Att'y Hogan on SEC v. Ripple Court Hearing_ V is for Victory! Judge's Hypo. YouTuber Interviews!.

Hello and welcome to Legal Briefs. And today in the SEC versus Ripple case there was of course the long-awaited hearing about the documents related to the SEC's internal deliberations on the security status of Ether and XRP. And I of course was there for you. And this was a doozy of a hearing, so of course I'm going to tell you all about the legal issues, the arguments, who won, and of course why it was all important. Here's my tweet from just before the hearing started. Just a little tease for you. There I am. Listen for the magic words from the judge. I'll do an in-camera review. Okay, we'll get to that in a second. But today, unlike our typical video with me just basically talking in front of the camera, I have arranged something very special for you. A fellow YouTuber and XRP enthusiast is going to join me on Zoom and we are going to discuss the hearing today together. Now this is going to be amazing. I'm very excited to be doing a joint video with so let's join the video conference and get this party started. Okay, here he is. Attorney John Deaton, the one and only with the Crypto Law TV YouTube channel. John, I'm so excited to have you on. Thanks for being here. Thanks Jeremy. Great seeing you somewhere other than Twitter. Let me just get right to it and ask you about the SEC versus Ripple case. Okay man, let's do it. Hold on one second please. Hi, this is John Deaton. BitBoy? Hey BitBoy. What? Sure I can talk about the SEC v. Ripple case. When do you want to? Now? Hey man, I got nothing better to do. Just give me one second. Jeremy, hey man, I got to go. Sorry. Talk to you later. Who the hell is BitBoy? Ladies and gentlemen, it is my privilege to have Mr. Bibi himself as a guest on Legal Briefs, Mr. Bearable Bull. Welcome. Welcome, ladies and gentlemen. This is the Bearable Bull here. So Mr. Bibi, my first question is... Jeremy, Jeremy, did you send me a tip on Exim yet? I'm sorry? What? So I normally charge about 1000 XRP per interview. Did you not get the memo? No, I mean, I just kind of assumed, you know, we're doing a YouTuber to YouTuber... Jeremy, Jeremy, I'm all about the aggressively average content, but you're not up to the average level yet, buddy. Hey, crypto Eddie, this is Jeremy Hogan. Welcome to Legal Briefs. Oh, it's you, the lawyer. Yes, I'm so excited to have you on. You're known as the mother of crypto. My apologies. My people told me this interview was with Jeremy Irons, you know, the actor. I'm sorry? Well, nothing personal. You know, people in your profession. Well, maybe we should reschedule this. We'll talk to you soon. Who's Jeremy Irons? Ah, hold on a sec. This asshat Hogan is about to Zoom me for a stupid interview. Matt, this is Jeremy. This is Legal Briefs for the interview. Oh, hi. Hi, Attorney Jeremy. This is Matt with the Moon Lambeau Channel. Hey, I'm sorry, Matt. Listen, I can't see your video. Something... Oh, I'm sorry. I don't know what's going on. We must be having a connection problem. It's breaking up. Sorry. Maybe another time, Jeremy. Bye. Are my video filters on OK? Thank you so much, John Deaton, Bearable Bull, Crypto Ari, and of course, Matt with the Moon Maserati for helping me with that opening. They all agreed to do that on short notice and they were all amazing. So thank you very much. Also, shout out to the Bearable Bull's mom. What a charming lady. And she obviously raised a great son. But in any case, let's get to the hearing from today because it was amazing. The motion to be ruled on today was Ripple's motion to get the SEC's internal documents, which show whether XRP and certain other digital assets were securities in the mind of the SEC, at least. Now, in response to the request for those documents, the SEC raised what is called the Government Deliberative Process Privilege, or DPP for short, because no one could say that many times. Now, if I worked for the SEC, the first thing I would have said to the judge today is, Judge, you down with DPP? And then I would, of course, been fired. So let's let's take a look at the argument. According to the SEC, looking at its brief Roman numeral to paragraph a SEC's response to privilege dispute, quote, To be protected by the deliberative process privilege, the documents must be pre-decisional and deliberative. Pre-decisional documents include recommendations, drafts, proposals and other subjective documents which reflect the personal opinions of the writer rather than the policy of the agency. So that is what the SEC is saying as to why it doesn't have to provide the documents. And here is what we haven't seen yet in the litigation. But whenever a privilege is raised, you have to produce a privilege log and give it to the other side. And here is a sample of a privilege log. It's from a very different type of case, but the format will be the same. So the SEC has produced a document like this to ripple. And this was looked at during the hearing today when you saw or heard her say privilege log. And on there, you can see that for every document that the SEC is withholding, it has to list the document with a brief description, the date of the document, and then you have to specify what exactly the privileges that requires you not to have to give it. So having looked at that sample privilege log, you should be able to get a kind of an idea why it's difficult for the parties, especially the party that wants to get the documents, to talk about them and argue the hearing because that's all you know about the documents that were produced. So those little pieces of information in there. But fortunately for ripple, attorney Matt Sullivan was arguing for ripple side and he was spot on the whole hearing. The judge began with a series of very pointed questions and I have to hand it to her. Oral argument is really supposed to be just to clarify things that are unclear or vague in the pleadings themselves. And this judge had three areas in mind that she needed clarified and she was very specific. But really, I will talk mostly about the very first question because it was the only really important and far-reaching question. And the question was this. Mr. Sullivan, in your opinion, is the standard for aiding and abetting a violation of law, which the individual defendants were charged with, an objective or subjective standard? Now at first I was a little concerned when I heard that question because this judge usually starts questioning the party she's going to rule against from what I've seen. But Sullivan was apparently ready because he knocked it out of the park and his answer was spot on. And he cited to the Safeco insurance company the Burr case, which I'm very familiar because it's really an insurance case. And here's what the U.S. Supreme Court said at the tail end of its ruling in that case. Quote, the common law has generally understood recklessness in the civil liability sphere as conduct violating an objective standard action entailing an unjustifiably high risk of harm that is either known or so obvious that it should be known. Close quote. And as we all know, only God is above the U.S. Supreme Court when it comes to the American judiciary. And if you were listening, this explains why the attorney for the SEC struggled with answering the same question. Question, Mr. Tenrero, is recklessness a subjective or objective standard? Now right away, Mr. Tenrero started talking about something completely different. And you know it's always a bad sign when asked a black and white straightforward question by the judge when you have to start with judge. Let me just start off by saying that never goes well. But eventually, even the SEC did have to admit that it is an objective standard. Now, why is that so critical? Why is that the big question? Because if the standard was a subjective standard, which means what did Brad Garlinghouse know about whether XRP was a security or not when he sold it? If that's all that's relevant, then the SEC's internal deliberations are 100% completely irrelevant. So that's why it's a key question. And that is why I breathed a little sigh of relief when the judge didn't bite on any of the SEC's arguments to the contrary. And actually, it was when the SEC would not concede this point that I heard the most irritation. We might even call it a bit of polite upsetness from the judge. But putting that aside, I think it's safe to say that the judge did believe it was an objective standard. But really, it was the interaction between the judge and the SEC attorney which led to the most interesting hypothetical and definitely caught my ear. And here's what I wrote in my notes. Now taking a look at that to translate my chicken scratch, the judge said, what if all the SEC commissioners were out having lunch and talking about how they are all confused about XRP and other digital assets status as a security or not? That would be relevant. And I literally laughed out loud because I think Judge Netburn is watching Dai's YouTube channel or following James Rule XRP on Twitter or something because that's exactly what you can see when you go back and look at statements and videos from 2017, 18, 19, 2020. Just total confusion on the digital assets. The commissioners were all over the place and they are all over YouTube and Twitter. And if it's an objective test and the SEC is confused, how can the defendants have acted with knowledge of wrongness? In any case, for me, that was the highlight of the hearing because, well, I'll just say it. I swear Judge Netburn is following some of the XRP people on Twitter or maybe even on YouTube. I didn't think so before, but now I see you, Judge Netburn. Remember to hit the like and subscribe button, your honor. But anyways, what this hearing made clear is that the judge believes that all of these documents are extremely relevant and I think relevant and important enough to overcome any DPP argument. And the reason why this is so important to the judge is because of a case that Attorney Solomon briefly pointed out but which is more important than the time it was given during the hearing. Looking at Solomon's brief at the bottom of page three, here's what he says. Quote, if the underlying law was unclear at the time, even to the SEC, then the alleged violation could not have been so obvious that the defendant must have been aware of it. Close quote. And that's citing to the Novak v. Kasich case. And that is what Solomon is gunning for. And that's why the judge ruled in favor of Ripple and the individual defendants on this motion. So you might be asking, well, what happens from here? Now, first, the SEC will be providing copies of the documents Ripple wants to Ripple. They'll be redacted. Now, the judge made a very strong point that they were to be lightly redacted. I think she said that three different ways. But the judge and the judge alone will get complete and unredacted copies of all the documents. This is called an in-camera review. And in-camera, we're not talking about something with megapixels. In-camera is a Latin word for in private. So the judge will review the complete documents and then the parties will provide legal briefs which argue why each individual document is or is not privileged. And then the judge is actually going to issue an order on each individual document and either order it produced to Ripple or not produced to Ripple. And based on today, I would say it's a good bet that she is going to order most of the documents Ripple is asking for produced. Now, this hearing has taken six months to get to. It's been very frustrating when things take this long. But keep in mind that this discovery phase is ending in a little over two months. And it's during this discovery phase that you plant and grow the food that feeds your case. And as you know, the lazy man does not plow during planting season. And at harvest, he looks and there is nothing. Now, it's obvious that Ripple has not been lazy during this litigation. And by the way, that is a quote from King Solomon. Thanks for watching.