Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 1 of 14
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`-against-
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`Plaintiff,
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`SECURITIES AND EXCHANGE COMMISSION,
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`RIPPLE LABS, INC., BRADLEY
`GARLINGHOUSE, and CHRISTIAN A. LARSEN,
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`Defendants.
`ANALISA TORRES, District Judge:
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`USDC SDNY
`DOCUMENT
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`ELECTRONICALLY FILED
`DOC #: _________________
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`DATE FILED: _10/3/2023__
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`20 Civ. 10832 (AT)
`ORDER
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`Plaintiff, the Securities and Exchange Commission (the “SEC”), brings this action against
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`Defendants Ripple Labs, Inc. (“Ripple”) and two of its senior leaders, Bradley Garlinghouse and
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`Christian A. Larsen, alleging that Defendants engaged in the unlawful offer and sale of securities
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`in violation of Section 5 of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C.
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`§§ 77e(a), (c). Am. Compl. ¶¶ 9, 430–35, ECF No. 46. The SEC also alleges that Larsen and
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`Garlinghouse aided and abetted Ripple’s Section 5 violations. Id. ¶¶ 9, 436–40. On July 13,
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`2023, the Court granted in part and denied in part the parties’ cross-motions for summary
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`judgment (the “Order”). Order, ECF No. 874; see SEC v. Ripple Labs, Inc., No. 20 Civ. 10832,
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`2023 WL 4507900 (S.D.N.Y. July 13, 2023).
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`The SEC now moves to certify for interlocutory appeal two holdings in the Order. ECF
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`No. 892; SEC Mem. at 1, ECF No. 893. For the reasons stated below, the SEC’s motion for
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`certification of the interlocutory appeal is DENIED.
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`

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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 2 of 14
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`BACKGROUND1
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`This case involves Defendants’ offer and sale of XRP. XRP is the native digital token of
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`the XRP Ledger, a cryptographically secured ledger, or “blockchain.” Order at 2. The SEC
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`alleges that Ripple engaged in three categories of unregistered XRP offers and sales:
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`(1) Institutional Sales2 under written contracts for which it received $728 million;
`(2) Programmatic Sales on digital asset exchanges for which it received $757
`million; and
`(3) Other Distributions under written contracts for which it recorded $609 million
`in “consideration other than cash.”
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`Id. at 15–16; see id. at 4–5. The SEC also alleges that Larsen and Garlinghouse engaged in
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`unregistered individual XRP sales from which they received at least $450 million and $150
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`million, respectively. Id. at 5, 16.
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`Under Section 5 of the Securities Act, it is “unlawful for any person, directly or
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`indirectly, . . . to offer to sell, offer to buy or purchase[,] or sell” a “security” unless a registration
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`statement is in effect or has been filed with the SEC as to the offer and sale of such security to
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`the public. 15 U.S.C. §§ 77e(a), (c), (e). To prove a violation of Section 5, the SEC must show:
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`(1) that no registration statement was filed or in effect as to the transaction, and (2) that the
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`defendant directly or indirectly offered to sell or sold the securities (3) through interstate
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`commerce. See SEC v. Cavanagh, 445 F.3d 105, 111 n.13 (2d Cir. 2006).
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`At summary judgment, Defendants did not dispute that they offered and sold XRP
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`through interstate commerce and that they did not register those offers or sales. Order at 10.
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`Rather, the relevant question before the Court was whether Defendants offered to sell or sold
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`XRP as a security. Id. The SEC alleged that Defendants sold XRP as an “investment contract,”
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`1 The Court presumes familiarity with the facts and procedural history of this matter as detailed in prior orders, see
`Order at 2–9, and, therefore, only summarizes those facts necessary for its decision here.
`2 Capitalized terms not otherwise defined herein have the meanings set forth in the Order.
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`2
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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 3 of 14
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`which is a type of security as defined by the Securities Act, 15 U.S.C. § 77b(a)(1). Id.; Am.
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`Compl. ¶¶ 3, 9, 60. Defendants argued that they did not sell XRP as an investment contract, and,
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`therefore, no registration statement was required. Order at 11.
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`In SEC v. W.J. Howey Co., the Supreme Court held that under the Securities Act, an
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`investment contract is “a contract, transaction[,] or scheme whereby a person [(1)] invests his
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`money [(2)] in a common enterprise and [(3)] is led to expect profits solely from the efforts of
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`the promoter or a third party.” 328 U.S. at 298–99; see also SEC v. Edwards, 540 U.S. 389, 393
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`(2004). In analyzing whether a contract, transaction, or scheme is an investment contract, “form
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`should be disregarded for substance and the emphasis should be on economic reality” and the
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`“totality of circumstances.” Tcherepnin v. Knight, 389 U.S. 332, 336 (1967); Glen-Arden
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`Commodities, Inc. v. Constantino, 493 F.2d 1027, 1034 (2d Cir. 1974).
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`In the Order, the Court declined to adopt Defendants’ novel “essential ingredients” test.
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`Order at 11–13. Instead, the Court applied Howey to each category of Defendants’ unregistered
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`XRP offers and sales. Id. at 16–27. After the Court “examine[d] the totality of circumstances
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`surrounding Defendants’ different transactions and schemes involving the sale and distribution
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`of XRP,” id. at 15, the Court concluded that Ripple’s Institutional Sales constituted offers or
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`sales of investment contracts, but Ripple’s Programmatic Sales and Other Distributions did not,
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`id. at 30. The Court also held that Larsen’s and Garlinghouse’s individual sales were not offers
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`or sales of investment contracts for “substantially the same reasons” stated in the Court’s
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`analysis of Ripple’s Programmatic Sales. Id. at 27–28. The Court, therefore, granted in part and
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`denied in part the parties’ cross-motions for summary judgment.3
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`3 The Court also rejected Defendants’ due process defenses and denied the SEC’s motion for summary judgment on
`the aiding and abetting claim against Larsen and Garlinghouse. Order at 29–30, 33–34. Those holdings are not at
`issue in this order.
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`3
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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 4 of 14
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`On August 9, 2023, the Court set a pretrial scheduling order and directed the parties to
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`submit blackout dates for trial. ECF No. 884. On August 18, 2023, the SEC moved to certify for
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`interlocutory appeal two holdings in the Order:
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`(1) the ruling that, as a matter of law, Defendants’ “Programmatic” offers and sales
`of XRP over crypto asset trading platforms could not lead investors to reasonably
`expect profits from the efforts of others; and
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`(2) the ruling that Ripple’s “Other Distributions” of XRP as a “form of payment for
`services” . . . was legally insufficient to constitute an “investment of money” under
`[Howey].
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`SEC Mem. at 1; ECF No. 892. The SEC also requested that the Court “stay any remedies
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`litigation and any pretrial proceedings while [its] interlocutory certification request and any
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`appeal are pending.” SEC Mem. at 19.
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`DISCUSSION
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`I.
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`Legal Standard
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`Pursuant to 28 U.S.C. § 1292(b), a district court may certify an order for interlocutory
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`appeal where: (1) “[the] order involves a controlling question of law,” (2) “as to which there is
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`substantial ground for difference of opinion,” and (3) “an immediate appeal from the order may
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`materially advance the ultimate termination of the litigation.” See also Flo & Eddie, Inc. v.
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`Sirius XM Radio Inc., No. 13 Civ. 5784, 2015 WL 585641, at *1 (S.D.N.Y. Feb. 10, 2015). The
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`moving party bears the burden of establishing the three factors. Bellino v. JPMorgan Chase
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`Bank, N.A., No. 14 Civ. 3139, 2017 WL 129021, at *1 (S.D.N.Y. Jan. 13, 2017).
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`Section 1292(b) is “a rare exception to the final judgment rule that generally prohibits
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`piecemeal appeals.” Koehler v. Bank of Bermuda Ltd., 101 F.3d 863, 865 (2d Cir. 1996).
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`Because interlocutory appeals are strongly disfavored, “only exceptional circumstances will
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`justify a departure from the basic policy of postponing appellate review until after the entry of a
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`4
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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 5 of 14
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`final judgment.” Klinghoffer v. S.N.C. Achille Lauro Ed Altri-Gestione Motonave Achille Lauro
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`in Amministrazione Straordinaria, 921 F.2d 21, 25 (2d Cir. 1990) (quoting Coopers & Lybrand
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`v. Livesay, 437 U.S. 463, 475 (1978)) (cleaned up).
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`II.
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`Application
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`A. Controlling Question of Law
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`Under § 1292(b), “[a] question of law must refer to a pure question of law that the
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`reviewing court could decide quickly and cleanly without having to study the record.” Youngers
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`v. Virtus Inv. Partners Inc., 228 F. Supp. 3d 295, 298 (S.D.N.Y. 2017) (cleaned up); see Stone v.
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`Patchett, No. 08 Civ. 5171, 2009 WL 1544650, at *2 (S.D.N.Y. June 3, 2009). A question of
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`law is controlling where: “(1) reversal of the district court’s opinion could result in dismissal of
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`the action, (2) reversal of the district court’s opinion, even though not resulting in dismissal,
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`could significantly affect the conduct of the action, or (3) the certified issue has precedential
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`value for a large number of cases.” Flo & Eddie, Inc., 2015 WL 585641, at *1 (citation
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`omitted); see Klinghoffer, 921 F.2d at 24.
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`Here, the SEC has not presented a “pure question of law” that could be “decided quickly
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`and cleanly without having to study the record.” Youngers, 228 F. Supp. 3d at 298 (cleaned up).
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`To the contrary, the Court “examine[d] the totality of circumstances surrounding Defendants’
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`different transactions and schemes involving the sale and distribution of XRP,” Order at 15, and
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`ultimately found that the Institutional Sales were sales of securities, but the Programmatic Sales
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`and Other Distributions were not, id. at 16–27. In doing so, the Court studied an extensive,
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`heavily disputed factual record and detailed expert reports. See, e.g., ECF Nos. 814, 835, 842.
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`For example, the SEC’s Rule 56.1 statement contains over 1,600 purported facts—many of
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`which are disputed by Defendants—and cites over 900 exhibits. ECF Nos. 629, 835.
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`5
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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 6 of 14
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`The SEC does not argue that the Court applied the wrong legal standard in deciding the
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`cross-motions for summary judgment. See Stone, 2009 WL 1544650, at *2 (holding that
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`litigant’s argument that court misapplied the law is not a pure question of law). In fact, the Court
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`specifically rejected Defendants’ “essential ingredients” legal test and applied the SEC’s legal
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`standard. See Order at 11–13. Rather, the core of the SEC’s argument is that the Court
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`improperly applied the Howey test to the facts in the undisputed record. As the SEC has
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`repeatedly argued, “Howey must be applied to the facts and circumstances at hand.” SEC MSJ
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`Reply at 34, ECF No. 843; see also SEC MSJ Mem. at 6, ECF No. 837 (“Whether or not a
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`particular transaction involves the offer and sale of a security . . . will depend on the facts and
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`circumstances, including the economic realities of the transaction.” (quoting SEC Rel. No.
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`81207, available at https://www.sec.gov/litigation/investreport/34-81207.pdf)). “Under these
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`circumstances, such questions do not present issues of pure law and therefore are not appropriate
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`for interlocutory appeal.” Stone, 2009 WL 1544650, at *2; cf. Century Pac., Inc. v. Hilton
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`Hotels Corp., 574 F. Supp. 2d 369, 371–72 (S.D.N.Y. 2008).
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`The Court also rejects the SEC’s argument that the questions presented are “controlling”
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`questions of law because the “certified issue[s] ha[ve] precedential value for a large number of
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`cases.” Flo & Eddie, Inc., 2015 WL 585641, at *1 (citation omitted); see SEC Mem. at 8–9.4
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`The Court’s findings come from a direct application of Howey to the unique facts and
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`circumstances of this case. The other enforcement actions cited by the SEC involve different
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`4 As to the SEC’s argument that the questions are “controlling” because reversal of the Order “could significantly
`affect the conduct of the action,” Flo & Eddie, Inc., 2015 WL 585641, at *1 (citation omitted), the Court notes that
`the questions are not dispositive of the parties’ cross-motions for summary judgment. The Order explicitly did not
`reach the other Howey prongs as to the Programmatic Sales and the Other Distributions. See Order at 25 n.17, 27
`n.18. The Court also did not reach other arguments, such as whether Defendants are entitled to summary judgment
`on offers and sales on “foreign exchanges” and Defendants’ fair notice defenses as to the Programmatic Sales and
`Other Distributions. See id. at 28 n.19, 29 n.20. If the Order were reversed and the case remanded, the Court may
`consider some of these questions in the first instance.
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`6
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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 7 of 14
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`digital assets and different companies, which offered and sold those digital assets under different
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`factual circumstances and economic realities. See SEC Mem. at 9 (listing cases).
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`In arguing that the Order has “precedential value” for other digital-asset cases, the SEC
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`misconstrues the Court’s holdings. For example, the SEC seeks to appeal the question, “[C]an
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`an issuer’s offers and sales on crypto asset trading platforms create a reasonable expectation of
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`profits based on the efforts of others?” Id. at 10. But the Court did not hold that offers and sales
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`on a digital asset exchange cannot create a reasonable expectation of profits based on the efforts
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`of others. The Court held that based on the totality of the circumstances in this case, including
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`an examination of the facts, circumstances, and economic realities of the transactions, Ripple’s
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`Programmatic Sales could not lead investors to reasonably expect profits from Ripple’s efforts.
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`See Order at 22–25. In so concluding, the Court considered several factors, including:
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`transactions, and
`(1) “Ripple’s Programmatic Sales were blind bid/ask
`Programmatic Buyers could not have known if their payments of money went to
`Ripple”;
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`(2) “Ripple’s Programmatic Sales represented less than 1% of the global XRP
`trading volume”;
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`(3) “Ripple did not make any promises or offers [to the Programmatic Buyers]
`because Ripple did not know who was buying the XRP”;
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`(4) “[M]any Programmatic Buyers were entirely unaware of Ripple’s existence”;
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`(5) “[T]he Programmatic Sales were not made pursuant to contracts that contained
`lockup provisions, resale restrictions, indemnification clauses, or statements of
`purpose”;
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`(6) The SEC failed to provide evidence that “Ripple’s promotional materials . . .
`were distributed more broadly to the general public, such as [to Programmatic
`Buyers]”;
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`(7) The SEC failed to provide evidence that objective, reasonable “Programmatic
`Buyers understood that statements made by Larsen, [Ripple chief cryptographer
`David] Schwartz, Garlinghouse, and others were representations of Ripple and its
`efforts”; and
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`7
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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 8 of 14
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`(8) The SEC failed to provide evidence that an objective, reasonable Programmatic
`Buyer “could parse through the multiple documents and statements . . . (sometimes
`inconsistent) across many social media platforms and news sites from a variety of
`Ripple speakers (with different levels of authority) over an extended eight-year
`period” to discern “Ripple’s marketing campaign and public statements connecting
`XRP’s price to its own efforts.”
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`Id. The Court also concluded that although the record may have demonstrated that “many
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`Programmatic Buyers purchased XRP with an expectation of profit,” the SEC failed to provide
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`evidence that such Programmatic Buyers’ “speculative motive derived from the entrepreneurial
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`or managerial efforts of others.”5 Id. at 24 (citation omitted). The Court’s holding did not turn
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`on the fact that Ripple’s “offers and sales [were] on crypto asset trading platforms.” SEC Mem.
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`at 10.
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`Likewise, the Court’s holding as to Ripple’s Other Distributions was based on applying
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`Howey to the facts and circumstances of this case. Order at 26–27. The Court did not conclude
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`that “distributing an asset in exchange for services” cannot “constitute[] an investment of
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`money.” SEC Mem. at 16 (capitalization altered); cf. Order at 26 (citing Int’l Bhd. of Teamsters
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`v. Daniel, 439 U.S. 551, 560 (1974)). Indeed, Howey’s first prong, that there be an “investment
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`of money,” may include “goods [or] services,” provided that “the purchaser gave up some
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`tangible and definable consideration.” Int’l Bhd., 439 U.S. at 560 & n.12; see Order at 26.
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`Applying that standard, the Court concluded that “the record shows that recipients of the
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`Other Distributions did not pay money or ‘some tangible and definable consideration’ to
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`Ripple.” Order at 26 (emphasis added). For example, the Other Distributions included grants to
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`5 Consider, for example, a Programmatic Buyer who, while browsing on a digital asset exchange, sees the price of
`XRP dramatically increase but is unaware of Ripple’s existence. If the Programmatic Buyer then purchases XRP
`from the exchange with the intention of later selling XRP for a profit, she would have purchased XRP “with an
`expectation of profit,” but that motive was not “derived from the entrepreneurial or managerial efforts of others,” as
`required under Howey. United Hous. Found., Inc. v. Forman, 421 U.S. 837, 852 (1975).
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`8
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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 9 of 14
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`“third parties as part of Ripple’s Xpring initiative to develop new applications for XRP and the
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`XRP Ledger.” Id. Ripple does not own the XRP Ledger, which is “based on open-source
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`software; anyone can use the ledger, submit transactions, host a node to contribute to the
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`validation of transactions, propose changes to the source code, or develop applications that run
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`on the ledger.” Id. at 3. The SEC failed to provide evidence that the development of “use cases”
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`for the XRP Ledger constitutes “tangible and definable” consideration to Ripple. Id. at 26. The
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`Court also rejected the SEC’s argument that XRP provided to Ripple employees as compensation
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`and bonuses satisfies Howey’s first prong where the SEC did not identify or explain what
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`“tangible and definable” employee labor was provided in exchange for XRP.6 Id.
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`Accordingly, the SEC has failed to meet its burden to show that the two holdings that it
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`moves to certify for interlocutory appeal “involve[] . . . controlling question[s] of law.” 28
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`U.S.C. § 1292(b).
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`B. Substantial Ground for Difference of Opinion
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`A substantial ground for difference of opinion exists where “(1) there is conflicting
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`authority on the issue, or (2) the issue is particularly difficult and of first impression for the
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`Second Circuit.” In re Goldman Sachs Grp., Inc. Sec. Litig., No. 10 Civ. 3461, 2014 WL
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`5002090, at *3 (S.D.N.Y. Oct. 7, 2014) (quoting Cap. Records, LLC v. Vimeo, LLC, 972
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`F. Supp. 2d 537, 551 (S.D.N.Y. 2013)). “Mere conjecture that courts would disagree on the
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`6 The Court further notes that in its summary judgment briefing, the SEC presented shifting and inconsistent
`arguments as to its legal theory about the Other Distributions. At one point, the SEC argued that the Other
`Distributions were unregistered offers and sales of securities because they were made in exchange for non-cash
`consideration. See SEC MSJ Mem. at 31–32. But at another point, the SEC argued that the Other Distributions
`were indirect offers and sales to the public, and the initial recipients of the Other Distributions—like the Xpring
`initiative third parties—were conduits (or underwriters) to “get XRP off [Ripple’s] balance sheet and into the hands
`of market participants in order to create XRP liquidity and to advance Ripple’s interests in attracting people to its
`technology.” SEC MSJ Opp. at 9, 26, ECF No. 841. The Court rejected the latter argument for the reasons stated in
`the Order. See Order at 26–27. It is also unclear how these legal theories relate to the SEC’s position that Ripple
`“gifted” XRP to third parties, which the SEC did not charge in its complaint. See SEC MSJ Opp. at 26 n.15.
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`9
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`issue” is insufficient. Bellino, 2017 WL 129021, at *3. Instead, “there must be substantial doubt
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`that the district court’s order was correct.” Century Pac., 574 F. Supp. 2d at 372 (quoting SPL
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`Shipping Ltd. v. Gujarat Cheminex Ltd., No. 06 Civ. 15375, 2007 WL 1119753, at *2 (S.D.N.Y.
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`Apr. 12, 2007)) (quotation marks omitted).
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`As to the Programmatic Sales, the SEC cites a recent decision in SEC v. Terraform Labs
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`Pte. Ltd., No. 23 Civ. 1346, 2023 WL 4858299, at *15 (S.D.N.Y. July 31, 2023), for the
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`proposition that “there is a substantial ground for difference of opinion on whether issuer offers
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`and sales over crypto asset trading platforms can give rise to an investment contract under
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`Howey.” SEC Mem. at 12 (capitalization altered). Not so. Notwithstanding that the SEC
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`misstates the Court’s holding, see supra § II.A, the Order does not conflict with the Terraform
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`court’s reasoning. The Terraform court did not engage with the Court’s reasoning in the Order.
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`Nor was it required to, given the different procedural postures of the two cases.
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`The Terraform court was required—as it must at the motion to dismiss stage—to accept
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`as true “all well-pleaded allegations” and to draw “all reasonable inferences . . . in the SEC’s
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`favor.” 2023 WL 4858299, at *1 (quoting Buon v. Spindler, 65 F.4th 64, 76 (2d Cir. 2023)). For
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`instance, the Terraform court accepted as true that the defendants “embarked on a public
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`campaign to encourage both retail and institutional investors to buy their crypto-assets by touting
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`the profitability of the crypto-assets and the managerial and technical skills that would allow the
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`defendants to maximize returns on the investors’ coins”; and “the defendants said that sales from
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`purchases of all crypto-assets—no matter where the coins were purchased—would be fed back
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`into the . . . blockchain and would generate additional profits for all crypto-asset holders.” Id. at
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`*15 (emphasis in original). The Terraform court then presumed that the defendants’
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`representations would “have reached individuals who purchased their crypto-assets on secondary
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`10
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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 11 of 14
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`markets . . . [and] [s]imply put, secondary-market purchasers had every bit as good a reason to
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`believe that the defendants would take their capital contributions and use it to generate profits on
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`their behalf.” Id.
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`As stated above, the Order did not turn on the fact that Programmatic Sales were “sold
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`through secondary market transactions to retail investors.” Id. Rather, the Court concluded,
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`based on the totality of circumstances, that an objective, reasonable Programmatic Buyer was not
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`led to expect profits from the efforts of Ripple. Order at 24. Unlike in Terraform, the reasonable
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`Programmatic Buyer would not believe that “sales from purchases of all [XRP] . . . would be fed
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`back into [Ripple and the XRP Ledger] and would generate additional profits for all [XRP]
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`holders.” Terraform, 2023 WL 4858299, at *15. Similarly, the undisputed record makes clear
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`that many of Ripple’s key promotional materials—such as the “Ripple Primer,” which states that
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`Ripple “hopes to make money from XRP if the world finds the Ripple network useful,” and the
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`“Gateways” brochure, which states that “Ripple’s business model is based on the success of
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`[XRP],” Order at 19–20—were only distributed to Institutional Buyers, and not more broadly to
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`Programmatic Buyers, id. at 24–25. In other words, after a close examination of the extensive
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`factual record and expert reports, the Court concluded that the Programmatic Buyers did not
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`“ha[ve] every bit as good a reason [as the Institutional Buyers] to believe that [Defendants]
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`would take their capital contributions and use [the capital] to generate profits on their behalf.”
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`Terraform, 2023 WL 4858299, at *15.
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`For substantially the same reasons, the Court rejects the SEC’s remaining argument that
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`“[c]ourts have accordingly found Section 5 violations where unregistered crypto asset
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`transactions occur not between the issuer and the investor, but through intermediaries, including
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`on trading platforms.” SEC Mem. at 12. In each of the cases cited by the SEC, the district court
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`11
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`applied the Howey test to the facts and circumstances of that particular case. The SEC does not
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`contend that courts substantially differ as to the proper legal standard to be applied.
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`Likewise, the Court rejects the argument that there is substantial ground for difference of
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`opinion about the Court’s holding as to the Other Distributions. See SEC Mot. at 16. The SEC
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`cites one out-of-circuit digital-asset case for the proposition that courts “have held that issuers
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`sold investment contracts in exchange for non-cash consideration such as labor, service, or other
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`assets.” Id. (citing SEC v. LBRY, Inc., 639 F. Supp. 3d 211 (D.N.H. 2022)).7 But in that case,
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`the parties did not dispute Howey’s first prong. See LBRY, 639 F. Supp. 3d at 216 (“Here, only
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`the third component of the Howey test is in dispute.”). The Court cannot draw any conclusions
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`about the LBRY court’s reasoning as to an issue that was never litigated. Therefore, the SEC
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`fails to point to any digital-asset cases which conflict with the Court’s holding as to the Other
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`Distributions and, thus, cannot show beyond “[m]ere conjecture that courts would disagree on
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`the issue.” Bellino, 2017 WL 129021, at *3.
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`Accordingly, the SEC fails to meet its burden to show “substantial ground for difference
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`of opinion” as to the two holdings that it moves to certify for interlocutory appeal. 28 U.S.C.
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`§ 1292(b).
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`C. Materially Advance the Ultimate Termination of the Litigation
`
`In determining whether certification will materially advance the ultimate termination of
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`the litigation, “courts must consider the institutional efficiency of both the district court and the
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`appellate court.” Tocco v. Real Time Resolutions, Inc., No. 14 Civ. 810, 2015 WL 5086390, at
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`*2 (S.D.N.Y. Mar. 4, 2015).
`
`
`7 The other cases cited by the SEC are also out-of-circuit cases. See SEC Mem. at 16–17 (listing cases). These
`cases are also inapposite because they do not address the Order’s finding that, based on the factual record in this
`case, the “recipients of the Other Distributions did not pay money or ‘some tangible and definable consideration’ to
`Ripple.” Order at 26.
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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 13 of 14
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`Here, the SEC fails to meet its burden to demonstrate that interlocutory appeal would
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`“materially advance the ultimate termination of the litigation.” Id. at 1 (citation omitted). As
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`stated above, if the Second Circuit were to reverse the Order and remand the case, the Court
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`would be in the position of considering many complicated legal and factual issues in the first
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`instance, such as whether Ripple’s Programmatic Sales satisfy Howey’s second prong that there
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`exists a common enterprise or Defendants’ fair notice defenses as to the Programmatic Sales and
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`Other Distributions. See supra note 4. Then, any party that disagreed with the Court’s
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`subsequent summary judgment order could move again for interlocutory appeal. Therefore, any
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`interlocutory appeal “would instead likely prolong the action as it would be subject to multiple
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`bites at the apple for appellate review.” Platinum Partners Value Arbitrage Fund L.P. v.
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`Goldberg, No. 22 Civ. 6376, 2022 WL 4357548, at *4 (S.D.N.Y. Sept. 19, 2022).
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`Further, resource-intensive litigation remains in this matter before final judgment,
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`including a remedial phase which could raise questions about “injunctive relief, disgorgement,
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`and civil monetary penalties,” additional Daubert briefing, pretrial litigation (including motions
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`in limine), and trial. SEC Mem. at 5–6. Thus, complicated factual and legal issues remain to be
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`adjudicated before final judgment. Under these circumstances, the litigation may be most
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`expeditiously advanced by “proceeding in the ordinary course to judgment, [and] permitting a
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`single round of appellate review on a complete record.” Platinum Partners, 2022 WL 4357548,
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`at *4.
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`The Court is aware that litigation may be extensive regardless of whether interlocutory
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`appeal is granted. But here, the SEC has failed to meet its burden to show that such an appeal
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`would “materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b)
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`(emphasis added).
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`Case 1:20-cv-10832-AT-SN Document 917 Filed 10/03/23 Page 14 of 14
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`CONCLUSION
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`
`
`For the reasons stated above, the SEC’s motion for certification of interlocutory appeal is
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`DENIED, and the SEC’s request for a stay is DENIED as moot. The Clerk of Court is directed
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`to terminate the motion at ECF No. 892.
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`Trial in this matter is set to begin on April 23, 2024, at 9:00 a.m. in Courtroom 15D of
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`the United States Courthouse, 500 Pearl Street, New York, New York 10007. The deadlines as
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`set forth in the Court’s Pretrial Scheduling Order remain in effect. Accordingly:
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`1. By December 4, 2023, the parties shall submit any motions in limine.
`Oppositions to any motions in limine shall be submitted by December 18, 2023.
`
`2. By December 4, 2023, the parties shall submit all required pretrial filings,
`including their proposed joint pretrial order, requests to charge, verdict form, and
`voir dire questions in accordance with Paragraphs V.B, V.C, and V.D of the
`Court’s Individual Practices in Civil Cases. The parties shall also email copies of
`these submissions to Torres_NYSDChambers@nysd.uscourts.gov as Word
`Documents.
`
`3. By December 4, 2023, the parties shall deliver to the Court one copy of each
`documentary exhibit sought to be admitted, pre-marked (i.e., labeled with exhibit
`stickers) and assembled sequentially in a loose-leaf binder or in separate manila
`folders labeled with the exhibit numbers and placed in a suitable container for
`ready reference in accordance with Paragraph V.C.v of the Court’s Individual
`Practices in Civil Cases.
`
`4. On April 16, 2024, at 2:00 p.m., counsel for all parties shall appear for a final
`pretrial conference in Courtroom 15D of the United States Courthouse, 500 Pearl
`Street, New York, New York 10007.
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`5. Prior to the final pretrial conference, counsel for both parties, along with the
`parties themselves, shall meet in person for at least one hour to discuss settlement
`of this matter.
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`SO ORDERED.
`
`
`Dated: October 3, 2023
`New York, New York
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