Securities and Exchange Commission v. Ripple Labs Inc.
- Analisa Torres
- 1:20-cv-10832
- U.S. District Court · Southern District of New York
- 6
In Securities and Exchange Commission v. Ripple Labs, Judge Netburn granted in part a discovery motion, requiring some SEC records while excluding informal internal communications.
The SEC and the defendants in the case. The order determines which SEC communications must be searched or produced and which may be excluded from discovery.
What happened
In Securities and Exchange Commission v. Ripple Labs Inc., the SEC asked the court to limit the defendants’ requests for SEC records during discovery in the enforcement case.
The SEC sought to prevent searches for informal internal staff communications and employee personal devices, and to stop the defendants from adding a custodian beyond those previously identified. The defendants sought broader records about cryptocurrency, including internal SEC materials.
Judge Sarah Netburn granted in part the motion at ECF No. 126. The court required searches for certain external communications and formal internal documents, allowed privilege claims with privilege logs, excluded informal internal communications from the search, and directed the parties to continue discussing remaining issues.
The detailed version
- Securities and Exchange Commission v. Ripple Labs Inc. · No. 1:20-cv-10832
- Analisa Torres
- May 6, 2021
Background
The SEC asked the court to resolve discovery disputes and limit the defendants’ requests for SEC materials. An earlier order required the SEC to search external emails from 19 custodians for documents related to XRP, Bitcoin, and Ethereum. The SEC said that order did not require searches for informal internal SEC communications, such as staff emails, and argued that those materials were irrelevant and could expose deliberative government discussions.
The SEC also said the defendants were seeking broader discovery than the earlier order allowed. According to the SEC, the defendants sought internal materials about cryptocurrency generally, asked to add a 20th custodian, requested searches of SEC employees’ personal devices and email accounts, and sought records concerning a former SEC chair’s compensation after leaving the agency. The SEC asked the court to limit production to external communications and formal agency views, subject to privilege claims.
The Court’s Clarifications
The court ordered the following:
- The SEC must produce communications with third parties, including external agencies and market participants, subject to any privilege assertion. - The SEC need not produce, search, or log informal intra-agency communications, including emails. - The SEC must search for and produce, subject to privilege assertions, intra-agency memoranda or formal position papers discussing Bitcoin, Ethereum, and XRP. The court gave Division reports, final reports of internal working groups, and formal position papers submitted to the Commissioners as examples. - Documents withheld on the basis of privilege must be identified on a privilege log. The court stated that information that would appear on such a log, including dates and participants, could itself be relevant and discoverable. - The parties must continue meeting and conferring about the remaining issues raised in their letters.
The Clerk of Court was directed to GRANT in PART the motion at ECF No. 126. The opinion is a discovery ruling and does not decide the underlying securities-law claims.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.