Ripple execs have opposed the SEC’s request to stay the trial proceeding against them.
In a tweet yesterday, seasoned lawyer James Filan said Ripple executives filed separate opposition to the SEC’s anticipated interlocutory appeal.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: @bgarlinghouse and @chrislarsensf file their opposition to the SEC’s request to file an interlocutory appeal and for a stay of all proceedings pending appeal. pic.twitter.com/HU7vXOKegW
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) August 16, 2023
Recall that Ripple asked the court to deny the SEC’s interlocutory appeal request on three grounds. Ripple said the court’s order does not involve a controlling question of law. It stated that the SEC cannot show a substantial ground for a difference of opinion.
Lastly, the blockchain company argued that an immediate appeal would not advance the termination of this litigation.
Ripple execs noted that the abovementioned reasons prove that the SEC cannot show any existence of extraordinary circumstances warranting an interlocutory appeal.
Ripple Execs Opposes SEC Stay Request
Interestingly, Ripple execs- Chris Larsen and Brad Garlinghouse- individual defendants in the case, filed a subsequent opposition to the SEC’s request.
The individual defendants opposed the SEC’s request to “stay the case” should the court certify the interlocutory appeal.
The legal team of Ripple execs urged the court to proceed with the trial as scheduled to resolve the SEC’s case against them.
Stay, in law, refers to an action by a court to stop the legal proceeding of a case.
For context, the SEC alleged in its initial claim that Garlinghouse and Larsen were reckless in Ripple’s distribution of XRP. In a July 13 order, Judge Torres noted that the case would go to trial.
On August 9, she scheduled a trial for Q2 2024 while ordering the parties to submit blackout dates for trial.
A few hours later, the SEC requested leave to file an interlocutory appeal on Judge Torres’ decision. The appeal will cover the ruling on Ripple’s programmatic XRP sales and other distributions deemed non-securities. The regulatory agency also requested that the court “stay the proceedings” regarding the case against Ripple execs.
Reacting, Ripple CEO and chairman said:
“Even in rare cases where interlocutory appeals are granted, the default statutory rule is that an application for such an appeal shall not stay proceedings in the district court.”
4 Factors Why Court Should Deny SEC’s “Stay” Request
The execs highlighted four factors the court must consider before deviating from the default statutory rule.
Firstly, the court should consider whether the SEC has strongly shown that it will succeed on the merits. Secondly, the court should consider whether the SEC will be irreparably injured when the stay is not granted.
Thirdly, the court should also consider whether granting the stay will substantially injure other parties interested in the proceedings. Lastly, the court must determine where the public interest lies about the issue.
Ripple execs argued that the SEC is unlikely to succeed on the merits of the appeal, adding that the agency faces no irreparable injury if the stay is not approved.
However, the execs noted that a stay of the trial would injure the individual defendants. It also added that the public interest favors proceeding to trial.