Deaton prepares to file a request to join the Zakinov v. Ripple case as a friend of the court.
Attorney John E. Deaton, who represents over 75,000 XRP holders as a friend of the court in the US Securities and Exchange Commission case against Ripple, is set to request to join the Zakinov v. Ripple case to fight investors’ claims that XRP is a security.
This is according to a Twitter thread from prominent defense lawyer James K. Filan yesterday. The latest development comes as the complainants who claim that XRP is security seeks to certify a class of all XRP holders who purchased, hold XRP, or have sold XRP at a loss, as explained by Filan.
#XRPCommunity #XRP @JohnEDeaton1 will be filing a Motion to File an Amicus Brief in Zakinov v. Ripple in California. There, the plaintiffs claim that Ripple sold XRP as an unregistered security. They are asking the court to certify a class of ALL XRP Holders who purchased 1/5
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) February 6, 2023
Consequently, the plaintiffs request that the court recognize them as a fair representation of XRP holders worldwide, regardless of whether they purchased XRP in the secondary market or directly from Ripple.
As highlighted by the defense attorney, from Deaton’s role in the Ripple case, we know that at least 75,000 XRP holders disagree with the complainants’ position in the Zakinov suit. As a result, Deaton will be arguing against the certification of the class, asserting that there are differing views on XRP’s classification and that the small number of plaintiffs in the Zakinov case can not fairly represent so many others who disagree with their stance.
In response to Filan’s thread, Deaton confirmed the development, noting that, regardless of the opposition, he is willing to fight all claims that secondary market sales of tokens represent securities.
Whether its the @SECGov or a Plaintiff’s Attorney making the absurd argument that secondary market transactions of a token are also securities simply b/c it may have been previously offered or sold in a way that violated Section 5 of the Securities Act, I’ll see you in Court. https://t.co/WDPra4FZ5O
— John E Deaton (@JohnEDeaton1) February 7, 2023
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Notably, the courts have already granted Deaton’s pro hac vice request allowing him to participate in the case in the Northern District of California, despite being a member of the Rhode Island bar. Deaton’s CryptoLaw disclosed this in a tweet yesterday.
It is worth noting that the Zakinov case is the second of at least three investor-led class action suits against Ripple, alleging that XRP is a security after investors made a loss on selling lower than they purchased it. Ripple was able to get the court to dismiss the first class action suit by Ryan Coffey in a few months. However, the Zakinov case has persisted for over four years.
The judge in 2020, per a Bloomberg report, denied a Ripple request to throw out the entire case. However, the judge did dismiss claims by the plaintiff that Ripple had made misleading statements to investors under California law.
Per a blog post on Top Class Actions, the lead plaintiff must meet three requirements to certify a class in a class action suit.
- Prove that they have suffered harm and others have as well at the hands of the defendant
- Secondly, the plaintiff must clearly define the class to determine who can join the suit
- Lastly, the lead plaintiff has to show that he fairly represents the defined class
Fellow attorney Fred Rispoli commenting on Deaton’s involvement in the lawsuit noted that the lawyer can significantly damage the plaintiffs’ case at this stage.
“Being familiar with class actions, the class certification battle is the most important fight in these types of cases,” Rispoli asserted. “John coming in here in this capacity is a real kick in the balls to plaintiff’s counsel. And I don’t disagree with John, but the ball kick cannot be overstated.”
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