By Pam Martens and Russ Martens: November 9, 2023 ~
WilmerHale Law Partner, Felicia Ellsworth
On October 20 we reported that JPMorgan Chase, a serial recidivist when it comes to crime, had paid $1.085 billion in legal expenses in just the last six months. A nice chunk of that money went to the Big Law firm, WilmerHale, which has been representing JPMorgan Chase this year in multiple lawsuits involving the bank’s dark history of financial dealings with child sex trafficker Jeffrey Epstein. (See Related Articles at the bottom of this article.)
When the largest bank in the United States pays big bucks to a law firm with a roster of 1,000 attorneys, it doesn’t expect its $290 million class action settlement with Jeffrey Epstein’s victims to blow up in its face just days before the final Fairness Hearing – a legally required court event to determine if the terms of the agreement are “fair, adequate and reasonable.”
That Fairness Hearing will be conducted today in Judge Jed Rakoff’s courtroom in the U.S. District Court for the Southern District of New York in lower Manhattan at 4 p.m. It’s a big embarrassment for both WilmerHale and JPMorgan Chase that 16 state Attorneys General and the Attorney General for the District of Columbia are objecting to the terms of the settlement, along with two Epstein claimants.
Judge Rakoff had given the lawyers that hatched the terms of the settlement until November 6 to file their responses to the Attorneys General challenges. The lawyers included WilmerHale representing JPMorgan Chase and high-profile attorney, David Boies (and others) representing the Epstein victims.
Boies brings a lot of baggage with him as a result of his prior representation of now convicted rapist Harvey Weinstein and the strong-arm tactics Boies employed on Weinstein’s behalf. (See Ronan Farrow’s blockbuster investigative report in The New Yorker, Harvey Weinstein’s Army of Spies.)
We had anticipated that WilmerHale might file a respectful response to the Attorneys General objections, perhaps agreeing to change the language in the settlement that the Attorneys General found improper. These are, after all, the highest law enforcement offices in 16 states and the District of Columbia.
We could not have been more wrong. The response from WilmerHale effectively blasted the Attorneys General for sticking their nose where it didn’t belong.
What the Attorneys General are challenging boils down to this: Under the federal law known as the Trafficking Victims Protection Act (TVPA), Attorneys General have the right to bring claims on behalf of sex trafficked victims. The language in the JPMorgan Chase settlement proposes to extinguish those rights. The State Attorneys General explained it as follows in their filing with the court:
“Section 1.25 [of the proposed settlement agreement] releases claims that could be brought to recover damages from the Released Defendant Parties on behalf of a Member of the Class by any other party, including any sovereign or government, relating to or arising from any Member of the Class’s harm, injury, abuse, exploitation, or trafficking by Jeffrey Epstein or by any person who is in any way connected to or otherwise associated with Jeffrey Epstein, as well as any right to recovery on account thereof. (Emphasis added.)”
WilmerHale and David Boies’ settlement agreement hoped to pay Boies and his fellow lawyers working on behalf of the victims $87 million in legal fees; $2.5 million in legal expenses; and buy blanket immunity going forward for all those JPMorgan executives and the bank’s ultra wealthy clients who were regular visitors to Epstein’s mansions/brothels; as well as the bank’s employees who were funneling $40,000 to $80,000 in hard cash each month to Epstein for over a decade while the bank failed to file the legally-mandated Suspicious Activity Reports.
It’s a sweet deal for lawyers and a sweet deal for a recidivist money laundering bank. (See JPMorgan/Jeffrey Epstein Cases Are a Cross Between the Bank’s Chinese Princeling Scandal and Madoff Fraud, Using Sex with Minors as a Bribe.) But it’s a very bad deal for the public interest.
The lawyer who drafted and signed WilmerHale’s response to the objections of the state Attorneys General was law partner, Felicia Ellsworth, the Vice Chair of WilmerHale’s Litigation/Controversy Department. Ellsworth goes for the jugular with this in her response:
“Standing between the victims and this compensation are the Attorneys General of New Mexico, Arizona, California, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maryland, Minnesota, Mississippi, New York, Oregon, Pennsylvania, Tennessee, Utah, and Vermont. These Attorneys General have no stake in this matter: they do not articulate any reason why the settlement would harm their states or their citizens. Just the opposite, their objection undermines the settlement and the victims they claim to support.
“First, there is no procedural mechanism for the Attorneys General—who are neither parties to the case, nor members of the certified class—to object to the proposed settlement.
“Second, the Attorneys General identify no legal or equitable flaw in the proposed settlement, whether to their respective States or to their citizens. With no stake in this case, the Court should decline the Attorneys General’s invitation to issue an advisory opinion.”
In reality, the challenge from the Attorneys General very specifically identified the legal flaw in the settlement and cited to numerous examples of case law that backed up their arguments. In one section, they explained to the court as follows:
“In adding Section 1595(d) to the civil remedy section of the TVPA, which previously only explicitly recognized victim suits, Congress intended to ‘unleash’ the power of state law enforcement to prosecute these heinous sex-trafficking crimes, recognizing that, in many circumstances, victims are unable or unwilling to come forward and ‘more prosecutors,’ ‘more investigators,’ and ‘more resources’ are needed to ‘address this growing problem throughout our country.’…‘This amendment is needed in order to give enhanced powers to State attorneys general that they can provide the extra litigation leverage for individuals who are impacted in a devastating manner.’…If broad releases of non-party state Attorneys General law enforcement actions under the TVPA seeking victim-specific relief were deemed permissible without their express consent, state Attorneys General may be deterred from bringing these important civil law enforcement actions in the future – upsetting Congress’ very purpose in amending the TVPA to add state law enforcement.”
Related Articles:
The Justice Department Has Had the Epstein Case Since July 2006 – It’s Time to Arrest Accomplices
