawsuit against Ripple must stay in federal court, potentially giving the platform a minor benefit going forward.
U.S. District Judge Phyllis Hamilton, of the Northern District of California, ruled Thursday that a class action suit filed versus Ripple and associated subsidiaries and individuals would not be shifted back to lower courts after attorneys for the business first relocated to district court last year.
A judge ruled that a class action suit versus Ripple must stay in federal court, potentially giving the company a small advantage. A judge has actually ruled that a continuous class action suit against Ripple needs to stay in federal court, potentially offering the payments firm a slight advantage going forward.
U.S. District Judge Phyllis Hamilton, of the Northern District of California, ruled Thursday that a class action claim submitted against Ripple, associated subsidiaries, and individuals would not be shifted back to lower courts after lawyers for the company first moved to district court in 2015.
This is a “minor but meaningful victory” for the firm, said Jake Chervinsky, Kobre Kim’s attorney.
Stephen Palley, a partner at Anderson Kill, formerly told CoinDesk that generally, business offenders in cases feel more comfy with federal courts, as lower court juries and judges are locally selected and hence might be more sympathetic to plaintiffs.
Chervinsky concurred, noting that “Ripple fought tough” to keeon Twitterp the case at the federal court level. The case centers around XRP. The complainants in the event allege that Ripple issued the cryptocurrency as an unregistered securities offering, a claim Ripple has frequently denied. Ripple Labs, its subsidiary XRP II, CEO Brad Garlinghouse and a number of other individuals have been named as defendants in the event.
Over The Long term
In spite of Ripple’s win on the jurisdictional question, “the case won’t go to trial for years, if it goes to trial at all, ” Chervinsky told CoinDesk via email. The lawsuit will have to move past several other stages, starting with a likely motion to dismiss.
“Ripple will argue that the complaint fails to state a legally cognizable claim as a matter of law, even assuming all the allegations in the complaint are true, ” he said.
If a judge rules against such a motion, or if Ripple decides not to file one, the plaintiffs can then file for class certification. Right now, Chervinsky explained, “the lawsuit is styled as a class action but technically does not become one until and unless the Court grants a motion for class certification.”
Only then can the discovery procedure begin, which would include plaintiffs and defendants exchanging files, addressing concerns and carrying out depositions. The case would still have to go through motions for summary judgment before the judge can figure out whether a trial is required.
It is entirely possible the case could conclude prior to this, nonetheless. Ripple and the complainants may decide to settle the case, though Chervinsky does not think this can happen in the instant future due to procedural roadblocks.
In particular, any settlement prior to class certification would lead to individual payments to the complainants presently connected to the lawsuit. This would not avoid any future suits from being submitted versus Ripple, and the financiers taking legal action against the firm would likely not recuperate much of the funds. Should the parties settle after class accreditation, members of the class would waive their rights to another suit, which the business would likely prefer.
“As a result, there isn’t much incentive for Ripple or the plaintiffs to settle the case before the class certification stage, ” Chervinsky commented.
He pointed out that while this case has been before the court system since May 2018, a minuscule amount of litigation has actually occurred. “Ripple still hasn’t had to file a substantive response to any of the plaintiffs’ complaints, ”Chervinsky said, adding:
“This demonstrates a few points: (1) Ripple’s litigation team seems comfortable delaying the case as long as possible; (2) assuming Ripple’s strategy is to delay, they are so far executing that strategy with great success; and (3) it will probably be a very long time – on the order of months or years – before this dispute is finally resolved.”
According to Thursday’s ruling, the parties now have 2 weeks to fulfill and determine how they might wish to proceed. The complainants have 30 days to submit a changed consolidated grievance, while Ripple has 30 days to file a movement to dismiss or notify the court that it does not intend to do so.