Latest / The Epstein Chronicles / Jes Staley And His Unredacted Motion To Exclude JP Morgan's Expert Witness Opinions (Part 1) (10/7/26)

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Jes Staley And His Unredacted Motion To Exclude JP Morgan's Expert Witness Opinions (Part 1) (10/7/26) · 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 diving right back into the court
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  Speaker 1: documents and we're going to take a look at the
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  Speaker 1: third party defendant James Staley's brief in support of his
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  Speaker 1: motion to exclude JPMorgan Chase Bank's proffered expert opinions. The
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  Speaker 1: one constant in these related cases has been JPMorgan's attempt
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  Speaker 1: to pin the entirety of the problems with Jeffrey Epstein
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  Speaker 1: on its former executive Jess Staley. Consistent with this theme,
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  Speaker 1: the three experts whom the bank is retained to support
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  Speaker 1: its third-party claims against Mr. Staley are focused on a
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  Speaker 1: single question. How much should Mr. Staley have to pay?
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  Speaker 1: That is, the three of them assume liability and then
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  Speaker 1: divide up the economic terrain as follows. 1. Edith Wong,
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  Speaker 1: an accountant, opines that J.P. Morgan's $ 290 million settlement with
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  Speaker 1: the Jane Doe class was reasonable. 2. Shelley Chapman, a
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  Speaker 1: retired bankruptcy judge, opines that that J.P. Morgan's redacted legal
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  Speaker 1: fees in the Jane Doe and USVI cases was reasonable.
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  Speaker 1: And three, Carlin Irwin, also an accountant, adds up how
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  Speaker 1: much Mr. Staley earned to J.P. Morgan to assess the
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  Speaker 1: potential amount that might be clawed back under a disgorgement remedy.
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  Speaker 1: None of these experts' opinions meets the Daubert standard of admissibility,
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  Speaker 1: and each of them must therefore be excluded. The argument.
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  Speaker 1: Federal Rule of Evidence 702 states, allows testimony in the
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  Speaker 1: form of expert opinion if, among other things, the opinion, one,
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  Speaker 1: will assist the trier of fact to determine a fact
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  Speaker 1: and issue, and two, is the product of reliable principles
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  Speaker 1: and methods. The party offering the expert opinion here, J.P. Morgan,
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  Speaker 1: bears the burden to show that it meets every element
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  Speaker 1: of these standards, including that the opinion in both relevant
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  Speaker 1: and reliable. 1. J.P. Morgan's expert opinion on settlement amount.
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  Speaker 1: To foist the cost of its settlement with the Jane
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  Speaker 1: Doe class onto Mr. Staley, J.P. Morgan must show, among
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  Speaker 1: other things, that $ 290 million was a reasonable price to
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  Speaker 1: pay to be released from the liability in that lawsuit.
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  Speaker 1: On this point, the bank starts on its back foot
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  Speaker 1: for at least two reasons. First, in both absolute and
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  Speaker 1: per claimant terms, J.P. Morgan has agreed to pay an
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  Speaker 1: amount far greater than the other settlements arising out of
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  Speaker 1: Epstein's abuse, including those paid by the abuser himself. Second,
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  Speaker 1: given the number of Epstein-related settlements that have already occurred, e.g.
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  Speaker 1: the settlement in Jane Doe v. Deutsche Bank, the bank
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  Speaker 1: will be compensating victims who have already been compensated for
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  Speaker 1: the same harm, in some cases multiple times. To make
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  Speaker 1: the case that its extraordinary and cumulative settlement payments meets
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  Speaker 1: the test of reasonableness, the bank proffers the opinions of
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  Speaker 1: Edith Wong, a forensic accountant employed by the advisory firm
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  Speaker 1: FTI Consulting. To arrive at her opinions, Ms. Wong states
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  Speaker 1: that she, one, researched sex abuse settlements to find ones
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  Speaker 1: that were, in her view, comparable to J.P. Morgan's settlement. Two,
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  Speaker 1: group the settlements into the types of her own fashioning.
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  Speaker 1: And then three, determine the average per victim payout for
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  Speaker 1: each type. As her final step, Ms. Wong averaged the
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  Speaker 1: averages arriving at an average per victim settlement payment of $ 1. 7 million, which,
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  Speaker 1: by her calculation, happened to be an exact match for
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  Speaker 1: the J.P. Morgan settlement. Wong Deposition at 138. None of Ms.
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  Speaker 1: Wong's analysis was informed by any expertise in class action settlements,
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  Speaker 1: and each stage of her analysis was marked by outcome-driven
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  Speaker 1: judgment calls of an entirely subjective nature, which she was
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  Speaker 1: not qualified to make. Given Rule 702's requirement that opinion
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  Speaker 1: testimony must come from a qualified expert and result from
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  Speaker 1: the application of reliable principles and methods, a failing of
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  Speaker 1: either expertise or reliability will render an expert's testimony inadmissible.
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  Speaker 1: The opinions of Ms. Wong fail on both points. A. Ms.
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  Speaker 1: Wong has no expertise in class action settlements. To determine
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  Speaker 1: whether a witness qualifies as an expert, courts compare the
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  Speaker 1: area in which the witness has superior knowledge, education, experience,
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  Speaker 1: or skill with the subject matter of the proffered testimony.
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  Speaker 1: A court must ensure that the expert will actually be
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  Speaker 1: testifying on issues or subject matter within his or her
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  Speaker 1: area of expertise. When an expert is no longer applying
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  Speaker 1: her extensive experience and reliable methodology, Daubert teaches that the
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  Speaker 1: testimony should be excluded. Here, the subject matter of Ms.
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  Speaker 1: Wong's opinion is the reasonableness of a price paid to
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  Speaker 1: settle a class action lawsuit. Ms. Wong readily admits that
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  Speaker 1: she is not an expert in class action settlements and
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  Speaker 1: has never before provided an opinion on the reasonableness of
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  Speaker 1: a civil settlement or one comparing civil settlements. None of
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  Speaker 1: her expertise is in forensic accountant, redacted, at 44, is
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  Speaker 1: of anything more than general relevance and all of her
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  Speaker 1: previous work as a testifying expert has been in criminal matters.
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  Speaker 1: Although it is true that Ms. Wong's work in such
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  Speaker 1: criminal matters has involved calculating restitution to individual victims of
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  Speaker 1: sex trafficking, her opinions in those cases have been victim-specific
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  Speaker 1: and based on personal factors like age, earning capacity, and
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  Speaker 1: the extent of personal trauma. She did not apply that
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  Speaker 1: methodology in this case. She could not. as she did
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  Speaker 1: not have any personal information for the victims in the
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  Speaker 1: Jane Doe class, and thus none of her prior experience
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  Speaker 1: calculating restitution lends itself to expertise in the subject matter
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  Speaker 1: of her opinion here. The closest that Ms. Wong could
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  Speaker 1: come to identifying a prior engagement comparable to this one
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  Speaker 1: was one single project involving sex abuse claims against a
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  Speaker 1: religious entity. In that matter, which is still ongoing, she
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  Speaker 1: helped to quantify an appropriate settlement proposal on the entity's behalf.
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  Speaker 1: and her work included reviewing class action sex abuse settlements
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  Speaker 1: for comparison purposes. As she admitted, however, the settlements she
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  Speaker 1: considered for that matter were ones that she expressly excluded
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  Speaker 1: from her analysis in this case, and her methodology there
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  Speaker 1: boiled down to a victim-specific restitution analysis akin to what
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  Speaker 1: she has done in criminal cases. Next section, redacted. That
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  Speaker 1: methodology was of course not the one she used for
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  Speaker 1: her assignment here, as she testified, redacted. B. Ms. Wong's
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  Speaker 1: opinion on the reasonableness of the Jane Doe settlement is
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  Speaker 1: based on an outcome-driven methodology. Under Daubert and its progeny,
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  Speaker 1: the hallmark of a reliable methodology is an analytical rigor,
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  Speaker 1: meaning the expert's reliance on objective standards. Daubert 509 U.S.
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  Speaker 1: at 594. the existence, and maintenance of standards controlling the
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  Speaker 1: technique's operation. Thus, whenever an expert's opinion boils down to
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  Speaker 1: the expert's own subjective views, the court must reject it.
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  Speaker 1: Linko Incorporated v. Fujitsu Limited, No. 00-7242-SAS-2002-WL-1585551-4-SDNY, July 16, 2002.
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  Speaker 1: A court may not simply take the expert's word for it,
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  Speaker 1: quoting Fed R. Evidence 702 Advisory Committee's Note C-523 IP
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  Speaker 1: LLC 48 F SUPP 3D at 649. This requirement applies
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  Speaker 1: to every step in the expert's analysis, and thus any
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  Speaker 1: step that renders the analysis unreliable renders the expert's testimony inadmissible. 1. Ms.
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  Speaker 1: Wong's Skewed Selection of Comparables By Ms. Wong's calculation, the
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  Speaker 1: average per victim payout by Epstein's estate was well below
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  Speaker 1: the $ 1. 7 million that she calculated in for the JP
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  Speaker 1: Morgan settlement, and the average for the Jane Doe v.
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  Speaker 1: Deutsche Bank settlement was lower still. When selecting comps for
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  Speaker 1: her reasonableness analysis, therefore, Wong did not limit herself to
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  Speaker 1: lawsuits based on abuse by Epstein, or even to ones
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  Speaker 1: under the Trafficking Victims Protection Act. Wong instead redacted, These
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  Speaker 1: additional settlements had significantly higher average payments than the ones
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  Speaker 1: based on Epstein's abuse, raising the overall average for Ms.
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  Speaker 1: Wong's comparison. next section redacted, next section redacted as well. Ms.
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  Speaker 1: Wong's universe of comparables was also noteworthy for the settlements
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  Speaker 1: that she decided to exclude. Chief among her exclusions were
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  Speaker 1: 39 settlements by victims of Harvey Weinstein, the per-victim average
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  Speaker 1: of which was $ 437, 000, roughly one-quarter of Ms. Wong's average.
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  Speaker 1: Although Weinstein was a serial abuser, and in that regard
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  Speaker 1: a closer match to Epstein than Prince Andrew, Ms. Wong
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  Speaker 1: nevertheless claimed that it was proper to exclude the Weinstein
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  Speaker 1: settlements because 1. Weinstein Company was in bankruptcy proceedings at
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  Speaker 1: the time, which could have reduced the claimant's leverage, and 2.
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  Speaker 1: Weinstein's victims were reportedly older than Epstein's, which, as noted above,
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  Speaker 1: would have reduced the potential liability. As was the case
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  Speaker 1: with Epstein's victims, however, Ms. Wong possessed no data on
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  Speaker 1: the ages of Weinstein's victims and thus had no way
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  Speaker 1: to quantify the purported average age difference. None of the
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  Speaker 1: above will fly under Daubert. For any comparative analysis to
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  Speaker 1: satisfy a rule 702's rigorous reliability requirements, the expert must
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  Speaker 1: justify the comparator used. See King v. Wong, 2021 WL
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  Speaker 1: 523-7195 at 11, SDNY, November 9, 2021. In each context,
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  Speaker 1: the analysis requires criteria for the identification of comparables. and
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  Speaker 1: the making of appropriate adjustments to account for differences between
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  Speaker 1: the comparable and the thing being appraised. Ms. Wong's inclusion
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  Speaker 1: of sex abuse settlements involving perpetrators other than Epstein with
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  Speaker 1: no knowledge of how the sued upon acts compared to
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  Speaker 1: Epstein beyond their basic sexual nature is fundamentally non-rigorous, and
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  Speaker 1: it is completely unjustifiable to treat those settlements as comparable
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  Speaker 1: when in both Prince Andrew's case and the hotel chain case,
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  Speaker 1: Additional factors were present, which, by Ms. Wong's own assessment,
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  Speaker 1: would have increased the victim's leverage and driven up the
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  Speaker 1: settlement cost. But even more problematic... than Ms. Wong's non-rigorous
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  Speaker 1: comparability criteria was her selective application of that criteria when
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  Speaker 1: deciding which settlements were in or out. The reasons that Ms.
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  Speaker 1: Wong gave to exclude the lower-valued Weinstein settlements, reduced victim leverage,
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  Speaker 1: and increased victim age were were one-way drivers of settlement
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  Speaker 1: value that did not trouble her greatly in the case
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  Speaker 1: of settlements that raised her average. Simply put, if reduced
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  Speaker 1: victim leverage suffices to exclude the Weinstein settlements, then certainly
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  Speaker 1: increased victim leverage suffices to exclude the settlements of Prince
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  Speaker 1: Andrew and the hotel chain. And if a higher average
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  Speaker 1: victim age suffices to exclude the Weinstein settlements, then certainly
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  Speaker 1: a lower one suffices to exclude the hotel chains. On
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  Speaker 1: both points, Miss Wong was trying to have it both ways.
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  Speaker 1: applying her criteria rigorously when the settlements would lower her average,
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  Speaker 1: but not when they did not. That is nothing more
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  Speaker 1: than cherry picking, and it is the antithesis of a
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  Speaker 1: sound methodology. All right, we're going to wrap up this
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  Speaker 1: episode right here, and in the next episode discussing the topic,
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  Speaker 1: we're going to pick up with two, Ms. Wong's determination
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  Speaker 1: of the per victim amount. All of the information that
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  Speaker 1: goes with this episode can be found in the description box.