Latest / The Epstein Chronicles / The USVI And Their Motion To Strike The JP Morgan Affirmative Defenses (Part 2) (9/21/26)

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The USVI And Their Motion To Strike The JP Morgan Affirmative Defenses (Part 2) (9/21/26) · The Epstein Chronicles

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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 picking right back up where we
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  Speaker 1: left off with the USVI and their motion to strike
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  Speaker 1: affirmative defenses. The government's TVPA parents' patriotic claims like the
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  Speaker 1: CCTA claims in the city of New York versus FedEx
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  Speaker 1: are public law enforcement claims. Compare U.S. Code 18 Section
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  Speaker 1: 234 B1 and 2 providing state or local government plaintiff
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  Speaker 1: right of action in federal court to prevent and restrain
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  Speaker 1: violations to this chapter by any person and for other
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  Speaker 1: appropriate relief, including civil penalties, money damages, and injunctive or
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  Speaker 1: other equitable relief, with U.S. Code 18, Section 1595D, providing
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  Speaker 1: State Attorney General right of action in federal court as
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  Speaker 1: parens patriae to obtain appropriate relief for violations of U.S.
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  Speaker 1: Code Section 18, 1591, and Docket 130-51-2023, Opposition and Order,
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  Speaker 1: Act 17. Government satisfies parent-patriarch standing requirements that it 1.
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  Speaker 1: Allege an injury to a quasi-sovereign interest that affects a
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  Speaker 1: sufficiently substantial segment of its population, and 2. Seek relief
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  Speaker 1: to the territory's injury that would be unavailable to individual plaintiffs.
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  Speaker 1: The government's TVPA claims, therefore, are not subject to J.P.
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  Speaker 1: Morgan's equitable defenses. The general rule prohibiting equitable defense to
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  Speaker 1: government plaintiffs' public enforcement claims applies here to J.P. Morgan's
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  Speaker 1: affirmative defense of Latch's seventh defense. Latch's bars the party's
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  Speaker 1: claim in equity where the party has unreasonably delayed in
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  Speaker 1: a prejudicial manner. City of New York v. FedEx, 314
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  Speaker 1: FRD at 356. Controlling the persuasive authority establishes that the
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  Speaker 1: defense of Latch's does not apply to claims by the
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  Speaker 1: government to enforce public rights, CEG United States v. Summerlin,
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  Speaker 1: 310 U.S. 414, 416, 1940. It's well settled that the
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  Speaker 1: United States is not subject to the defense of latches
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  Speaker 1: in enforcing its rights. Clear Channel Outdoor Incorporated v. The
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  Speaker 1: City of New York, 594 F. 3D, 94, 111 Second Circuit, 2010.
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  Speaker 1: Principals of Latches or Estoppel do not bar a municipality
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  Speaker 1: from enforcing ordinances that have been allowed to lie fallow.
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  Speaker 1: Quoting La Trieste Restaurant and Cabaret Incorporation vs. The Village
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  Speaker 1: of Portchester 40 F. 3D 587 590 2nd Circuit 1994 United
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  Speaker 1: States vs. Angel 292 F. 3D 333 338 2nd Circuit 2002
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  Speaker 1: Latches is not available against the federal government. when it
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  Speaker 1: undertakes to enforce public right or protect the public interest.
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  Speaker 1: City of New York v. FedEx 314 FRD 358 Striking
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  Speaker 1: Latches Defense to State and City Government Plaintiffs CCPA Public
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  Speaker 1: Enforcement Claims United States v. Philip Morris, Inc. 300 F.S.U.P.P.
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  Speaker 1: 2D61-72-DDC-2004 As a general rule, latches or 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 by it to enforce a public
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  Speaker 1: right or protect a public interest. Quoting Utah Power and
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  Speaker 1: Light Company v. U.S., 243 U.S. 389-409-1917, ID at 74.
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  Speaker 1: Granting summary judgment for federal government on Philip Morris' latches defense.
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  Speaker 1: The general rule prohibiting equitable defense to government public enforcement
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  Speaker 1: claims also applies to J.P. Morgan's affirmative defenses of unclean hands,
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  Speaker 1: fifth and sixth defenses. Unclean hands prohibits awarding equitable relief
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  Speaker 1: to a party that has acted fraudulently or deceitfully to
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  Speaker 1: gain an unfair advantage. City of New York v. FedEx
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  Speaker 1: 314 FRD at 356 and 57. Substantial authority holds that
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  Speaker 1: these defenses do not apply to a government plaintiff's claims
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  Speaker 1: enforcing public rights. CID at 358, when, as here, the
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  Speaker 1: government acts as the public interest, the unclean hands doctrine
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  Speaker 1: is unavailable as a matter of law. Quoting United States v.
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  Speaker 1: Philip Morris, 300F, SUPP, 2D at 7576, State of New
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  Speaker 1: York v. UPS at 160, F.SUPP, 3D at 647 and 48.
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  Speaker 1: granting motion to strike unclean hands, defenses to CCTA public
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  Speaker 1: enforcement claim as not cognizable as matter of law. United
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  Speaker 1: States v. Vineland Chemical Company, Inc., 692 F.S.U.P.P. 415-423 D.N.J. 1988.
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  Speaker 1: The equitable doctrine of unclean hands may not be asserted
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  Speaker 1: against the United States when it acts in its sovereign
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  Speaker 1: capacity to protect the public welfare. SEC v. Electronics Warehouse, Inc.,
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  Speaker 1: The doctrine of unclean hands may not be invoked against
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  Speaker 1: a government agency which is attempting to enforce a congressional
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  Speaker 1: mandate in the public interest. Quoting SEC v. Gulf Western
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  Speaker 1: 502 F.S.U.P.P. 343-348 D.D.C. 1980 Since the government here is
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  Speaker 1: acting in its sovereign capacity to enforce public rights under
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  Speaker 1: the TVPA... J.P. Morgan's equitable defenses are not cognizable as
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  Speaker 1: a matter of law. Moreover, maintaining these legally inapplicable defenses
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  Speaker 1: would prejudice the government by requiring additional discovery and expanding
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  Speaker 1: trial time on questions about the government's actions or inaction
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  Speaker 1: that are irrelevant to and distracting from the material questions
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  Speaker 1: of whether and how J.P. Morgan violated the TVPA. Indeed, J.P.
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  Speaker 1: Morgan has specifically cited It's in pari delicito defense as
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  Speaker 1: justification for discovery requests in this litigation, signaling that J.P.
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  Speaker 1: Morgan intends to second-guess the USVI's discretionary governance decisions. But
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  Speaker 1: that type of argument, and the discovery it entails, is
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  Speaker 1: precisely what the above authority precludes. Given the necessity that
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  Speaker 1: government actors have discretion in making policy judgments and given
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  Speaker 1: the multiplicity of factors that influence the exercise of this discretion,
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  Speaker 1: courts have correctly concluded that private litigants may not assert
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  Speaker 1: affirmative defenses that effectively seek to re-litigate government policy decisions.
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  Speaker 1: For all these reasons, J.P. Morgan's equitable defense, unclean hands,
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  Speaker 1: and latches should be stricken. B. The false shifting defense
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  Speaker 1: should be stricken. Government plaintiffs suing to vindicate public rights
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  Speaker 1: also are not subject to fault-shifting defenses. This includes J.P.
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  Speaker 1: Morgan's defense asserting that the government damages should be barred
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  Speaker 1: or reduced in accordance with the doctrines of comparative and
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  Speaker 1: contributory negligence or fault. Answer at 26, defense 8. This
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  Speaker 1: defense is both factually baseless and, for purposes of this motion,
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  Speaker 1: legally inopposite. In the City of New York v. FedEx,
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  Speaker 1: this court addressed the defendant's attempt to assert fault-shifting defenses
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  Speaker 1: against the city and state defendants and ruled that the
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  Speaker 1: 18th defense is identical to the 17th defense, except that
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  Speaker 1: it also purports to raise what appears to be a
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  Speaker 1: defense of contributory or comparative negligence. The minor difference is
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  Speaker 1: of no import in the context of the CCTA claim.
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  Speaker 1: The core premise of the defense is that the plaintiffs
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  Speaker 1: were negligent in their discretionary tax enforcement a contention that
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  Speaker 1: is impermissible where the government seeks to vindicate public interest
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  Speaker 1: via enforcement of a public statutory right. ID see also
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  Speaker 1: FTC v. Crescent Publications 129F SUPP 2D at 324. As
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  Speaker 1: a general rule, neglect of duty on the part of
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  Speaker 1: the officers of the government is no defense to a suit,
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  Speaker 1: buy it, or to enforce a public right or protect
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  Speaker 1: a public interest. It is the attempt to assert contributory
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  Speaker 1: or comparative negligence defense against plaintiffs in their public enforcement
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  Speaker 1: role that the objectional and compels striking of the 18th
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  Speaker 1: defense as to the CCTA claim, quoting Nevada 463 U.S.
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  Speaker 1: at 141. This court's recognition that fault-shifting defenses are not
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  Speaker 1: available against government plaintiffs for alleged failure to enforce or
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  Speaker 1: regulate is consistent with the Virgin Islands law applicable to
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  Speaker 1: the government's policymaking and law enforcement activity. Courts applying Virgin
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  Speaker 1: Island law recognize the public duty doctrine, which precludes suit
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  Speaker 1: for governmental negligence based only on the government's failure to
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  Speaker 1: comply with a duty owed to the public in general.
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  Speaker 1: Perez v. Government of the Virgin Islands, 847 F. 2D 104-107,
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  Speaker 1: 3rd Circuit, 1988. See also De Jesus v. Virgin Islands
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  Speaker 1: Water and Power Authority, 2011 WL 586-4552 at 4. VI's
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  Speaker 1: Superior Court, October 26, 2011. The public duty doctrine effectively
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  Speaker 1: immunizes the government and its officials from liability from a
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  Speaker 1: plaintiff's injuries except where a special relationship exists between the
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  Speaker 1: plaintiff and the government or official or where the official's
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  Speaker 1: acts are ministerial. Courts applying the law of other states
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  Speaker 1: similarly recognize that alleged failure to engage in regulatory or
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  Speaker 1: enforcement action is not grounds to pin fault on the
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  Speaker 1: government actor. CEG Maldonado, by and through Ochoa, 1st City
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  Speaker 1: of Sibley, 58F. 4th, 1017-1022, 8th Circuit, 2023. Under Iowa law,
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  Speaker 1: the public duty doctrine generally applies when the government fails
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  Speaker 1: to adequately enforce criminal or regulatory laws for the benefit
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  Speaker 1: of the general public or protect the general public from
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  Speaker 1: somebody else's instrumentality. Quoting Phelps v. City of Urbandale, 956NW2D469, 475,
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  Speaker 1: Iowa 2021. for failure to investigate rape allegation. Courts and
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  Speaker 1: juries are ill-equipped to review legislative and executive decisions about
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  Speaker 1: how to allocate limited municipal resources to best protect the public.
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  Speaker 1: Since J.P. Morgan's eighth defense seeks to shift fault to
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  Speaker 1: the government for alleged failure to prevent Epstein and J.P.
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  Speaker 1: Morgan's own trafficking-related activity, this defense is barred by the
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  Speaker 1: public duty doctrine and or this court's decision-holding that alleged
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  Speaker 1: neglect of duty is no defense to government law enforcement actions. Here, too,
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  Speaker 1: maintaining this legally inapplicable and factually incorrect defense would prejudice
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  Speaker 1: the government by requiring additional discovery and expending trial time
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  Speaker 1: on questions about the government's actions or inactions that are
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  Speaker 1: irrelevant to and distracting from the material questions of whether
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  Speaker 1: and how J.P. Morgan violated the TVPA. For all of
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  Speaker 1: these reasons, J.P. Morgan's defense of comparative or contributory negligence
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  Speaker 1: or fault should be stricken. Conclusion, for all the reasons
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  Speaker 1: as set forth, the court should strike J.P. Morgan's affirmative
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  Speaker 1: defenses 5 through 8. This was dated May 8, 2023,
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  Speaker 1: and it was signed by Linda Singer. Alright, that's going
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  Speaker 1: to do it for this one and this document as
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  Speaker 1: a whole. All of the information that goes with this
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  Speaker 1: episode can be found in the description box.