August 20, 2025 • 26 mins
The lawsuits stem from parallel cases in the Southern District of New York: one brought by Jane Doe on behalf of Epstein’s victims and another by the Government of the U.S. Virgin Islands, both targeting JPMorgan Chase for its alleged role in enabling Jeffrey Epstein’s sex trafficking operation. JPMorgan, in turn, filed third-party claims against former executive James Edward Staley, arguing that he should bear responsibility for any liability tied to Epstein, given his close personal and professional ties to the financier. These cases became highly significant in exposing the financial networks that allegedly allowed Epstein’s crimes to flourish.
In response, Staley filed a motion to exclude JPMorgan Chase’s proffered expert opinions, challenging the credibility and admissibility of the bank’s expert witnesses. His brief sought to limit the evidence that could be used against him, aiming to weaken JPMorgan’s case for shifting liability onto him. This move reflects Staley’s broader defense strategy of resisting being scapegoated as the primary enabler within JPMorgan, while the bank itself faced mounting scrutiny for its role in maintaining Epstein as a client despite numerous red flags.
to contact me:
bobbycapucci@protonmail.com
source:
gov.uscourts.nysd.591653.342.0.pdf (courtlistener.com)
In response, Staley filed a motion to exclude JPMorgan Chase’s proffered expert opinions, challenging the credibility and admissibility of the bank’s expert witnesses. His brief sought to limit the evidence that could be used against him, aiming to weaken JPMorgan’s case for shifting liability onto him. This move reflects Staley’s broader defense strategy of resisting being scapegoated as the primary enabler within JPMorgan, while the bank itself faced mounting scrutiny for its role in maintaining Epstein as a client despite numerous red flags.
to contact me:
bobbycapucci@protonmail.com
source:
gov.uscourts.nysd.591653.342.0.pdf (courtlistener.com)
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
What's up, everyone, and welcome back to the Epstein Chronicles.
In this episode, we're diving right back into the core
documents and we're going to take a look at the
third party defendant, James Staley's brief in support of his
motion to exclude JP Morgan. Chase Banks proffered expert opinions.
The one constant in these related cases has been JP
(00:20):
Morgan's attempt to pin the entirety of the problems with
Jeffrey Epstein on its former executive Jess Staley. Consistent with
this theme, the three experts whom the bank is retained
to support its third party claims against mister Staley are
focused on a single question, how much should mister Staley
have to pay? That is, the three of them assume
liability and then divide up the economic terrain as follows. One.
(00:43):
Edith Wong, an accountant, opines the JP Morgan's two hundred
and ninety million dollars settlement with the Jane Doe class
was reasonable. To Shelley Chapman, a retired bankruptcy judge, opines
that JP Morgan's redacted legal fees in the Jane Doe
and USVII cases was reason and three Carlyn Irwin, also
an accountant, adds up how much mister Staley earned a
(01:06):
JP Morgan to assess the potential amount that might be
clawed back under a disgorgement remedy. None of these experts
opinions meets the Daubert standard of admissibility, and each of
them must therefore be excluded the argument. Federal Rule of
Evidence seven zero two allows testimony in the form of
expert opinion if, among other things, the opinion one will
(01:28):
assist the trier of fact to determine a fact an issue,
and two is the product of reliable principles and methods.
The party offering the expert opinion here, JP Morgan bears
the burden to show that it meets every element of
these standards, including that the opinion in both relevant and reliable. One.
(01:48):
JP Morgan's expert opinion on settlement amount to foist the
cost of its settlement with the Jane Doe class onto
mister Staley, JP Morgan must show, among other things, that
two hundred and ninety million dollars is a reasonable price
to pay to be released from the liability in that lawsuit.
On this point, the bank starts on its back foot
for at least two reasons. First, in both absolute and
(02:10):
per claimant terms, JP Morgan has agreed to pay an
amount far greater than the other settlements arising out of
Epstein's abuse, including those paid by the abuser himself. Second,
given the number of Epstein related settlements that have already occurred, eg.
The settlement in Jane Doe versus Deutsche Bank, the bank
will be compensating victims who have already been compensated for
(02:31):
the same harm, in some cases multiple times. To make
the case that its extraordinary and cumulative settlement payments meets
the test of reasonableness, the bank proffers the opinions of
Edith Wong, a forensic accountant employed by the advisory firm
FTI Consulting, to arrive at her opinions. Miss Wong states
that she won research sex abuse settlements to find ones
(02:53):
that were, in her view, comparable to JP morgan settlement. Two,
group the settlements into the types of her own fashioning,
and then three determine the average per victim payout for
each type. As her final step, Miss Wong averaged the averages,
arriving at an average per victim settlement payment of one
point seven million, which by her calculation, happened to be
(03:14):
in an exact match for the JP. Morgan settlement Wong
deposition at one thirty eight. None of Miss Wong's analysis
was informed by any expertise in class action settlements, and
each stage of her analysis was marked by outcome driven
judgment calls of an entirely subjective nature, which she was
not qualified to make. Given Rule seven oh two's requirement
(03:35):
that opinion testimony must come from a qualified expert and
result from the application of reliable principles and methods, a
failing of either expertise or reliability will render an expert's
testimony in admissible. The opinions of Miss Wong fail on
both points. A Miss Wong has no expertise in class
action settlements. To determine whether a witness qualifies as an expert,
(03:58):
courts compare the area in which the witness has superior knowledge, education, experience,
or skill with the subject matter of the proffered testimony.
Of court must ensure that the expert will actually be
testifying on issues or subject matter within his or her
area of expertise. When an expert is no longer applying
her extensive experience and reliable methodology. Dowbert teaches that the
(04:21):
testimony should be excluded here. The subject matter of Miss
Wong's opinion is the reasonableness of a price paid to
settle a class action lawsuit. Miss Wang readily admits that
she is not an expert in class action settlements and
has never before provided an opinion on the reasonableness of
a civil settlement or one comparing civil settlements. None of
(04:42):
her expertise is in forensic accountant redacted at forty four,
is of anything more than general relevance, and all of
her previous work as a testifying expert has been in
criminal matters. Although it is true that Miss Wang's work
in such criminal matters has involved calculating restitution too in
individual victims of sex trafficking, her opinions in those cases
(05:03):
have been victims specific and based on personal factors like age,
earning capacity, and the extent of personal trauma. She did
not apply that methodology in this case. She could not
as she did not have any personal information for the
victims in the Jane Doe class and thus none of
her prior experience calculating restitution lends itself to expertise in
(05:24):
the subject matter of her opinion here. The closest that
Miss Wong could come to identifying a prior engagement comparable
to this one was one single project involving sex abuse
claims against a religious entity. In that matter, which is
still ongoing, she helped to quantify an appropriate settlement proposal
on the entity's behalf, and her work included reviewing class
(05:46):
action sex abuse settlements for comparison purposes. As she admitted, however,
the settlements she considered for that matter were ones that
she expressly excluded from her analysis in this case and
her methodology. They're boiled down to a victim's specific restitution analysis,
akin to what she has done in criminal cases next
section redacted. That methodology was, of course, not the one
(06:10):
she used for her assignment here, as she testified redacted b.
Miss Wong's opinion on the reasonableness of the Jane Do
settlement is based on an outcome driven methodology. Under Daubert
and its progeny. The hallmark of a reliable methodology is
an analytical rigor, meaning the expert's reliance on objective standards Dawbert,
(06:33):
five oh nine, US at five ninety four. The existence
and maintenance of standards controlling the technique's operation. Thus, whenever
an expert's opinion boils down to the expert's own subjective us,
the court must reject it. Link Co Incorporated versus Fujitsu
Limited Number zero zero Sieve seven two four to two
SAS two thousand and two w L one five eight
(06:55):
five five five one at four SDNY, July sixteenth, twoan T. Two.
A court may not simply take the expert's word for it,
quoting that are evidence seven oh two Advisory Committee's note
C five twenty three ip LLC forty eight f supp
three d at six forty nine. This requirement applies to
every step in the experts analysis, and thus any step
(07:18):
that renders the analysis unreliable renders the experts testimony inadmissible. One,
Miss Wong skewed selection of comparables. By Miss Wang's calculation,
the average per victim payout by Epstein's estate was well
below the one point seven million that she calculated for
the JP Morgan settlement, and the average for the Jane
Doe versus Deutsche Bank settlement was lower still. When selecting
(07:41):
comps for her reasonableness analysis. Therefore, Wong did not limit
herself to lawsuits based on abuse by Epstein, or even
to one's under the Trafficking Victims Protection Act. Wong instead redacted.
These additional settlements had significantly higher average payments than the
ones based on Epstein's abuse, raising the overall average for
(08:01):
Miss Wang's comparison. Next section redacted. Next section redacted as well.
Miss Wang's universe of comparables was also noteworthy for the
settlements that she decided to exclude. Chief among her exclusions
were thirty nine settlements by victims of Harvey Weinstein, the
per victim average of which was fourner in thirty seven thousand,
(08:21):
roughly one quarter of Miss Wang's average. Although Weinstein was
a serial abuser and in that regard, a closer match
to Epstein than Prince Andrew, Miss Wong nevertheless claimed that
it was proper to exclude the Weinstein settlements because one
Weinstein company was in bankruptcy proceedings at the time, which
could have reduced the claimant's leverage, and two Weinstein's victims
(08:41):
were reportedly older than Epstein's, which, as noted above, would
have reduced the potential liability as was the case with
Epstein's victims. However, Miss Wong possessed no data on the
ages of Weinstein's victims and thus had no way to
quantify the purported average age difference. None of the above
will fly under Daubert. For any comparative analysis. To satisfy
(09:03):
a rule seven oh two's rigorous reliability requirements, the expert
must justify the comparatory used. See King versus Wong, twenty
twenty one, w L five two three seven one nine
five out eleven, SDNY, November ninth, twenty twenty one. In
each context, the analysis requires criteria for the identification of
comparables and the making of appropriate adjustments to account for
(09:27):
differences between the comparable and the thing being appraised. Miss
Wang's inclusion of sex abuse settlements involving perpetrators other than
Epstein with no knowledge of how the sued upon acts
compared to Epstein beyond their basic sexual nature, is fundamentally
non rigorous, and it is completely unjustifiable to treat those
settlements as comparable when in both Prince Andrew's case and
(09:49):
the hotel chain case, additional factors were present, which, by
miss Wang's own assessment, would have increased the victim's leverage
and driven up the settlement cost. But even more problematic
in Miss Wong's non rigorous comparability criteria was her selective
application of that criteria when deciding which settlements were in
or out. The reasons that Miss Wong gave to exclude
(10:10):
the lower valued Weinstein settlements reduced victim leverage and increase
victim age were one way drivers of settlement value that
did not trouble her greatly in the case of settlements
that raised her average. Simply put, if reduced victim leverage
suffices to exclude the Weinstein settlements, then certainly increase victim
leverage suffices to exclude the settlements of Prince Andrew and
(10:31):
the hotel chain. And if a higher average victim age
suffices to exclude the Weinstein settlements, then certainly a lower
one suffices to exclude the hotel chains. On both points,
Miss Wong was trying to have it both ways, applying
her criteria rigorously when the settlements would lower her average,
but not when they did not. That is nothing more
than cherry picking, and it is the antithesis of a
(10:54):
sound methodology. All Right, we're going to wrap up this
episode right here and in the next episode discussing the topic,
we're going to pick up with two miss Wang's determination
of the per victim amount. All of the information that
goes with this episode can be found in the description box.
What's up everyone, and welcome back to the Epstein Chronicles.
(11:14):
In this episode, we're going to continue taking a look
at jess Daley's attempt to bar expert testimony from JP
Morgan two miss Wang's determination of the per victim amount.
In order to allow apples to Apple's comparison, miss Wang
reduced all settlements in her analysis to their per victim average.
(11:35):
In most cases, this was not difficult, as the number
of claimants was a known quantity. For the JP Morgan
and Deutsche Bank settlements, However, the underlying lawsuits were class actions,
so miss Wang had to estimate the number of potential
claimants to derive her denominator. Miss Wang's approach in the
former case was adequate and in the latter preposterous. As
(11:56):
to the JP Morgan settlement, miss Wang's approach was straightforward.
She totaled the number of victims who had settled with
Epstein's estate, either directly or through the Epstein Victims Compensation Program,
and then use the sum one hundred seventy one as
a proxy for the Jane Doe settlement class. Miss Wang's
rationale was the bank's relationship with Epstein was of such
(12:18):
duration that essentially anyone could recover from the estate could
also recover from JP Morgan. As to the Deutsche Bank case, however,
Miss Wang's approach bordered on the byzantine. In that case,
plaintiff's council had publicly estimated the size of his client's
class had one hundred and twenty five persons next part redacted,
(12:39):
next part redacted. This was less than the half of
her one point seven million dollars average of the JP
Morgan settlement, but still significantly greater than the six hundred
thousand dollars average that would result from the one hundred
and twenty five person estimate by class council. Merely to
describe Miss Wang's process is to criticize it. It is
simply bizarre to contend that an unsworn statement describing events
(13:02):
from fourteen years earlier by a person who was a
high school teenager at the time would provide a more
reliable estimate of class size than a statement by class council,
and Miss Wang fares no better in here theorizing that
victims from the early two thousands would have escaped Epstein's
abuse by twenty thirteen, simply based on anecdotal reports of
his desire for teenagers. Such analytical choices are indistinguishable from
(13:26):
guesswork and conjecture, but even more problematic, they were in
no way random. Every aspect of miss Wang's analysis was
geared to decrease the Deutsche Bank class size in order
to inflate its per victim average and thereby make the
JP Morgan settlement look less exorbitant. Such an outcome driven
approach as the opposite of a reliable one three miss
(13:47):
Wang's average of the averages comparison. The last stage of
miss Wang's analysis was the victim per average from the
universe of comparables, which he then used for comparisons to
the JP Morgan settlement. Of all the steps in miss
Wang's analysis, her approach to this one was perhaps the
most tendentious. The most straightforward way to determine the average payment,
(14:10):
of course, would be simply to sum that settlement payments
and divide by the number of victims, giving equal way
to each victim's case. Miss Wang therefore replaced that approach
with one in which he first categorized the settlements, determined
the per victim average for each category, and then averaged
the averages. Her chart to this effect is below redacted redacted,
(14:31):
end redacted. This methodological choice was again entirely outcome driven.
Next section redacted. As applied to the deutsch Bank settlement,
this was an absurd rationale. As noted above, The Jane
Doe versus Deutsche Bank lawsuit was premised on the same
theory of liability as the one against J. P. Morgan
and compensated victims for the same harm next section completely redacted. Moreover,
(14:56):
even if one were to credit Miss Wong's fear of
overweighing the Deutsche Ban settlement, the idea that it should
be given less weight on a per victim basis than
the settlements in the outlier categories is again absurd. Next
section redacted. Absent a reason to think that Prince Andrew's
case was also forty eight more times comparable than the
Deutsche Bank one, and Miss Wong gave no such reason
(15:19):
any methodology would weigh as such cannot be deemed reliable
to JP Morgan's expert opinion on legal fees, as was
the case with its two hundred and ninety million dollars
settlement payment, the bank must show that its redacted legal
fees was reasonable before it can recover them from jess Daily.
As was also the case with its settlement payment, JP
(15:41):
Morgan again starts off on its back foot and must justify,
among other things redacted. The bank's burden to show the
reasonableness of its expenditures is only made heavier by the
fact that its law firms invoices are redacted so heavily
that any attempt to review particular attorney tasks or do
implication of tasks across law firms involved is effectively impossible
(16:04):
next section redacted. To address the reasonableness issue, JP Morgan
retained Shelley Chapman, a former bankruptcy judge, for her engagement.
Judge Chapman evaluated the bank's legal fees in a holistic
matter from top down perspective. Chapman deposition at forty seven,
seventy one, and seventy nine as she described her methodology redacted.
(16:28):
As the above description suggests, Judge Chapman's methodology did not
involve detailed reviews of the law firm invoices. That is,
she reviewed only the redacted versions, which she conceded could
be opaque, and she did not review them to evaluate
particular attorney tasks or the time spent thereon. Redacted, redacted
and redacted and redacted. Consistent with her approach to the invoices,
(16:51):
Judge Chapman relied principally on her personal perspective in her
overall evaluation of the legal fees and hours claimed by
JP Morgan next section redacted again on the equally fundamental
question of why additional six thousand hours billed by Massy
and Gale were necessary at all, in other words, why
JP Morgan needed more than one law firm. Judge Chapman
(17:14):
was quite candid that her opinion was not based on
any subjective standard redacted, but rather than rely on her
personal insight to assess the reasonableness of hiring Massy and Gale,
Judge Chapman was clear that she relied on J. P.
Morgan's judgment redacted redacted. The same was true for her
opinions on the reasonableness of council staffing decision and potential
(17:35):
duplication of effort. Judge Chapman simply deferred to JP Morgan's
judgment in reviewing the bills. Without independent analysis next part redacted,
none of Judge Chapman's analysis comes close to meeting the
Daubert standard. First, Judge Chapman's opinion does not aid the
jury in making a decision as required by Rules seven
oh two. Rather, it undertakes to tell the jury what
(17:58):
result to reach, and thus attempts to substitute the expert's
judgment for the juries. Judge Chapman's testimony will not provide
the jury with the tools needed to assess the reasonableness
of the legal fees, for example, guidance on how to
evaluate excessive staffing, duplication of work, or the number of
hours needed to prepare emotion. The judge acknowledged that she
(18:18):
did not perform that analysis herself, notwithstanding her own view
that doing so is necessary in some instances redacted. Without
such analysis, Judge Chapman's testimony boils down to asking the
jury to find the fees reasonable simply because she says
they are, or is noted above, simply because JP Morgan
decided to pay them. That sort of testimony does not
(18:40):
help the FactFinder at all. Second, Judge Chapman did not
apply or reliable methodology or reliable methodology requires application of
the proper standard. In so far as Judge Chapman purported
to apply any standard of reasonableness at all, it was
not New York state law, which governs JP Morgan's request
for idemification of its legal fees redacted. Judge Chapman also
(19:04):
failed to apply the governing standard reliably. Under New York laws,
the reasonableness of attorney fees must be assessed by examining
billing records that specify, among other things, the amount of
time spent on specific tasks and projects. A FactFinder assessing
the reasonableness of attorney fees must evaluate various distinct factors,
such as whether one the work performed was necessary, two
(19:28):
was duplication of work, three the case was overstaffed, and
four the work performed was of legal nature. None of
that can be assessed without examination of the time records,
as Judge Chapman's own judicial opinions have acknowledged. Yet, Judge
Chapman's assessment was not based on that sort of analysis,
and indeed, she admitted that she could not perform any
(19:49):
such analysis given the extensive redactions to the invoice. Judge
Chapman's methodology therefore fails to apply even her own standards,
much less the proper standards, and is unreliable. As noted above,
the only ostensibly objective aspect of Judge Chapman's opinion was
her top line comparison of JP Morgan's fees to those
(20:10):
in the handful of bankruptcy fee applications that she reviewed.
But on that point Judge Chapman made no attempt to
assess whether the underlying bankruptcy cases were comparable to JP
Morgan's on any index relevant the cost of litigating, eg.
Complexity of legal services, quantity of documents, number of witnesses,
or extent of potential liability. Absent a showing of comparability
(20:33):
on those fronts, the fact that the top line fees
were in the same ballpark is meaningless, and any opinion
based thereon is inherently unreliable. Third, the fact that Judge
Chapman came to her conclusion first based solely on looking
at the top line numbers, and only afterward looked at
the subset of the heavily redacted invoices to see whether
they supported her conclusion is the hallmark of an unreliable methodology. Indeed,
(20:57):
by her own account, she did not review the fee
applications from her previous bankruptcy cases, which were her only
extrinsic point of comparison, until after she had already submitted
her expert report declaring the fees reasonable. In addition, it
is a dead giveaway of unreliability that Judge Chapman applied
none of the rigor that she applied as a judge
(21:18):
when undertaking the identical task. Next part redacted Chapman deposition
at one fifty three and fifty four. If only her
technique had been quite so involved. Finally, one of the
critical issues bearing on reasonableness, Judge Chapman does not provide
opinions of her own. As noted above, she expressly relied
on JP Morgan's judgment and hiring counsel and reviewing their invoices.
(21:42):
This is a fatal failing. Even more important than the
requirement that an expert opinion be based on sufficient facts
for data is the requirement that it be an independent
examination of the facts for data, as that is the
whole point of bringing in an otherwise uninvolved person to
explain complex issues to the trier of fact. For this reason,
(22:02):
the ipso facto disqualifying for an expert simply to rely
on and repeat the conclusion of others, particularly when the
conclusions are not even those of another expert, but rather
those of the party that retained her. Yet, that is
exactly what Judge Chapman did. In doing so, she converted
the question from what would a client reasonably pay? To
(22:22):
what did this client pay? That is not the right question,
and it will serve no purpose for Judge Chapman to
tell the jury that she claimed fees are reasonable simply
because JP Morgan saw a fit to pay them. Three.
JP Morgan's expert opinion on income subject to clawback. The
final element of JP Morgan's damages that is the subject
of expert testimony is its claim to claw back mister
(22:44):
Staley's compensation. To quantify this claim, JP Morgan plans to
rely upon the opinions of Carlin Erwin, a forensic accountant
who tallied up mister Staley's compensation by JP Morgan over
the last twenty years. Miss Irwin's methodology and an now
assist were mechanical in that she i review JP Morgan's
payroll records for mister Staley. Two manually entered every instance
(23:08):
of compensation into an Excel spreadsheet, three checked her work
against mister Staley's w two's and the year end totals
within the payroll records, and four sum the total. She
then assumed three potential dates of breach dates that were
given to her by counsel, and calculated mister Staley's net
compensation after each date to determine amounts potentially subject to clawback.
(23:30):
In addition, Miss Irwin calculated prejudgment interest on the amount's
clawed back using the nine percent simple rate prescribed by
New York law, running from the date of each clawdback payment.
None of the above is the stuff of expert testimony.
An express requirement for the admissibility of expert testimony under
rule seven oh two is that, by bringing specialized knowledge
(23:51):
to bear on the evidence, the testimony will help the
shier effect to understand the evidence or to determine effect.
An issue inherent in this helpfulness requirement is the idea
that the subject matter of the expert testimony lies beyond
the ken of la jurors. Rule seven oh two ensures
the expert witness will not testify about lay matters which
(24:12):
a jury is capable of understanding and deciding without the
expert's help. Thus, where an expert performs calculations or provides
analysis that the jury is equally capable of performing on
its own, the testimony is not helpful and therefore should
not be admitted. By this standard, miss Irwin's proposed testimony
is inadmissible. The mere transportation of numbers from JP Morgan's
(24:34):
payroll to an Excel spreadsheet and the performance of simple
arithmetic thereon are tasks well within the competence of the
ordinary person. Miss Irwin's accounting skills were completely unnecessary for
those tasks. Even the deduction necessary to convert gross income
into net were already present in the payroll run that
(24:55):
served as miss Irwin's starting point. All she did was
figure out how much mister Staley been paid. That's information
that can be obtained with reasonable accuracy simply by reference
to mister Staley's W Two's a type of document that
every jury is familiar with. Even more difficult to justify
is miss Irwin's opinion calculating prejudgment interest. Simple interest is
(25:16):
not called simple for no reason, and it's well within
the grasp of any person with a calculator, which, given
the ubiquity of smartphones, means everyone. But even more fundamentally,
the jury needs no instruction on pre judgment interest because
the calculation of such interest is not a jury task
under the very statute that Miss Irwin cites as providing
(25:37):
for pre judgment interest in the first place, interest is
computed by the clerk of the court, not the tryer
of fact. There is no need for the jury to
be educated on a task that it will not be
asked to perform conclusion. For the foregoing reasons, mister Staley
respectfully requests that the exclude JP Morgan's expert opinions identified above,
(25:57):
respectfully submitted by John M. Nichols, and this was dated
September twentieth, twenty twenty three. All Right, folks, that's gonna
do it for this document, and like usual, we'll just
keep it moving right into the next one. All of
the information that goes with this episode can be found
in the description box.
What's up, everyone, and welcome back to the Epstein Chronicles.
In this episode, we're diving right back into the core
documents and we're going to take a look at the
third party defendant, James Staley's brief in support of his
motion to exclude JP Morgan. Chase Banks proffered expert opinions.
The one constant in these related cases has been JP
(00:20):
Morgan's attempt to pin the entirety of the problems with
Jeffrey Epstein on its former executive Jess Staley. Consistent with
this theme, the three experts whom the bank is retained
to support its third party claims against mister Staley are
focused on a single question, how much should mister Staley
have to pay? That is, the three of them assume
liability and then divide up the economic terrain as follows. One.
(00:43):
Edith Wong, an accountant, opines the JP Morgan's two hundred
and ninety million dollars settlement with the Jane Doe class
was reasonable. To Shelley Chapman, a retired bankruptcy judge, opines
that JP Morgan's redacted legal fees in the Jane Doe
and USVII cases was reason and three Carlyn Irwin, also
an accountant, adds up how much mister Staley earned a
(01:06):
JP Morgan to assess the potential amount that might be
clawed back under a disgorgement remedy. None of these experts
opinions meets the Daubert standard of admissibility, and each of
them must therefore be excluded the argument. Federal Rule of
Evidence seven zero two allows testimony in the form of
expert opinion if, among other things, the opinion one will
(01:28):
assist the trier of fact to determine a fact an issue,
and two is the product of reliable principles and methods.
The party offering the expert opinion here, JP Morgan bears
the burden to show that it meets every element of
these standards, including that the opinion in both relevant and reliable. One.
(01:48):
JP Morgan's expert opinion on settlement amount to foist the
cost of its settlement with the Jane Doe class onto
mister Staley, JP Morgan must show, among other things, that
two hundred and ninety million dollars is a reasonable price
to pay to be released from the liability in that lawsuit.
On this point, the bank starts on its back foot
for at least two reasons. First, in both absolute and
(02:10):
per claimant terms, JP Morgan has agreed to pay an
amount far greater than the other settlements arising out of
Epstein's abuse, including those paid by the abuser himself. Second,
given the number of Epstein related settlements that have already occurred, eg.
The settlement in Jane Doe versus Deutsche Bank, the bank
will be compensating victims who have already been compensated for
(02:31):
the same harm, in some cases multiple times. To make
the case that its extraordinary and cumulative settlement payments meets
the test of reasonableness, the bank proffers the opinions of
Edith Wong, a forensic accountant employed by the advisory firm
FTI Consulting, to arrive at her opinions. Miss Wong states
that she won research sex abuse settlements to find ones
(02:53):
that were, in her view, comparable to JP morgan settlement. Two,
group the settlements into the types of her own fashioning,
and then three determine the average per victim payout for
each type. As her final step, Miss Wong averaged the averages,
arriving at an average per victim settlement payment of one
point seven million, which by her calculation, happened to be
(03:14):
in an exact match for the JP. Morgan settlement Wong
deposition at one thirty eight. None of Miss Wong's analysis
was informed by any expertise in class action settlements, and
each stage of her analysis was marked by outcome driven
judgment calls of an entirely subjective nature, which she was
not qualified to make. Given Rule seven oh two's requirement
(03:35):
that opinion testimony must come from a qualified expert and
result from the application of reliable principles and methods, a
failing of either expertise or reliability will render an expert's
testimony in admissible. The opinions of Miss Wong fail on
both points. A Miss Wong has no expertise in class
action settlements. To determine whether a witness qualifies as an expert,
(03:58):
courts compare the area in which the witness has superior knowledge, education, experience,
or skill with the subject matter of the proffered testimony.
Of court must ensure that the expert will actually be
testifying on issues or subject matter within his or her
area of expertise. When an expert is no longer applying
her extensive experience and reliable methodology. Dowbert teaches that the
(04:21):
testimony should be excluded here. The subject matter of Miss
Wong's opinion is the reasonableness of a price paid to
settle a class action lawsuit. Miss Wang readily admits that
she is not an expert in class action settlements and
has never before provided an opinion on the reasonableness of
a civil settlement or one comparing civil settlements. None of
(04:42):
her expertise is in forensic accountant redacted at forty four,
is of anything more than general relevance, and all of
her previous work as a testifying expert has been in
criminal matters. Although it is true that Miss Wang's work
in such criminal matters has involved calculating restitution too in
individual victims of sex trafficking, her opinions in those cases
(05:03):
have been victims specific and based on personal factors like age,
earning capacity, and the extent of personal trauma. She did
not apply that methodology in this case. She could not
as she did not have any personal information for the
victims in the Jane Doe class and thus none of
her prior experience calculating restitution lends itself to expertise in
(05:24):
the subject matter of her opinion here. The closest that
Miss Wong could come to identifying a prior engagement comparable
to this one was one single project involving sex abuse
claims against a religious entity. In that matter, which is
still ongoing, she helped to quantify an appropriate settlement proposal
on the entity's behalf, and her work included reviewing class
(05:46):
action sex abuse settlements for comparison purposes. As she admitted, however,
the settlements she considered for that matter were ones that
she expressly excluded from her analysis in this case and
her methodology. They're boiled down to a victim's specific restitution analysis,
akin to what she has done in criminal cases next
section redacted. That methodology was, of course, not the one
(06:10):
she used for her assignment here, as she testified redacted b.
Miss Wong's opinion on the reasonableness of the Jane Do
settlement is based on an outcome driven methodology. Under Daubert
and its progeny. The hallmark of a reliable methodology is
an analytical rigor, meaning the expert's reliance on objective standards Dawbert,
(06:33):
five oh nine, US at five ninety four. The existence
and maintenance of standards controlling the technique's operation. Thus, whenever
an expert's opinion boils down to the expert's own subjective us,
the court must reject it. Link Co Incorporated versus Fujitsu
Limited Number zero zero Sieve seven two four to two
SAS two thousand and two w L one five eight
(06:55):
five five five one at four SDNY, July sixteenth, twoan T. Two.
A court may not simply take the expert's word for it,
quoting that are evidence seven oh two Advisory Committee's note
C five twenty three ip LLC forty eight f supp
three d at six forty nine. This requirement applies to
every step in the experts analysis, and thus any step
(07:18):
that renders the analysis unreliable renders the experts testimony inadmissible. One,
Miss Wong skewed selection of comparables. By Miss Wang's calculation,
the average per victim payout by Epstein's estate was well
below the one point seven million that she calculated for
the JP Morgan settlement, and the average for the Jane
Doe versus Deutsche Bank settlement was lower still. When selecting
(07:41):
comps for her reasonableness analysis. Therefore, Wong did not limit
herself to lawsuits based on abuse by Epstein, or even
to one's under the Trafficking Victims Protection Act. Wong instead redacted.
These additional settlements had significantly higher average payments than the
ones based on Epstein's abuse, raising the overall average for
(08:01):
Miss Wang's comparison. Next section redacted. Next section redacted as well.
Miss Wang's universe of comparables was also noteworthy for the
settlements that she decided to exclude. Chief among her exclusions
were thirty nine settlements by victims of Harvey Weinstein, the
per victim average of which was fourner in thirty seven thousand,
(08:21):
roughly one quarter of Miss Wang's average. Although Weinstein was
a serial abuser and in that regard, a closer match
to Epstein than Prince Andrew, Miss Wong nevertheless claimed that
it was proper to exclude the Weinstein settlements because one
Weinstein company was in bankruptcy proceedings at the time, which
could have reduced the claimant's leverage, and two Weinstein's victims
(08:41):
were reportedly older than Epstein's, which, as noted above, would
have reduced the potential liability as was the case with
Epstein's victims. However, Miss Wong possessed no data on the
ages of Weinstein's victims and thus had no way to
quantify the purported average age difference. None of the above
will fly under Daubert. For any comparative analysis. To satisfy
(09:03):
a rule seven oh two's rigorous reliability requirements, the expert
must justify the comparatory used. See King versus Wong, twenty
twenty one, w L five two three seven one nine
five out eleven, SDNY, November ninth, twenty twenty one. In
each context, the analysis requires criteria for the identification of
comparables and the making of appropriate adjustments to account for
(09:27):
differences between the comparable and the thing being appraised. Miss
Wang's inclusion of sex abuse settlements involving perpetrators other than
Epstein with no knowledge of how the sued upon acts
compared to Epstein beyond their basic sexual nature, is fundamentally
non rigorous, and it is completely unjustifiable to treat those
settlements as comparable when in both Prince Andrew's case and
(09:49):
the hotel chain case, additional factors were present, which, by
miss Wang's own assessment, would have increased the victim's leverage
and driven up the settlement cost. But even more problematic
in Miss Wong's non rigorous comparability criteria was her selective
application of that criteria when deciding which settlements were in
or out. The reasons that Miss Wong gave to exclude
(10:10):
the lower valued Weinstein settlements reduced victim leverage and increase
victim age were one way drivers of settlement value that
did not trouble her greatly in the case of settlements
that raised her average. Simply put, if reduced victim leverage
suffices to exclude the Weinstein settlements, then certainly increase victim
leverage suffices to exclude the settlements of Prince Andrew and
(10:31):
the hotel chain. And if a higher average victim age
suffices to exclude the Weinstein settlements, then certainly a lower
one suffices to exclude the hotel chains. On both points,
Miss Wong was trying to have it both ways, applying
her criteria rigorously when the settlements would lower her average,
but not when they did not. That is nothing more
than cherry picking, and it is the antithesis of a
(10:54):
sound methodology. All Right, we're going to wrap up this
episode right here and in the next episode discussing the topic,
we're going to pick up with two miss Wang's determination
of the per victim amount. All of the information that
goes with this episode can be found in the description box.
What's up everyone, and welcome back to the Epstein Chronicles.
(11:14):
In this episode, we're going to continue taking a look
at jess Daley's attempt to bar expert testimony from JP
Morgan two miss Wang's determination of the per victim amount.
In order to allow apples to Apple's comparison, miss Wang
reduced all settlements in her analysis to their per victim average.
(11:35):
In most cases, this was not difficult, as the number
of claimants was a known quantity. For the JP Morgan
and Deutsche Bank settlements, However, the underlying lawsuits were class actions,
so miss Wang had to estimate the number of potential
claimants to derive her denominator. Miss Wang's approach in the
former case was adequate and in the latter preposterous. As
(11:56):
to the JP Morgan settlement, miss Wang's approach was straightforward.
She totaled the number of victims who had settled with
Epstein's estate, either directly or through the Epstein Victims Compensation Program,
and then use the sum one hundred seventy one as
a proxy for the Jane Doe settlement class. Miss Wang's
rationale was the bank's relationship with Epstein was of such
(12:18):
duration that essentially anyone could recover from the estate could
also recover from JP Morgan. As to the Deutsche Bank case, however,
Miss Wang's approach bordered on the byzantine. In that case,
plaintiff's council had publicly estimated the size of his client's
class had one hundred and twenty five persons next part redacted,
(12:39):
next part redacted. This was less than the half of
her one point seven million dollars average of the JP
Morgan settlement, but still significantly greater than the six hundred
thousand dollars average that would result from the one hundred
and twenty five person estimate by class council. Merely to
describe Miss Wang's process is to criticize it. It is
simply bizarre to contend that an unsworn statement describing events
(13:02):
from fourteen years earlier by a person who was a
high school teenager at the time would provide a more
reliable estimate of class size than a statement by class council,
and Miss Wang fares no better in here theorizing that
victims from the early two thousands would have escaped Epstein's
abuse by twenty thirteen, simply based on anecdotal reports of
his desire for teenagers. Such analytical choices are indistinguishable from
(13:26):
guesswork and conjecture, but even more problematic, they were in
no way random. Every aspect of miss Wang's analysis was
geared to decrease the Deutsche Bank class size in order
to inflate its per victim average and thereby make the
JP Morgan settlement look less exorbitant. Such an outcome driven
approach as the opposite of a reliable one three miss
(13:47):
Wang's average of the averages comparison. The last stage of
miss Wang's analysis was the victim per average from the
universe of comparables, which he then used for comparisons to
the JP Morgan settlement. Of all the steps in miss
Wang's analysis, her approach to this one was perhaps the
most tendentious. The most straightforward way to determine the average payment,
(14:10):
of course, would be simply to sum that settlement payments
and divide by the number of victims, giving equal way
to each victim's case. Miss Wang therefore replaced that approach
with one in which he first categorized the settlements, determined
the per victim average for each category, and then averaged
the averages. Her chart to this effect is below redacted redacted,
(14:31):
end redacted. This methodological choice was again entirely outcome driven.
Next section redacted. As applied to the deutsch Bank settlement,
this was an absurd rationale. As noted above, The Jane
Doe versus Deutsche Bank lawsuit was premised on the same
theory of liability as the one against J. P. Morgan
and compensated victims for the same harm next section completely redacted. Moreover,
(14:56):
even if one were to credit Miss Wong's fear of
overweighing the Deutsche Ban settlement, the idea that it should
be given less weight on a per victim basis than
the settlements in the outlier categories is again absurd. Next
section redacted. Absent a reason to think that Prince Andrew's
case was also forty eight more times comparable than the
Deutsche Bank one, and Miss Wong gave no such reason
(15:19):
any methodology would weigh as such cannot be deemed reliable
to JP Morgan's expert opinion on legal fees, as was
the case with its two hundred and ninety million dollars
settlement payment, the bank must show that its redacted legal
fees was reasonable before it can recover them from jess Daily.
As was also the case with its settlement payment, JP
(15:41):
Morgan again starts off on its back foot and must justify,
among other things redacted. The bank's burden to show the
reasonableness of its expenditures is only made heavier by the
fact that its law firms invoices are redacted so heavily
that any attempt to review particular attorney tasks or do
implication of tasks across law firms involved is effectively impossible
(16:04):
next section redacted. To address the reasonableness issue, JP Morgan
retained Shelley Chapman, a former bankruptcy judge, for her engagement.
Judge Chapman evaluated the bank's legal fees in a holistic
matter from top down perspective. Chapman deposition at forty seven,
seventy one, and seventy nine as she described her methodology redacted.
(16:28):
As the above description suggests, Judge Chapman's methodology did not
involve detailed reviews of the law firm invoices. That is,
she reviewed only the redacted versions, which she conceded could
be opaque, and she did not review them to evaluate
particular attorney tasks or the time spent thereon. Redacted, redacted
and redacted and redacted. Consistent with her approach to the invoices,
(16:51):
Judge Chapman relied principally on her personal perspective in her
overall evaluation of the legal fees and hours claimed by
JP Morgan next section redacted again on the equally fundamental
question of why additional six thousand hours billed by Massy
and Gale were necessary at all, in other words, why
JP Morgan needed more than one law firm. Judge Chapman
(17:14):
was quite candid that her opinion was not based on
any subjective standard redacted, but rather than rely on her
personal insight to assess the reasonableness of hiring Massy and Gale,
Judge Chapman was clear that she relied on J. P.
Morgan's judgment redacted redacted. The same was true for her
opinions on the reasonableness of council staffing decision and potential
(17:35):
duplication of effort. Judge Chapman simply deferred to JP Morgan's
judgment in reviewing the bills. Without independent analysis next part redacted,
none of Judge Chapman's analysis comes close to meeting the
Daubert standard. First, Judge Chapman's opinion does not aid the
jury in making a decision as required by Rules seven
oh two. Rather, it undertakes to tell the jury what
(17:58):
result to reach, and thus attempts to substitute the expert's
judgment for the juries. Judge Chapman's testimony will not provide
the jury with the tools needed to assess the reasonableness
of the legal fees, for example, guidance on how to
evaluate excessive staffing, duplication of work, or the number of
hours needed to prepare emotion. The judge acknowledged that she
(18:18):
did not perform that analysis herself, notwithstanding her own view
that doing so is necessary in some instances redacted. Without
such analysis, Judge Chapman's testimony boils down to asking the
jury to find the fees reasonable simply because she says
they are, or is noted above, simply because JP Morgan
decided to pay them. That sort of testimony does not
(18:40):
help the FactFinder at all. Second, Judge Chapman did not
apply or reliable methodology or reliable methodology requires application of
the proper standard. In so far as Judge Chapman purported
to apply any standard of reasonableness at all, it was
not New York state law, which governs JP Morgan's request
for idemification of its legal fees redacted. Judge Chapman also
(19:04):
failed to apply the governing standard reliably. Under New York laws,
the reasonableness of attorney fees must be assessed by examining
billing records that specify, among other things, the amount of
time spent on specific tasks and projects. A FactFinder assessing
the reasonableness of attorney fees must evaluate various distinct factors,
such as whether one the work performed was necessary, two
(19:28):
was duplication of work, three the case was overstaffed, and
four the work performed was of legal nature. None of
that can be assessed without examination of the time records,
as Judge Chapman's own judicial opinions have acknowledged. Yet, Judge
Chapman's assessment was not based on that sort of analysis,
and indeed, she admitted that she could not perform any
(19:49):
such analysis given the extensive redactions to the invoice. Judge
Chapman's methodology therefore fails to apply even her own standards,
much less the proper standards, and is unreliable. As noted above,
the only ostensibly objective aspect of Judge Chapman's opinion was
her top line comparison of JP Morgan's fees to those
(20:10):
in the handful of bankruptcy fee applications that she reviewed.
But on that point Judge Chapman made no attempt to
assess whether the underlying bankruptcy cases were comparable to JP
Morgan's on any index relevant the cost of litigating, eg.
Complexity of legal services, quantity of documents, number of witnesses,
or extent of potential liability. Absent a showing of comparability
(20:33):
on those fronts, the fact that the top line fees
were in the same ballpark is meaningless, and any opinion
based thereon is inherently unreliable. Third, the fact that Judge
Chapman came to her conclusion first based solely on looking
at the top line numbers, and only afterward looked at
the subset of the heavily redacted invoices to see whether
they supported her conclusion is the hallmark of an unreliable methodology. Indeed,
(20:57):
by her own account, she did not review the fee
applications from her previous bankruptcy cases, which were her only
extrinsic point of comparison, until after she had already submitted
her expert report declaring the fees reasonable. In addition, it
is a dead giveaway of unreliability that Judge Chapman applied
none of the rigor that she applied as a judge
(21:18):
when undertaking the identical task. Next part redacted Chapman deposition
at one fifty three and fifty four. If only her
technique had been quite so involved. Finally, one of the
critical issues bearing on reasonableness, Judge Chapman does not provide
opinions of her own. As noted above, she expressly relied
on JP Morgan's judgment and hiring counsel and reviewing their invoices.
(21:42):
This is a fatal failing. Even more important than the
requirement that an expert opinion be based on sufficient facts
for data is the requirement that it be an independent
examination of the facts for data, as that is the
whole point of bringing in an otherwise uninvolved person to
explain complex issues to the trier of fact. For this reason,
(22:02):
the ipso facto disqualifying for an expert simply to rely
on and repeat the conclusion of others, particularly when the
conclusions are not even those of another expert, but rather
those of the party that retained her. Yet, that is
exactly what Judge Chapman did. In doing so, she converted
the question from what would a client reasonably pay? To
(22:22):
what did this client pay? That is not the right question,
and it will serve no purpose for Judge Chapman to
tell the jury that she claimed fees are reasonable simply
because JP Morgan saw a fit to pay them. Three.
JP Morgan's expert opinion on income subject to clawback. The
final element of JP Morgan's damages that is the subject
of expert testimony is its claim to claw back mister
(22:44):
Staley's compensation. To quantify this claim, JP Morgan plans to
rely upon the opinions of Carlin Erwin, a forensic accountant
who tallied up mister Staley's compensation by JP Morgan over
the last twenty years. Miss Irwin's methodology and an now
assist were mechanical in that she i review JP Morgan's
payroll records for mister Staley. Two manually entered every instance
(23:08):
of compensation into an Excel spreadsheet, three checked her work
against mister Staley's w two's and the year end totals
within the payroll records, and four sum the total. She
then assumed three potential dates of breach dates that were
given to her by counsel, and calculated mister Staley's net
compensation after each date to determine amounts potentially subject to clawback.
(23:30):
In addition, Miss Irwin calculated prejudgment interest on the amount's
clawed back using the nine percent simple rate prescribed by
New York law, running from the date of each clawdback payment.
None of the above is the stuff of expert testimony.
An express requirement for the admissibility of expert testimony under
rule seven oh two is that, by bringing specialized knowledge
(23:51):
to bear on the evidence, the testimony will help the
shier effect to understand the evidence or to determine effect.
An issue inherent in this helpfulness requirement is the idea
that the subject matter of the expert testimony lies beyond
the ken of la jurors. Rule seven oh two ensures
the expert witness will not testify about lay matters which
(24:12):
a jury is capable of understanding and deciding without the
expert's help. Thus, where an expert performs calculations or provides
analysis that the jury is equally capable of performing on
its own, the testimony is not helpful and therefore should
not be admitted. By this standard, miss Irwin's proposed testimony
is inadmissible. The mere transportation of numbers from JP Morgan's
(24:34):
payroll to an Excel spreadsheet and the performance of simple
arithmetic thereon are tasks well within the competence of the
ordinary person. Miss Irwin's accounting skills were completely unnecessary for
those tasks. Even the deduction necessary to convert gross income
into net were already present in the payroll run that
(24:55):
served as miss Irwin's starting point. All she did was
figure out how much mister Staley been paid. That's information
that can be obtained with reasonable accuracy simply by reference
to mister Staley's W Two's a type of document that
every jury is familiar with. Even more difficult to justify
is miss Irwin's opinion calculating prejudgment interest. Simple interest is
(25:16):
not called simple for no reason, and it's well within
the grasp of any person with a calculator, which, given
the ubiquity of smartphones, means everyone. But even more fundamentally,
the jury needs no instruction on pre judgment interest because
the calculation of such interest is not a jury task
under the very statute that Miss Irwin cites as providing
(25:37):
for pre judgment interest in the first place, interest is
computed by the clerk of the court, not the tryer
of fact. There is no need for the jury to
be educated on a task that it will not be
asked to perform conclusion. For the foregoing reasons, mister Staley
respectfully requests that the exclude JP Morgan's expert opinions identified above,
(25:57):
respectfully submitted by John M. Nichols, and this was dated
September twentieth, twenty twenty three. All Right, folks, that's gonna
do it for this document, and like usual, we'll just
keep it moving right into the next one. All of
the information that goes with this episode can be found
in the description box.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.