Ripple loses patience and wants court to sanction SEC
“A continuance would reward the SEC for its gamesmanship, and further prejudice Defendants.”
Ripple Labs and the individual defendants, Chris Larsen and Brad Garlinghouse, have filed a letter in further support of their Motion to Strike the SEC’s Metz Supplemental Expert Report, exploring the effect of Ripple news on the price of XRP.
“Dr. Metz failed to present “a complete statement of all opinions” that he “intended to express and the basis and reasons for them” in his initial report, as required by the Federal Rules of Civil Procedure”.
Since the SEC failed to make a necessary disclosure, “the party is not allowed to use that information or witness to supply evidence…at a trial, unless the failure was substantially justified or is harmless”, the defendants argued, adding that the plaintiff failed to prove either of those things.
Ripple added that the firm will suffer significant prejudice if discovery is reopened, not only for the resources allocated but also because of further delays to the resolution of the SEC v. Ripple lawsuit.
SEC’s “gamesmanship” necessitates sanctions
The defendants enumerated a list of reasons why the court should refuse the SEC’s supplemental expert report but the last one was pointier.
“A continuance would reward the SEC for its gamesmanship, and further prejudice Defendants. The SEC has already asked the Court for numerous extensions in this case that Defendants have vigorously opposed”, the letter stated.
“The SEC’s decision to wait until after the very last deposition scheduled in this case to file Dr. Metz’s new reply report necessitates sanctions. Rule 37 sanctions specifically serve several important purposes, such as ensuring that a “party will not benefit from its own failure to comply” and serving as “a general deterrent effect on the case at hand on other litigation. Both rationales apply here. And district courts are “not required to exhaust possible lesser sanctions” if a harsher remedy “is appropriate on the overall record.”
The SEC’s delays tactics are its best leverage against Ripple, which is looking to put the lawsuit behind as fast as possible in order to stay ahead of the competition, this time with more clarity as to the regulatory nature of its activities and XRP.
Ripple might be seeing a light at the end of the tunnel as Judge Sarah Netburn ordered both parties to agree on a schedule for summary judgment. The defendants want the briefing schedule to start by mid-May, while the SEC finds it “premature”. The Joint Proposed Scheduling Order is expected to be filed on April 22, 2022.