The Ripple labs legal team has removed a pending securities lawsuit regarding the nature of XRP, the cryptocurrency of Ripple.
Ripple’s representatives argued that the class action lawsuit was initiated by a group of investors who did not have geographical limitations and that the case shouldn’t be handled by the state court.
Peter Morrison, a partner of Skadden, Arps, Slate, Meagher and Flom, emphasized that the controversy exceeds over $5 million, which was brought by more than 100 members, and that Ripple labs has the right to remove the lawsuit.
“A putative class action may be removed to the appropriate federal district court if (1) the action purports to be a ‘class’ action brought on behalf of 100 or more members; (2) any member of a class of plaintiffs is a citizen of a state different from any defendant; and (3) the amount in controversy exceeds $5 million.”
Jake Chervinsky, a securities litigation attorney and a government enforcement defence official, said that the move by the legal team of Ripple labs to counter the securities lawsuit involving XRP token to federal court, was “brilliant”.
“Ripple’s legal team showing some tactical brilliance here. It’s hard to explain the procedural maneuver in one tweet & I’m not going to thread this, but suffice to say it’s a seriously crafty attempt to go federal. Might not work, but slick regardless.”
Chervinsky also said that if the class action lawsuit stayed in the court of California, it could’ve been a nationwide class action lawsuit which could’ve garnered public scrutiny. He stated the Ripple Labs legal team needed a way to justify the relocation of the class action from the state court to the federal court.
Chervinsky also tweeted regarding the case:
“I can’t speak to their odds of winning since the case is still so young & I don’t know all the facts, but it’s fair to say Ripple’s lawyers think they have better odds of winning in federal court than in state court (or else they wouldn’t be trying so hard to remove the case).
— Jake Chervinsky (@jchervinsky) November 9, 2018”