Securities and Exchange Commission v. Ripple Labs Inc.

Background

The Securities and Exchange Commission (SEC) asked the court to seal or redact documents filed in connection with six individual XRP holders’ joint request to file a brief concerning the opinions of an SEC expert. The materials included the SEC’s opposition, the defendants’ response, and exhibits supporting both documents. The SEC argued that its expert had been threatened and harassed and that disclosure could increase the risk of further threats. The defendants separately asked to seal Exhibit O to the SEC’s filing and redact a passage discussing it, arguing that the material contained confidential information about Ripple’s business, regulatory, and marketing strategy.

Legal standard

The court treated the filings as judicial documents—materials relevant to the court’s work and potentially useful in deciding a motion. Such documents carry a common-law presumption of public access. Sealing may overcome that presumption only when specific facts show that protection of a more important interest is necessary and the restriction is narrowly tailored. Witness safety can support sealing, but general claims of confidential business information are not enough. The fact that information was covered by a protective order or designated confidential by agreement also does not, by itself, justify sealing.

The SEC’s requests

The court allowed the SEC’s proposed redactions to the SEC’s opposition because they were narrowly tailored to conceal arguments and evidence about harassment of the expert. The court found that publicizing that material could increase the likelihood of future threatening behavior and affect witness safety and the efficiency of the judicial process.

The court also allowed the SEC to redact language in the defendants’ response related to the harassment, except for footnote one. It denied the SEC’s request to redact footnote one because the possibility that the information might provoke strong feelings did not justify withholding it from the public.

For the exhibits, the court granted the SEC’s request to seal Exhibits D, E, F, G, and P to the SEC’s opposition. Those exhibits contained public statements and social-media posts that included threats, harassment, and the expert’s personal identifying information. The court also granted the SEC’s request to redact Exhibit B to the SEC’s opposition and Exhibit 1 to the defendants’ response because the redactions were narrowly tailored to protect witness safety.

The court denied the SEC’s request to seal Exhibits C, H, L, M, N, and Q to the SEC’s opposition. The SEC had not adequately justified sealing Exhibits C, L, M, N, and Q, and the court found that a confidentiality designation or concern that publication could inflame discussion did not justify sealing Exhibit H, which contained part of the expert’s deposition transcript.

The defendants’ request

The court denied the defendants’ request to seal Exhibit O and redact the related passage in the SEC’s opposition. The court found that the quoted portion was a judicial document because it could support a finding about a common interest between the defendants and the six XRP holders and could influence the court’s decision on their request. The defendants’ assertions about confidential business information were insufficient, and the protective order did not overcome public access.

Disposition

The parties’ motions were granted in part and denied in part. Specifically, the SEC’s request to redact the SEC’s opposition was granted, while the defendants’ request to redact the citation to Exhibit O was denied. The SEC’s request to redact the defendants’ response was granted in part and denied in part because the request concerning footnote one was denied. The SEC’s request to seal and redact exhibits was granted in part and denied in part, and the defendants’ request to seal Exhibit O was denied. The parties were permitted to propose narrowly tailored redactions to Exhibits C, H, L, M, N, O, and Q by July 15, 2022.