Consolidated Class-Action Lawsuit Lobbed Against Ripple Proceeds to Federal Court

alphacoders.com

The legal dispute between XRP investors and payments startup Ripple continues to heat up as it enters the next phase.

Based on court documents released on November 7, lawyers for both Ripple Labs and its associated defendants have filed to move a consolidated class-action lawsuit from its initial venue at the San Mateo Superior Court to the U.S. District Court, Northern District of California.

The defendant disputes that the combined suit corresponds to the requirements needed for a case to be elevated to the higher federal court.

Aside from the request to change the venue, lawyers for Ripple also hints at the firm’s defense against the suit, which accuses that the Ripple’s XRP token is actually a security. In line with this, they argue:

“Plaintiffs do not allege that they lacked information about the nature of these transactions. Nevertheless, Plaintiffs claim that they were somehow injured because the Defendants were allegedly required to register XRP as a ‘security’ with the Securities & Exchange Commission (‘SEC’) but failed to do so.”

The document shows that the combined class action merges prior class-action lawsuits filed by plaintiffs Avner Greenwald, David Oconer, and Vladi Zakinov. While the separate suit filed by Ryan Coffey has been voluntarily dismissed by the plaintiff himself last August, Ripple’s lawyers have later filed it in conjunction with Zakinov’s suit.

The defendants are now composed of Ripple Labs and its subsidiary XRP II, together with Ripple CEO Bradley Garlinghouse, Christian Larsen, Ron Will, Antoinette O’Gorman, Eric van Miltenburg, Susan Athey, Zoe Cruz, Ken Kurson, BitLicense Architect and Ripple exec Ben Lawsky, Anja Manuel, and Takashi Okita.

Under the U.S. Class Action Fairness Act (CAFA), Ripple’s lawyers dispute that the suit can now be transferred to federal court. The attorneys note that there are over 100 members of the suing class, stressing that at least one plaintiff is a resident of a different state than the defendants, and the amount being sued for is more than $5 million.

According to one of the lawsuits, which was initially filed by Israeli resident Avner Greenwald, “thousands” of people lost their money after purchasing XRP. The plaintiffs are also demanding that Ripple pay damages amounting to $167.7 million.

Washington D.C.-based law firm Anderson Kill partner, Stephen Palley states that the act which aims to transfer the case to district court means that the case is now before the said federal court.

Palley has previously said that the plaintiffs may bring the case back to a state-level court by filing a motion to remand. True enough, an ensuing filing introduced on November 8 shows that the plaintiffs will file a motion to remand the case back to the San Mateo Superior Court.

The deadline for Ripple to respond to the complaint will either be two weeks from the day the motion to remand has been denied, or two weeks from the date the San Mateo court receives the case.

In reference to the class-action lawsuits, Palley clarifies that “the conventional wisdom is that state court juries and judges tend to be more sympathetic to plaintiffs,” perhaps due to the fact that state-level courts will be taking from a local jury pool.

He adds that sometimes a state court judge gives the impression of being political, noting that several state-level judges are elected to their positions.

However, he also says that many defendants believe that they will get a more fair treatment in a federal court.