STEPHEN HLGEM-8.1 swohlgemuth wc.com July Hon Jed Rakoff Re USVI JPMorgan Chase Bank N.A Privilege4.3 iver Relating to Settlem8.3 nt Discussions July Page Bilzer5.3 ian F.2d 2d Cir 223Courts cannot sanction the use of the privilege to prevent effective cross-exam8.3 in ation on tters reasonably related to those introduced in direct exam8.4 ination Based on is prin5.5 ciple multiple cou5.5 ts ve held in language too cl ear to be scep5.7 tible of sunderstanding that By bringing an indem7.9 ification acti on which of necessity injects the issue of the reasonableness the settlement plaintiff st be deem8.3 ed to have waived whatever attorney-client or work-product privileg would otherwise-6.6 atta4.6 ch to mmunicatio5.8 ns with their a tto6 rneys or adjus5.2 ers rela4.8 ting to the bases for the settlem8.1 nt Scotstoun Shipping Co Diplomatic Marine Inc S6 D.N.Y Jan accord Cooper Meridian Yachts Ltd WL at S.D Fla May 223Because Third-Party Plaintiffs m8 ust necessa rily demonstrate the reasonab5.2 eness of their settlem8.6 ent with lain5.8 tif3.8 they have waived aim8.8 of4 privilege4.8 with respec4.8 to6 the eviden6 necessary evaluate at issue Union Pac R.R Co Lo ram Main5.8 of Way at Utah Feb 223The nature of indemnity litigation akes prior work by counsel very significant Conoco Inc Boh Bros Const Co F.R.D plaintiff seeking indem8.1 nification 223has put at issue the basis for its liability it liability analys5 is the reason5.8 ableness5 of the se ttlem8.3 nt and5.5 thu5.5 waived ivilege4.3 Safeway Stores Inc Natl Union Fire Ins Co of Pittsburg5.3 WL at N.D Cal Dec pla4.8 intif4 f4 seeking indemnity f4 o1 settlem8.8 ent of4 deriva4.8 tive su6 it waived privilege as to6 docum8.8 ents 223which bear upon the allocation of settlem8 nt costs between plainti ff and its directors Here re than just the4.7 reasonableness of the settlem8.5 ent is at issue Because the ank played its6 w4 activ6.8 le th anagem8.7 ent of Jeffrey Epstei 2s accounts 227wholly separate and apart from7.8 any actions by Mr aley 227JPMorgan ust also pr ove that Mr Staley 2s conduct 223caused the potential liability that it decided to ttle See As the Court has already held that ts dire5 ctly at issue why JPMorgan thought it should settle with the Jane Doe class was it becau5.7 se of Mr aley or was it because of the bank 2s own actions including failu5.7 res in its4.9 internal controls and its concerns about con tinuing negative publicity and regulatory risk ithout access to the bank 2s comm8.4 unications with its counsel on is point both Mr Staley and the factfinder would have to take bank at its word as to its tive which is n1 able f4 a fairness standpoint See Scotstoun Shipping C7 As one court has noted It is ac5 ceptab6.2 a party4.2 to take position6.2 rust us justification5.1 we are putting forwar2 here are why we settled See also Holdings Corp Marconi Corp PLC N.Y.S.2d Sup Ct 223Plaintiffs cannot on the one ha nd seek indem7.8 ification for the settlem7.4 nt and costs and on the other hand refuse to produce the docum8.4 entary record leading to such settlem7.7 nt Case Document Filed Page of WILLIAMS CONNOLLYLLP July Page In re Namenda Direct Purchaser ntitru5.1 Litig5.1 at S.D.N.Y May phasis and citation itted In sum JPMorgan cannot be erm8.7 itted argue to factfinder at it ttled with the Jan5.4 Doe cl ass because it believed5.7 th at it faced liability due to Mr Staley 2s conduct while at the sam7.9 tim7.9 withholding docum7.9 en ts that contradict that argum8.2 ent See Scotstoun Shipping Co communications with counsel relevant to 223whether3.6 liability ttled was4.8 proxim8.4 tely caused by the behavior of the indem7.4 nitor-7.4 defendants To avoid this outcom8.2 227and to carry its rden to asser3.8 ivile4.6 227the bank has identified several cases that it contends how that a party seeking dam8 ges based on a prior settlem8.1 nt does-5.5 not necessar4.9 ily ace at sue its oth5.6 rwise privileged comm7.9 unications ail of July citing AngioDynamics Inc Biolitec Inc at N.D.N.Y Deutsche B6 ank Trust Co of Americas Tri-Links Investment Trust A.D.3d N.Y App Div AIU Insurance Co TIG Insurance Co WL at S.D.N.Y Nov and Bovis Lend ase LMB Inc Seasons Contracting Corp at S.D.N.Y Dec None of these cases is helpful to the bank Common to each of these cas4.6 es a critically different fro5.2 m8 the present cas5.2 is that in)6 each instance there was no question5.3 of causatio5.3 the link between the underlying liab5.6 ility and the indem8.3 ity defendant was al ready established by contract See AngioDynamics Inc at products distributor settled tent infringem7.6 nt suits and sued product anufacturer for contractual indem8.5 Deutsche Bank A.D.3d at agent for collective lenders ed the m9 ajority con6.2 ller the llec5 tive ontrac5 ual dem9 ity AIU Ins Co at insu5.5 er brough5.5 each of co ntract action5.4 against its reinsu5.4 rer for ailure to ind6.3 the cost settlin6.3 insured 2s ersonal injur4.3 lawsuits Bovis Lend Lease WL at insurer brought contribution claim8.2 for of settlem8.2 nt and associated10.4 costs agains4.7 co-insu5.5 er Hence the only questions in each5.6 case were i the mnitee 2s good aith settling and ii the ove4.8 ll reasonableness of the settlem7.9 nt quantum7.9 Both of these questions the courts held could be adequately evaluated without refe rence to privileged communications and the courts foun that there had been no waiver Here by con5.9 ras5.1 cau5.9 sal onnection between Mr Staley on one hand and JPMorgan 2s liab5.8 ility to the vic4.6 tim8.6 Jef3.8 ey Epstein5.8 the other is very uch in dispute The bank 2s rela4.7 tionsh5.9 with and ailur3.9 to addr3.9 ess Epste)4.7 i arose wholly independently of Mr Staley who joined JPM4.7 rgan 2s priv5.5 ate bank after Epstein wa already a client JPMorgan would have acilitated nd did5.5 acilitate4.3 rtain of Epstein5.1 transactio5.1 ns whether or not Mr Staley5.6 ever Universal Standard Inc Target Corp F.R.D S.D.N.Y party asserting privilege bears burden to show privilege applies 223Good faith in settling and otive for settling are not synonym8 ous Indeed two of the bank 2s cited5.8 cas5 es5 recogn5.8 ized5.8 that faith w8 as proven5.8 only by establishing the 223objective-6.4 reasonableness of the settlem8.2 nt AngioDynamics Inc at citing Deutsche Bank A.D.3d at Case Document Filed Page of WILLIAMS CONNOLLYLLP July Page worked for the bank Nor was Mr Staley the only JPMorgan ployee with access to negative inform8.6 ation on Epstein as the Court has obser ved Morgan either knew or should have known that Jeffrey Epstein operated a sex-trafficking ve nture perhaps as early as simply because suspiciou6.1 tran6.1 sac4.9 tion6.1 activity hich tiv6.1 ity6.1 Mr Staley is not alle ged to have known about Dkt at For this reason it is re than plausible that the bank chose to settle with the Jane Doe class ecaus4.6 it saw that its own negligence and not any allege sconduct by Mr Staley could give rise to substantial liability and other conseq ences But only its tern5.8 al communication5.8 will show what its otive was If as the bank asser3.9 it was tivated to ettle4.7 because of Mr Staley conduct then its comm7.9 unications with counsel ought to confirm8.1 that fact Regardless the bank should not perm8.2 itted to argue to factfinder that Mr Staley 2s conduct alone caused the bank to enter into6 the settlem8.8 ent reem8.8 n1 without p6 erm8.8 itting Staley to probe the basis for that assertion hich necessarily include the bank 2s comm7.4 unications with its counsel that the bank has put at issue Neither Mr Staley nor the factfinder should be forced to take the bank at its word as to its o1 tiva4.8 tions f4 o1 ttling and th reasonableness of its settlem8.1 nt For the foregoing reasons JPMorgan shoul produce all communications between itself and its in-house and outside counsel as well as attorney work-pr oduct relating to the reasonableness and causation of the settlem8.1 nt Respectf3.3 ully subm8.1 itted Stephen Wohlgemuth Stephen ohlge-5.6 th Case Document Filed Page of WILLIAMS CONNOLLYLLP
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