More on the SEC's letter after reading it again.
Why do you bait a hook? To see if a fish will bite. Were RH’s lawyers trying to bait a hook with their letter?
I mean, I know why RH’s attorneys filed it. I don’t understand why the SEC felt the need to respond like this. However, I have an idea I’ll explain below.
RH’s attorneys filed it to frame the issues they intend to bring in upcoming motion(s) to dismiss. They had already discussed the issues in it with the SEC, as they note in the letter. In other words, the SEC wasn’t surprised by anything included in RH’s letter.
There was no legal reason for the SEC to file a letter in response to Richard’s. Neither letter has any legal effect on the case. So why was it filed?
Going back to RH’s letter, his attorneys use the phrase “failed to plead” a number of times. This is lawyer-speak for “your Complaint sucks.”
Plaintiffs put what they think they have, or what they can prove, in a Complaint. Motions to dismiss attack what a Plaintiff puts in their Complaint, basically arguing that even if Plaintiff proved everything they claim, it’s still not legally enough to win.
Here, RH’s letter starts with their argument regarding personal jurisdiction. Again, no personal jurisdiction, no case. So, I think this argument by RH’s lawyers hit its intended target and the SEC decided, for some reason, to waste tax dollars responding to it instead of waiting for an actual motion to be filed.
But why? Well, let’s look at the SEC v Plexcorps citation in it. Note that it’s not binding precedent, since it’s not a 2nd Circuit or SCOTUS opinion. But it was decided by *Judge Amon*, the same judge in RH’s case, so they’re basically saying “look judge, you decided we were right about personal jurisdiction last time, so you should give us the benefit of the doubt this time.” It’s the equivalent of saying “you look great in black, your honor!”
But each case lives on its own facts, and the facts Judge Amon found significant when deciding the Plexcorps case are very different than the facts of this case. I have the opinion downloaded, but I don’t actually know how to upload a 40+ page pdf doc to Twitter, and I’m feeling like shit today so I’m not in the mood to figure it out. But I can’t seem to find the opinion on CL or any other free website, just PACER. If you're some kind of internet magician and have this technology and want to post it, let me know.
Anyway, the key takeaway here is that nothing in the SEC’s letter changes anything in the SEC’s Complaint. RH’s motions to dismiss will attack what the SEC put in the Complaint, and the Court will analyze the Complaint, not the SEC’s letter.
#Hex #PLS