Court orders Ripple and SEC to agree on schedule to end XRP lawsuit

Rick Steves

The most awaited summary judgment in the SEC v. Ripple case is likely to be the one on the fourth affirmative defense, also known as the Fair Notice Defense. 

The New York Southern District Court has ordered the SEC and Ripple to come to an agreement on the briefing schedule for summary judgment motions.

“The parties are directed to meet and confer as to a briefing schedule for summary judgment motions. The parties shall submit a joint proposed schedule for the Court’s approval no later than one week after the SEC’s submission”, Magistrate Sarah Netburn ordered.

The abovementioned “SEC’s submission” refers to the plaintiff’s request to inform the court of its position on whether any additional discovery is required. The motion must be submitted within a week of the filing of the Individual Defendants’ upcoming answer, which is due April 8, 2022.

This places the SEC’s position on additional discovery to be filed as late as April 15, 2022, and the Joint Proposed Scheduling Order to be filed on April 22, 2022.

Ripple wants XRP lawsuit to end sooner rather than later

A recent motion by the SEC disclosed that Ripple proposed a summary judgment schedule with opening briefs and related fillings due in mid-May. Unsurprisingly, the SEC wants to schedule the summary judgment at a later date.

“The SEC believes that such a briefing schedule is premature, given that the Individual Defendants have yet to answer the complaint and plead affirmative defenses, and respectfully requests that the court direct the parties to meet and confer regarding a summary judgment schedule once the SEC has advised the court of its position on the need for additional discovery.”

The most awaited summary judgment in the SEC v. Ripple case is likely to be the one on the fourth affirmative defense, also known as the Fair Notice Defense.

The SEC failed to strike that defense in a major win for Ripple and individual defendants, who also saw the court stating its terms to eventually side with Ripple on fair notice.

In a previous court order, Judge Analisa Torres pointed out what critical factors may weigh in a future summary judgment on the Fair Notice defense: if XRP was or not sold as an investment and if Ripple has or not any relationship with the vast majority of XRP holders. Ripple denies both claims and, according to the court, it can make all the difference in terms of fair notice.

“If true, would raise legal questions as to whether Ripple had fair notice that the term “investment contract” covered its distribution of XRP, and the court may need to consider these questions more deeply”, said the court.

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