025.pdf
308 KB
Extraction Summary
43
People
29
Organizations
5
Locations
1
Events
2
Relationships
3
Quotes
Document Information
Type:
Legal document / memorandum of law
File Size:
308 KB
Summary
This document is a Memorandum of Law in Support of Defendants' Motion to Dismiss, filed in the United States District Court for the Southern District of New York in the derivative litigation against JP Morgan Chase & Co. It outlines arguments regarding pleading standards, demand futility, and failure to state claims against the defendants, including specific points related to JPMorgan's termination of Epstein as a client and the oversight of internal controls by the board of directors. The document includes a table of authorities citing numerous legal cases.
People (43)
| Name | Role | Context |
|---|---|---|
| Epstein | client |
JPMorgan terminated Epstein as a client
|
| Mr. Dimon | defendant |
The Complaint Fails to State a Fiduciary Duty Claim Against Mr. Dimon
|
| Aronson |
Case citation: Aronson v. Lewis
|
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| Lewis |
Case citation: Aronson v. Lewis
|
|
| Ashcroft |
Case citation: Ashcroft v. Iqbal
|
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| Iqbal |
Case citation: Ashcroft v. Iqbal
|
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| Cantor |
Case citation: Cantor Fitzgerald, L.P. v. Cantor
|
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| Gohl |
Case citation: Caspian Select Credit Master Fund Ltd. v. Gohl
|
|
| Bingle |
Case citation: Constr. Indus. Laborers Pension Fund v. Bingle
|
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| Rowlands |
Case citation: Corp. Risk Holdings LLC v. Rowlands
|
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| David B. Shaev |
Case citation: David B. Shaev Profit Sharing Acct. v. Armstrong
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| Armstrong |
Case citation: David B. Shaev Profit Sharing Acct. v. Armstrong
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| Desimone |
Case citation: Desimone v. Barrows
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| Barrows |
Case citation: Desimone v. Barrows
|
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| Sorenson |
Case citation: Firemen’s Ret. Sys. of St. Louis v. Sorenson
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| Huang |
Case citation: Guttman v. Huang
|
|
| Harcum |
Case citation: Harcum v. Lovoi
|
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| Lovoi |
Case citation: Harcum v. Lovoi
|
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| Horman |
Case citation: Horman v. Abney
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| Abney |
Case citation: Horman v. Abney
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| Jane Doe I | plaintiff |
Case citation: Jane Doe I v. JPMorgan Chase Bank, N.A.
|
| Kahn |
Case citation: Kahn v. M & F Worldwide Corp.
|
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| Kococinski |
Case citation: Kococinski v. Collins
|
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| Collins |
Case citation: Kococinski v. Collins
|
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| Kravitz |
Case citation: Kravitz v. Tavlorios
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| Tavlorios |
Case citation: Kravitz v. Tavlorios
|
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| Chatterjee |
Case citation: Manbro Energy Corp. v. Chatterjee Advisors, LLC
|
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| Martha Stewart |
Case citation: Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart
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| Stewart |
Case citation: Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart
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| Keeler |
Case citation: Meyers v. Keeler
|
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| Corbat |
Case citation: Okla. Firefighters Pension & Ret. Sys. v. Corbat
|
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| Petriy |
Case citation: Petriy v. Smith
|
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| Smith |
Case citation: Petriy v. Smith
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| Rahbari |
Case citation: Rahbari v. Oros
|
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| Oros |
Case citation: Rahbari v. Oros
|
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| Rales |
Case citation: Rales v. Blasband
|
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| Blasband |
Case citation: Rales v. Blasband
|
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| Roche |
Case citation: Ret. Sys. v. Roche
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| Rojas |
Case citation: Rojas v. Ellison
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| Ellison |
Case citation: Rojas v. Ellison
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| South |
Case citation: South v. Baker
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| Baker |
Case citation: South v. Baker
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| Steinberg |
Case citation: Steinberg v. Dimon
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Organizations (29)
| Name | Type | Context |
|---|---|---|
| UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK |
Court in which the case is filed
|
|
| JP MORGAN CHASE & CO. |
Defendant in the derivative litigation
|
|
| JPMorgan Board |
Board of Directors of JPMorgan
|
|
| Am. Int’l Grp., Inc. |
Party in a cited derivative litigation
|
|
| Cantor Fitzgerald, L.P. |
Party in a cited case
|
|
| Caspian Select Credit Master Fund Ltd. |
Party in a cited case
|
|
| Citigroup Inc. |
Party in a cited derivative litigation
|
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| Constr. Indus. Laborers Pension Fund |
Party in a cited case
|
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| Corp. Risk Holdings LLC |
Party in a cited case
|
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| David B. Shaev Profit Sharing Acct. |
Party in a cited case
|
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| Delta and Pine Land Co. |
Party in a cited derivative litigation
|
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| Firemen’s Ret. Sys. of St. Louis |
Party in a cited case
|
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| Genworth Fin., Inc. |
Party in a cited derivative litigation
|
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| Gov’t of the U.S. Virgin Islands |
Plaintiff in a cited case against JPMorgan Chase Bank, N.A.
|
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| ITT Corp. |
Party in a cited derivative litigation
|
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| M & F Worldwide Corp. |
Party in a cited case
|
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| Synutra Int’l, Inc. |
Party in a cited case
|
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| Manbro Energy Corp. |
Party in a cited case
|
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| Chatterjee Advisors, LLC |
Party in a cited case
|
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| Martha Stewart Living Omnimedia, Inc. |
Party in a cited case
|
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| McDonald’s Corp. |
Party in a cited derivative litigation
|
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| Merrill Lynch & Co., Inc. |
Party in a cited derivative litigation
|
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| Morgan Stanley |
Party in a cited derivative litigation
|
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| Okla. Firefighters Pension & Ret. Sys. |
Party in a cited case
|
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| Old Bpsush, Inc. |
Party in a cited case
|
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| Pfizer Inc. |
Party in a cited derivative litigation
|
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| Ret. Sys. |
Party in a cited case
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| SAIC |
Party in a cited derivative litigation
|
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| Fund Asset Mgmt., L.P. |
Party in a cited case
|
Locations (5)
| Location | Context |
|---|---|
|
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
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Gov’t of the U.S. Virgin Islands v. JPMorgan Chase Bank, N.A.
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Kococinski v. Collins (D. Minn. 2013)
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Meyers v. Keeler (W.D. Okla. 1976)
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In re: Old Bpsush, Inc. (D. Del. Sept. 29, 2021)
|
Relationships (2)
JPMorgan terminated Epstein as a client
Eight Demand Board members assumed membership on the JPMorgan Board only after JPMorgan terminated Epstein as a client.
Full Extracted Text
Complete text extracted from the document (9,702 characters)
Case 1:23-cv-03903-JSR Document 25 Filed 07/06/23 Page 1 of 32
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE SOUTHERN DISTRICT OF NEW YORK
IN RE JP MORGAN CHASE & CO.
DERIVATIVE LITIGATION
DERIVATIVE LITIGATION
Master Case No. 1:23-CV-03903 (JSR)
DERIVATIVE ACTION
MEMORANDUM OF LAW IN SUPPORT OF
DEFENDANTS' MOTION TO DISMISS
DEFENDANTS' MOTION TO DISMISS
Case 1:23-cv-03903-JSR Document 25 Filed 07/06/23 Page 2 of 32
TABLE OF CONTENTS
Page
Table of Authorities...................................................................................................................ii
II.
Relevant Background Facts as Pleaded in Complaint ......................................................4
III.
No Demand Was Made, and Demand Futility Is Not Adequately Pleaded......................9
A.
Legal Standard for Demand Futility ............................................................................9
B.
Plaintiffs Fail to Plead Particularized Facts Demonstrating that a Majority
of the Demand Board Directors Face a “Substantial Likelihood of
Liability.” ...................................................................................................................10
of the Demand Board Directors Face a “Substantial Likelihood of
Liability.” ...................................................................................................................10
1.
Eight Demand Board members assumed membership on the
JPMorgan Board only after JPMorgan terminated Epstein as a
client. .....................................................................................................................11
JPMorgan Board only after JPMorgan terminated Epstein as a
client. .....................................................................................................................11
2.
Plaintiffs fail to plead particularized facts demonstrating that the
remaining Demand Board Directors knowingly failed to oversee
internal controls. ...................................................................................................13
remaining Demand Board Directors knowingly failed to oversee
internal controls. ...................................................................................................13
3.
Plaintiffs fail to plead particularized facts demonstrating the
Directors’ “utter failure” to implement any internal controls...............................15
Directors’ “utter failure” to implement any internal controls...............................15
C.
Plaintiffs Fail to Plead Particularized Facts Demonstrating That Any
Demand Board Director “Lacks Independence.” .......................................................16
Demand Board Director “Lacks Independence.” .......................................................16
IV.
Plaintiffs Have Failed to State a Claim Against Any Defendant...................................18
A.
Legal Standard Under Rule 12(b)(6)........................................................................18
B.
The Complaint Fails to State a Fiduciary Duty Claim Against Any
Director Defendant ...................................................................................................18
Director Defendant ...................................................................................................18
C.
The Complaint Fails to State a Fiduciary Duty Claim Against Mr. Dimon.................20
D.
The Complaint Fails to State a Claim for Unjust Enrichment ...................................24
V.
Conclusion ...................................................................................................................25
i
Case 1:23-cv-03903-JSR Document 25 Filed 07/06/23 Page 3 of 32
TABLE OF AUTHORITIES
Cases
Page(s)
In re Am. Int’l Grp., Inc. Derivative Litig.,
700 F. Supp. 2d. 419 (S.D.N.Y. 2010), aff’d, 415 F. App’x 285 (2d Cir. 2011)......................10
700 F. Supp. 2d. 419 (S.D.N.Y. 2010), aff’d, 415 F. App’x 285 (2d Cir. 2011)......................10
Aronson v. Lewis,
473 A.2d 805 (Del. 1984) .....................................................................................................10
473 A.2d 805 (Del. 1984) .....................................................................................................10
Ashcroft v. Iqbal,
556 U.S. 662 (2009).............................................................................................................18
556 U.S. 662 (2009).............................................................................................................18
Cantor Fitzgerald, L.P. v. Cantor,
724 A.2d 571 (Del. Ch. 1998)...............................................................................................24
724 A.2d 571 (Del. Ch. 1998)...............................................................................................24
In re Caremark Int’l Inc. Derivative Litig.,
698 A.2d 959 (Del. Ch. 1996)...........................................................................................3, 11, 19
698 A.2d 959 (Del. Ch. 1996)...........................................................................................3, 11, 19
Caspian Select Credit Master Fund Ltd. v. Gohl,
No. CV 10244-VCN, 2015 WL 5718592 (Del. Ch. Sep. 28, 2015) ........................................25
No. CV 10244-VCN, 2015 WL 5718592 (Del. Ch. Sep. 28, 2015) ........................................25
In re Citigroup Inc. S’holder Derivative Litig.,
964 A.2d 106 (Del. Ch. 2009)..............................................................................................9, 14
964 A.2d 106 (Del. Ch. 2009)..............................................................................................9, 14
Constr. Indus. Laborers Pension Fund v. Bingle,
No. 2021-0940-SG, 2022 WL 4102492 (Del. Ch. Sept. 6, 2022), aff’d, No.
411, 2022, 2023 WL 3513271 (Del. May 17, 2023)...........................................................11, 19
No. 2021-0940-SG, 2022 WL 4102492 (Del. Ch. Sept. 6, 2022), aff’d, No.
411, 2022, 2023 WL 3513271 (Del. May 17, 2023)...........................................................11, 19
Corp. Risk Holdings LLC v. Rowlands,
No. 17-CV-5225 (RJS), 2018 WL 9517195 (S.D.N.Y. Sept. 28, 2018) ...................................15
No. 17-CV-5225 (RJS), 2018 WL 9517195 (S.D.N.Y. Sept. 28, 2018) ...................................15
David B. Shaev Profit Sharing Acct. v. Armstrong,
No. Civ. A. 1449-N, 2006 WL 391931 (Del. Ch. Feb. 13, 2006), aff’d, 911
A.2d 802 (Del. 2006) ............................................................................................................14
No. Civ. A. 1449-N, 2006 WL 391931 (Del. Ch. Feb. 13, 2006), aff’d, 911
A.2d 802 (Del. 2006) ............................................................................................................14
In re Delta and Pine Land Co. S’holders Litig.,
No. Civ.A. 17707, 2000 WL 875421 (Del. Ch. June 21, 2000) ................................................10
No. Civ.A. 17707, 2000 WL 875421 (Del. Ch. June 21, 2000) ................................................10
Desimone v. Barrows,
924 A.2d 908 (Del. Ch. 2007)................................................................................................11
924 A.2d 908 (Del. Ch. 2007)................................................................................................11
Firemen’s Ret. Sys. of St. Louis v. Sorenson,
No. CV 2019-0965-LWW, 2021 WL 4593777 (Del. Ch. Oct. 5, 2021) ...................................13
No. CV 2019-0965-LWW, 2021 WL 4593777 (Del. Ch. Oct. 5, 2021) ...................................13
ii
Case 1:23-cv-03903-JSR Document 25 Filed 07/06/23 Page 4 of 32
TABLE OF AUTHORITIES
(Continued)
(Continued)
Genworth Fin., Inc. Consol. Derivative Litig., No. CV 11901-VCS, 2021 WL
4452338 (Del. Ch. Sept. 29, 2021) .........................................................................................23
4452338 (Del. Ch. Sept. 29, 2021) .........................................................................................23
Gov’t of the U.S. Virgin Islands v. JPMorgan Chase Bank, N.A.,
23-CV-10904 (S.D.N.Y. 2023)............................................................................................4, 25
23-CV-10904 (S.D.N.Y. 2023)............................................................................................4, 25
Guttman v. Huang,
823 A.2d 492 (Del. Ch. 2003)................................................................................................15
823 A.2d 492 (Del. Ch. 2003)................................................................................................15
Harcum v. Lovoi,
C.A. No. 2020-0398-PAF, 2022 WL 29695 (Del. Ch. Jan. 3, 2022) .......................................24
C.A. No. 2020-0398-PAF, 2022 WL 29695 (Del. Ch. Jan. 3, 2022) .......................................24
Horman v. Abney,
No. CV 12290-VCS, 2017 WL 242571 (Del. Ch. Jan. 19, 2017) ............................................23
No. CV 12290-VCS, 2017 WL 242571 (Del. Ch. Jan. 19, 2017) ............................................23
In re ITT Corp. Derivative Litig.,
588 F. Supp. 2d 502 (S.D.N.Y. 2008) .....................................................................................15
588 F. Supp. 2d 502 (S.D.N.Y. 2008) .....................................................................................15
Jane Doe I v. JPMorgan Chase Bank, N.A.,
22-CV-10019 (S.D.N.Y. 2023)............................................................................................4, 25
22-CV-10019 (S.D.N.Y. 2023)............................................................................................4, 25
Kahn v. M & F Worldwide Corp.,
88 A.3d 635 (Del. 2014), overruled on other grounds by Flood v. Synutra
Int’l, Inc., 195 A.3d 754 (Del. 2018) .......................................................................................17
88 A.3d 635 (Del. 2014), overruled on other grounds by Flood v. Synutra
Int’l, Inc., 195 A.3d 754 (Del. 2018) .......................................................................................17
Kococinski v. Collins,
935 F. Supp. 2d 909 (D. Minn. 2013) (D. Minn. 2013).............................................................10
935 F. Supp. 2d 909 (D. Minn. 2013) (D. Minn. 2013).............................................................10
Kravitz v. Tavlorios,
No. 19 Civ. 8438 (NRB), 2020 WL 3871340 (S.D.N.Y. July 8, 2020), aff’d,
No. 20-2579-CV, 2021 WL 5365582 (2d Cir. Nov. 18, 2021)...................................................15
No. 19 Civ. 8438 (NRB), 2020 WL 3871340 (S.D.N.Y. July 8, 2020), aff’d,
No. 20-2579-CV, 2021 WL 5365582 (2d Cir. Nov. 18, 2021)...................................................15
Manbro Energy Corp. v. Chatterjee Advisors, LLC,
No. 20 Civ. 3773 (LGS), 2021 WL 2037552 (S.D.N.Y. May 21, 2021) ...................................25
No. 20 Civ. 3773 (LGS), 2021 WL 2037552 (S.D.N.Y. May 21, 2021) ...................................25
Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart,
845 A.2d 1040 (Del. 2004) .....................................................................................................17
845 A.2d 1040 (Del. 2004) .....................................................................................................17
In re McDonald’s Corp. S’holder Derivative Litig.,
289 A.3d 343 (Del. Ch. 2023)..................................................................................................20
289 A.3d 343 (Del. Ch. 2023)..................................................................................................20
In re Merrill Lynch & Co., Inc., Sec., Derivative & ERISA Litig.,
773 F. Supp. 2d 330 (S.D.N.Y. 2011) (JSR) ............................................................................12
773 F. Supp. 2d 330 (S.D.N.Y. 2011) (JSR) ............................................................................12
iii
Case 1:23-cv-03903-JSR Document 25 Filed 07/06/23 Page 5 of 32
TABLE OF AUTHORITIES
(Continued)
(Continued)
Meyers v. Keeler,
414 F. Supp. 935 (W.D. Okla. 1976).......................................................................................11
414 F. Supp. 935 (W.D. Okla. 1976).......................................................................................11
In re Morgan Stanley Derivative Litig.,
542 F. Supp. 2d 317 (S.D.N.Y. 2008) .....................................................................................17
542 F. Supp. 2d 317 (S.D.N.Y. 2008) .....................................................................................17
Okla. Firefighters Pension & Ret. Sys. v. Corbat,
No. CV 12151-VCG, 2017 WL 6452240 (Del. Ch. Dec. 18, 2017)..........................................13
No. CV 12151-VCG, 2017 WL 6452240 (Del. Ch. Dec. 18, 2017)..........................................13
In re: Old Bpsush, Inc.,
No. 16-12373 (BLS), 2021 WL 4453595 (D. Del. Sept. 29, 2021) ..........................................23
No. 16-12373 (BLS), 2021 WL 4453595 (D. Del. Sept. 29, 2021) ..........................................23
Petriy v. Smith,
C.A. No. 2019-0795-JRS, 2021 WL 2644475 (Del. Ch. Jun. 28, 2021) ..................................20
C.A. No. 2019-0795-JRS, 2021 WL 2644475 (Del. Ch. Jun. 28, 2021) ..................................20
In re Pfizer Inc. S’holder Derivative Litig.,
722 F. Supp. 2d 453 (S.D.N.Y. 2010) .....................................................................................24
722 F. Supp. 2d 453 (S.D.N.Y. 2010) .....................................................................................24
Rahbari v. Oros,
732 F. Supp. 2d 367 (S.D.N.Y. 2010) .....................................................................................18
732 F. Supp. 2d 367 (S.D.N.Y. 2010) .....................................................................................18
Rales v. Blasband,
634 A.2d 924 (Del. 1993) .......................................................................................................9
634 A.2d 924 (Del. 1993) .......................................................................................................9
Ret. Sys. v. Roche,
2020 WL 7023896 (Del. Ch. Nov. 30, 2020) ............................................................................24
2020 WL 7023896 (Del. Ch. Nov. 30, 2020) ............................................................................24
Rojas v. Ellison,
C.A. No. 2018-0755-AGB, 2021 WL 3408812 (Del. Ch. Jul. 29, 2021) ...................................16
C.A. No. 2018-0755-AGB, 2021 WL 3408812 (Del. Ch. Jul. 29, 2021) ...................................16
In re SAIC Derivative Litig.,
948 F. Supp. 2d 366 (S.D.N.Y. 2013) .....................................................................................14
948 F. Supp. 2d 366 (S.D.N.Y. 2013) .....................................................................................14
Scalisi v. Fund Asset Mgmt., L.P.,
380 F.3d 133 (2d Cir. 2004).....................................................................................................9
380 F.3d 133 (2d Cir. 2004).....................................................................................................9
South v. Baker,
62 A.3d 1 (Del. Ch. 2004).....................................................................................................14, 16
62 A.3d 1 (Del. Ch. 2004).....................................................................................................14, 16
Steinberg v. Dimon,
No. 14 Civ. 688 (PAC), 2014 WL 3512848 (S.D.N.Y. July 16, 2014) .....................................15
No. 14 Civ. 688 (PAC), 2014 WL 3512848 (S.D.N.Y. July 16, 2014) .....................................15
iv
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