Latest / Beyond The Horizon / The USVI And Their Motion To Strike The JP Morgan Affirmative Defenses (Part 1) (9/26/26)

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The USVI And Their Motion To Strike The JP Morgan Affirmative Defenses (Part 1) (9/26/26) · Beyond The Horizon

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  Speaker 1: What's up everyone and welcome back to the Epstein Chronicles.
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  Speaker 1: In this episode we're going to take a look at
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  Speaker 1: some more court documents and this time we're going to
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  Speaker 1: be diving into the government of the United States Virgin
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  Speaker 1: Islands Memorandum of Law in support of motion to strike
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  Speaker 1: defendants affirmative defenses 5 through 8. Case number 122-CV10904JSR. The
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  Speaker 1: government of the United States Virgin Islands versus JPMorgan Chase
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  Speaker 1: and JPMorgan Chase versus James Edward Staley. Introduction. Plaintiff, the
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  Speaker 1: government of the United States Virgin Islands government brought this
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  Speaker 1: civil action against defendant JPMorgan Chase Bank as part of
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  Speaker 1: its ongoing effort to protect public safety and to hold
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  Speaker 1: accountable those who facilitated or participated in the trafficking venture
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  Speaker 1: or enterprise of Jeffrey Epstein. The government's investigation has revealed
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  Speaker 1: that JPMorgan knowingly, recklessly, and unlawfully provided and pulled the
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  Speaker 1: levers through which Epstein's recruiters and victims were paid and
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  Speaker 1: was indispensable to the operation and the concealment of Epstein's trafficking.
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  Speaker 1: Financial institutions can connect or choke human trafficking networks, and
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  Speaker 1: Attorney General's public enforcement actions are essential to prevent trafficking
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  Speaker 1: ventures like Epstein's from flourishing in the future. J.P. Morgan
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  Speaker 1: had real-time information on Epstein's activity that the government did
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  Speaker 1: not have and had specific legal duties to report this
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  Speaker 1: information to law enforcement authorities, which it intentionally decided not
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  Speaker 1: to do. The government's remaining claims are for the violation
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  Speaker 1: of the Trafficking Victims Protection Act, U.S. Code 18, Section 1581-1597, TVPA.
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  Speaker 1: Section 1595 provides the State Attorney General a right of
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  Speaker 1: civil action against as parens patriae for appropriate relief to
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  Speaker 1: protect the interests of state residents that have been threatened
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  Speaker 1: or adversely affected by any person who's violated U.S. Code 18,
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  Speaker 1: Section 1591. The government alleges that J.P. Morgan knowingly participated
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  Speaker 1: in and benefited from Epstein's sex trafficking venture by holding
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  Speaker 1: his accounts, processing payments to victims and recruiters, and concealing
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  Speaker 1: these suspicious transactions from law enforcement in violation of U.S.
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  Speaker 1: Code 18, Section Section 1591A and 2. Second amended complaint,
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  Speaker 1: Docket 119, 2AC, 102 through 119, count 1. The government
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  Speaker 1: further alleges that J.P. Morgan, concealment of Epstein's suspicious transactions
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  Speaker 1: from law enforcement, constitutes unlawful obstruction of TVPA enforcement in
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  Speaker 1: violation of U.S. Code 18, Section 1591D. The government seeks
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  Speaker 1: appropriate relief as parents' patriots under U.S. Code 18, Section 1595D,
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  Speaker 1: including all available equitable and legal remedies. J.P. Morgan answered
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  Speaker 1: the second amended complaint on April 24th, 2023, answered a
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  Speaker 1: second amended complaint and statement of affirmative defenses. In addition
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  Speaker 1: to its admissions and denials of the government's allegations, J.P.
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  Speaker 1: Morgan also pleads 25 separate affirmative defenses, ID at 26
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  Speaker 1: through 29. Among J.P. Morgan's defenses are those asserting that
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  Speaker 1: the government's TVPA claims are barred by the doctrine of
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  Speaker 1: unclean hands and latches. ID at 26, defenses 5 through 7,
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  Speaker 1: collectively the equitable defenses. J.P. Morgan also asserts that the
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  Speaker 1: government's damages should be barred or reduced in accordance with
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  Speaker 1: the doctrines of comparative and contributory negligence or fault. ID
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  Speaker 1: defense 8. J.P. Morgan's equitable and fault-shifting defense states, To
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  Speaker 1: the government's TVPA, Perrin's patriotic claim should be stricken. First,
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  Speaker 1: the court and others long have held that the equitable defense,
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  Speaker 1: including the unclean hands and latches, do not apply against
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  Speaker 1: government plaintiffs suing to vindicate public rights. CEG City of
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  Speaker 1: New York v. FedEx Ground Package System Inc. 314 FRD
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  Speaker 1: 348 357 N58 SDNY 2016 where plaintiffs are acting in
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  Speaker 1: law enforcement capacity in their roles as government entities and
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  Speaker 1: not in the capacity akin to that of a private entity.
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  Speaker 1: This falls squarely into the line of authority prohibiting equitable
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  Speaker 1: defenses from applying to government actors exercising broad discretion to
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  Speaker 1: discharge statutory duties, internal quotation marks and citations omitted. The
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  Speaker 1: government asserts its TVPA, Perrin's Patriot claim, is sovereign acting
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  Speaker 1: in its law enforcement capacity. J.P. Morgan's equitable defense, therefore,
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  Speaker 1: do not apply and should be stricken. Second, the court
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  Speaker 1: and others also have held that fault-shifting defenses, including contributory
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  Speaker 1: or comparative negligence, addressed to law enforcement or regulatory acts,
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  Speaker 1: or omissions likewise, do not apply against government plaintiffs suing
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  Speaker 1: to vindicate public rights. CID at 359. The core premise
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  Speaker 1: of the defense is that plaintiffs were negligent in their
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  Speaker 1: discretionary tax enforcement, a contention that is impermissible where the
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  Speaker 1: government seeks to vindicate the public interest via enforcement of
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  Speaker 1: a public statutory right. FTC v. Crescent Public Group Inc. 129F. SUPP
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  Speaker 1: 2D311-324 SDNY 2001 As a general rule, neglect of duty
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  Speaker 1: on the part of officers of the government is no
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  Speaker 1: defense to a suit buy it to enforce a public
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  Speaker 1: right or protect a public interest. Quoting Nevada v. U.S.
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  Speaker 1: 463 U.S. 110-141-1983. J.P. Morgan's fault-shifting defense, therefore, likewise, does
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  Speaker 1: not apply and should be stricken. Legal Standard The court
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  Speaker 1: may strike from a pleading and insufficient defense. Fed. R. Siv. P.
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  Speaker 1: 12 F. The standard for striking an affirmative defense is three-pronged. 1.
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  Speaker 1: There must be no question of fact that might, allow
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  Speaker 1: the defense to succeed. 2. There must be no substantial
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  Speaker 1: question of law that might allow the defense to succeed. 3.
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  Speaker 1: The plaintiff must be prejudiced by the inclusion of the defense.
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  Speaker 1: Specialty Minerals, Inc. v. Pluss-Stofer, AG 395, F.S.U.P.P. 2D 109,
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  Speaker 1: 111 S.D.N.Y. 2005 In determining whether to grant the motion
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  Speaker 1: to strike, a court will deem the non-moving party's well-placed
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  Speaker 1: facts to be admitted. Draw all reasonable inferences in the
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  Speaker 1: pleader's favor and resolve all doubts in favor of denying
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  Speaker 1: the motion. A plaintiff is prejudiced for purpose of a
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  Speaker 1: motion to strike where inclusion of a fascially deficient defense
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  Speaker 1: would require additional discovery and or expand the length and
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  Speaker 1: scope of the trial. Specialty Minerals 395 F.SUPP 2D at $ 114.
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  Speaker 1: See also Coach Incorporated vs. Kmart Corpse 756 F.SUPP 2D
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  Speaker 1: 421-426 SDNY 2010. Increased time and expense of trial may
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  Speaker 1: constitute sufficient prejudice to warrant striking and affirmative defense. Moreover,
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  Speaker 1: inclusion of Of a defense that must fail as a
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  Speaker 1: matter of law, prejudice is the plaintiff because it will
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  Speaker 1: needlessly increase the duration and expense of litigation. Estee Lauder
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  Speaker 1: Incorporated v. Fragrance Counter Incorporated 189 FRD 269 272 SDNY
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  Speaker 1: 1999 Increased time and expense of trial may constitute prejudice
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  Speaker 1: to warrant granting plaintiff's Rule 12 F motion. The Argument A.
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  Speaker 1: The equitable defenses should be stricken. It is well established
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  Speaker 1: within the Second Circuit and elsewhere that the government's plaintiffs
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  Speaker 1: suing to vindicate public rights are not subject to equitable
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  Speaker 1: defenses that may be invoked against private plaintiffs. In the
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  Speaker 1: City of New York v. FedEx Supra, this court addressed
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  Speaker 1: equitable defenses including latches and unclean hands, 314 FRD 356,
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  Speaker 1: as follows. Once again, given the body of case law
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  Speaker 1: involving government plaintiffs and these equitable defenses, a basic principle emerges.
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  Speaker 1: courts have routinely held that when acting in a capacity
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  Speaker 1: to enforce public rights in the public interest and discharge
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  Speaker 1: statutory responsibilities, government entities are not subject to all equitable defenses,
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  Speaker 1: such as latches or estoppel, that could ordinarily be invoked
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  Speaker 1: against a private actor. Idea 357, quoting State of New
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  Speaker 1: York v. United Parcel Service Inc., 160F. SUPP 3D, 629640, SDNY 2016.
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  Speaker 1: vacated in part on other grounds by 2016 WL 10672074
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  Speaker 1: at 1, June 21, 2016, granting partial reconsideration, vacating order
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  Speaker 1: striking different non-equitable defenses. The court in City of New
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  Speaker 1: York v. FedEx struck the defendant's equitable defense legally inapplicable
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  Speaker 1: to the city and state government's plaintiff's public enforcement claims
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  Speaker 1: under U.S. Code 18, Section 2346B, part of the Contraband
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  Speaker 1: Cigarette Trafficking Act, U.S. Code 18, Section 2341. The court
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  Speaker 1: explained that the CCTA authorizes state and local governments to
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  Speaker 1: seek various types of relief to restrain CCTA violations, but
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  Speaker 1: it does not provide a private right to action. With
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  Speaker 1: respect to the CCTA claim, therefore, plaintiffs are acting in
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  Speaker 1: law enforcement capacity in their roles as government entities, and
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  Speaker 1: not in the capacity akin to that of a private entity.
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  Speaker 1: This situation thus falls squarely into the line of authority
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  Speaker 1: prohibiting equitable defenses from applying to government actors, exercising broad
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  Speaker 1: discretion to discharge their statutory duties. 314 FRD at 357
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  Speaker 1: and 58, quoting the state of New York at UPS 160, F.SUPP
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  Speaker 1: 3D at 647. All right, we're going to wrap up
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  Speaker 1: this episode here, and in the next episode, we're going
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  Speaker 1: to finish this bad boy off. All of the information
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  Speaker 1: that goes with this episode can be found in the
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  Speaker 1: description box.