On March 1, U.S. District Judge Phyllis J. Hamilton of the Northern District of California issued a ruling in which she declared that a class action lawsuit filed against Ripple must remain in federal court. The ruling was announced in a tweet by attorney Jake Chervinsky, who further said that the ruling was a "minor but meaningful victory for Ripple." The lawsuit was filed against Ripple Labs, which created and manages the popular Ripple digital currency. Also named in the suit is a subsidiary of Ripple Labs called XRP II and the CEO of the company Brad Garlinghouse. The plaintiffs in the suit are claiming that the defendants have been engaged in the sale of unregistered securities. Ripple wanted the lawsuit to remain in federal court, and the court concurred, citing the fact that interstate class action lawsuits typically have a larger number of interstate commerce ramifications than other kinds of suits. They also involve more money and people. As part of the ruling, all parties in the suit have two weeks to meet and decide how the suit should proceed. The plaintiffs further have a month to file a revised complaint. In May of 2018, Ryan Coffey filed the class action suit against Ripple through the law firm of Taylor-Copeland. Coffey says that on January 5, 2018, he bought 650 Ripple tokens, known as XRP, and then sold them a few weeks later for USDT, which is a stablecoin tied to the U.S. Dollar. He finally exchanged these for actual dollars, losing in the process more than $550, which was nearly a third of his investment. The lawsuit alleges that the defendants broke both the California Corporations Code and the U.S. Securities Act by selling what they call an unregistered security. They are asking for punitive damages as well as attorney fees and court costs. In November of 2018, attorneys representing Ripple applied to move the lawsuit to federal court. They reportedly did so in order to prove definitively that the Ripple currency is not legally a security should they prevail in the suit.
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