Latest / The Vault: The Epstein Files / Mega Edition: Jes Staley Looks To Wiggle Free Of The Epstein Survivor Lawsuit (7/19/26)

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Mega Edition: Jes Staley Looks To Wiggle Free Of The Epstein Survivor Lawsuit (7/19/26) · The Vault: The Epstein Files

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 begin taking a look
0:06
Speaker 1: at Jess Staley's third party defendant memorandum of law and
0:10
Speaker 1: support of motion to dismiss. And this was all part
0:13
Speaker 1: of the USVII versus JP Morgan lawsuit that has bled
0:18
Speaker 1: over into their lawsuit against the survivors. So it's very
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Speaker 1: important to understand all of this. I know there's a
0:25
Speaker 1: lot and some of it is a slog, there's no doubt,
0:28
Speaker 1: but if you want the real story, this is the
0:30
Speaker 1: way to get it. Save the Epstein file bullshit for
0:33
Speaker 1: people who don't know what they're talking about, for people
0:36
Speaker 1: who don't even understand the story. For the rest of us, well,
0:40
Speaker 1: the battle continues. Preliminary statement in November twenty twenty two,
0:44
Speaker 1: plaintiff Jane Doe to JP Morgan Chase Bank. Her complaint
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Speaker 1: asserts that JP Morgan ignored Jeffrey Epstein's sex trafficking crimes
0:52
Speaker 1: to retain them as a lucrative banking client, which in
0:55
Speaker 1: turn enabled Epstein to victimize Doe and others. The government
0:59
Speaker 1: of the US US Virgin Islands filed its own suit,
1:02
Speaker 1: alleging that JP Morgan enabled Epstein to operate his enterprise
1:06
Speaker 1: out of its territory. Confronted with the documented failures in
1:10
Speaker 1: its anti money laundering compliance along with the history of
1:13
Speaker 1: such failures and other matters, JP Morgan sought to change
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Speaker 1: the narrative and deflect blame by pulling Jess Staley, one
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Speaker 1: of its former employees, into the two cases. Via two
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Speaker 1: third party complaints. The bank claims its fifteen year long
1:26
Speaker 1: relationship with Epstein was in fact all mister Staley's fault,
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Speaker 1: and that he must pay the plaintiff's damages. JP Morgan
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Speaker 1: further seeks to claw back years of compensation from mister
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Speaker 1: Staley plus damages for harm to its already solied reputation.
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Speaker 1: But JP Morgan has failed to state any viable claim
1:43
Speaker 1: against mister Staley. Indeed, the third party complaints, while creating
1:47
Speaker 1: provocative media fodder, never explain how an employee who is
1:50
Speaker 1: not alleged to have had decision making authority over Epstein's accounts,
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Speaker 1: and who is not alleged to have seen any of
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Speaker 1: the suspicious account activity that other JP Morgan pla is
2:00
Speaker 1: ignored cause the plaintiff's alleged injuries. Each of JP Morgan's
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Speaker 1: four claims is legally deficient. Neither the identification claim Count
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Speaker 1: one nor a contribution claim Count two is actionable. First,
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Speaker 1: the identification and contribution claims fail because the bank engages
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Speaker 1: in defective shotgun pleading that improperly tries to combine multiple claims,
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Speaker 1: all lacking into two cursory counts. Second, the identification and
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Speaker 1: contribution claim fail to the extent that they are based
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Speaker 1: on the plaintiff's claims under the Trafficking Victims Protection Act TVPA,
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Speaker 1: because that statute does not permit contribution or identification. Third,
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Speaker 1: the identification claim fails because JP Morgan does not and
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Speaker 1: cannot plausibly allege that its liability is solely attributable to
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Speaker 1: mister Staley's conduct. Fourth, JP Morgan's contractual identification of mister
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Speaker 1: Staley as one of its officers bars the bank's identification
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Speaker 1: claim against them under black letter New York law if
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Speaker 1: JP Morgan fails to identify any distinct injury for which
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Speaker 1: it seeks contribution. The two additional claims alleging that mister
3:07
Speaker 1: Staley breached his fiduciary duty to the bank during his
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Speaker 1: employment and violated the faithless servant doctrine employment claims that
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Speaker 1: counts three to four also fell as a matter of law,
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Speaker 1: they do not meet the requirements for impleting under Rule fourteen,
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Speaker 1: and for various reasons, they are deficient on the merits.
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Speaker 1: Whether or not JP Morgan is liable to DOE and
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Speaker 1: the USVII remains to be seen. What is certain is
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Speaker 1: that the bank cannot treat mister Staley and its public
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Speaker 1: relations shield by asserting claims that lack any legal or
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Speaker 1: factual basis background. Third party defendant James Edward Jess Staley
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Speaker 1: is former JP Morgan executive. He began his career at
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Speaker 1: the company in nineteen seventy nine and rose up the
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Speaker 1: ranks to the highest levels of management see JP Morgan's
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Speaker 1: third Party Complaint sixteen. From two thousand and one to
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Speaker 1: two thousand and nine, mister Staley was as the chief
4:00
Speaker 1: executive officer of the bank's Asset Management Group. Starting in
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Speaker 1: two thousand and nine, mister Staley moved to the Corporate
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Speaker 1: and Investment Banking division, where he served as its chief
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Speaker 1: executive officer and reported to Jamie Diamond, the bank's president
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Speaker 1: and chairman. Per its by laws, JP Morgan agreed to
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Speaker 1: identify corporate officers such as Staley to the fullest extent
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Speaker 1: permitted by applicable law. Mister Staley left JP Morgan in
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Speaker 1: January of twenty thirteen, eventually joining its competitor Barclays as
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Speaker 1: chief executive officer. Upon departing JP Morgan, mister Staley allegedly
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Speaker 1: signed an agreement and release in which he agreed to
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Speaker 1: be bound by JP Morgan's code of conduct even after
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Speaker 1: he left employment at the bank. Since November of twenty
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Speaker 1: twenty two, JP Morgan has been embroiled in lawsuits relating
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Speaker 1: to the bank's alleged involvement with Jeffrey Epstein and his
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Speaker 1: sex trafficking enterprise. These suits began when plaintiff Jane Doe
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Speaker 1: sued the bank on November twenty fourth, twenty twenty two,
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Speaker 1: with the US Virgin Islands filing a simil he complaint
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Speaker 1: about a month later. Those allegations. Those class action complaint
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Speaker 1: alleges at JP Morgan supplied the financial lifeblood of Epstein's
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Speaker 1: sex trafficking enterprise by providing him and his associates banking
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Speaker 1: services and access to exorbit amounts of cash from nineteen
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Speaker 1: ninety eight through August of twenty thirteen, first amended Complaint
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Speaker 1: twenty two CV DASH one zero zero one nine. Doe
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Speaker 1: claims that JP Morgan provided these services even though it
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Speaker 1: knew that Epstein was engaged in sex trafficking. While though
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Speaker 1: alleges at JP Morgan's knowledge stemmed in part from what
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Speaker 1: mister Staley observed, she alleges a plethora of other ways
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Speaker 1: that JP Morgan knew of Epstein's misconduct, completely independent of
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Speaker 1: mister Staley's observations. One Epstein's widely reported arrest in two
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Speaker 1: thousand and six that resulted in his incarceration and registering
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Speaker 1: as a sex offender. Two Epstein's involvement in civil lawsuits
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Speaker 1: which resulted in payments that were sent from JP morgan
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Speaker 1: bank accounts. Three Epstein's suspicious transaction history that included large
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Speaker 1: cash withdrawals, wires to women with Eastern European surnames, and
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Speaker 1: payments to own conspirators. Doe claims that she was trafficked
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Speaker 1: by Epstein and unnamed associates. Doe also alleges at JP
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Speaker 1: Morgan started banking regulations to conceal its involvement with the
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Speaker 1: trafficking enterprise. The bank, for example, neglected the file suspicious
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Speaker 1: activity reports required by anti money laundering laws, and failed
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Speaker 1: to adequately conduct know your Customer due diligence dough alleges
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Speaker 1: that had the bank followed these standard practices, Epstein's conduct
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Speaker 1: would not have flown under the radar. For years, awareness
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Speaker 1: of Epstein's criminal conduct reached the bank's highest levels, including
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Speaker 1: CEO Jamie Diamond and the CEO of Private Banking, Mary Erdos,
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Speaker 1: who nevertheless advocated to keep Epstein as a client. JP
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Speaker 1: Morgan continued to serve Epstein for the financial benefits to
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Speaker 1: the bank, such as access to his networks of wealthy
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Speaker 1: potential customers. Notably, zero alleges that JP Morgan's misconduct extended
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Speaker 1: beyond twenty thirteen when Staley left the bank. In particular,
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Speaker 1: JP Morgan refused to file stars and continue to recommend
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Speaker 1: Epstein as a client to others. Four of those claims
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Speaker 1: survive JP Morgan's motion to dismiss. One negligently failing to
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Speaker 1: prevent physical harm, two negligently failing to exercise reasonable care
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Speaker 1: as a banking institution providing non routine banking. Three knowingly
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Speaker 1: benefiting from participating in a sex trafficking venture in violation
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Speaker 1: of US Code eighteen, Section fifteen ninety one A and
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Speaker 1: two and four obstructing enforcement of the TVPA in violation
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Speaker 1: of US Code eighteen, Section fifteen ninety one D. Order
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Speaker 1: on motion to dismiss twenty two CV Dash one zero
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Speaker 1: zero one nine ECF Number sixty six. The USVII Allegations
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Speaker 1: USVII complaint makes similar allegations. It claims that JP Morgan
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Speaker 1: provided financial services in cash to Epstein even though the
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Speaker 1: bank knew of his sex trafficking through various means, including
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Speaker 1: one Epstein suspicious transactions such as wires to victims, withdrawals
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Speaker 1: of large sums of cash, and payments to own recruiters
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Speaker 1: see USVII first amended complaint and two public reports of
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Speaker 1: Epstein's arrest and misconduct. USVII alleges that internal messages at
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Speaker 1: the bank show that JP Morgan employees were aware of
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Speaker 1: these facts, and that this knowledge reached the highest levels
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Speaker 1: of the bank, including CEO Jamie Diamond, and JP Morgan's
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Speaker 1: failure to follow required banking practices permitted the sex trafficking
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Speaker 1: conspiracy to operate. Following the court's order on JP Morgan's
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Speaker 1: motion to dismiss, the only remaining claim brought by the
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Speaker 1: USVII arises under the TVPA order on motion to dismiss
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Speaker 1: twenty two DASH CV Dashed one zero nine zero four
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Speaker 1: ECF Number ninety. JP Morgan's third party complaints. JP Morgan
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Speaker 1: filed a third party complaint in each case. Both complaints
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Speaker 1: plead identical claims for common law identification, contribution, breach of
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Speaker 1: fiduciary duty, and breach of the faithless servant doctrine. JP
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Speaker 1: Morgan first brings omnibus claims for contribution and identification that
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Speaker 1: seek to hold mister Staley liable for all the claims
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Speaker 1: that Doe in the USVII bring against JP Morgan, lumping
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Speaker 1: together does common law and federal statutory claims. JP Morgan alleges,
9:25
Speaker 1: despite contry assertions in the plaintiff's complaints, that the plaintiff
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Speaker 1: seeks to hold the bank liable based on substantial part
9:31
Speaker 1: on the acts or omissions of Staley TPC forty six. Thus,
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Speaker 1: it alleges, if JP Morgan is held liable, then mister
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Speaker 1: Staley must pay the bank for all damages awarded to
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Speaker 1: the plaintiffs by means of identification and or contribution. JP
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Speaker 1: Morgan's claims for breach of fiduciary duty and breach of
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Speaker 1: the faithless servant doctrine, rely on the duties he owed
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Speaker 1: the bank as an employee and his alleged agreement to
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Speaker 1: abide by the bank's Code of conduct, which he purportedly
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Speaker 1: said signed each year between two thousand and six and
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Speaker 1: twenty twelve. JP Morgan alleges that mister Staley breached his
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Speaker 1: duties by acting against the interests of the bank, failing
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Speaker 1: to report or fraudently concealing information about Epstein, affirmatively misrepresenting
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Speaker 1: facts about his personal interactions with Epstein, and repeatedly providing
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Speaker 1: misleading information to JPMC when vouching for Epstein's character and conduct.
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Speaker 1: As for the breach of fiduciary duty claim, JP Morgan
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Speaker 1: seeks damages related to one the cost of defending and
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Speaker 1: adverse publicity from these lawsuits, and two any amounts and
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Speaker 1: damages at JP Morgan might have to pay out to
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Speaker 1: the plaintiffs ID. Sixty four and sixty five. For the
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Speaker 1: faithless servant claim, JP Morgan seeks disgorgement of mister Staley's
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Speaker 1: compensation from the Amorphis period of his disloyalty. The bank
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Speaker 1: also seeks punitive damages. All right, we're going to wrap
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Speaker 1: up this episode right here, and in the next episode
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Speaker 1: we're going to pick up with legal standard. All of
10:59
Speaker 1: the informationation that goes with this episode can be found
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Speaker 1: in the description box. What's up everyone, and welcome back
11:05
Speaker 1: to the Epstein Chronicles. In this episode, we're picking up
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Speaker 1: where we left off with the just Daily motion to
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Speaker 1: dismiss the legal standard. Under Federal Rule of Civil Procedure
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Speaker 1: twelve B six, a complaint must contain sufficient factual matter
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Speaker 1: accept it is true to state a claim to relief
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Speaker 1: that is plausible on its face Ashcroft versus zick Ball,
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Speaker 1: five point fifty six US six sixty two six seventy eight,
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Speaker 1: two thousand and nine. A claim has facile plausibility when
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Speaker 1: the plaintiff pleads factual content that allows the court to
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Speaker 1: draw the reasonable inference that the defendant is liable for
11:42
Speaker 1: the misconduct alleged. While the court must draw all reasonable
11:45
Speaker 1: inferences in the complaints favor, it need not accept as
11:48
Speaker 1: true mere conclusions of law or unwarranted deductions of fact.
11:52
Speaker 1: Petro Assurance Incorporated versus National Association of Insurance Commissars eight
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Speaker 1: eighty eight f. Dot su upp. Two D four ninety
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Speaker 1: one five O two SDN y twenty twelve. Claims that
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Speaker 1: sound and fraud are subject to the heightened pleading standards
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Speaker 1: of Rule nine B. Cohen versus Sac Trading Corporation, seven
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Speaker 1: eleven f Dot three D three fifty five three fifty nine,
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Speaker 1: Second Circuit twenty thirteen. Such allegations must be stated with particularity,
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Speaker 1: meaning that they must specify the time, place, speaker, and
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Speaker 1: content of any alleged misrepresentations, explain how the misrepresentations were fraudulent,
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Speaker 1: and plead those events which give rise to a strong
12:33
Speaker 1: inference that the defendant had an intended to fraud, knowledge
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Speaker 1: of the falsity, or a reckless disregard for the truth.
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Speaker 1: In other words, a plaintiff must set forth the who, what, when, where,
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Speaker 1: and how of alleged fraudulent conduct. United States versus Kester
12:50
Speaker 1: versus Novardes Pharmaceutical Corporation, twenty three f Dot supp. Three
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Speaker 1: D two forty two two fifty two SDN Y two
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Speaker 1: five fourteen. Rule nine B applies to fiduciary duty claims
13:04
Speaker 1: that sound in fraud. Babbitt versus Copal Nissan Incorporated. Twenty
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Speaker 1: twenty WL thirty one eighty three eight nine five at five,
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Speaker 1: Eastern District of New York, June fifteenth, twenty twenty one.
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Speaker 1: The identity in contribution claims Counts one and two fail
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Speaker 1: as a matter of law. JP Morgan's Shotgun pleading warrants
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Speaker 1: dismissal of counts one and two as an initial matter.
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Speaker 1: The claims for identification and contribution are procedurally improper because
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Speaker 1: they violate rules eight and ten B by lumping together
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Speaker 1: all the plaintiffs outstanding claims under singular causes of action
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Speaker 1: for contribution and common law identification. For each of these claims,
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Speaker 1: JP Morgan seeks relief under two distinct bodies of law,
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Speaker 1: federal law for the plaintiffs TVPA claims and state law
13:50
Speaker 1: for Doze common law claims, even though these claims require
13:54
Speaker 1: distinct analysis. See Don King Productions Versus King Vision vers.
13:58
Speaker 1: Ferrara nine Dot supp. Two eighty six, two eighty eight
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Speaker 1: and eighty nine Eastern District of California of nineteen ninety six,
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Speaker 1: noting that the right to identity for claim arising under
14:10
Speaker 1: federal law must be treated separately from right relating to
14:13
Speaker 1: state law claim Zeno. Davidoff Sa Verse selective Distribution, International, Incorporated.
14:19
Speaker 1: Twenty thirteen, w L one two four five nine seven
14:23
Speaker 1: four at four SDNY, March eight, twenty thirteen. Whether a
14:28
Speaker 1: defendant who incurs liability under a federal statute may pursue
14:32
Speaker 1: either contribution or identification is a question of federal law.
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Speaker 1: The haphazard style of pleading is flatly forbidden by the spirit,
14:40
Speaker 1: if not the letter, of Rules eight A and two
14:43
Speaker 1: and ten B, because, among other vices, it confuses the parties, courts,
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Speaker 1: and factfinders and hinders cojin analysis of each claim independently.
14:52
Speaker 1: Barmapav Versus aMule nine eighty six f Dot three D
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Speaker 1: thirteen twenty one, thirteen twenty four eleven Circuit twenty two,
15:00
Speaker 1: twenty one CC Versus Anucci, twenty twenty two, w L
15:04
Speaker 1: one eighteen thirty two seventy four at two, Northern District
15:08
Speaker 1: of New York, April twenty first, twenty twenty two, identifying
15:11
Speaker 1: failure to separate into a different count each cause of
15:14
Speaker 1: action or claim for relief as shot completing, and the
15:18
Speaker 1: Court should dismiss the identification and contribution claims for this
15:22
Speaker 1: reason alone. B There is no right to identity or
15:26
Speaker 1: a contribution under the TVPA. JP Morgan's identification in contribution
15:31
Speaker 1: claims also fail to the extent that they seek to
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Speaker 1: offload liability for the plaintiffs TVPA damages because the TVPA
15:38
Speaker 1: does not permit claims for identification or contribution against third parties.
15:44
Speaker 1: When an underlying claim arises under federal law, there is
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Speaker 1: no claim for contribution or identification unless the operative federal
15:52
Speaker 1: statute provides one. Bernard Made Off Securities LLC seven to
15:57
Speaker 1: twenty one F dot three four fifty four sixty five,
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Speaker 1: Second Circuit twenty thirteen. See Herman versus RSR Security Services Ltd.
16:07
Speaker 1: One seventy two F dot three D one thirty two
16:10
Speaker 1: one forty four, Second Circuit nineteen ninety nine, affirming dismissal
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Speaker 1: of New York State law claims for contribution and identification
16:18
Speaker 1: for liability under Fair Labour Standards Act. Such claims are
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Speaker 1: available only through one the affirmative creation of a right
16:25
Speaker 1: of action by Congress, either expressly or by clear implication,
16:29
Speaker 1: or two the power of federal courts to fashion of
16:32
Speaker 1: federal common law of contribution or identification. Texas Industries Incorporated
16:38
Speaker 1: Versus Radcliffe Materials Incorporated. Four fifty one US six thirty
16:42
Speaker 1: six thirty eight, nineteen eighty one. Yet, courts have been
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Speaker 1: particularly reluctant to recognize the right of contribution or identification
16:51
Speaker 1: as a matter of either federal common law or of
16:53
Speaker 1: a statute. Anderson versus Griffin, three ninety seven f. Dot
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Speaker 1: three D. Five point fifteen five twenty three seven Circuit
17:00
Speaker 1: twenty twenty five. If the TVPA does not mention contribution
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Speaker 1: or identification. To determine whether a statute nonetheless contains an
17:09
Speaker 1: implied right, courts have traditionally looked to the language of
17:12
Speaker 1: the statute itself, its legislative history, the underlying purpose and
17:16
Speaker 1: structure of the statutory scheme, and the likelihood that Congress
17:20
Speaker 1: intended to supersede or to supplement existing statute remedies. Northwest
17:25
Speaker 1: Airlines Incorporated versus Transportation Workers Union of America four fifty
17:29
Speaker 1: one US seventy seven ninety one, nineteen eighty one. While
17:33
Speaker 1: the sole consideration is congress apparent intent, in recent decades,
17:37
Speaker 1: the Supreme Court has signaled that court should adopt a
17:40
Speaker 1: far more cautious course before finding implied causes of action.
17:44
Speaker 1: See Ziggler versus A. Bossy, five eighty two US one
17:47
Speaker 1: twenty one thirty two twenty seventeen. First is mentioned, the
17:52
Speaker 1: TVPA provisions invoked by the plaintiffs are completely silent on
17:56
Speaker 1: the issue. See generally US Code eighteen, section fifteen ninety one.
18:01
Speaker 1: The omission is significant, and given that Congress certainly knows
18:04
Speaker 1: how unambiguously create such rights see Northwest Airlines four fifty
18:09
Speaker 1: one US at ninety one and ninety two d N
18:12
Speaker 1: twenty four, contrasting Section eleven of the Securities Act of
18:16
Speaker 1: nineteen thirty three, where Congress did though Texas Industrial four
18:20
Speaker 1: to fifty one US at six forty and DOT eleven same.
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Speaker 1: And this silence rings loudly given that Congress has routinely
18:27
Speaker 1: amended the TVPA since its enactment in two thousand and
18:31
Speaker 1: yet has never included such rights. Simply put, if Congress
18:35
Speaker 1: had wanted to include identification and contribution, it would have
18:39
Speaker 1: second causes of action for contribution or identification would cut
18:44
Speaker 1: against the tvpa's mission to protect trafficking victims. Noble versus Weinstein,
18:49
Speaker 1: three thirty five f. Dot supp three D five oh
18:52
Speaker 1: four five point fifteen SDNY twenty eighteen, explaining that civil
18:57
Speaker 1: remedies portion of TVPA services the remedial purpose of enhancing
19:01
Speaker 1: protections of trafficking victims, quoting Trafficking Victims Protection Reauthorization Act
19:07
Speaker 1: of two thousand and three one seventeen Statute twenty eight
19:10
Speaker 1: seventy eight, Section four, effective December nineteenth, two thousand and three,
19:15
Speaker 1: as evident in this litigation, such claims serve only to
19:18
Speaker 1: complicate and add expense to victims suits. See Little versus
19:22
Speaker 1: Arabank PLC. Six eleven F. Dot supp two d. Two
19:27
Speaker 1: thirty three, two forty one Eastern District, New York, two
19:30
Speaker 1: thousand and nine. Finding the right of contribution under Anti
19:33
Speaker 1: Terrorism Act would not further the goal of compensating victims
19:36
Speaker 1: of terrorism because it would add expenses to the litigation. Anderson, three,
19:41
Speaker 1: ninety seven f. Dot three d at five twenty three.
19:44
Speaker 1: All that or right of contribution does is add to
19:46
Speaker 1: the cost of litigation, and so unless there is a
19:48
Speaker 1: compelling reason to suppose that the legislature would want such
19:53
Speaker 1: a right to be enforced, it will not be. And
19:55
Speaker 1: to the extent that the statute is intended to deter
19:58
Speaker 1: would be traffickers permit hitting, identification or contribution claims would
20:02
Speaker 1: undermine that purpose. C Anderson three ninety seven f dot
20:06
Speaker 1: three d at five twenty three, reasoning the absence of
20:09
Speaker 1: contribution or identification to divide damages among co conspirators itself
20:14
Speaker 1: performs a deterrent function for would be violators, who must
20:18
Speaker 1: risk being the unlucky ones saddled with liability. Third, the
20:21
Speaker 1: tvpa's remedial scheme makes clear that Congress did not intend
20:26
Speaker 1: to include rights to contribution or idemnity. Courts of routinely
20:30
Speaker 1: cautioned against creating any federal common law rights of idemnity
20:34
Speaker 1: or contribution in areas where Congress is created comprehensive legislative
20:39
Speaker 1: remedies access for all incorporated versus. Trump International Hotel and
20:43
Speaker 1: Tower and Condo two thousand and seven WL sixty three
20:47
Speaker 1: thirty nine fifty one at seven SDN Y February twenty six,
20:51
Speaker 1: two thousand and seven Northwest Airlines four fifty one US
20:55
Speaker 1: at ninety three to ninety four. The TVPA presents such
20:58
Speaker 1: a comprehensive scheme. Along with criminal punishments, it provides for
21:02
Speaker 1: various civil causes of action, and the express provision for
21:06
Speaker 1: private enforcement in certain carefully defined circumstances. Strongly counsels against
21:10
Speaker 1: judiciously in grafting additional remedies Herman, one seventy two ft
21:16
Speaker 1: three d At one forty four. Indeed, it's not the
21:19
Speaker 1: court's place simply to alter the balance struck by Congress
21:21
Speaker 1: in determining how damages should be apportioned. Fourth, the relevant
21:26
Speaker 1: legislative history in the TVPA is silent on an idemnity
21:29
Speaker 1: and contribution, showing that Congress did not even contemplate, let
21:33
Speaker 1: alone intent for such rights. Without express language or even
21:37
Speaker 1: a hint of intent, the essential predicate for implication of
21:40
Speaker 1: a private remedy simply does not exist here. Further, it
21:44
Speaker 1: would be improper to craft such a remedy from federal
21:47
Speaker 1: common law. The situations in which such judicial legislating is
21:50
Speaker 1: welcome are few and restricted Texas Industrial for fifty one
21:54
Speaker 1: US at six forty, and they generally fall into one
21:57
Speaker 1: of two categories, one when a federal rule is nestssari
22:00
Speaker 1: to protect a uniquely federal interest, or two when Congress
22:04
Speaker 1: is given the court power to develop substantative law. Neither
22:07
Speaker 1: applies here. A defendant's right of recovery from another wrongdoer
22:12
Speaker 1: does not implicate any federal interest. Scalia versus Staffing Group LLC.
22:17
Speaker 1: Nine point fifty one Ft three D. Ten ninety seven
22:20
Speaker 1: eleven h five, Ninth Circuit, twenty twenty. And there's no
22:23
Speaker 1: indication that Congress has given the courts the power to
22:26
Speaker 1: develop substantative law in the area of sex trafficking enforcement,
22:29
Speaker 1: as it has an admiralty law, for example. Since there
22:32
Speaker 1: is no hint that Congress intended for there to be
22:35
Speaker 1: a right of contribution or identification under the TVPA, and
22:39
Speaker 1: this issue does not implicate a federal interest or area
22:41
Speaker 1: of law expressly left to the courts to develop, the
22:44
Speaker 1: Court should not imply such causes of action here. JP
22:48
Speaker 1: Morgan's claims for identification and contribution arising under the TVPA,
22:52
Speaker 1: which include all of the claims alleged in the USVI
22:56
Speaker 1: fac therefore fell. All right, we're going to wrap up
22:59
Speaker 1: this episode here and in the next episode we're going
23:01
Speaker 1: to pick up where we left off, and that's with
23:03
Speaker 1: parts c. JP Morgan's identification claim fails for additional reasons.
23:08
Speaker 1: If you'd like to contact me, you can do that
23:10
Speaker 1: at bo B B Y c ap u Cci at
23:14
Speaker 1: Protonmeil dot com. All of the other information that goes
23:18
Speaker 1: with the episode can be found in the description box.
23:22
Speaker 1: What's up, everyone, and welcome back to the Epstein Chronicles.
23:25
Speaker 1: In this episode, we're picking up where we left off
23:28
Speaker 1: with the jes Stay motion for dismissal See JP Morgan's
23:32
Speaker 1: identification claims fail for additional reasons. JP Morgan's claims for
23:37
Speaker 1: identification fails for three other reasons. One JP Morgan's contractual
23:41
Speaker 1: idemity of mister Staley precludes any claim for common law
23:46
Speaker 1: identification in favor of the bank. Two, both those in
23:49
Speaker 1: usvii's complaints allege that JP Morgan was directly not vicariously
23:54
Speaker 1: liable for the misconduct. And three JP Morgan fails to
23:58
Speaker 1: allege that the decisions as plaintiff's injuries were solely within
24:02
Speaker 1: mister Staley's province at the bank. I. Mister Staley's contractual
24:07
Speaker 1: idemnity precludes common law idemnity here Under black letter New
24:11
Speaker 1: York law, contractual identity between parties flowing only in one
24:15
Speaker 1: direction extinguishes common law idemnity flowing in the other direction.
24:20
Speaker 1: Serve sign Erector's Company versus Allied Outdoor Advertisement, Incorporated. Five
24:24
Speaker 1: seventy three Nys two D five thirteen five fourteen, First Apartment,
24:29
Speaker 1: nineteen ninety one. Within the subject of identification clearly contemplated
24:34
Speaker 1: and expressly addressed by contract. We hold that under these
24:38
Speaker 1: circumstances there could be a one way obligation to identify
24:42
Speaker 1: by the idemeter, and any reciprocal obligation is extinguished accord
24:47
Speaker 1: Lamela versus Verdicon Ltd. One twenty eight NYS three D
24:52
Speaker 1: ninety one, ninety four, Third Department, twenty twenty Honeywell Incorporated
24:56
Speaker 1: versus J. P. Maguire Company, nineteen ninety nine WL one
25:00
Speaker 1: zero two seven six two at six sdn Y, February
25:04
Speaker 1: twenty fourth, nineteen ninety nine. Here JP Morgan agreed to
25:08
Speaker 1: identify mister Staley as an officer and employee to the
25:11
Speaker 1: fullest extent permitted by law example a Section five oh
25:15
Speaker 1: one of two thousand and four by laws. These bylaws
25:19
Speaker 1: serve as a contract between the company and its officers.
25:21
Speaker 1: But nowhere in the by laws or otherwise did mister
25:24
Speaker 1: Staley agree to identify JP Morgan. Since the parties agreed
25:28
Speaker 1: that JP Morgan would identify mister Staley without a reciprocal
25:32
Speaker 1: right to identification for the bank, the common law identification
25:35
Speaker 1: claim benefiting JP Morgan is foreclosed. Two. JP Morgan fails
25:40
Speaker 1: to state a claim for identification because USVII and Doe
25:44
Speaker 1: seek the whole JP Morgan directly not vicariously liable. Even
25:48
Speaker 1: if common law identification were available, the claim still fails
25:52
Speaker 1: because the plaintiff's complain seek the whole the bank liable
25:55
Speaker 1: for its own actions, not as mister Staley's employer. Under
25:59
Speaker 1: New York line, a party cannot obtain common law identification
26:03
Speaker 1: unless it has been held to be vicariously liable without
26:06
Speaker 1: proof of any negligence on its own part. McCarthy versus
26:09
Speaker 1: Turner Construction Incorporated. Nine fifty three Northeast two d seven
26:14
Speaker 1: ninety four, eight oh one and Y twenty eleven. See
26:17
Speaker 1: Lamello one twenty eight n Ys three d at ninety four.
26:21
Speaker 1: Common Law identification is available only in favor of one
26:24
Speaker 1: who is held responsible solely by operation of law because
26:28
Speaker 1: of his or her relation to the actual wrongdoer. Emphasis added,
26:32
Speaker 1: Citations omitted Board of Managers of the one twenty five
26:36
Speaker 1: North tenth Condo Verse one twenty fifth North ten LLC.
26:40
Speaker 1: Fifty five Nys three d three seventy four, three seventy six,
26:44
Speaker 1: affirming dismissal of a claim for common law identification where
26:48
Speaker 1: party seeking idemnity liability was not purely vicarious. In other words,
26:53
Speaker 1: identification claims are not recognizable where the purported idemnities liability
26:58
Speaker 1: in the pending main action would be based on its
27:00
Speaker 1: own failures. Here, none of the plaintiffs' claim seek the
27:04
Speaker 1: whole JP Morgan liable solely because it employed mister Staley
27:07
Speaker 1: to the country. Both DOE and the USVII premise liability
27:11
Speaker 1: on JP Morgan's own alleged conduct. Underlying the outstanding common
27:15
Speaker 1: law on federal law claims is the allegation that JP
27:18
Speaker 1: Morgan provided financial services to Epstein and his associates and
27:22
Speaker 1: furtherance of their sex trafficking enterprise. These services included, for example,
27:26
Speaker 1: allowing Epstein to withdraw large sums of cash without question
27:30
Speaker 1: dough Fac. Three twenty six, three fifty four, seventy four.
27:34
Speaker 1: Though also alleges that JP Morgan failed to follow AML
27:37
Speaker 1: and anti structuring reporting requirements found in the Bank Secrecy
27:41
Speaker 1: Act and other laws. Felled the timely file with the
27:44
Speaker 1: federal government, though required SAARs that financial institutions must file
27:48
Speaker 1: with the FINSEN whenever there is suspected case of money
27:51
Speaker 1: laundering or fraud. And concealed from the federal government as
27:54
Speaker 1: numerous cash payments to co conspirators. The USVII makes similar allegationations.
28:01
Speaker 1: There is no allegation that this conduct by JP Morgan
28:03
Speaker 1: was undertaken solely by, or even known to, mister Staley.
28:07
Speaker 1: The bank is solely responsible for those acts. Nowhere is
28:10
Speaker 1: it alleged in either plaintiffs complaints or JP Morgan's third
28:14
Speaker 1: party complaints that mister Staley provided cash or participated in
28:18
Speaker 1: decision making on BSA compliance. In fact, it's not even
28:22
Speaker 1: alleged that mister Staley was aware of Epstein's cash withdrawals
28:25
Speaker 1: or at all involved in the compliance functions consideration of
28:29
Speaker 1: whether the Epstein transactions breached banking laws, and even if
28:32
Speaker 1: he did, those allegations regarding the bank's willful failure to
28:36
Speaker 1: follow regulations extends beyond twenty thirteen, when mister Staley was
28:40
Speaker 1: no longer working at the bank. Nor is it alleged
28:43
Speaker 1: that mister Staley had decision making authority for Epstein's accounts
28:47
Speaker 1: such that he helped decide whether to keep Epstein as
28:50
Speaker 1: a client. In short, it's clear on the face of
28:52
Speaker 1: these complaints that the bank is not being sued as
28:55
Speaker 1: mister Staley's employer, but rather because it allegedly provided Epstein
28:59
Speaker 1: with a financial tools and cover to maintain his sex
29:02
Speaker 1: trafficking ring. Three. JP Morgan's identification claim fails because JP
29:07
Speaker 1: Morgan's allegamistconduct was outside the scope of mister Staley's responsibilities.
29:11
Speaker 1: JP Morgan's claim for identification also fails because it seeks
29:15
Speaker 1: to hold mister Staley accountable for actions outside the scope
29:18
Speaker 1: of his responsibilities at the bank. Under the New York law,
29:22
Speaker 1: identification is actionable only where the injury was due solely
29:25
Speaker 1: to the proposed idemeter's negligent performance or non performance of
29:29
Speaker 1: an act solely within his province. Corley versus Country Squire
29:33
Speaker 1: Apartments Incorporated. Eighty Nys two d nine hundred, nine hundred,
29:37
Speaker 1: Second Department, two thousand and six. Barren versus Grant eight
29:41
Speaker 1: fifty two Nys three seventy four three seventy four, Second Department,
29:45
Speaker 1: two thousand and eight. The party seeking identification must have
29:49
Speaker 1: delegated exclusive responsibility for the duties given rise to the
29:52
Speaker 1: loss to the party from whom identification is sought. Here,
29:57
Speaker 1: both the USVII and though allege that they were in
30:00
Speaker 1: by JP Morgan's decision to retain Epstein as a client
30:03
Speaker 1: and to continue providing financial services that served as the
30:06
Speaker 1: lifeblood of his sex trafficking scheme. They likewise claim that
30:10
Speaker 1: they were injured by JP Morgan's refusal to follow federal
30:13
Speaker 1: banking regulations. JP Morgan is not pleaded that mister Staley
30:17
Speaker 1: had decision making authority over Epstein's accounts or the compliance department,
30:21
Speaker 1: let alone that these were solely within his province at
30:23
Speaker 1: the bank. JP Morgan concedes this, alleging that the conducted
30:27
Speaker 1: places at issue in the third party complaints were not
30:30
Speaker 1: in connection with the performance of mister Staley's duties for JPMC. Thus,
30:35
Speaker 1: JP Morgan is failed to adequately plead identification d. JP
30:40
Speaker 1: Morgan's contribution claim fells. To state a claim for contribution,
30:44
Speaker 1: JP Morgan must plead that one mister Staley breached the
30:47
Speaker 1: duty that he owed to either the plaintiffs or JP Morgan,
30:50
Speaker 1: two his breach caused an injury, and three the injury
30:53
Speaker 1: was the same injury for which JP Morgan is being
30:55
Speaker 1: held liable. Bellis versus Tokyomarne and Fire Insurance Company two
31:00
Speaker 1: thousand and two WL one nine three one four nine
31:03
Speaker 1: at seventeen sdn Y February seventh, two thousand and two
31:07
Speaker 1: CE ny CPLR Section fourteen oh one. JP Morgan fails
31:11
Speaker 1: to plead the elements one in three. First, JP Morgan
31:15
Speaker 1: has failed to properly plead that mister Staley breached the
31:18
Speaker 1: duty that he owed to either the plaintiffs or to
31:20
Speaker 1: the bank. Nowhere in the complaint is JP Morgan allege
31:23
Speaker 1: that mister Staley owed a duty to the USVII or
31:25
Speaker 1: to DOE. And while Staley may have voted a fiduciary
31:28
Speaker 1: duty to JP Morgan through their employee employer relationship, JP
31:32
Speaker 1: Morgan is felt to adequately plead that such a duty
31:35
Speaker 1: was breached, as explained further below. Second, JP Morgan has
31:39
Speaker 1: not adequately pleaded that mister Staley caused the same harm
31:42
Speaker 1: for which the bank has been sued. No right of
31:45
Speaker 1: contribution arises when the injuries allegedly caused by the party
31:48
Speaker 1: are separate and distinct. Nasaw Roofing and Sheet Metal Company
31:53
Speaker 1: versus Facilities Development Corporation five twenty three any dot two
31:57
Speaker 1: D eight three eight oh five n Y nineteen eight.
32:00
Speaker 1: Here JP Morgan has failed to plead the injuries for
32:03
Speaker 1: which it's seeking contribution. Instead, JP Morgan merely claims that,
32:07
Speaker 1: if Doe is successful on her claims, Staley's actions caused
32:11
Speaker 1: or substantially contributed to any resulting damages TPC fifty three.
32:16
Speaker 1: This terrest statement fails to state what harm mister Staley
32:19
Speaker 1: is being alleged to have caused. Perhaps this is no
32:21
Speaker 1: surprise because whatever injury the bank caused simply cannot be
32:25
Speaker 1: the same as to what mister Staley allegedly caused. The
32:29
Speaker 1: crux of the plaintiff's complaints is that JP Morgan provided
32:32
Speaker 1: the financial lifeblood of Epstein's sex trafficking ring by providing
32:36
Speaker 1: access to limitless cash and helping Epstein of a detection
32:39
Speaker 1: by ignoring banking regulations. JP Morgan fails to allege how
32:43
Speaker 1: mister Staley, alone bank employee who has no banking license
32:47
Speaker 1: and who is not alleged to have control over Epstein's
32:50
Speaker 1: accounts or formal compliance role, contributed to injuries that are
32:53
Speaker 1: uniquely caused by a financial institution. JP Morgan also alleges
32:58
Speaker 1: that mister Staley sexually assaulted OH. Even accepting this baseless
33:02
Speaker 1: allegation is true as is required, it does not provide
33:05
Speaker 1: a basis for JP Morgan to seek contribution. Those claims
33:09
Speaker 1: do not seek damages for battery. Instead, she seeks all
33:13
Speaker 1: damages arising from JP Morgan's financial support of Epstein's sex
33:17
Speaker 1: trafficking ring. Because JP Morgan has failed to adequately plead
33:21
Speaker 1: the requirements for contribution, this claim must be dismissed. E
33:26
Speaker 1: JP Morgan cannot receive contribution for punitive damages. Even if
33:30
Speaker 1: the court finds that the contribution claim should stand, it
33:33
Speaker 1: should strike JP Morgan's attempt to receive contribution for any
33:36
Speaker 1: potential punitive damages awarded to Doe or the USVII. JP
33:41
Speaker 1: Morgan seeks contribution for all damages awarded to Doe and
33:44
Speaker 1: the USVII, who in turn both seek punitive damages. But
33:48
Speaker 1: because punitive damages are in the nature of a penalty,
33:51
Speaker 1: contribution among toward feesers for these damages is not permissible.
33:55
Speaker 1: Felice versus del Porti, five twenty four Nys two d Nine,
33:59
Speaker 1: nineteen nine to twenty fourth, Department, nineteen eighty eight. All right,
34:03
Speaker 1: we're going to wrap up right here, and in the
34:05
Speaker 1: next episode we're gonna pick up with section two. Because
34:08
Speaker 1: the idemnity and contribution claims fail, the employment claim should
34:11
Speaker 1: be dismissed for non compliance with Rule fourteen. All of
34:15
Speaker 1: the information that goes with this episode can be found
34:18
Speaker 1: in the description box. What's up everyone, and welcome back
34:21
Speaker 1: to the Epstein Chronicles. In this episode, we're picking up
34:24
Speaker 1: or we left off with the just daily motion to
34:27
Speaker 1: dismiss two. Because the idemnity and contribution claims fail, the
34:31
Speaker 1: employment claims should be dismissed for non compliance with Rule fourteen.
34:35
Speaker 1: Count three breach of fiduciary duty and Count four a
34:38
Speaker 1: violation of the faithless servant doctrine do not belong in
34:41
Speaker 1: this case. If those two employment claims are the only
34:44
Speaker 1: claims remaining, the court should dismiss them without prejudice under
34:48
Speaker 1: Rule fourteen A. Rule fourteen A permits a party to
34:51
Speaker 1: inplead another who is or may be liable to the
34:55
Speaker 1: third party plaintiff for all or part of the plaintiff's
34:58
Speaker 1: claims against the third party plaintiff fed rcivp. Fourteen A one.
35:02
Speaker 1: This standard is not a mirror technicality, as impleter under
35:06
Speaker 1: Rule fourteen A is narrowly construed. The Media Beauty Investment
35:11
Speaker 1: Partners LLC, First Media Tribeca LLC twenty fifteen WL seven
35:16
Speaker 1: zero seven eight six four one at three SDN Y,
35:20
Speaker 1: November twelfth, twenty fifteen. A third party claim satisfies Rule
35:24
Speaker 1: fourteen A only when the third party's liability is somehow
35:28
Speaker 1: dependent on the outcome of the main action, or when
35:30
Speaker 1: the third party is secondarily liable to the defendant. Zohar
35:34
Speaker 1: CDO two thousand and three, Dash One Ltd. Versus Patriarch
35:38
Speaker 1: Partners Llc. Two eighty six f supp three D six
35:42
Speaker 1: thirty four six fifty six, SDN Y, twenty seventeen. Unlike
35:47
Speaker 1: for supplemental jurisdiction under US Code twenty eight, Section thirteen
35:51
Speaker 1: sixty seven, or for analyzing a discretionary motion to several claims,
35:55
Speaker 1: the mere fact that the alleged third party claim arises
35:58
Speaker 1: from the same transaction or set of facts as the
36:01
Speaker 1: original claim is not enough. State National Insurance Company versus
36:05
Speaker 1: Certain Interested Underwriters at Lloyd's London, twenty twenty two, w
36:09
Speaker 1: L four five four seven four four four at two
36:13
Speaker 1: SDN Y, September twenty ninth, twenty twenty two, only if
36:16
Speaker 1: in pleater is proper with at least one predicate claim,
36:20
Speaker 1: that is one dependent on the outcome of the main action.
36:23
Speaker 1: Can the third party plaintiff join non dependent claims see
36:26
Speaker 1: Fedar civ p. Eighteen A. Here, the employment claims are
36:30
Speaker 1: properly joined under rule eighteen A only if mister Staley
36:34
Speaker 1: first is properly impleted based on a third party claim
36:37
Speaker 1: that satisfies Rule fourteen A. If the court dismisses the
36:41
Speaker 1: contribution and idemnity claims, then in plead of the independent
36:45
Speaker 1: employment claim is improper. Neither employment claims depend on the
36:48
Speaker 1: outcome of the plaintiff's claims against JP Morgan Zohar two
36:52
Speaker 1: eighty six f Dot supp. Three d at six fifty six.
36:56
Speaker 1: While JP Morgan relies on Dose and us svii's allegations
37:01
Speaker 1: as the basis for the purported breach of fuduciary duty,
37:04
Speaker 1: that alone is not sufficient in theory. JP Morgan could
37:07
Speaker 1: prevail entirely in the main actions and evade any liability,
37:11
Speaker 1: yet still prevail against mister Staley on the employment claims
37:14
Speaker 1: and secure disgorgement of his salary or compensatory damages and
37:18
Speaker 1: dependent of what it could have owed the plaintiffs. Whereas
37:21
Speaker 1: the crucial characteristic of a Rule fourteen claim is a
37:24
Speaker 1: defendant trying to transfer the third party defendant the liability
37:28
Speaker 1: asserted against Tim by the original plaintiff. The employment claims
37:32
Speaker 1: here are the type that JP. Morgan could have asserted
37:35
Speaker 1: in an independent action Zohar two eighty six f supp
37:39
Speaker 1: Three d At six, fifty six and fifty seven. Accordingly,
37:43
Speaker 1: if is argued above, the identification in contribution claim fails,
37:47
Speaker 1: the employment claims cannot stand. Three the employment claims fell
37:51
Speaker 1: on the merits. The employment claims are also subject to
37:55
Speaker 1: dismissal under Rule twelve B six A. The employment claims
37:59
Speaker 1: are time barred. Although the statute of limitations is ordinarily
38:02
Speaker 1: an affirmative defense that must be raised in the answer,
38:05
Speaker 1: a statute of limitations defense may be decided on a
38:08
Speaker 1: Rule twelve B six motion if the defense appears on
38:12
Speaker 1: the face of the complaint a Lule versus Congregation of
38:15
Speaker 1: Christian Brothers seven seventy four Ft. Three d. Seven ninety one,
38:19
Speaker 1: seven ninety eight and Dot twelve, Second Circuit twenty fifteen.
38:23
Speaker 1: Such is the case here. In New York. The limitations
38:26
Speaker 1: period for breach of fiduciary duty claims generally depends on
38:29
Speaker 1: the substantative remedy that the plaintiff seeks ALP Incorporated versus
38:34
Speaker 1: Moskowitz one sixty seven Nys three d forty five fifty two,
38:39
Speaker 1: First Apartment, twenty twenty two. There is only a three
38:42
Speaker 1: year limitations period when, as here, the remedy sought is
38:45
Speaker 1: purely monetary. JP Morgan may argue that a six year
38:49
Speaker 1: limitations period applies, claiming that the case should be covered
38:53
Speaker 1: by the longer limitations period for actions by a corporation
38:56
Speaker 1: against their directors and officers n y cplaw Our Section
39:00
Speaker 1: two thirteen, at seven. See Levy versus Young Adult Institution Incorporated.
39:05
Speaker 1: One O three f Dot supp three d four twenty six,
39:09
Speaker 1: four thirty four and thirty five SDNY twenty fifteen. The
39:13
Speaker 1: claim is time barred either way. Mister Staley left JP
39:16
Speaker 1: Morgan in early twenty thirteen, which was when his fiduciary
39:21
Speaker 1: duty and duty of loyalty to the company ended, and
39:24
Speaker 1: which is thus the most recent date the claim could arise.
39:27
Speaker 1: JP Morgan, however, waited over ten years to file these claims.
39:31
Speaker 1: Its suit falls well outside even the six year statute
39:35
Speaker 1: of limitations, so the court should dismiss these claims to
39:38
Speaker 1: be sure for an action based upon fraud the discovery
39:41
Speaker 1: a cruel rule extends the limitations period to the greater
39:45
Speaker 1: of six years or two years from the time the
39:47
Speaker 1: plaintiff or the person under whom the plaintiff claims discovered
39:50
Speaker 1: the fraud or could with reasonable diligence have discovered it
39:54
Speaker 1: and why CPLR Section two thirteen eight. Because JP Morgan's
39:58
Speaker 1: employment claims sound and fraud see Infra Page twenty and
40:02
Speaker 1: twenty one. JP Morgan bears the burden to a plead
40:05
Speaker 1: and establish that the fraud could not have been discovered
40:08
Speaker 1: prior to the two year period before the commencement of
40:11
Speaker 1: the action. Canariato verse Canariato, twenty four nys Dot three
40:16
Speaker 1: d two fourteen to sixteen, Second Department, twenty sixteen, noting
40:20
Speaker 1: burden rests with the plaintiff to raise sufficient factual issue
40:23
Speaker 1: and that the issue can be resolved at pleading stage.
40:26
Speaker 1: Despite that burden, JP Morgan has pleaded zero facts as
40:30
Speaker 1: to why it could not have discovered the alleged claims
40:32
Speaker 1: before the past two years. What is more, there is
40:35
Speaker 1: a duty to inquire. A plaintiff cannot claim ignorance of
40:38
Speaker 1: an alleged fraud when the facts call for investigation a
40:41
Speaker 1: Zora Bank Ltd. Versus Deutsche Bank twenty nine NYS three
40:46
Speaker 1: d ten fourteen, First Department, twenty sixteen. In other pleadings
40:50
Speaker 1: in this case, JP Morgan Herald's a bombshell Miami Herald
40:53
Speaker 1: story from November twenty eighteen that blew the lid open
40:57
Speaker 1: in exposed shocking details about Epstein's decade long operation. JP
41:02
Speaker 1: Morgan motioned to dismiss do complaint at one and two
41:05
Speaker 1: and in February twenty twenty two years after JP Morgan
41:08
Speaker 1: concedes that it learned of Epstein's misconduct through the article.
41:12
Speaker 1: Media outlets reported that mister Staley was under investigation by
41:16
Speaker 1: the UK's Financial Conduct Authority for his connection to Epstein. Surely,
41:20
Speaker 1: the Bombshell article, Epstein's subsequent arrest in twenty nineteen, and
41:24
Speaker 1: the public investigation into mister Staley put JP Morgan on
41:28
Speaker 1: notice of at least the duty to inquire into its
41:31
Speaker 1: own dealings with Epstein, including mister Staley's alleged involvement. After all,
41:36
Speaker 1: numerous JP Morgan employees knew that mister Staley had a
41:39
Speaker 1: relationship with Epstein, and the bank had access to mister
41:42
Speaker 1: Staley's communications from this tenure that JP Morgan now alleges
41:46
Speaker 1: reflect that relationship as pleaded. The complaint provides no explanation
41:50
Speaker 1: for why JP Morgan sat on its putative claims. The
41:53
Speaker 1: Court should dismiss the employment claims which concern a job
41:57
Speaker 1: mister Staley left more than a decade ago as time
42:00
Speaker 1: barred B. The employment claims are improperly pleaded untimeliness. Aside
42:05
Speaker 1: JP Morgan fails to properly plead the employment claims. As
42:09
Speaker 1: an initial matter, both claims must meet the heightened pleading
42:12
Speaker 1: standard of Rule mind B. The standard applies to not
42:15
Speaker 1: only the cause of action stylized as fraud claims, but
42:18
Speaker 1: also those in which the gravamen of the claim relies
42:22
Speaker 1: on dishonest conduct. Rombach versus Chong three point fifty five
42:26
Speaker 1: Ft three D one sixty four one seventy one and
42:29
Speaker 1: seventy two Second Circuit, two thousand and four. Courts have
42:32
Speaker 1: found non fraud claims to sound and fraud where the
42:35
Speaker 1: underlying conduct alleged has been fraud or closely linked with
42:39
Speaker 1: fraudulent behavior, such as claims that the other party is
42:42
Speaker 1: attempted to induce action through misrepresentation or material emissions. This
42:47
Speaker 1: can include claims for breach of fiduciary duty. Here counts
42:51
Speaker 1: three to four sound and fraud both rely on the
42:54
Speaker 1: same alleged underlying conduct, namely that mister Staley supposedly subverted
42:59
Speaker 1: the interests of his employer, JP Morgan, to which he
43:02
Speaker 1: owed a duty of good faith and loyalty for support.
43:05
Speaker 1: JP Morgan practically trips over itself alleging varied deception by
43:09
Speaker 1: mister Staley. It alleges that he deceived it about a
43:12
Speaker 1: material conflict of interest, fraudulently concealed his misconducts, secretly acted
43:17
Speaker 1: against the interests of the bank, repeatedly providing misleading information,
43:21
Speaker 1: affirmatively misrepresented facts, and consistently and misleadingly vouch for Epstein.
43:26
Speaker 1: These claims, which rely on allegedly fraudulent statements and conduct,
43:30
Speaker 1: are precisely the kind that trigger Rule B nine scrutiny eg.
43:34
Speaker 1: Rubio versus BSD Management, Incorporated, twenty twenty one w L
43:39
Speaker 1: ten twenty six fifty one at four sdn Y applying
43:43
Speaker 1: Rule nine B to counterclaim for violation of faithless servant doctrine,
43:48
Speaker 1: because the gravimen of the claim was Plaintiff's alleged fraudulent misrepresentations. Cf.
43:53
Speaker 1: Levy one oh three f Dot supp Three d At
43:56
Speaker 1: four forty seven, finding Rule nine B not triggered where
43:59
Speaker 1: Breech whch claim did not allege that Levy tricked the
44:02
Speaker 1: organization into taking action it would not have otherwise taken.
44:06
Speaker 1: Having level claims of fraud, JP Morgan must plead with
44:09
Speaker 1: particularity when and how mister Staley allegedly deceive the bank I.
44:14
Speaker 1: JP Morgan fails to state a claim for breach of
44:17
Speaker 1: fiduciary duty. JP Morgan fails to meet its burden and
44:20
Speaker 1: plead a viable breach of fiduciary duty claim. Under New
44:24
Speaker 1: York law, a plaintiff must allege one the existence of
44:27
Speaker 1: a fiduciary relationship, two misconduct by the defendant, and three
44:31
Speaker 1: damages directly caused by the defendant's misconduct Yucus cap sorrel
44:36
Speaker 1: Verse Feldmann, nine seventy seven Ft three D two sixteen
44:40
Speaker 1: two forty one, Second Circuit twenty twenty. The complaint falls
44:44
Speaker 1: far short. First, while sweeping, the actual allegations of misconduct
44:49
Speaker 1: are conclusiony and fatally vague, especially in the face of
44:52
Speaker 1: Rule nine B. When how and from whom did mister
44:55
Speaker 1: Staley fraudulently conceal facts and observations about Epstein. When now
45:00
Speaker 1: into whom did mister Staley affirmatively misrepresent Epstein's activities or
45:04
Speaker 1: provide misleading information on Epstein's character and conduct. The complaint
45:09
Speaker 1: leaves the parties in the court guessing as to the
45:12
Speaker 1: critical who, what, when, where, and how of the alleged
45:15
Speaker 1: fraud underlying this claim Kester twenty three f. Supp. Three
45:19
Speaker 1: d at two fifty two. Such cursory pleading violates Rule
45:23
Speaker 1: nine B and merits the claim's dismissal. Babbitt twenty twenty
45:27
Speaker 1: w L three one eight eight nine five at five.
45:30
Speaker 1: Nor does JP Morgan properly plead that mister Staley had
45:33
Speaker 1: any duty to report to the bank information about Epstein
45:37
Speaker 1: or their alleged relationship. An agent like mister Staley is
45:40
Speaker 1: obligated to disclose only information that is relevant to the
45:43
Speaker 1: affairs of the agency entrusted to them, not every fact
45:46
Speaker 1: on every topic. Polar Versus Bioscript Incorporated. Nine seventy four FT. Supp.
45:52
Speaker 1: Two D two four two twenty seven, sdn Y twenty thirteen.
45:56
Speaker 1: See also Neurological surgery PC first mL MIIC Insurance Company
46:01
Speaker 1: one seventy five NYS three D two sixty six two
46:05
Speaker 1: sixty nine, second Department, twenty twenty two. A cause of
46:09
Speaker 1: action alleging fraudulent omission or concealment of material information requires
46:13
Speaker 1: an allegation that the defendant had a duty to disclose
46:16
Speaker 1: that information. Since JP Morgan has nowhere alleged that mister
46:19
Speaker 1: Staley had any official responsibilities regarding the Epstein accounts, mister
46:24
Speaker 1: staley purported failure to disclose information to the bank about
46:27
Speaker 1: Epstein does not give rise to breach of his fiduciary duty. Second,
46:32
Speaker 1: the complaint fails to properly plead damages directly caused by
46:35
Speaker 1: the defendant's misconduct. For a breach of fiduciary claim, JP
46:39
Speaker 1: Morgan must plead both that it suffered damages and that
46:42
Speaker 1: the alleged misrepresentations or other misconduct were the direct and
46:46
Speaker 1: approximate cause of the losses claimed, not merely a butt
46:49
Speaker 1: for cause. Tobia versus United Group of Cost Insurance twenty
46:55
Speaker 1: sixteen w L five four one seven eight two four
46:58
Speaker 1: at twenty two and the n Y September twenty second,
47:02
Speaker 1: twenty sixteen dismissing breach of fiduciary duty claim for failure
47:06
Speaker 1: to allege damages directly caused by defendant's conducts. According to
47:10
Speaker 1: Lamb versus Fisel seven forty five Nys two d five
47:14
Speaker 1: thirty four, five thirty six and thirty seven, First Apartment,
47:17
Speaker 1: two thousand and two, JP Morgan notably does not plead
47:20
Speaker 1: that as of this date it has actually lost any
47:24
Speaker 1: money from mister Staley is alleged deception. Indeed, Doe and
47:27
Speaker 1: USVII assert that JP Morgan financially benefited by earning millions
47:31
Speaker 1: of dollars through its connection to Epstein, including from interest commissions, fees,
47:36
Speaker 1: and other financial benefits do fac two sixty seven and
47:40
Speaker 1: sixty eight. The only damages that JP Morgan points to
47:44
Speaker 1: four count three are one costs in defending and adverse
47:48
Speaker 1: publicity from these lawsuits, and two any amounts in damages
47:51
Speaker 1: that JP Morgan might have to pay the plaintiffs, But
47:54
Speaker 1: in neither form of alleged damages suffices. Mister Staley did
47:59
Speaker 1: not directly cause the litigation initiated by independent plaintiffs some
48:03
Speaker 1: ten years after he left the company, nor any of
48:06
Speaker 1: the associated publicity. Indeed, many of the allegations in USVII,
48:10
Speaker 1: and those complaints are completely unrelated to mister Staley's conduct. Similarly,
48:15
Speaker 1: any secondhand damages that JP Morgan might have to pay
48:18
Speaker 1: the plaintiffs are completely remote and speculative and thus improperly pleaded.
48:23
Speaker 1: CEGC Trade Maritime Corporation versus Counts Dutanis seven forty four
48:29
Speaker 1: f Appendix seven twenty one through seven twenty five and
48:32
Speaker 1: twenty six, noting that in order to succeed on breach
48:35
Speaker 1: of fiduciary duty claim, plaintiffs must prove nonspeculative damages, and
48:40
Speaker 1: that the claim is not enforceable until damages are sustained.
48:43
Speaker 1: Given JP Morgan's clear of failure to point to any
48:46
Speaker 1: speculative damages that it has incurred through mister Staley's purported disloyalty,
48:51
Speaker 1: it is failed to properly plead a cause of action
48:53
Speaker 1: for breach of fiduciary duty, and this claim must be dismissed. Two.
48:58
Speaker 1: JP Morgan fails to state a claim under the faithless
49:01
Speaker 1: servant doctrine. Count For's claims that mister Staley violated the
49:05
Speaker 1: faithless servant doctrine fails for similar reasons. New York courts
49:08
Speaker 1: are far from clearer regarding the contours of and interplay
49:12
Speaker 1: between a claim for breach of fiduciary duty and the
49:15
Speaker 1: faithless servant doctrine Feldman, nine seventy seven f. Dot three
49:18
Speaker 1: d at two forty two, and some courts treat the
49:21
Speaker 1: cause of action as merely an alternate form of recovery
49:24
Speaker 1: for a breach of fiduciary duty claim. But under the doctrine,
49:28
Speaker 1: one who owes a duty of loyalty to an employer
49:31
Speaker 1: but it's faithless in the performance may be liable to
49:34
Speaker 1: forfeit his compensation. Fouling Serve versus Anderson Weinroths and Company Lp.
49:39
Speaker 1: Three forty four F. Dot three D one eighty four,
49:43
Speaker 1: two hundred Second Circuit two thousand and three. Courts apply
49:46
Speaker 1: alternate standards to decide whether an employee's conduct merits disgorgement
49:50
Speaker 1: see Rubio twenty twenty one w L one O. Two
49:54
Speaker 1: six fifty one at four. One standard requires that the
49:57
Speaker 1: misconduct and unfaithfulness substantially violate the contract of service, while
50:02
Speaker 1: another requires that an agent acted versely to his employer
50:05
Speaker 1: in any part of a transaction, or omit to disclose
50:08
Speaker 1: any interest which would naturally influence his conduct. In dealing
50:11
Speaker 1: with the subject of his employment. But however, the standard
50:14
Speaker 1: is stated. New York courts have applied the faithless servant
50:17
Speaker 1: doctrine only in the limited circumstances where the employee is
50:21
Speaker 1: acted directly against the employer's interests, as an embezzlement, in
50:25
Speaker 1: properly competing with the current employer, or usurping business opportunities.
50:29
Speaker 1: Ebel versus Geomedia Incorporated, twenty twenty one, w L two
50:34
Speaker 1: zero three seven eight sixty seven at seven Skeny, May
50:38
Speaker 1: twenty first, twenty twenty one. Along with lacking particularity for
50:42
Speaker 1: the same reasons as Count three, Count four does not
50:44
Speaker 1: remotely allege such circumstances. The complaint here repeat stock phrases
50:49
Speaker 1: such as mister Staley acted as a faithless servant, abandoned
50:53
Speaker 1: the interests of JP Morgan, and violated the JP Morgan
50:56
Speaker 1: Code of Conduct in a way that permeated his service,
51:00
Speaker 1: but it lacks factual allegations that match the claim. There
51:03
Speaker 1: are no allegations that mister Staley embezzled, competed against JP Morgan,
51:07
Speaker 1: you serve business opportunities, or undertook any of the activity
51:10
Speaker 1: that would put him in financial odds with the bank
51:13
Speaker 1: closest JP Morgan gets is alleging that mister Staley lied
51:16
Speaker 1: to keep Epstein as a lucrative client for the bank,
51:19
Speaker 1: but misconduct, which is only an incremental profit from increasing
51:23
Speaker 1: the amount of referred business to the employer, is not
51:26
Speaker 1: actionable under the very narrow faithless servant doctrine. Miller versus
51:30
Speaker 1: Levi and Kerensky LLP. Twenty twenty one, w L five
51:35
Speaker 1: three five five nine nine at six, SDN Y, February twelfth,
51:39
Speaker 1: twenty twenty one, dismissing claim against lawyer who acted unfaithfully
51:43
Speaker 1: to benefit other law firms and a mentor of hers
51:46
Speaker 1: outside of her firm, when the only financial benefit derived
51:49
Speaker 1: from actions that profited her firm as well. While JP
51:52
Speaker 1: Morgan does not allege in subordination and dishonesty, it fell
51:56
Speaker 1: still allege any element of self dealing on mister Staley's part,
52:00
Speaker 1: so the claim is not actionable under the faithless servant doctrine.
52:04
Speaker 1: Gruel versus Cuneo, twenty sixteen, w L three zero eight
52:08
Speaker 1: eight zero three at eight, SDN Y, January twenty fifth,
52:11
Speaker 1: twenty sixteen. The Court should therefore dismiss count number four conclusion.
52:17
Speaker 1: For the foregoing reasons, mister Staley respectfully requests that the
52:20
Speaker 1: Court dismissed the complaint respectfully submitted Brendan Sullivan, Junior, and
52:24
Speaker 1: this was dated April twenty fourth, twenty twenty three. All
52:29
Speaker 1: of the information that goes with this episode can be
52:31
Speaker 1: found in the description box