In re Ripple Labs Inc. Litigation

District Court, N.D. California·Decided June 30, 2023·No. 4:18-cv-06753·Unknown

Opinion

VLADI ZAKINOV, et al., Case No. 18-cv-06753-PJH Plaintiffs,

v. ORDER GRANTING MOTION FOR CLASS CERTIFICATION RIPPLE LABS, INC., et al., Re: Dkt. No. 181 Defendants.

Plaintiff’s motion for class certification came on for hearing on April 26, 2023. Plaintiff appeared through his counsel, Nicholas Spear, James Taylor-Copeland, Steven Sklaver, and Oleg Elkhunovich. Defendants appeared through their counsel, Andrew Michaelson, Damien Marshall, Bradley Oppenheimer, Meghan Strong, and Bethan Jones. Having read the papers filed by the parties and carefully considered their arguments and relevant authority, and good cause appearing, the court hereby rules as follows. This is a securities case. The factual and procedural backgrounds of the case are lengthy, and largely laid out in the court’s previous orders during the pleading stage. As relevant here, plaintiff Bradley Sostack seeks to pursue securities claims against defendants Ripple Labs, XRP II (a subsidiary of Ripple), and Bradley Garlinghouse, CEO of Ripple. The gravamen of the case is the argument that the XRP cryptocurrency issued by Ripple is a “security” under relevant securities laws and should have been registered, The following claims remain in the case: 1. Violation of Section 12(a)(1) of the Securities Act (Title 15 U.S.C. § 77l(a)(1)) against defendants for the unregistered offer and sale of securities; 2. Violation of Section 15 of the Securities Act (Title 15 U.S.C. § 77o) against defendant Ripple and defendant Garlinghouse for control person liability for the primary violation of Title 15 U.S.C. § 77l(a)(1); 3. Violation of California Corporations Code § 25503 against defendants for a primary violation of § 25110’s restriction on the offer or sale of unregistered securities; 4. Violation of California Corporations Code § 25501 against defendant Ripple and defendant XRP II, as well as a parallel material assistance claim under § 25504.1 against defendant Ripple and defendant Garlinghouse, for misleading statements in connection with the offer or sale of securities in violation of § 25401; and 5. Violation of California Corporations Code § 25504 against defendant Ripple and defendant Garlinghouse for control person liability in connection with defendants’ primary violation of § 25110. Plaintiff concedes that he is not seeking class treatment for the fourth cause of action. See Dkt. 262 at 6. That leaves four claims at issue on this motion: failure to register the XRP security under federal law (first cause of action) and state law (third cause of action); and that Ripple and Garlinghouse “controlled” the primary violation under federal law (second cause of action) and state law (fifth cause of action). Plaintiff now seeks to certify the following two classes under Rule 23(b)(3): Federal securities claims class: all persons or entities who purchased XRP from May 3, 2017 through the present and who have (a) retained the XRP, and/or (b) sold the XRP at a loss.

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In re Ripple Labs Inc. Litigation, (N.D. Cal. 2023).

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