SEC Slight Win against Ripple.
Efforts by blockchain company Ripple to strike Dr. Albert Metz’s supplemental expert report have ended in futility, as Judge Sarah Netburn has denied the defendants’ motion to strike.Ā
With the most recent ruling, the Securities and Exchange Commissionās late filings of Dr. Metz’s supplemental expert rebuttal report will stand.Ā
Recall that the deadline for the submission of all expert discovery reports was initially slated for August 16, 2021. However, following several disputes raised, the deadline was pushed to January 14, 2022, and subsequently February 28, 2022.Ā
At the last deadline on February 28, 2022, the SEC served the defendants a new supplemental report from Dr. Metz, while citing information that is already known by Ripple and the Individual Defendants.Ā
Based on this, Ripple moved to strike the Dr. Metz supplemental expert rebuttal report, saying the report does not meet the requirements of Civil Procedure Rule 26(e) and 37(c)(i).Ā
The SEC argued that the defendantās motion is one filed to strike out expert testimony, which is essential in the case.Ā
āDefendants have not demonstrated that re-deposing Dr. Metz on his additional analysis and potentially filing their own supplemental reports would constitute, as they put it. […] Overall, given the harshness of preclusion, I decline to strike Dr. Metzās supplemental report,ā Judge Netburn ruled.Ā Ā
Following the most recent ruling, the court extended the discovery deadline to May 13, 2022, to give more room to re-depose Dr. Metzās analysis in the supplemental rebuttal report.Ā
It is worth noting that the Dr. Metz report is drafted to show the economic significance and effects of Rippleās public announcement with regard to the value of the XRP coin.Ā
Court Says Estabrook Notes Are Protected By DPP
Meanwhile, Ripple also recorded another loss in the hallmark lawsuit after Judge Netburn denied Individual Defendant Brad Garlinghouseās motion to compel the SEC into producing the Estabrook notes.Ā
In a recent ruling, Judge Netburn noted that Estabrookās notes are no different from the documents the court deemed to be protected by the Deliberative Process Privilege (DPP).Ā
“The SECās fact-gathering from third parties is not an inherently privileged activity, but having reviewed Estabrookās notes, I find that they could reveal to Garlinghouse the SECās internal thought processes during his meeting with Commissioner Roisman. The privilege applies,” an excerpt from the ruling, as shared by James K. Filan, reads.Ā
"The SECās fact-gathering from third parties is not an inherently privileged activity, but having reviewed Estabrookās notes, I find that they could reveal to Garlinghouse the SECās internal thought processes during his meeting with Commissioner Roisman. The privilege applies."
— James K. Filan ????90k+ (beware of imposters) (@FilanLaw) April 19, 2022
Ripple to Rely on Hinmanās Emails
With Ripple denied access to Estabrookās notes, the blockchain company would have to rely on an email containing a draft of SECās former Director William Hinman’s 2018 speech on Ethereum not being a security.Ā
Earlier this week, Judge Netburn insisted in her ruling that the SEC should surrender Hinman’s documents to Ripple.Ā
However, the SEC was also granted permission to redact certain portions of Hinman’s documents that reflect the personal thoughts of its staff before producing the documents to Ripple.Ā
With this decision, the SEC may edit some parts that could prove that XRP is not a security.Ā
In other news, Judge Torres also granted the Securities and Exchange Commissionās extension of time request to file an objection to Judge Netburnās DPP ruling of Hinmanās emails.Ā
āThe Objection is due 14 days after Magistrate Judge Netburn rules on the SECās new privilege assertions,ā Filan noted.Ā
#XRPCommunity #SECGov v. #Ripple #XRP Judge Torres has granted the SECās Motion for Extension Time to file its Objection to Magistrate Judge Netburnās DPP Ruling. The Objection is due 14 days after Magistrate Judge Netburn rules on the SECās new privilege assertions. pic.twitter.com/YMpj5dBEPN
— James K. Filan ????90k+ (beware of imposters) (@FilanLaw) April 19, 2022
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