Latest / The Epstein Chronicles / Jes Staley's Reply Memo In Support Of The Motion To Dismiss The JP Morgan Claims (Part 2) (9/25/26)

Transcript

Jes Staley's Reply Memo In Support Of The Motion To Dismiss The JP Morgan Claims (Part 2) (9/25/26) · The Epstein Chronicles

• 0:00
  Speaker 1: What's up everyone and welcome back to the Epstein Chronicles.
• 0:03
  Speaker 1: In this episode we're going to continue on with the
• 0:06
  Speaker 1: Jess Staley motion to intervene and finish this bad boy up. 3.
• 0:12
  Speaker 1: The alleged misconduct was outside the scope of Mr. Staley's employment.
• 0:16
  Speaker 1: As Mr. Staley's opening brief showed, identifications available only, one,
• 0:21
  Speaker 1: for acts failing within the scope of employment, and two,
• 0:24
  Speaker 1: where a plaintiff's injury was due solely to the agent's
• 0:27
  Speaker 1: negligent performance or non-performance of an act solely within his province.
• 0:32
  Speaker 1: Corley v. Country Squire Apartments, Inc., 820 NYS. 2D, 902nd Department, 2006.
• 0:37
  Speaker 1: On the first element, J.P. Morgan, never disputes that the
• 0:45
  Speaker 1: claim applies only to the injuries caused by an agent
• 0:48
  Speaker 1: acting within his agency. Rather than plead that Mr. Staley's
• 0:52
  Speaker 1: actions were within the scope of the employment or just
• 0:56
  Speaker 1: say nothing, the bank chose to plead that he acted
• 0:58
  Speaker 1: outside that scope. TPC at 42. So the identification claim fails.
• 1:04
  Speaker 1: The bank argues that dismissal is premature because there is
• 1:07
  Speaker 1: a factual dispute over whether Mr. Staley acted within the
• 1:10
  Speaker 1: scope of his employment. But it cannot cite allegations in
• 1:14
  Speaker 1: the plaintiff's complaints, allegations it disclaimed repeatedly, to try and
• 1:19
  Speaker 1: fix what is plainly missing from its own complaints. And
• 1:22
  Speaker 1: the claim still fails the second element. The bank does
• 1:25
  Speaker 1: not and cannot allege that injuries were solely caused by Mr.
• 1:29
  Speaker 1: Staley or arose from actions that fell solely within his
• 1:33
  Speaker 1: responsibility at the bank. D. J.P. Morgan's contribution claim fails.
• 1:38
  Speaker 1: JP Morgan concedes that it did not allege that Mr.
• 1:41
  Speaker 1: Staley owed a duty to Doe or the USVI. As
• 1:46
  Speaker 1: to duty to the bank, JP Morgan has failed to
• 1:48
  Speaker 1: adequately plead that such a duty was breached, especially under
• 1:52
  Speaker 1: Rule 9b' s pleading standard. The contribution claim also fails the
• 1:57
  Speaker 1: same injury requirement. First, the complaints simply do not allege
• 2:01
  Speaker 1: the specific harm that Mr. Staley inflicted on the plaintiffs,
• 2:05
  Speaker 1: much less say that It's the same as the one
• 2:08
  Speaker 1: the bank allegedly caused. The claim is defective without that. Second,
• 2:12
  Speaker 1: faced with this clear pleading failure, JPMorgan asserts that both Mr.
• 2:17
  Speaker 1: Staley and the bank in some way allegedly helped cause
• 2:20
  Speaker 1: Epstein's continued retention as a JPMC client. But that's not
• 2:25
  Speaker 1: the injury that the plaintiffs complain of. They allege that J.P.
• 2:29
  Speaker 1: Morgan provided financial lifeblood for Epstein's enterprise, which is, of course,
• 2:34
  Speaker 1: not something that any single bank employee could provide. J.P.
• 2:38
  Speaker 1: Morgan's stray comment about being able to pursue different grounds
• 2:41
  Speaker 1: of liability than the plaintiffs is besides the point. What
• 2:45
  Speaker 1: matters is that under no theory could Mr. Staley, as
• 2:48
  Speaker 1: an individual, have provided the financial lifeblood to Epstein's enterprise. 2.
• 2:53
  Speaker 1: The court should dismiss the remaining employment claims under Rule 14. J.P.
• 2:58
  Speaker 1: Morgan insists that if this court dismisses counts 1 and 2,
• 3:02
  Speaker 1: then it can still retain supplemental jurisdiction over the employment claims. Mr.
• 3:07
  Speaker 1: Staley never argued otherwise. He instead asserted that the court
• 3:10
  Speaker 1: should reject the employment claims under Rule 14 if only
• 3:14
  Speaker 1: they remain. The bank entirely failed to address the argument. 3.
• 3:18
  Speaker 1: The employment claims count 3 and 4 are stale and
• 3:23
  Speaker 1: deficiently pleaded. A. The opposition cannot resurrect the Time Bard claims. J.P.
• 3:28
  Speaker 1: Morgan sat on its employment claims against Mr. Staley, who
• 3:31
  Speaker 1: left the bank over a decade ago. The bank declares
• 3:34
  Speaker 1: that Delaware law governs the claims and provides the statute
• 3:38
  Speaker 1: of limitations. This assertion is bizarre, given that Count 3
• 3:42
  Speaker 1: explicitly pleads the claim under New York law. It's also wrong.
• 3:47
  Speaker 1: The court applies New York Choice of Law Principles Rogers v. Grimaldi,
• 3:51
  Speaker 1: 875 F. 2d, 994-1002 2nd Circuit, 1989, And under the Inter-Analysis
• 4:00
  Speaker 1: Test for Breach of Fiduciary Duty, the law of the
• 4:03
  Speaker 1: jurisdiction where the tort occurred will generally apply because the
• 4:06
  Speaker 1: jurisdiction has the greatest interest in regulating behavior within its borders. Mr.
• 4:11
  Speaker 1: Staley worked in New York, the bank's worldwide headquarters is
• 4:14
  Speaker 1: in New York, and the TPC's allegations concern alleged misconduct
• 4:19
  Speaker 1: in New York. Regardless, choice of law is a sideshow.
• 4:22
  Speaker 1: The employment claims fail under either a two- or three-year
• 4:26
  Speaker 1: limitations period. J.P. Morgan, nowhere, denies that it only hopes
• 4:30
  Speaker 1: to preserve these dated claims is the discovery rule, under
• 4:34
  Speaker 1: which it must plead and establish that the alleged fraud
• 4:36
  Speaker 1: could not have been discovered prior to the limitations period. J.P.
• 4:40
  Speaker 1: Morgan argues that it did not discover any misconduct until
• 4:44
  Speaker 1: it was sued. But that misses the point. The standard
• 4:47
  Speaker 1: does not require the bank to have discovered all the
• 4:50
  Speaker 1: factual allegations, including those underlying the plaintiff's claims, before the
• 4:54
  Speaker 1: clock started on its employment claims. It merely needed to
• 4:58
  Speaker 1: know enough to be on notice to investigate Mr. Staley's
• 5:01
  Speaker 1: possible disloyalty, that is, that he might have lied about
• 5:04
  Speaker 1: Epstein's character and conduct. And JPMorgan, in touting the public
• 5:09
  Speaker 1: scrutiny from news reports in 2018 and Epstein's 2019 arrest
• 5:13
  Speaker 1: that exposed shocking details about Epstein's trafficking enterprise... at one
• 5:18
  Speaker 1: and two, has conceded it was on notice of a
• 5:21
  Speaker 1: potential need to investigate well over three years ago. In
• 5:25
  Speaker 1: the face of this barrier, J.P. Morgan's chief response is
• 5:28
  Speaker 1: to punt, claiming that the statute of limitations presents a
• 5:31
  Speaker 1: factual issue. But to create a factual dispute, J.P. Morgan
• 5:35
  Speaker 1: had to plead relevant contested facts. It has not and
• 5:39
  Speaker 1: cannot do so. Even J.P. Morgan's favorite authority notes that
• 5:43
  Speaker 1: that once a defendant makes a prima facie case of
• 5:46
  Speaker 1: inquiry notice, as Mr. Staley has done, the burden then
• 5:49
  Speaker 1: shifts to the plaintiff to establish that even if it
• 5:52
  Speaker 1: had exercised reasonable diligence, it could not have discovered the
• 5:56
  Speaker 1: basis for its claims before that date. Affirming dismissal of
• 6:00
  Speaker 1: fraud claim because plaintiff could have discovered allegations. Neither the
• 6:11
  Speaker 1: complaints nor the opposition explain why J.P. Morgan could not
• 6:14
  Speaker 1: have discovered Mr. Staley's alleged disloyalty with reasonable diligence. Indeed,
• 6:19
  Speaker 1: in addition to the abundant press on Epstein and Mr. Staley,
• 6:23
  Speaker 1: the bank possessed decades' worth of Mr. Staley's records and
• 6:26
  Speaker 1: emails with Epstein. J.P. Morgan also tosses in a bid
• 6:30
  Speaker 1: for equitable tolling, but to qualify a plaintiff must plead
• 6:34
  Speaker 1: and prove 1. the wrongful concealment, by the defendant of
• 6:38
  Speaker 1: its actions, 2. the failure by the plaintiff to discover
• 6:41
  Speaker 1: the operative facts underlying the action within the limitations period,
• 6:45
  Speaker 1: and 3. the plaintiff's due diligence to discover the facts.
• 6:48
  Speaker 1: Donahue v. Pendleton Woolen Mills, Inc. 633, F.S.U.P.P. 1423, 1443, S.D.N.Y. 1986. J.P.
• 6:51
  Speaker 1: Morgan pleaded literally zero about any due diligence undertaken. Courts
• 6:54
  Speaker 1: also require... particularity in pleading fraudulent concealment. The bank's conclusory
• 7:09
  Speaker 1: statements come nowhere close as discussed below. B. The employment
• 7:14
  Speaker 1: claims do not satisfy Rule 9b. J.P. Morgan does not
• 7:18
  Speaker 1: contest the fact that employment claims, factual allegations, must satisfy
• 7:22
  Speaker 1: Rule 9b. Courts must rigorously enforce this standard, which safeguards
• 7:27
  Speaker 1: parties' reputation and goodwill from improvident charges of wrongdoing. Ross v.
• 7:33
  Speaker 1: Bolton 904 F. 2D, 819, 823, 2nd Circuit, 1990. The TPCs, however,
• 7:40
  Speaker 1: never identify any date or event or even a single
• 7:44
  Speaker 1: person Mr. Staley supposedly fooled and thus lack the mandatory who, what, when, where,
• 7:49
  Speaker 1: and how of the alleged fraud. Williams v. Finney Group,
• 7:53
  Speaker 1: 889 F. 3D, 116, 124, and 25, 2nd Circuit, 2018. The
• 7:55
  Speaker 1: opposition barely offers any fix. It notes that Mr. Staley,
• 8:05
  Speaker 1: like every employee, allegedly signed a code of conduct, here
• 8:09
  Speaker 1: again without any dates or allegations, that anyone at the
• 8:12
  Speaker 1: bank relied on this, and then made points outside the
• 8:15
  Speaker 1: TPC's to the plaintiff's pleadings, which notably the bank never
• 8:19
  Speaker 1: expressly incorporated and often disclaimed, but the conduct underlying the
• 8:23
  Speaker 1: employment claims is Mr. Staley's alleged deception of the bank's
• 8:27
  Speaker 1: employees in their managing of Epstein's accounts. And the TPC
• 8:31
  Speaker 1: plainly lacked particularized pleading on the alleged deception. C. The
• 8:37
  Speaker 1: breach of fiduciary duty claim is deficient. The breach claims
• 8:41
  Speaker 1: requiring pleading, one, that Mr. Staley actually had a duty
• 8:44
  Speaker 1: to share the information he supposedly concealed, and two, that
• 8:48
  Speaker 1: the bank suffered damages directly caused by his alleged acts
• 8:52
  Speaker 1: or omissions. That the opposition points to scattered allegations from
• 8:56
  Speaker 1: the plaintiffs, complaints underscores what is missing from J.P. Morgan's complaints.
• 9:01
  Speaker 1: Any allegations at sharing personal details about Epstein fell within Mr.
• 9:05
  Speaker 1: Staley's job purview. A fiduciary obligation is limited to matters
• 9:09
  Speaker 1: relevant to affairs entrusted, Ross v. FSG Private Air Inc.,
• 9:14
  Speaker 1: 2004 WL 1837366, at 7, SDNY, August 17, 2004. The complaints, however,
• 9:16
  Speaker 1: plead that Mr. Staley's alleged knowledge, participation, and observations were
• 9:28
  Speaker 1: not in connection with the performance of his duties for J.P. Morgan,
• 9:32
  Speaker 1: nor does the opposition shore up the deficient damages or allegations.
• 9:37
  Speaker 1: A breach claim requires non-conclusory factual allegations explaining how the
• 9:41
  Speaker 1: breach was a direct and proximate cause of a non-speculative injury.
• 9:46
  Speaker 1: See Founds Brothers vs. J.P. Morgan Chase, 92 A.D. 3D, 582-583, 2012.
• 9:54
  Speaker 1: JPMorgan claims damages for this litigation costs and reputational harm
• 9:58
  Speaker 1: incurred over a decade. after mr staley left the bank
• 10:02
  Speaker 1: mr staley's alleged actions even if true could not be
• 10:05
  Speaker 1: the direct and proximate cause of those harms d the
• 10:09
  Speaker 1: faithless servant claim is defective The opposition merely repeats inflammatory
• 10:14
  Speaker 1: and baseless accusations of sexual misconduct by Mr. Staley and
• 10:18
  Speaker 1: then casually labels them disloyal activities because Mr. Staley purportedly
• 10:22
  Speaker 1: served his own interests by not reporting himself and Epstein
• 10:26
  Speaker 1: to the bank. But J.P. Morgan's capacious reading of this
• 10:30
  Speaker 1: cause of action departs from the case law. It would
• 10:33
  Speaker 1: sweep in literally any activity that benefited an employee to
• 10:37
  Speaker 1: his employer's detriment. Faithless servant claims are limited to circumstances
• 10:41
  Speaker 1: that put a company and its employees at financial odds.
• 10:45
  Speaker 1: The opposition tries to fight the standard, but it unsurprisingly
• 10:49
  Speaker 1: cites no cases supporting its reading. Compare at six. Rejecting
• 10:54
  Speaker 1: suit for employee retaining confidential and privileged documents and trying
• 10:58
  Speaker 1: to trigger a favorable severance package with Morgan Staley v.
• 11:01
  Speaker 1: Scoran 989FSUPP2D356362 SDNY 2013. Hiding alleged malfeasance is not akin
• 11:12
  Speaker 1: to competing with a bank to its financial detriment. Conclusion.
• 11:16
  Speaker 1: The complaint should be dismissed with prejudice. This was submitted
• 11:20
  Speaker 1: by Brendan Sullivan and it was dated May 15th, 2023.
• 11:25
  Speaker 1: All of the information that goes with this episode can
• 11:28
  Speaker 1: be found in the description box.