Beyond The Horizon

JP Morgan's Memorandum In Law In Opposition To Jes Staley's Motion To Dismiss (Part 4) (7/7/24)

JPMorgan Chase Bank N.A.'s memorandum of law in opposition to James Edward Staley’s motion to dismiss addresses several key points:

Responsibility and Knowledge: JPMorgan argues that James Staley, as a senior executive, played a significant role in managing the relationship with Jeffrey Epstein. They assert that Staley was aware, or should have been aware, of Epstein's illegal activities and failed to take appropriate action to address or report these issues.
Claims of Misconduct: The memorandum highlights specific allegations that Staley facilitated Epstein's criminal enterprise by maintaining and managing Epstein's accounts, even after red flags were raised. This includes allegations of willful blindness and failure to comply with legal and regulatory obligations.
Legal Arguments: JPMorgan contends that Staley's motion to dismiss lacks merit because the claims against him are well-supported by evidence and legal precedent. They argue that the allegations, if proven true, establish a clear basis for Staley's liability in connection with Epstein's activities.
Fiduciary Duties: The bank emphasizes that Staley breached his fiduciary duties by prioritizing the bank's financial interests over legal compliance and ethical standards. This breach of duty, JPMorgan argues, justifies the continuation of legal proceedings against him.
Impact on the Bank: JPMorgan also addresses the reputational and financial damage caused by Staley's alleged misconduct. They claim that his actions have led to significant legal and regulatory scrutiny, which has harmed the bank’s standing and operations.

The opposition memorandum seeks to ensure that Staley remains a party to the lawsuit, holding him accountable for his alleged role in facilitating Epstein's criminal conduct

(commercial at 8:21)

to contact me:

bobbycapucci@protonmail.com

source:

gov.uscourts.nysd.591653.140.0.pdf (courtlistener.com)

Duration:: 19m
Broadcast on:: 07 Jul 2024
Audio Format:: mp3

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See terms at racing.fanduel.com, gambling problem, call 1-800-Gambler. What's up, everyone, and welcome back to the Epstein Chronicles. In this episode, we're picking up where we left off with the paperwork from JP Morgan, Jess Daly, and the USVI. JPMC's breach of fiduciary duty and faithless servant cause of action would survive dismissal of the identification and contribution claims. Even if the court were to dismiss JPMC's identity claim and contribution claim and JPMC respectfully submits it should, this court should not dismiss the remaining state law, fiduciary duty, and faithless servant claims. Under US Code 28, Section 1367C, the court may decline to exercise supplemental jurisdiction over a claim even if three the district court has dismissed all claims over which it has original jurisdiction. The court should assess four factors to evaluate whether to exercise its discretion to do so, judicial economy, convenience, fairness, and comedy. Carnegie Mellon University v. Cohill 484, US, 343, 350N.7, 1988. This discretion applies equally to third-party complaints, CEG, Derry v. Wire, 265F.2D804, 807, and 8, second-circuit 1959. Amtex Fabrics Inc. v. Justin Materials Inc. 140F.3D101, 1056, second-circuit 1998. Staley ignores this familiar standard and the factors that govern this court's discretion. In fact, he fails even to acknowledge that this court has discretion. Instead, Staley analyzes supplemental jurisdiction as if JPMC had in the first instance filed a third-party complaint based solely on non-derivative claims that the cases he cites only address that situation. Lemayr-Beauty Investment Partners, LLC v. Matayr Tribeca, LLC, 2015 WL, 707, 8641 at 3SDNY, November 12, 2015. Great National Insurance Company v. Certain Interested Underwriters at Lloyd's London, 2022 WL, 4547444 at 3SDNY, September 29, 2022. None of those cases address the standard for retaining jurisdiction over non-derivative cases and causes of action after dismissal of contribution or identification claims that inquiry is governed by the factors articulated in Carnegie Mellon and those factors counsel in favor of retaining jurisdiction even if the court dismisses the identity and contribution claims. JPMC's breach of fiduciary duties and faithless servant claims substantially overlap with the underlying dough and USVI actions where as described above, Staley's alleged conduct and knowledge form a significant part of the plaintiff's claims. Where as here the claims substantially overlap, there is very substantial judicial economy in maintaining supplemental jurisdiction, FBI Hang Chan, v. Jingfong Rest Inc., 582F.supp2d602, 603 and 604, SDNY, 2008. See also Zurich American Life Insurance Company v. Nagle, 2021, WL, 3077-681 at 4 and 5, SDNY July 20, 2021. Having that cases involve substantial overlap of the factual issues in both cases, making them more efficiently resolved in the same court under the same rules of evidence and discovery. The parties, including Staley, have already engaged in substantial discovery, received numerous procedural rulings, and are scheduled for trial in October of 2023. Judicial economy would be thwarted where this court to decline to exercise supplemental jurisdiction, as JPMC, would as a result be forced to restart the third party claims in state court. Fay Hang Chan, 582F.supp2d at 603. See also Zurich American Life Insurance, 2021, WL, 3077-861 at 5. Section 6, Staley's challenges to the breach of fiduciary duty and faithless servant claims are without merit. The breach of the fiduciary duty and faithless servant claims are timely. Staley argues that JPMC's breach of fiduciary duty and faithless servant claims are untimely because he left JPMC in 2013, but under the Delaware Discovery Rule, which governs the breach of fiduciary duty claim, the three-year limitation period under 10 declaration C. Section 8106 is told, where "the injury is inherently unknowable and the claimant is blamelessly ignorant of the wrongful act and injury complained of," Walmart stores incorporated versus AIG Life Insurance Company, 860-A.2d, 312-319, Delaware 2004. This is a low threshold for plaintiff to meet. Certain Teed Corporation vs. Celatex Corporation 2005, WL, 21-703-2 at 9, Delaware, January 24, 2005, Service Inc. vs. Service Master Company, LLC, 2022 WL, 116-4859 at 5. Under New York law, the limitations period for actions, based upon fraud like faithless servant claim or bard, extends two years from the time the plaintiff or the person under whom the plaintiff claims discovered the fraud or could with reasonable diligence have discovered it, NYCPLR, Section 213-8. As the third party complaint makes clear, Staley concealed his activities and JPMC did not discover his alleged behavior and act of concealment until Doe and the USBI brought these actions, from which bases of JPMC's third party can plane. See, JPMC can plane, 36-42. For instance, JPMC did not know nor could have it reasonably known of Doe's allegations that Staley personally spent time with young girls whom he met through Epstein on several occasions, personally visited young girls at Epstein's apartments, located at 301-E66 street, personally observed Epstein around young girls, and personally observed Epstein sexually grabbed young women in front of them. Doe FAC-227, C. also IDA-226 Indeed, JPMC did not know that Doe's allegation that the powerful financial executive, sexually assaulted her with Epstein's permission, was Staley until she revealed as much in discovery in this case. Staley, protests that JPMC could and should have discovered Staley's activities earlier. But that claim is flawed. It involves a mixed question of law and fact, where the record does not conclusively demonstrate that a plaintiff had knowledge of facts from which the alleged fraud might be reasonably inferred, the cause of action should not be disposed of summarily on statute of limitation grounds, epiphany, community, nursery, school versus levy, 171 AD3D, 1794, NYS-3D, 1 2019. It's premature to resolve this factual issue based on the assertions of a motion to dismiss. It's premature to resolve this factual issue based on the assertions in a few newspaper articles, without discovery and further factual inquiry, a few tidbits including a Miami Herald article about Epstein's activities with no mention of Staley. And that Epstein had been arrested, hardly provide dispositive evidence that JPMC should have known that Staley may have participated in Epstein's sex trafficking. Staley offers no reasons why the fact that JPMC provided banking services to Epstein means it should have discovered Staley's misconduct merely from Epstein's arrest. Even if no statutory discovery rule applied, Staley's active concealment of his activities tolls the limitations period. See Alaska Election Pension Fund versus Bank of America Corporation, 175 SUPP, 3D, 44, 66, SDNY 2016. Under federal and New York law, the statute of limitations is told where a plaintiff shows that a defendant committed fraudulent acts intended to conceal its misconduct and that the plaintiff's ignorance of the concealed misconduct was not a product of its own lack of reasonable diligence. As the third party can plant alleges, Staley hid his activities from his JPMC colleagues. That he did so should come as no surprise as both Doe and the USVI alleged that Staley engaged in misconduct so serious even criminal that Staley could not dare reveal it to JPMC. Staley allegedly learned of Epstein's sex trafficking operation by engaging in sexual activity with young women Epstein procured and according to Doe sexually assaulted her with force and aggression. Staley affirmatively and falsely stated in his separation agreement that he had reported all code of conduct violations. JPMC can plant 21. In doing so he acted to protect himself and Epstein who could have exposed Staley's misconduct. That concealment tolls the limitations period in this case. B. The third party can plant states a claim for a breach of fiduciary duty. Staley's contention that the third party can plant does not adequately allege breach of fiduciary duty is without merit. To establish breach of fiduciary duty, one must allege, one, that a fiduciary duty existed and two, that the defendant breached that duty. The third party can plant alleges both elements, C. JPMC can plant at 58 and 65. Staley's contention that JPMC's allegations are insufficiently specific under Fedarsiv P-9B ignores key aspects of JPMC's complaint which in turn incorporates the USVI and Doe's complaint. For instance, JPMC alleged that Staley acknowledged in writing that he had a duty to act in JPMC's best interests to avoid conflicts of interest and to avoid any activities that would damage JPMC either financially or reputationally. JPMC can plant 17 through 20 and Staley plainly breach that duty is made clear by those allegations recounted above that Staley personally observed Epstein, sex trafficking, spent time with young girls he met through Epstein and even sexually assaulted her with force and aggression while saying he had Epstein's permission to do what he wanted to her. JPMC further alleges that Staley concealed this highly relevant information from JPMC, which is not at all surprising giving the serious legal jeopardy Staley would face if the alleged misconduct was revealed. C. JPMC can plant at 34 and 36 and contrary to Staley's argument to the contrary, JPMC alleged citing the Doe and USVI complaints that Staley promised to use his clout within JP Morgan to make Epstein untouchable, repeatedly thwarted JPMC's efforts to sever ties with Epstein and played a role in convincing JPMC to maintain Epstein as a client. Indeed, Doe alleges that Staley was generally in charge of Epstein's accounts and was Epstein's protector at JPMC who prevented JPMC from getting rid of Epstein as a client before Staley left in 2015. The USVI likewise alleges that Staley was a decision maker with respect to Epstein's accounts and even talked to Epstein regarding trafficking allegations as part of JPMC's January 2011 review of his account. These allegations are sufficient to establish Staley's breach of fiduciary duty. Staley's contention that JPMC felt a plead that it was damaged by his breach of fiduciary duty is wrong. The complaint expressly alleges that Staley's fiduciary duty breach was a direct and proximate cause of JPMC's decision to do business with Epstein until 2013 and that Staley's breach caused JPMC to suffer both adverse publicity for which it seeks reputational damages and the cost of litigation from the Doe and USVI lawsuits. JPMC complained to 63 through 65. That Doe and the USVI also tender independent allegations against JPMC, which of course have not been proven, does nothing to remove Staley from the chain of causation. Finally, Staley's argument that holding him responsible to JPMC for damages awarded in the Doe and USVI cases is improperly speculative ignores the plaintext of Rule 14 which allows JPMC to plead Staley who is or may be liable to JPMC for all claims against JPMC. That are SIV 14 C. Customs vs Tax Administration of Kingdom of Denmark, Tax Refund Litigation 2021, WL 499-353-6 at 9, SDNY October 26, 2021. The secondary or derivative liability notion is central and thus in pleater has been successfully utilized when the basis of the third party claim is identity, subrogation, contribution express or implied warranty or some other theory. C. Third party complaint states a faithless servant claim. One who owes a duty to Fidelity to a principal and who is faithless in the performance of his service is generally disentitled to recover his compensation. Under commissions or salary, Figer vs. jewelry limited, 41 NY2D928, 928 NY 1977. New York courts require either a misconduct that rises to the level of a breach of a duty of loyalty or good faith. Fansalker 344 F.3D at 202 or b) that employees substantially violates the contract of service such that it permeates the employee's service in its most material and substantial part. Stefanovitch vs. Old Heidelberg Corporation 2022 WL 3928370 at 7, SDNY August 31, 2022. JPMC's third party complaint adequately states a faithless servant claim against Staley under either standard. As noted above, JPMC's third party complaint alleges that despite having a duty of loyalty to JPMC, Staley abandoned JPMC's interest in favor of his own interest and that of Epstein. Staley allegedly knew of Epstein's sex trafficking operation, engaged in sexual activity with young women procured by Epstein and according to Doe, sexually assaulted her with force and aggression. Staley not only concealed that information but thwarted any efforts within JPMC to sever ties with Epstein. In doing so, he acted to protect himself and Epstein, who could have exposed Staley's misconduct, and Staley persisted for years in protecting Epstein in the face of attempts by JPMC personnel to end the company's relationship with Epstein on reputational grounds, made misrepresentations in the process, and continued to do so to the end of his JPMC tenure, stating in his separation agreement that he was unaware of any violations of JPMC's code of conduct. That is sufficient to state a faithless servant claim, C.E.G. Morgan Stanley vs. Scowron, 989f.supp, 2d356, 362, SDNY 2013, employee who admitted to one instance of insider trading, nevertheless permeated his service because he lied and covered up his involvement for years afterwards. Staley's argument to the contrary assumes faithless servant claims are limited to cases of embezzlement or usurpation of the employer's business opportunities, but Ebel vs. Geo Media Inc., 2021, WL, 2037867, SDNY, May 21st, 2021, upon which Staley relies, merely offers embezzlement as one example of the broader category of cases in which the faceless servant doctrine applies, where the employee has acted directly against the employer's interests. That is exactly what JPMC complaint alleges, an employee acts directly contrary to an employer's interests, when he acts to protect himself and an alleged sex trafficker by concealing important information from his employer, including, according to Do, his own crime. Finally, Staley's suggestion that JPMC has not adequately alleged damage from Staley's disloyalty overlooks the allegations of the impletor complaints discussed above, and the obvious long-term damage from his activities with Epstein and concealment of them. It also ignores the second circuit's clear pronouncement that it does not make any different that the services were beneficial to the principal or that the principal suffered no provable damage as a result of the breach of fidelity by the agent. Conclusion Staley's motion to dismiss should be denied. This was dated May 8th, 2023, and it was signed by Leonard Gail and Felicia Ellsworth. All of the information that goes with this episode can be found in the description box. A new law is helping me save more money on prescription drug costs. Maybe you can save too. With Medicare's extra help program, my premium is zero and my out-of-pocket costs are low. Who should apply? 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