Ghislaine Maxwell Complex Case

SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST THOMAS / ST JOHN GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS, Case No ST 2020 CV 00014 PLAINTIFF, Action for Damages V DARREN K INDYKE, m HIS CAPACITY AS THE EXECUTOR Jury Trial Demanded FOR THF ESTATE OF JEFFREY E EPSTFIN A:\D ADMINISTRATOR OF THE 1953 TRLST, RICHARD D KAHN, LN HIS CAPACITY AS THE EXECUTOR FOR THE EbTATF 0F JEFFREY E EPSTEIN AM) ADMINISTRATOR OF THE 1953 } TRUST; ESTATE OF JEFFREY E EPSTELN, THE 1953 1 TRUST, PLAIN D, LLC, GREAT ST JIM, LLC, NALTII Ls, INC , HYPERION AIR, LLC, POPLAR, 1M: , SOLTHERN TRUST COMPANY, INC , AM) JOHN AND JAM: 00125, DEFFADAMS G"'5LA“E MAX‘WLL’ Case No ST 2020 CV 00155 Plaintiff » 7 Action for Indemnification EsTATF OF JFFFRM E LPSTFIN, DARREN K It\DYKE, ll\ ‘ HIS CAPACITY AS EXECLTOR OF THE EbTATF 0F JEFFREY i E EPSTFLN, RICHARD D KAHN, IN HIS CAPACITY A5 ‘ EXECL TOR 0F THF ESTATE OF JFFFRP Y E EPbTFIN, AND NES, LLC, A NEW YORK LIMITED Ll \BlLlTY COMPANY, Defendants \ 11x RF ESTATE OF JEFFREY E EPSTELN, ‘ Case 1N0 ST 2019 PB 00080 deceased ORDER THESE MATTERS are before the Court to determine whether they should be designated as complex or in the alternative assigned to the same judge as related cases For the reasons 9tated below Gm tofrlze US V] t Indxke er a1 lMamelli Estate oprstem er a! /In 12 Estate oprsrem Case Nos ST 2020 CV 00014/9'1‘ 2020 CV 00155 IST 20|9 PB 00080 ORDER Page 2 of 12 the Coutt will designate Govemmem 0f the Unzted States Virgin Islands 1' Darren K Indtke er a] (hereinafter Ind) Ice ) as complex and assign the case to the undersignedjudge for all further proceedings The Court will also designate Gluslane Maxwell 1 Estate of Jefi’rex E Epstein er al (hereinafter Mame]! ) as complex and reassign it to the undersigned for all further proceedings Finally the Court will decline to designate the Estate ofJe/j‘I es E Epstem probate proceeding as complex at this time Darren K Indyke and Richard D Kahn Co Executors 0f the Estate of Jeffiey E Epstein and Administrators of the 1953 Trust (hereinafter Co Executom ) and Defendants in Indtke and Maxwell filed a motion in Indtke to have that case deSignated complex The Plaintiff Govemment of the United States Viigin Islands (hereinaftei the Government ) did not oppose The Comt (Tejo J ) teferred the motion to the Complex Litigation Division for determination ‘ This Cou1t in its administrative capacity issued an Older setting a bi iefing schedule The Court also asked the patties to address whether the telated probate pieceeding which the C0 Executors had leferenced in their motion to designate Indtke as complex should also be designated complex or altematively whether the same judge should handle both cases Leave was granted to identify othet related cases that might benefit from being assigned to the same judge The C0 Executors filed a supplemental brief in support of their motion to which the Government responded The C0 Executors also filed a reply Defendant Southern Trust Company had appealed in Indike (by filing a motion for a protective order) but did not respond as to whether the case should be designated as complex None of the other Defendants have appeared to date despite having been served After the Older issued in Indtke the Court (Tejo J ) referred a second case Ghzslane Max» ell l Estate (effefiret E Epstein er a] to determinate whether it too should be treated as complex This Court again in its administrative capacity issued a briefing schedule and as earlier inquired whether if Maxwell ' The Honorable Sigrid M Tejo then recused from lndxke after which the Clerk 5 Office reassigned the case to the Honorable Denise M Francois who also recused At present lna'tke is assigned to the Honorable Kathleen Mackay Gm tofrhe U S V] 1 1nd\ke e! a! I Mautelli Estate of Emma: 01 (11 I In m Estate oprstem Case Nos ST 2020 CV 00014/9'1‘ 2020 CV 00155 I ST 2019 PB 00080 ORDER Page 3 of 12 was not designated complex it should be assigned to the same judge as Induce and the probate case The C0 Executors and the Plaintiff Ghislane Maxwell (hereinafter Ghisiane ) filed briefs in response Although the Government had filed a motion to inteivene in Maxwell the Government did not file a brief The Court tuins fiist to Indike In theii supplemental brief the Co Executors gave little attention to the question asked whethei this case should be designated as complex Instead they focused on the telated question whethei the probate matter should be designated as complex or a1ternative1y both cases assigned to the same judge The C0 Executore did adequately address the Cliteria for designating Indike as complex in their initial motion for complex treatment however Hence the Count accepts their eatlier arguments and finds no harm fiom omitting those points in their supplemental brief The Govemment by contrast initially filed a one page [espouse to the C0 Execut01 s motion to state its non opposition to designating this case as complex a position the Govemment reiteiated in its brief in iesponse t0 the Co Executor s supplemental brief Although the Gmemment did touch on why it believes this case should be designated as complex it too devoted much of its brief to addlessing whether the probate proceeding should be treated as complex 01 both matters assigned to the same judge The Court will address the arguments f01 and against designating the probate ease as complex furthei below In shOit both the Government and the Co Executors agree that Indike is complex and should be so designated Considering that the parties are in agreement and that litigants generally have the right to choose the division in which their case is heard the Court concuis that [nahke should be designated as complex More than the parties agreement compels this conclusion howevei As the C0 Executors point out in their motion the number of defendants (10) the nature and number of the statutory claims (twenty three (23) CICO counts) the purported duration of the alleged criminal activity (more than two (2) decades) and the myriad financial transactions and tax matters at iesue weigh substantia1ly in favor of [complex treatment] (Mot 2, filed Feb 1,2021 )And as the Government notes in its response if Gm Inf the U 5 V] i Ind\ke e! a! / Mantelll Estate oprstem eta! / In 16 Estate of Epstein Case Nos ST 2020 CV 00014 / ST 2020 CV 00155/9'1‘ 2019 PB 00080 ORDER Page 4 01 12 its motion for leave to file a second amended complaint is granted the numbei of parties and claims in Indike will only expand Although this case does not fit within any of the categories of presumptively complex cases see V I R Civ P 92(b) a single case unrelated to any other and regardless of the numbel of parties can also be complex if it tequires exceptional judicial management Highland Credit Oppmtumtzes CDO Ltd 1 Bum? Fieke 74 VI 275 281 (Super Ct 2021) (quoting Sixteen Plus Corp \ Yomqf 72 V I 610 627 (Supei Ct 2020)) Gixen the number of defendants the type and nature of the claims and the potential need to coordinate proceedings with other cases both within and without this jurisdiction it is clear that Indike is complex and will be so designated The Court turns next to Maxwell Both the C0 Executors and Ghislane agiee that the case is not complex The C0 Executors note that Mame]! is a simple one (I) issue dispute whether Maxwell is entitled to indemnification of legal fees (Co Executors Br I filed Mai 29 2021 ) The case does not fall within any of the presumptiyely complex categories nor will it require exceptional judicial management they contend The C0 ExecutOis also do not belieVe the case needs to be assigned to the same judge as Indyke or the piobate case However they fail to explain why Ghislane for her part concurs with the Co Executms on both points complex treatment is not warianted and there is no reason to assign this case to the same judge as Indike or the probate she says Although the Court agrees in general with Ghislane and the C0 Executors that at fiist glance Maxwell does not appeal to be complex both sides neglected to mention (or intentionally omitted) that the Government has moved to intervene In its motion the Government maintains that Ghislane is the subject of a local investigation concerning her role in Epstein s alleged criminal activity and that she has evaded attempts to serve her with a CICO subpoena What 5 more the Government moved to intervene in Mame]! as of right and by permission claiming an interest in the funds Ghislane seeks to cover legal fees and expenses Ghislane opposed the Government 5 motion to intervene The C0 Executors did not Gm tofr/ze U S V] I Imbke er a1 IMamellt Estate oprsrem et a] / In re Estate of Epstein Cast. Nos ST 2020 CV 00014 / ST 2020 CV 00155 / ST 2019 PB 00080 ORDER Pace 5 of 12 respond to it But neither side noted the potential for the Govemment to be involved in Maxwell should its motion be granted which would t1ansf01m a simple one (1) issue dispute into a much mone complicated case Both sides failure to leference this development undermines thei1 purported certainty as to the simplicity of the case What 5 mete Ghifilane and the Co Executors fail to recognize that Mame]! could be Seen as presumptively complex once Ind) ke is designated as complex Cf. VI R Civ P 92(b) Although the language of Rule 92(b)(6) speaks of insunance covetage Claims (including indemnification and contribution claims) atising out of multi patty proceedings in any of the above categories of cases 1d meaning the other categ01y of plesumptively complex cases the overall intent of the xule is to allow for satellite litigation imolving insu1ance coverage issues to also be designated as complex A(cmd Santa Clara Vallet Ware) Dist 1 Centmt Indem C0 Case No 115CV286500 2016 Cal Super LEXIS 273 2 3 (Cal Santa Claw Cty Super Ct Mar 23 2016) ( Insuxance covelage cases are complex in part because 01 the complexity of the underlying actions from which they arise [C]omp1ex cases often genemte satellite litigation dealing with insurance coverage issues which involVe extlemely complex sets of documents and facts (brackets intelnal quotation matks and citation omitted» It would be countelintuitive to allow a single case to be designated as complex because it requires exceptional judicial management but not designate any satellite litigation later spawned by that same case as complex At first glance Mame]! does not appear to be satellite litigation generated by Indtke because Ghislane is not a party to lndyke at least not yet But the Government has dieclosed that Ghislane is the subject of an investigation and the target of subpoenas issued in Indyke and Ghislane seeks indemnification in Maxwell for any threatened pending or completed suit proceeding or investigation relating to Epstein his affiliated businesses and his alleged victims (Compl (fl filed Mar 12 2020, filed Mar 12 Con 10] the US V] t lnd\ke er a1 lMamellt Estate oprstem er al lln re Estate oprstem Case Nos ST 2020 CV 00014 / ST 2020 CV 00l55 / ST 2019 PB 00080 ORDER Page 6 0| I2 2020 ) Since Ghislane seeks payment fOi legal fees incurred due to pending investigations and threatened suits it follows that a portion the indemnification claims at issue in Mame]! arise out of Indike Thus the C0u1t will likewise designate Mame]! as complex as an indemnification case arising out of Imbke See VI R Civ P 96(b)(6) Cf. Sanm Clam Valley Watei Dlst 2016 Cal Supel LEXIS 273 at 4 ( The insurance coverage claims in this action are likely to implicate difficult and/or novel legal issues that will require extensive pretiial motions Some of these issues could potentially be dispositive and the Court and the parties may benefit significantly fiom the piecedures available thiough complex case management such as flaming dismete legal issues for resolution phasing discovery and peihaps‘ undertaking mini trials on threshold issues ) The Coutt turns next to the Epvtem probate The Gowemment supports designating the probate case as complex The C0 Executors oppose it As a threshold point the Couit notes that probate proceedings can be designated as complex See V I R Civ P 92(a) ( A complex case is a civil action 0; proc eedmg (emphasis added» Thus the Epstem probate is eligible for complex tleatment A piobate case would neVei qualify as piesumptively complex however Instead it would have to warrant exceptional judicial managemenfl] VI R Civ P 92(3) Considering that Co Executors themselves refer to the estate as being of enormous size and complexity[ ] (Supp Br 3) involving a weltei of activity related to administration[ ] Id at 2 and potentially iemaining in existence for years down the road[ ] (Reply Br 3 filed Apr 6 2021) it certainly seems as if the Epstein piobate qualifies as complex In fact the magistrate judge appointed a special master to assist with the Epstein Victims Compensation Fund which underscoree the exceptional judicial management the probate proceeding has already demanded See also V I R Civ P 95 ( Because complex cases inherently present exceptional circumstances the judge assigned to the Complex Litigation Division may appoint and assign a master to assist with any of the cases pending in the Complex Litigation Division whether individual cases related Gm tofthe U S V] 1 Indike er a1 / Mantel] 1 Estate oprstem eta] / In re Estate of Epstem Case Nos ST 2020 CV 00014 I ST 2020 CV 00155 / ST 2019 PB 00080 ORDER Page 7 of 12 cases or master case[s} ) accord In re Authon (man for the Creation & Appomtmenr 0f Smfl Master S Ct Admin Older No 2021 0012 2021 V I Supreme LEXIS 14 (VI Aug 12 2021) Of course this is not to say that any case in which a master is appointed is per se complex But the question here is whether an estate of this enormous size and complexity[ ] (Supp Br 3) has already consumed (01 will consume) too large a portion of judicial resouices in contrast with other cases and proceedings pending befOie the same judicial officel After all the definition of [a] complex case is a civil action or proceeding that tequires exceptional judicial management to avoid placing unnecessary burdens on the court or the litigants and to expedite the case keep costs reasonable and promote effective decision making by the own the parties and counsel V I R CiV P 92(a) The Complex Litigation Division has additional iesources not available to other divisions of the court The C0 Executors proffer the piobate should not be designated complex because the magistrate judge has adeptly handled the many challenges associated with administration of the Estate including the establishment and successful opeiations of the EVCP {0r Epstein Victims Compensation Progiam] (Supp Bi 5 filed Mai 19 2021 see also id at l 2( [D1uring the 19 monthsthdtludge Hermon Percell has handled the probate pioceedings she has piesided over a continuous stream of case filings hearings and othei activities and has an in depth knowledge of the myriad issues pertaining to administration of this complex Estate )' 1d at 3 (detailing extensive ptoceedings between 2019 and 2021) ) The Couit joins the Co Executors in lauding the magistrate judge s efforts to date But this Couit in its administrative capacity must also be mindful of caseloads and efficient case management See 4 V I C § 72b(a) ( {The presiding judge] shall from time to time designate the judges who are to sit in each judicial division and divide the business in such manner as will secure the piompt dispatch of the business of the court and equalize the case loads of the several judges ) What 9 more the very same point the Co Executors make might now support complex designation since the magistrate judge has retired Thus even if the Got tofthe U S V] t Inchke er al / Mame” 1 Estate oprstem er a1 / In re Estate oprsrem Case Nos 9T 2020 CV 000M / 8T 2020 CV 00155 I ST 2019 PB 00080 ORDER Pace 8 0% l2 probate case is not designated as complex, a new judge will be assigned anti have to familiarize herself or himself with the case which will have the same effect as removing the one judge who has both historical and ongoing knowledge of the probate proceeding {Reply Br 2 filed Apr 6 2021 ) Thus. the arguments in favor of leaving the smtm quo in place no longer catty the same weight That said the Court cannot overlook the Co Executors concerns about requests to designate cases as complex masquerading as attempts at “judge shopping ’ Cf ENNIS Freke 74 V I at 285 (noting that the motion for complex treatment was untimely and came after assigned judge had twice luled against the mmant) Here, the party who motioned for complex treatment opposes treating the probate matter as complex It was the Court who asked the parties to consider whether the probate case should be among all the Epstein cases to be assigned or teassigned to the same judge Thus this is not an instance “hem the party seeking complex treatment did so in Old€l to seek[] a new audience (Reply Bl 4 ) But the Co Executom’ concerns are still Valid insofat as they telate t0 the Government s support f0; designating the probate as complex when viewed against the iatgei backdtop namely the autholity the Government has wielded over the Estate 5 assets freezing most of the assets putsuant t0 Climinal Activity Lien Notices authmized by Title 14, Section 610 of the thin Islands Code The record also teflects that the Probate Cou1t and the Government have been at loggetheads at times The Government 3 tequest to have the probate case designated as complex could give reason to pause Again, however the magistzate judge has retired and thus, the Co Executors concerns lack the force they once had ° 3 To be lair the Co Executors Lould also be Seen as seek[ig]a new audience“ (Reply Br 1) insofar as they suggested that the Government should consent to having the magistrate judge assigned to the Estate probate try lrtdtke by consent Cf. 4 V I C § 123(d) ( Upon consent ot the parties the magistrate judge may conduct all proceedings in ajury or non jury civil matter inLluding trial and enter a judgment in the case ) The Co Executors only made this suggestion after this Court questioned whether the probate should be designated as complex or reassigned to the same judge as Indtke if that case ultimately were designated complex Got toft/Ie US VI 1 Indtke er a! lMamell i Estate oprstein er a! /In 19 Estate oprstem Case Nos ST 2020 CV 00014 I ST 2020 CV 00155 [ST 2019 PB 00080 ORDER Page 9 01 12 Having consideied the arguments of the C0 Executors and the Government the Court cannot find at this time that the probate should be designated as compiex Again probate cases can meet the definition of a complex case and if eV e1 there were a probate case that could be deemed complex the Epstein probate case may be it But the magistrate judge who was assigned to the probate has handled it well and the Court tiusts that her successor will too What 5 moze the judicial officer who will take over the probate case letains the discretion to 1efe1 it for complex tieatment at a later date Cf. Exam Fi eke 74 V I at 283 84 ( Refenai by the assigned judge 01 self designation by the parties ate the two ways in which a case is designated complex Referia1 by the assigned judge does not have a time limit (citing V I R Ci» P 92(e)(1))) Similarly the Court does not find that assigning the probate case to the samejudge presiding over Mame]! and lndxke is appiopiiate here [Aissigning related cases to different judicial officers is inefficient wastefui of scarce judicial iesou1ces and may result in inconsistent deteiminations [n )6 Pl()( edme for the Assignment & Reasszgnment (3f Related Cases & Pmc eedmgs N0 SX 2020 MC 00087 2020 VI LEXIS 75 “‘1 (VI Supei Ct Dec 3 2020) [Ely contrast assigning related cases to the same judge can be more efficient because the judge has knowledge of both cases and their respective procedui a1 histon ies and can issue any other ordeis short of formal consolidation to avoid unnecessary cost 01 de1ay Id at l 2 (brackets and ellipses omitted) (quoting In re Kelim Manbodh Athena? ng $611635 69 VI 394 422 (VI Super Ct 2018)) Chi] cases are deemed related when two 01 more lawsuits (1) concern the same property (real or personal) or (2) involve the same 01 similar claim(s) between one or more of the same parties (or their successors in interest) that arises out of the same event transaction or contract Id at *2 (piomulgation as Super Ct R 17 1 pending) Under this definition Indyke and Mame]! are clearly related Both cases concern the same property (Estate assets) and arising out of Epstein s alleged criminal activity Moreover the Co Executors Gm toftlie U S V] I Indtke er a1 / Mam 6111 Estate oprstem era! /In re Estate oprstem Case Nos §T 7020 CV 0001-1 I ST 2020 CV 00155 / ST 2019 PB 00080 ORDER Page 10 01 12 moved to dismiss Indxke and Mame]! partly for the same reasons because the Government and Ghislane respectively did not comply with the statutory waiting period bef01e assetting claims against the Estate and futther failed to submit their claims to the Co Executors before bringing suit Having different judges decide this same legal question would be inefficient and might result in inconsistent decisions thereby inc1easing cost and delay Contra V I R CiV P 1 In ttuth howevei all three cases Indtke Maxwell and the Epstein probate do orbit the same axis the assets of the Estate That is all three cases concem the sameissue JeffreyE Epstein( Epstein )and his affiliated businesses[] (Compl (Ill Mantel!) the distribution of his asgets and the assets of his affiliated businesses and the claims and demands upon them In one [espect the Court does agree with the Co Executors that piobate proceedings do not [necessarily] share the same civil litigation features [as regular civil actions] and thus do not easily lend themselves to coordination (Supp Br 5 n 2 ) Unlike mags tort actions 01 multiple toxic torts cases in» olving the same defendants 01 even regulai civil cases there will be little overlap between lndtkc and Mame]! and the Epstein probate case at least insofar as discovei y motion ptactice and genelal p16 trial litigation is concerned The Cou1t does not agree howevei that coordination would haVe only limited benefits Id In fact the oxeilapping legal questions and potential for inconsistent rulings has been a source of concern for the Couit F01 example the Co Executors contend that the Government and Ghislane each should have waited twelve months before asserting claims against the Estate and further that the Probate Court has exclusive jurisdiction over their claims For these reasons among others the Co Executoxs moved to dismiss each case Assuming arguendo that the judges assigned to Maxwell and Indtke were to agree and dismissed the cases or stay them pending the filing of a claim in the probate case the magistrate judge could still rule differently rejecting the claims as premature or improper which would leave the Government and Ghislane in legal limbo forced to incur the costs of an appeal There certainly are overlapping legal and factual issues between all three cases and any assertion to the Gm tofrhe US VI 1 Ind\ke e! a! /M[l\’u€[[l Estate ofEpstem er (11 /In )6 Estate of Epstem Case Nos ST 2020 CV 00014 / 9T 2020 CV 00155 I ST 2019 PB 00080 ORDER Page 11 m 12 contrary or that coordination of all thlee cases before the same judge would not be more efficient is mistaken In the end however the Court will decline to reassign the ptobate case as a related case for one simple teason the balance of caseloads and efficient case management The Court has decided to designate Mame]! and lna'tke as complex and assign them both to itself in funtherance of an earlier decision to shale some of the caseload of the Complex Litigation Division This Court still retains however an active general jurisdiction docket of regular civil and eliminal cases as well as an Appellate Division docket of magistlate appeals and appeals and petitions for writs or review of administrative agency decisions To take on a complicated plobate case which may continue f01 years with a special mastel appointed and hearings and other protracted issues that have sometimes consumed a full day on the bench the dlain on this Count 3 othet cases might be too much F01 this reason the Court will decline to deem the plobate case related Accordingly for the masons stated above it is hereby ORDERED that the Motion for Complex Treatment filed by Defendants Danen K Indyke and Richard D Kuhn on Februaty 1 2021 in Govemment of the Vugzn Islands t Dmren K Indtke e! a! , Case No ST 2020 CV 00014 is GRANTED The Clerk 5 Office shall DESIGNATE Case No ST 2020 CV 00014 as COMPLEX and REASSIGN it to the docket 0f the undersigned judge Venue remains in the St Thomas/St John Division It is further ORDERED that the Clerk 5 Office shall DESIGNATE Gluslane Maxwell 1 Estate ofJeflIet E Epstem er a] Cage N0 ST 2020 CV 00155 as COMPLEX and REASSIGN it to the docket of the undersignedjudge Venue remains in the St Thomas / St John Division It is further ORDERED that Goternment 0fthe Vugm Islands t Darren K Ind)ke et a] Case No ST 2020 CV 00014 and Ghzslane Maxwell t Estate ofJeflIe) E Epstein er a] Case No ST 2020 CV 00155 are Gm tofthe US VI 1 Indxke er (ll lMamellx Estate oprstem e! a! lln 16’ Estate oprsrem Cast. Nos ST 2020 CV 00014 / ST 2020 CV 00155 / ST 2019 PB 00080 ORDER Page 12 01 12 DEEMED RELATED so that proceedings short of formal consolidation may be coordinated between the two cases it is further ORDERED that In re Estate ofJeflz ex E Epstem Case No ST 2019 PB 00080 remainq assigned to the magistrate judge and any request (insofar as it could be Viewed as such) to designate the probate case as complex or to assign it to the same judge as Government offhe Vngm Islands 1 Darren K Indtke er a] Case No ST 2020 CV 00014 as a related case is DENIED without prejudice 1* DONE and so ORDERED this ¥ day of December 2021 HAROLD W L WILLOCKS ATTEST Plesiding Judge of the SupeIiOI Court Tamata Charles Clerk of the Court 7 x/ 47 By L twfl flip“ Cour: Clel Dated W