On 22 October 2024, the U.S. Court of Appeals for the Second Circuit issued a Default Notice [Create clickthrough with provided pdf] pursuant to its Local Rule 12.3. According to this rule, the appellee’s counsel (in this case, representing Ripple Labs or related parties) was required to file an Acknowledgment and Notice of Appearance by 18 October 2024. This case, listed under Docket #24-2648, is on appeal from the Southern District of New York under District Court Docket #1:20-cv-10832, where Judge Analisa Torres presided. This document is legal representation in appellate proceedings for all parties to comply with court protocols for continued involvement in the appeal.
As of the date of the notice, however, the court had not received this filing from the appellee’s counsel. The notice serves as a procedural enforcement measure, reminding the counsel to meet the requirements set by the court, and outlines potential consequences if the filing is not submitted in a timely manner.
The court’s notice specifies that if the Acknowledgment and Notice of Appearance is not filed within 14 days of the notice date (i.e., by 5 November 2024), the appellee’s counsel may face restrictions during the appeals process. Specifically, without this filing, appellee’s counsel will not have the automatic right to be heard during oral arguments when the appeal is placed on the court calendar. Should they wish to participate in oral arguments, they will need to seek special permission from the court, which may or may not be granted.
The court’s Default Notice acts as a procedural safeguard, to ensure that all parties fulfill administrative obligations necessary for the orderly conduct of appellate proceedings. By enforcing these deadlines, the court seeks to maintain efficient operations, ensuring that parties have clearly designated representation and that all necessary filings are completed prior to key events, such as oral arguments.
The court has provided a contact number for inquiries related to this case, allowing involved parties or interested individuals to contact the court directly. The case inquiries can be directed to 212-857-8588, which facilitates communication regarding procedural questions or clarification needs.
In the ongoing Ripple vs. SEC lawsuit, Ripple Labs executives Brad Garlinghouse and Chris Larsen have appointed attorneys to seek dismissal of charges brought against them by the US SEC. Notably, both executives have engaged Cleary Gottlieb’s attorneys, Nowell Bamberger, Rahul Mukhi, and Samuel Levander, who were instrumental in securing previous dismissals for Garlinghouse in related claims.
In parallel, the U.S. Securities and Exchange Commission has requested the Second Circuit Court to set 15 January 2025 as the deadline for submitting its principal brief on the appeals. This brief will address its allegations of securities law violations against Ripple and its executives, with a particular focus on XRP sales and distributions to employees.
Matthew Solomon from Cleary Gottlieb and John Deaton, attornies known for representing XRP holders, filed as non-admitted attorney thereby limiting their role in the appeals process, indicating potential constraints on their influence. The law firm Paul, Weiss, Rifkind, Wharton & Garrison no longer represents Larsen, an update concurrent with a court notice reminding Larsen to submit his notice of appearance.
Ripple’s counterarguments aim to challenge the US SEC’s interpretation of an “investment contract.” The company questions whether such a contract necessarily requires:
- A formal contract,
- Obligations from the seller post-sale, and
- Profit reliance on the seller’s ongoing activities.
Ripple has revived the fair notice defense in its appeals, arguing that the regulatory framework surrounding cryptocurrency was insufficiently clear. This defense, if validated, could strengthen Ripple’s position against the SEC’s allegations.
