Thread by @innercitypress

OK - now #XRP crypto case of SEC v. Ripple a proceeding before @SDNYLIVE Magistrate Judge Netburn, on SEC trying to quash deposition of Hinman innercitypress.com/sdny10cryptose… Inner City Press asked IMF today about #BTC ElSalvador & Paraguay; will live tweet, thread below

Judge Netburn: I have before me the subpoena seek to depose former SEC official Hinman, and the SEC application to quash. SEC?
SEC's lawyer: If official have to testify, years after, it would have a chilling effect.

SEC lawyer: Let me cite again your Honor's decision in the 9/11 case. From Page 14 of your decision, you raised the issue of repetition and [wait for it] ripple effect. The burden on Ripple here is high, and they have not met it. Any questions?
Judge Netburn: Yes

Judge Netburn: Let's talk about his 2018 speech. The next prong of the analysis is how is the government defining the speech. He stated these were his own views... So how would answering questions interfere with the deliberative process of the SEC?

SEC lawyer Ladan Stewart: A speech is a speech, it's on the SEC's website. There is no tension. Director Hinman consulted with others in the SEC about the speech. It was all pre-decisional...
Judge Netburn: So what was the decision made?

SEC lawyer: There doesn't have to be a decision made. We found another case, not in our letter: it's Nacchio, 2009 Westlaw 211511, Dist of Colorado, Jan 29, 2009.
[If it's an SEC case, how could they not have "found" it?]

Judge Netburn: For what proposition are you citing the Nacchio case?
SEC lawyer: That Mr. Hinman falls under deliberative process privilege.
Judge Netburn: Would the privilege be invoked if Mr. Hinman were asked, Why do YOU think xyz?
SEC: Yes.

Ripple's lawyer: Mr. Hinman was trying to provide guidance --
Judge Netburn: Why do you say that?
Ripple's lawyer: The SEC held it out to Congress as such. Then the agency points to the speech, it shows the speech was meant to provide guidance.

Judge Netburn: But if the speech reflects agency guidance, isn't the process that led up to it covered by the deliberative process privilege?
Ripple's lawyer: We want to establish, with the deposition, if this WAS the policy of the SEC.

Ripple's lawyer: Mr. Hinman was never at the apex of the agency. The SEC is 4,200 employees. Mr. Hinman's department was much smaller. Between March 2018 and March 2019 he had a number of communications giving guidance.

Ripple's lawyer: He was being asked, Is it an investment contract under Howey. Mr. Hinman met with the founder of the Ethereum Foundation... And of Consensus, a leading software developer for Ether.

Ripple's lawyer: We don't know who all the 3d parties he met with are. We want to ask him.
Judge Netburn: Mr. Rapawy, if you were asking me to depose him for a list of who he met with, I'd direct you to his chief of staff or deputy. You could get his calendar

Ripple's lawyer: It's going to be hotly contested, we need everything we can get. And even if the speech were the decision, we could still do discovery about things after the speech. Let us do the deposition, then brief it afterward.

Ripple's lawyer: In unique cases, you do sometime get depositions of senior officials, like in the Judge Furman case, the Secretary of Commerce....
Martin Flemenbaum for Christian Larsen: We must be able to him about his other public remarks.

Judge Netburn: If I allow the deposition to go forward, it's Monday?
Flumenbaum: The Defendants are prepared.
SEC: We'd need time to evaluate.
[Meaning, appeal?]
SEC: They want to depose him twice - he declines to answer some, then they bring the transcript to you

Judge Netburn: In Nacchio, the deposition in fact happened...
Defense: Mr. Hinman met with Ether a week before the speech. This is not covered by the privilege.
SEC lawyer: If it goes forward, we'll be instructing not to answer the questions on privileged info

Rapawy: We don't agree to push this back. It should be possible to avoid 2 depositions, if invocations of privilege are reasonable.
Matthew Solomon for Bradley Garlinghouse: My client will be sitting for a deposition during this discovery period. No more delay

Judge Netburn: The issues are complicated. I am going to rule in part. I am prepared to find Mr. Hinman was a high ranking official. He is entitled to the standard in the Lederman case, 731 F. 3d 199.
Here: cite.case.law/f3d/731/199/

Judge Netburn: I find that this case is unique, and that the amount in controversy is substantial. And the public's interest is significant. In this case, Mr. Hinman must sit for the deposition. I am going to authorize it.

Judge Netburn: It seems to me to put it off for a week and think about how the privilege will apply is a good idea. Let me know.
SEC: That makes sense to us. We will meet and confer and get back to the court.
Ripple's lawyer: Will confer

Judge Netburn: Let me know by tomorrow afternoon, if deposition is Monday or a brief postponement, you could bring the issues of privilege to me. I will wait to hear back.
Podcast and stories soon on InnerCityPress.com and patreon.com/MatthewRussell…