Government of the United States Virgin Islands v. JPMorgan Chase Bank, N.A., No. 122-cv-10904 (S.D.N.Y. 2022)/266.pdf

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK GOVERNMENT OF THE UNITED ) STATES VIRGIN ISLANDS ) ) Plaintiff, ) ) v. ) Case Number: 1:22-cv-10904-JSR ) JPMORGAN CHASE BANK, N.A. ) ) Defendant/Third-Party Plaintiff. ) ____________________________________) ) JPMORGAN CHASE BANK, N.A. ) ) Third-Party Plaintiff, ) ) v. ) ) JAMES EDWARD STALEY ) ) Third-Party Defendant. ) ____________________________________) GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ MEMORANDUM OF LAW IN OPPOSITION TO JPMORGAN CHASE BANK N.A.’S MOTION FOR PARTIAL SUMMARY JUDGMENT Case 1:22-cv-10904-JSR Document 266 Filed 08/07/23 Page 1 of 32 i TABLE OF CONTENTS INTRODUCTION .......................................................................................................................... 1 ARGUMENT .................................................................................................................................. 2 I. THE GOVERNMENT SEEKS APPROPRIATE AND AVAILABLE MONETARY RELIEF ............................................................................................................................... 2 A. Section 1595(d) Broadly Authorizes the Government to Obtain Monetary Relief for Past Violations of the TVPA......................................................................................... 2 B. The Government’s Decision to Withdraw Its Request for Proprietary Damages Does Not Impact Its Quasi-Sovereign Interest....................................................................... 5 C. Congress Authorized States, as Parens Patriae, to Seek Victim Damages .................. 5 D. The Putative Doe Settlements Do Not A Priori Impact the Government’s Authority to Seek Victim Damages ................................................................................................... 7 E. Punitive Damages for Victim Harms Are Appropriate ................................................. 8 F. Section 1595(d) Permits Civil Penalties ..................................................................... 11 G. Section 1595(d) Permits Disgorgement or Restitution ............................................... 13 II. THE GOVERNMENT CAN PREVAIL ON ITS OBSTRUCTION CLAIM .................. 14 A. The Government Has Parens Patriae Authority to Pursue Its TVPA Claims Including Its Section 1591(d) Obstruction Claim ....................................................................... 14 B. The Government Meets the Elements of Its Obstruction Claim ................................. 16 III. THERE IS NO IMPERMISSIBLY RETROACTIVE APPLICATION OF OBSTRUCTION OR RECKLESS DISREGARD PRE-2008 ......................................... 23 A. Obstruction (Count V) Applies to JPMorgan’s Pre-2008 Conduct ............................ 23 B. Similarly, “Reckless Disregard” Applies to JPMorgan’s Pre-2008 Conduct ............. 24 CONCLUSION ............................................................................................................................. 26 Case 1:22-cv-10904-JSR Document 266 Filed 08/07/23 Page 2 of 32 ii TABLE OF AUTHORITIES Cases 4 Pillar Dynasty LLC v. New York & Co., Inc., 933 F.3d 202 (2d Cir. 2019) ...................................................................................................... 14 A.B. v. Marriott Int’l, Inc., 455 F. Supp. 3d 171 (E.D. Pa. 2020) .......................................................................................... 3 Aponte v. Perez, ___ F.4th ___, 2023 WL 4630502 (2d Cir. July 20, 2023) .................................................. 9, 10 California v. Frito-Lay, Inc., 474 F.2d 774 (9th Cir. 1972) ....................................................................................................... 5 Canosa v. Ziff, No. 18 Civ. 4115, 2019 WL 498865 (S.D.N.Y. Jan. 28, 2019) .................................................. 3 David v. Signal Int’l, LLC, 2015 WL 5254625 (E.D. La. Sept. 9, 2015) ............................................................................... 9 Ditullio v. Boehm, 662 F.3d 1091 (9th Cir. 2011) ............................................................................................... 8, 10 Erlenbaugh v. U.S., 409 U.S. 239 (1972) .............................................................................................................. 6, 11 Hudson v. U.S., 522 U.S. 93 (1997) .................................................................................................................... 13 Illinois v. AU Optronics Corp., 794 F. Supp. 2d 845 (N.D. Ill. 2011) ........................................................................................ 12 In re Am. Investors Life Ins. Co. Annuity Mktg. and Sales Practs. Litig., 263 F.R.D. 226 (E.D. Pa. 2009) .................................................................................................. 8 In re Fairfield Sentry Ltd., 714 F.3d 127 (2d Cir. 2013) ........................................................................................................ 4 King v. Macri, 993 F.2d 294 (2d Cir. 1993) ........................................................................................................ 9 Landgraf v. USI Film Prods., 511 U.S. 244 (1994) .................................................................................................................. 25 Lee v. Edwards, 101 F.3d 805 (2d Cir. 1996) ........................................................................................................ 9 Liu v. SEC, 140 S. Ct. 1936 (2020) .............................................................................................................. 14 Morrisette v. U.S. ̧ 342 U.S. 246 (1952) .................................................................................................................. 25 Case 1:22-cv-10904-JSR Document 266 Filed 08/07/23 Page 3 of 32 iii New Mexico ex rel. Balderas v. Real Estate Law Ctr. PC, 430 F. Supp. 3d 761 (D.N.M. 2019) ................................................................................... 12, 13 New York by Abrams v. 11 Cornwall Co., 695 F.2d 34 (2d Cir. 1982) .......................................................................................................... 5 New York by Abrams v. Seneci, 817 F.2d 1015 (2d Cir. 1987) ................................................................................................ 5, 14 New York by Underwood v. LaRose Indus. LLC, 386 F. Supp. 3d 214 (N.D.N.Y. 2019) ...................................................................................... 12 New York by Vacco v. Operation Rescue Nat’l, 80 F.3d 64 (2d Cir. 1996) ...................................................................................................... 5, 12 New York v. Permanent Mission of India to United Nations, 618 F.3d 172 (2d Cir. 2010) ........................................................................................................ 4 Noble v. Weinstein, 335 F. Supp. 3d 504 (S.D.N.Y. 2018) ......................................................................................... 3 Payne v. Jones, 711 F.3d 85 (2d Cir. 2013) ........................................................................................................ 10 Purdue Pharma L.P. v. Kentucky, 704 F.3d 208 (2d Cir. 2013) ................................................................................................ 12, 14 United States v. Jennings, 496 F.3d 344, 353 (4th Cir.2007) .............................................................................................. 25 United States v. Priv. San. Indus. Ass’n of Nassau/Suffolk, Inc., 793 F. Supp. 1114 (E.D.N.Y. 1992) .......................................................................