Securities and Exchange Commission v. Ripple Labs Inc. et al.

Filing 249

ORDER granting in part and denying in part #197 Letter Motion for Local Rule 37.2 Conference; granting in part and denying in part #198 Letter Motion for Local Rule 37.2 Conference. The Court GRANTS the SEC leave to conduct five additional depositions of (1) Christian Gil, (2) Ron Will, (3) Ethan Beard, (4) Phil Rapoport, and (5) Ryan Zagone. Fed. R. Civ. P. 30(a)(2)(A)(i). The SEC's request for a sixth deposition pursuant to Rule 30(b)(6) so that it may "cover any gaps in knowledge that these witnesses may have" is DENIED without prejudice as unripe. Based on the record before the Court, it is impossible to determine what topics would be noticed for any Rule 30(b)(6) deposition or why such deposition was not noticed among the first ten depositions. The Court ORDERS Ripple to search for responsive documents from Ryan Zagone and Cameron Kinloch. The SEC's request to order Ripple to search the records of its General Counsels and Deputy General Counsel is DENIED, as the Court interprets these requests to be highly burdensome, likely to be mostly privileged communications, and unreasonably cumulative or duplicative of searches already performed. See Fed. R. Civ. P. 26(b)(2). The SEC's request to compel production of documents post-dating the complaint is DENIED without prejudice. If, after the parties have exchanged expert reports, it becomes clear that Ripple's expert relied upon documents that, in fairness, requires the SEC to review post-complaint documents, the SEC may renew its application. Finally, the SEC's request to compel production of documents related to Ripple's lobbying efforts is DENIED. As discussed in the Court's earlier Opinion and Order denying access to Ripple's privileged communications, Ripple's fair notice defense centers on the activities of the SEC, not its own behaviors. See ECF No. 210 at *8 ("Ripple focuses on the SEC's failure to provide fair notice to the market about the Commission's state of mind as to whether XRP qualified as a security. It is not clear that such a defense even requires that a defendant act in good faith.") (citing United States v. Salerno, 505 U.S. 317, 323 (1992)). In the same vein, Ripple's lobbying efforts regarding the status of XRP are not relevant; and any relevancy argument is outweighed by the burden of production. (Signed by Magistrate Judge Sarah Netburn on 6/15/2021) (ras)

Case 1:20-cv-10832-AT-SN Document 249 Filed 06/15/21 Page 1 of 2

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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6/15/2021

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,

20-CV-10832 (AT) (SN)
ORDER

-againstRIPPLE LABS, INC., et al.,
Defendants.
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SARAH NETBURN, United States Magistrate Judge:

On May 25, 2021, the Securities and Exchange Commission (the “SEC”) filed a
discovery motion requesting that the Court issue an order (1) permitting the SEC to notice six
additional depositions; (2) compelling Defendant Ripple Labs, Inc. (“Ripple”) to search the
records of five additional custodians; (3) compelling Ripple to produce records relevant to postComplaint XRP transactions and efforts; and (4) compelling Ripple to produce records relevant
to its lobbying efforts. The motion is GRANTED IN PART and DENIED IN PART.
The Court GRANTS the SEC leave to conduct five additional depositions of (1) Christian
Gil, (2) Ron Will, (3) Ethan Beard, (4) Phil Rapoport, and (5) Ryan Zagone. Fed. R. Civ. P.
30(a)(2)(A)(i). The SEC’s request for a sixth deposition pursuant to Rule 30(b)(6) so that it may
“cover any gaps in knowledge that these witnesses may have” is DENIED without prejudice as
unripe. Based on the record before the Court, it is impossible to determine what topics would be
noticed for any Rule 30(b)(6) deposition or why such deposition was not noticed among the first
ten depositions.

Case 1:20-cv-10832-AT-SN Document 249 Filed 06/15/21 Page 2 of 2

The Court ORDERS Ripple to search for responsive documents from Ryan Zagone and
Cameron Kinloch. The SEC’s request to order Ripple to search the records of its General
Counsels and Deputy General Counsel is DENIED, as the Court interprets these requests to be
highly burdensome, likely to be mostly privileged communications, and unreasonably
cumulative or duplicative of searches already performed. See Fed. R. Civ. P. 26(b)(2).
The SEC’s request to compel production of documents post-dating the complaint is
DENIED without prejudice. If, after the parties have exchanged expert reports, it becomes clear
that Ripple’s expert relied upon documents that, in fairness, requires the SEC to review postcomplaint documents, the SEC may renew its application.
Finally, the SEC’s request to compel production of documents related to Ripple’s
lobbying efforts is DENIED. As discussed in the Court’s earlier Opinion and Order denying
access to Ripple’s privileged communications, Ripple’s fair notice defense centers on the
activities of the SEC, not its own behaviors. See ECF No. 210 at *8 (“Ripple focuses on the
SEC’s failure to provide fair notice to the market about the Commission’s state of mind as to
whether XRP qualified as a security. It is not clear that such a defense even requires that a
defendant act in good faith.”) (citing United States v. Salerno, 505 U.S. 317, 323 (1992)). In the
same vein, Ripple’s lobbying efforts regarding the status of XRP are not relevant; and any
relevancy argument is outweighed by the burden of production.
SO ORDERED.

Dates: June 15, 2021
New York, New York

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