EFTA00027884

JCB3DOEC UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK x JANE DOE, 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Plaintiff, New York, N.Y. v. DARREN K. INDYKE, et al., Defendants. Before: 19 CV 8673 (KPF) x Conference December 11, 2019 11:30 a.m. HON. KATHERINE POLK FAILLA, District Judge APPEARANCES KAPLAN HECKER & FINK LLP Attorneys for Plaintiff BY: ROBERTA KAPLAN ALEXANDRA CONLON KATE L. DONIGER LOUIS FISHER TROUTMAN SANDERS LLP Attorneys for Defendants BY: BENNET J. MOSKOWITZ CHARLES GLOVER SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027884 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE DEPUTY CLERK: In the matter of Doe v. Indyke. Counsel, please state your name for the record beginning with plaintiff. MS. KAPLAN: Good morning. Roberta Kaplan for plaintiff from Kaplan Hecker & Fink. I am here with my colleagues Kate Doniger, Alex Conlon, and Louis Fisher. THE COURT: Good morning. MR. MOSKOWITZ: Good morning. Bennet Moskowitz, Troutman Sanders LLP, counsel for the co-executors of the Estate of Jeffrey D. Epstein. MR. GLOVER: And Charles Glover of the same firm. THE COURT: First of all, I thank you very much for your indulgence. As you could see, we did not know until we knew that plaintiff in our prior case did not speak English. He was comfortable with the dates of a conference and not more than that. So I appreciate your patience. Let me begin by noting that I'm surprised we are having this conference, even though I am the one who convened it. And that is because what I thought made sense from an efficiency perspective was to have the discovery assigned to a single magistrate judge, and which is what was done. The reason that I'm having this conference, and Judge Freeman is not, is it does not appear that the discussion of motions to strike or motion practice is occurring in all of the cases. And so for those in which it is happening, those judges have SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027885 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 decided to talk about it. I'm asking in the first instance to speak with Mr. Moskowitz, unless he wants to pass the mic over to Mr. Glover. Mr. Moskowitz, I had understood, from a very sort of peripheral perspective, that the focus of your clients was on setting up a fund to perhaps fund the settlement of these claims. Am I correct? MR. MOSKOWITZ: That's absolutely correct. THE COURT: I'll ask you to stand only because there is a monitor in front of you. MR. MOSKOWITZ: I prefer it. Thank you. That's absolutely correct. That is still a major focus of my clients. In fact, it's full steam ahead. I understand that, as has been described when we were before Judge Freeman and before then, I understand that the administrators-to-be, Ken Feinberg, , Camille Biyos, all leading people in the field of claims administration, has been in touch with or have reached out to various plaintiffs' counsel. And the administrators are working on the protocol, which is basically the nuts and bolts of that program. It's our hope and expectation that all plaintiffs will give it a shot. It doesn't require anything in terms of waiving any rights. They can go through the whole claims process, get an independent determination -- the estate doesn't SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027886 4 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 control the program administrators or designers -- and if given plaintiff doesn't like that determination, they can say, you know what, I don't like this, I am going back to concentrate on my litigation. I too, although, you know, I'm hoping people come around, and I'm disappointed as of now no one has come to us and said I am going to give it a shot, let's stay the litigation in the meantime. But it's not required. The administrators aren't requiring that. THE COURT: This is the fork in the road where you and I diverge. I would have thought given your focus was on setting up a fund for claims administration you would not be focusing on motions to strike, which to me seemed to be a -- not a distraction, but a detour in the path to resolution of the case. MR. MOSKOWITZ: I see. If I can, I gather, but I'll ask the question, your Honor is wondering that based on your Honor's understanding of what the law is, on whether what we are talking about here is, as Ms. Kaplan asserted in her letter a motion to strike, or as I'll gladly briefly go over is actually, no, a motion to dismiss. And the reason we made the motion is because I would have loved to push the time out more. But plaintiff's counsel wasn't willing to do that. We have preserved our rights. A critical threshold issue for us, I have six points to briefly SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027887 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 touch upon, I'll be very quick, that will address that. But, it's very important to us that we be able to move to dismiss, which is what it is, the punitive damages claims. THE COURT: Okay. But, that wouldn't get rid of all of the claims. MR. MOSKOWITZ: No. THE COURT: I am trying to figure out why expend -- _ am not using the term waste -- why expend the resources when, at some point, perhaps, we can have a discussion about whether or not Virgin Islands permits law permits punitive damages or not. I am just trying to understand, because things were going so well, I thought. You've had your initial conference before Judge Freeman, there are discussions that I imagine were going on. There was, I presume, the establishment of protocols for discovery. And this, again, just seems like something that is inconsistent with everything that's been going on before her. So perhaps I need to hear some or all of your six points and I will listen to you. MR. MOSKOWITZ: Sure. Well, plaintiff's counsel generally, not all of them, but plaintiff's counsel here today included has made it clear to us that they are not yet sold, that's my wording, on the program. And unless and until they tell us otherwise, they are moving full steam ahead with their SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027888 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 litigation. So we are basically having to react to that. In terms of making motions, your Honor is correct, we've again, if we had it our way, we wouldn't have to engage in this practice on either side. We would stay everything. But we're here, and the reason moving to dismiss punitive damages in this case is so important to us and worth the time and energy now we are already halfway there to briefing and having this issue decided is two fold. Number one, the scope of discovery, ever since the 2015 amendments, now expressly as I think it did previous to that contemplates that the amount in controversy is directly relevant to the scope of discovery. This is a very different case, from our perspective, because no punitive damages are available than plaintiff, if they do, we think incorrectly believe punitive damages are available. People, as I'm sure your Honor is aware, make very large claims for punitive damages. That's out of the case and should be as a threshold. The second is going to the claims program, or any other settlement because, you know, Judge Freeman asked me this, well, can someone talk to you about settlement separate from the claims program. Absolutely. They all have my phone number. Nothing is off the table. We hope everyone will give that claims program a shot. Why wouldn't you. I don't see why. In the meantime, if someone wants to talk about SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027889 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 settlement, fine. How can the parties in this case see eye to eye if plaintiffs, again, I think clearly and incorrectly say and we are entitled to X millions punitive versus we are saying we are talking about compensatory damages. Let's have a discussion about that. THE COURT: Let's be clear. Assuming, as you'd like me to do, the exclusion of punitive damages, the claim's not going to be for ten dollars. It is going to be for millions upon millions of dollars. discovery is going to sought and the nature And do you really think the scope of change, given the nature of the damages of the claims raised? MR. MOSKOWITZ: Well, I do -- part of the clarity that I don't have, which I welcome to get, not trying to make my own questions, don't have clarity on how much is plaintiff claiming is owed to her in terms of punitive versus compensatory damages. It's not clear to me from the complaint. I haven't heard that yet, so it's hard for me to answer that question. But, I'm happy to answer questions in the order that your Honor desires. There is one other, I mentioned I had these six points. It Is often the case we don't come in and do things how I want. I want to raise another critical threshold issue that came up entirely because of what was in the contents of plaintiff's counsel's response to my letter, and that is if SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027890 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 they are correct that USVI law applies, this action is time barred. Every cause of action that is asserted in their complaint says it is timely because of the New York Child Victims Act. Well, it stands to reason that if U.S. Virgin Islands law applies in this case, then the plaintiff cannot avail herself of the New York Child Victims Act. That is certainly something that I also now need to brief, and would, like I said, that's a key threshold issue even more so than punitive damages. There can be no case if there is no New York Child Victims Act applying. It's time barred. THE COURT: Not to put words in your mouth, but what I'm understanding is that you believe your premotion letter is not inconsistent with your desire to have a claims resolution process. It is, rather, something you feel is thrust upon you by the fact that today, not all of the plaintiffs' counsel are interested in participating in the program that you're setting up. MR. MOSKOWITZ: Yes. Let me clarify that, too. That's correct, but various plaintiffs' lawyers have indicated to me that they are interested. In fact, and a big issue before Judge Freeman was various plaintiffs' lawyers reached out to me and others that represent the executors before these actions got filed in the case, certainly before they began in earnest, to say they wanted a kind of claims program. It was something we were already thinking about on our end. This was SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027891 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not something that was just thrust out here. I don't want to rehash during Judge Freeman's hearing there was a disagreement about the way it's unfolded, etc., and that's not why we're here. Your Honor is correct, having the final motion to dismiss now, I wish we could put it off for three months and see if the claims program works and save the dockets, but here we are. And again, we think that punitive damages and now again USVI law applies as being time barred. These are key issues we can't avoid. These are straightforward legal issues. These will not be 50-page briefs. The motions I filed in other cases have all been on the concise side I'll call it, which I'm sure is something your Honor would appreciate. This can be done on a relatively short time frame. These are threshold issues. Certainly the time bar aspect, and I still argue the punitives and subject to I'd love to know what is plaintiff asking for in terms of punitive damages. Based on a collective, not in this case, what I've heard from the plaintiffs' side is, for example, there is one case out there where two plaintiffs, not this firm, claim $100 million. They don't say what part is which, they don't even allege they were underage at the time of the alleged harms to them, but we have the complaint at the time. We request $100 million or another amount to be determined. That tells me we SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027892 IC JCB3DOEC need to set clarity where we can on the front end to make 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 things more efficient going forward. THE COURT: Thank you. Ms. Kaplan, I'll hear from you in response. MS. KAPLAN: Yes, your Honor. So, I think I heard Mr. Moskowitz say that various plaintiffs' lawyers are not yet sold on the proposed settlement process. THE COURT: That's the word that was used, yes. MS. KAPLAN: That might be the understatement of the day, your Honor. First of all, there is no fund. In response to questions from the plaintiffs, Mr. Moskowitz responded by saying that no amount of money is actually being set aside by the estate to settle these claims. That is something that is very, very concerning to the plaintiffs. It's one thing to agree to participate in a fund when you know that, say, 300 or 400 million of the 577 million in the estate is being set aside. But they have said that no amount is being set aside. They just want to settle claims, presumably, so they can settle as low as possible and have the rest for the estate. That's a huge problem. It is going to be a huge problem for the plaintiffs' lawyers. Number two, as Judge Freeman admonished Mr. Moskowitz when we met, settlement is a two-way street. There has to be consultation. The settlement -- the discussions that Mr. Moskowitz referred to, I was part of those, and I said to SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027893 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the estate that the plaintiffs needed to be involved. That these women who, many of whom, like my client, were horribly abused as young children, have to have agency. And they have to help pick the administrator, be involved in who the administrator is. None of that has happened. Mr. Moskowitz and the estate picked Ken Feinberg on their own. There was no consultation with us. We have now asked them to put on an administrator on a panel that the plaintiffs select. We've gotten no answer to that. With all respect, your Honor, I'm someone who has settled cases for decades in this district. This does not look to me like a case that's going to settle. If your Honor would like, I can move on to the merits issues. THE COURT: Please. MS. KAPLAN: With respect to this motion, whether it's styled as a motion to dismiss under 12(b)(6) or a motion to strike under 12(f), I've made those motions, I've always made them as 12(f) motions. I've never won one, but I've made them. However it's styled, your Honor said the fundamental important point here, which is not that it doesn't dismiss one claim, it dismisses no claims. We have compensatory damage sought in connection with all four of our claims. They have no motions to dismiss compensatory damage. They have no motion to dismiss any of the four underlying tort claims. SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027894 12 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 For that reason, your Honor, there is really no reason not to get started. We are happy to have a conference with Judge Freeman, but the problem is the cases are in all different kind of configurations. There are many cases that don't require even responses until late January. There are cases with different defendants. There are cases with federal trafficking statutory claims. This is a simple diversity claim, common law claim. We are ready to get started. We don't think we should be delayed. With all respect to the Southern District, the way this has been set up where there is one magistrate but I think at least nine, maybe a dozen different judges now, give the plaintiffs all the disadvantages of consolidation and none of the advantages of consolidation. Because various issues are being decided by various district court judges, most of the judges are deciding pseudonymity. Your Honor has deferred that to Judge Freeman. It's kind of a big mess. We understand that Judge Freeman has jurisdiction over discovery. We would just like to start, and maybe if we could set a trial date today that would help get that underway. THE COURT: I'm not setting a trial date today. MS. KAPLAN: Let me talk about the scope of discovery. I will hereby make representation there is nothing about the damages claim that will affect the scope of discovery. We expect this case will have at most four witnesses. SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027895 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Maybe five. Our plaintiff, the two women who booked meetings -- that's not a right term. But massages with Mr. Epstein. I expect both of those women to take the Fifth, so that won't take very long, and maybe two experts. In terms of the documents that we are seeking, your Honor, again, it will be very limited. We don't know if they have written evidence about our client. We understand that these transactions were done in cash. I don't know if they kept records of who he met with when. Obviously, if he has that record, we'd like it. We don't expect a lot of documents from the plaintiff. And I should also add that we have opened a conversation with the U.S. attorney's office for the Southern District who may have one or two documents that corroborate our client's claims. They are thinking about how they can get those to us subject to grand jury requirements. the minute we get them, we will share them with The final issue, your Honor, has to do law and time bar. The issues are distinct. So And obviously the estate. with choice of whether Virgin Islands law applies to issues relating to what you can get from the estate, whether that's an estate choice of law issue, is entirely different from the question of what state substantive law applies to the underlying torts. I think there can be no question that given this happened on the streets of New York City, in his mansion, that SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027896 14 JCB3DOEC the law, the substantive law of tort applies New York law, and 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 we clearly get the benefit of the New York statute on that. With respect to the estate and whether or not he purposefully availed himself two days before his death of the benefits Virgin Islands law, which he presumably thought was going to be an advantage to Mr. Epstein, and in fact it has been. It is incredibly difficult for us to deal with the Virgin Islands court, to get Virgin Island lawyers to file papers. There are 100 advantages to the estate being in the Virgin Islands. Having sought those advantages, they don't get to pick and choose and say for purposes of the punitive damages, we want New York law to apply. We're happy to brief that issue. Courts in the Southern District in civil cases apply different laws to different issues of cases in a single case all the time. There is nothing out of the ordinary about that, and there is no rule that requires that one state's law applies to all issues in the case, particularly when you have a particularized issue about estate law like this. I am happy to address anything else your Honor would want to address. Couple more points. Again, we don't think that discovery in this case should take very long, given the limited number of documents and witnesses. We would be willing to waive a jury trial, your Honor, to help expedite things. And SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027897 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 again, we are very much eager to get things to happen here as quickly as possible. Our client has lived with this for many, many years, she's really desirous of putting this behind her, and I'm sure your Honor can appreciate that. THE COURT: Just before you sit down. I am understanding, as you began this discussion, the problems that you see and that your client sees in the process that's been identified by defense. I am assuming you've had the discussions with them, because you've told me that you have, regarding increased plaintiff involvement in the administration process. If they agreed, might you change your mind about the futility or not of the claims administration process? MS. KAPLAN: I think if they were willing to have a panel of administrators, at least one of whom, maybe there would be two, Mr. Feinberg is the one chosen by the plaintiffs and a third neutral, I certainly would be open to participating. But I am not open in participating in something that's been done entirely by them, completely in secret, by someone they chose, and without denominated amounts that they are setting aside. THE COURT: There's two stumbling blocks. One is the composition of the panel and the other is the need for some defined amount. MS. KAPLAN: It is very hard for the plaintiffs to SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027898 1 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 figure out what they can expect without understanding what the denominator is, if you will. THE COURT: Understood. Thank you. Mr. Moskowitz. MR. MOSKOWITZ: Thank you. Your Honor, it's interesting. First, as to the motion, we think we have a fundamental right to make and intend to make. Plaintiff's counsel does not dispute that under New York law, punitive damages are not available. USVI law appears to me to be in accord with that. By the way -- THE COURT: No. Let me understand why you think it's in accord. I found it, I found it an interesting issue. I didn't see much in the way of cases in the Virgin Islands that dealt with the issue. I thought I understood that the Virgin Islands law tends to be accepting of common law and the law of other jurisdictions that doesn't seem to conflict. MR. MOSKOWITZ: What you'll find is many Virgin Islands cases, and I will tell you I'm not -- I can brief it, but I cannot tell you now the current state of Virgin Islands law with respect to restatement. You will find cases, including from as recent as 2009, that refer to the restatement on the issue of punitive damage against an estate, and the restatement as well as the majority of U.S. jurisdictions, because we looked into this, are in accord. THE COURT: So this will be Section 908 and Section 926? SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027899 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SPEAKER: I believe that's correct. I don't have it in front of me. I'm happy to pull that if I can after I finish speaking. But, there is Hamilton v. Dowson Holding, 51 VI 619, 628 (DVI 2009); there is Booth v. Bowen, 2008 WL 220067, at *5 (DVI Jan. 10, 2008). Candidly not Supreme Court USVI cases, but they are the authority that you will find on this issue in the USVI, and they are supportive of that restatement position. Which is not surprising. When someone's dead, you are not trying to punish them. Others would argue what about deterrence. The few cases I found work in our favor saying deterrence doesn't work like that. When someone is alive thinking if they die perhaps their estate will be impacted by this. This is not some obscure position. This is statutory law in a lot of places, including New York. In terms of the time issue, plaintiff's counsel also doesn't deny that if U.S. -- if New York law doesn't apply to that issue, this action is time barred. I'm surprised and I agree with Ms. Kaplan, this should be briefed. It should be briefed now. I am surprised to hear that it's routine that you get to pick and choose from one part of the case that X law applies -- THE COURT: I think that's an overstatement of what her argument was. I didn't hear the word "routine" mentioned at all. I have had cases, I'm sure you have as well, even SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027900 18 JCB3DOEC basic contract cases where there are certain provisions that 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 are subject to one jurisdiction of law and other claims that could be made on the same contract that would be under a different jurisdiction of law. MR. MOSKOWITZ: What I've seen, your Honor, is splits between procedural law and substantive law. We are talking about two very substantive issues here. Availability of a kind of damages and a right to revive a claim under New York statutory law that's part of a new trend but is, notwithstanding that, it relates to a reviving statute of limitations, gives it new vested substantive right to people to bring a claim that was otherwise previously time barred. THE COURT: To be clear, when you call it new trend, I'm sure you mean the law that actually provides for it. not like someone just woke up and decided let's do this. MR. MOSKOWITZ: Correct. THE COURT: Do you really think the tort issues in this case would be decided by Virgin Islands law? MR. MOSKOWITZ: No. That's why we were surprised to hear that in the response to our letter, which is why we came here, point number one was going to be that surprised us. But because of that suggestion, we number one need to brief it, because, as I said, and as has been denied, if USVI law applies wholesale or even to the two issues we are talking about, the action is time barred. Certainly that's a threshold issue that T t ' s SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027901 19 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 needs to be decided now. THE COURT: I understand. I wouldn't be -- I wouldn't be so sure that it is time barred. I guess my question is, if you are hellbent on bringing this motion -- that's the legal term -- and it appears that you are, is it your belief that I should not have discovery while the motion is pending because, at most, well, you think possibly that instead of hitting the single of getting rid of punitive damages, you would hit the home run of getting rid of the case in its entirety? MR. MOSKOWITZ: Certainly something we would brief. Having heard it for the first time, in the response to our letter, and not wanting to do something which I don't like when other people do, which is seek leave to submit an unauthorized reply to your Honor, it's something we think needs to be dealt with now. But we think both issues need to be dealt with now. THE COURT: Let's step back. While your motion is being briefed, which, by the way, I haven't allowed just yet, what is the status of discovery? MR. MOSKOWITZ: So, number one -- THE COURT: What do you think it should be? MR. MOSKOWITZ: Oh sure. If it is limited, all the more reason not to get going with it now. Nothing is going to change in six weeks that's going to impact the plaintiff's rights. Look, I get it -- SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027902 20 JCB3DOEC THE COURT: What is the six weeks that you are thinking? 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. MOSKOWITZ: Sorry. That was a ballpark guesstimation, if we're briefing, I don't know how long it will take to brief -- THE COURT: You haven't figured out my schedule yet, which is not six weeks, but okay, nice try. MR. MOSKOWITZ: Noted. And some judges look at me the other way if you say three weeks versus nine. Good to know. But in terms of discovery, Magistrate Freeman, number one, has ordered the parties to report back to her on January 10 including about the claims program and discovery. So that issue's to be determined. I am hoping we can come to some agreement. I know Judge Freeman threw out some ideas on the transcript, I don't have that transcript in front of me. She was in good control of that issue. If I can, I'd like to take a brief moment to set some things clear about the claims program. It's the opposite of what plaintiff's counsel has asserted. That's correct, we haven't said only X million is devoted. What we have said in writing numerous times there is no aggregate cap on the amount that the independent administrator can deem appropriate to pay to people. If you say 10 million is in it, then it's 10 million spread across however many joined. We are saying, no, we want people to join this program. Everything we are doing SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027903 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 is we want people to join. Choosing Ken Feinberg. Ms. Kaplan did express extreme interest in having one person and one person only who was not Ken Feinberg. We vetted and interviewed many people, including that person. We made our own decision, that's true. Ken Feinberg has impeccable credentials. And this notion of appointing someone to a panel, this is not arbitration or mediation. This is an independent claims program. The estate -- we have no control at the end of the day over when Ms. who is the designer and administrator of the fund, when she makes a determination that I think this person should get X, we can't veto that. We can't impact that. All we can do is, when we hear about a claim, is say here's what we know about this claim that we think you should know about, and Ms. , just like she gets whatever evidence claimants make, can do what she wants with it. She can find what we say not important. And she makes a determination. So I am hearing this notion like we put two people, two or three people up there, first of all, it's one. And she is independent. I mean, these people have, that we've selected, and we were so careful about it. I am just shocked, and this is perhaps the only case where I've heard repeated objections to Ken Feinberg being -- THE COURT: I know who he is. MR. MOSKOWITZ: Right. So candidly, I hear words get SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027904 22 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 thrown out. I'm honestly mystified by that. Who else better to ensure a successful claims program. It is not like we went out and hired our cousin. These are the leading people. , not as well known, worked on the 9/11 Fund for many, many years, just left the fund to do this program. She's very compassionate. She cares. They want this program to work and so do we. Various plaintiffs have told me they are interested too. THE COURT: To be clear, you don't have to sell me on it because I'm not participating one way or the other. Whatever PR work you are doing has failed, because here we are. And we are at motions practice and we are going with litigation because the efforts to sell folks on the claims resolution proceeding have not worked. MR. MOSKOWITZ: I don't think that's correct, your Honor. The time to sign up hasn't opened yet. THE COURT: All right. Why are you bringing this -- is it because there is otherwise a response due that you are not waiting to hear whether the folks at the front table are joining in the process or not? MR. MOSKOWITZ: I'm sorry. I don't think I understood the question. THE COURT: You just said to me now that people do not have to elect to participate or not participate today, they have a period of time. Correct? SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027905 23 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. MOSKOWITZ: Correct. THE COURT: Is that period of time the 10th of January or some date sooner than that? MR. MOSKOWITZ: I'm not certain. I know the protocol comes out very soon. Like in days or a week or so. And then shortly thereafter, it is a matter of months, so I don't have the exact date. But it's soon, it's very soon, it's not months from now. THE COURT: My understanding is that, first of all, you'd like more plaintiffs and their counsel to participate in the program. But, in the absence of that, you need to do something, and if it's to proceed with the litigation, you will proceed with the litigation. I was trying to understand, and I was trying to understand when I began this conference, why it was that you were bringing the motion now, if you are in the process of trying to persuade, encourage, entice people to participate in the claims resolution process. And I am assuming it is because otherwise you are going to be in default, and you have to do something. MR. MOSKOWITZ: That's right. I would have loved again to put off the date. But this to us, and I have cases, Judge Batts, Judge Buchwald, Judge Sweet, it is a motion to dismiss. We had to move. We had to respond to the complaint, and this is an important motion for us to make. SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027906 JCB3DOEC Yes, in fact, the last time we adjourned the date, 1- 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 was without consent. We've been saying since the start, hey, let's save resources on both sides. Let's get the claims program going. Again, I do want to be clear, it's not been -- I know your Honor said maybe it was a PR failure. I don't think that's the accurate way to look at it. Again, we've heard various plaintiffs express that they are very interested. Time to actually make that public -- or sorry, not public. Make that official hasn't happened yet. THE COURT: Okay. Ms. Kaplan, are you not going to join in? I just want to know. MS. KAPLAN: I think it's very unlikely, your Honor. They keep referring to them as independent. I don't know how they properly use that adjective to describe Mr. Feinberg and his colleague Ms. here. They were chosen by the estate, they are being paid for by the estate, there was no - not only was there no participation by us, but any opportunity for us to weigh in on that was declined. And they have a fiduciary duty not to our clients, but to the estate. That's not independent under any definition of the word. And what I am hearing from him frankly causes me greater concern. This protocol, this is what we've heard all along. I don't know, maybe a week. Maybe two weeks. Maybe three weeks. We were supposed to participate in the protocol. SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027907 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 What's he talking about? So we have very, very low confidence in the process, in the integrity of the process, in the ability of these women to have agency in their fates, and I think my client is very likely to go forward with litigation. THE COURT: All right. MS. KAPLAN: Highly likely. THE COURT: I didn't want to set a motion schedule. If we are going forward with the litigation, the folks at the back table have to respond. MS. KAPLAN: Understood. But nothing about their response is relevant to the motion about punitive damages. Again, it does not dismiss a single claim in the case. It doesn't relate to a single one of the one through 86 paragraphs of factual allegations in the complaint. All it relates to are three words in the prayer for relief at the end of the complaint, and we all acknowledge sitting here today that our client is entitled to compensatory damage. So I'm completely willing to brief the issue, your Honor. And I can talk about how the choice of law analysis would work here. But it shouldn't delay anything, frankly, your Honor. Because it won't change anything in terms of moving forward with discovery, and trial in the case. THE COURT: All right. I don't know I need to hear anything else. Mr. Moskowitz, last words? SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027908 26 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. MOSKOWITZ: Yes. If I can just give three cites where judges in this district, again, I think I referred to them earlier, Batts, Buchwald, and Sweet did dismiss on 12(b)(6) motions claims for punitive damages. Happy to do so. If you want us to save it for the brief. THE COURT: That's fine. Well, I haven't yet scheduled the brief, and I want to think about the degree to which discovery runs concurrent with the brief. It is only for the punitive damages; is that not correct? MR. MOSKOWITZ: And the time bar issue which since THE COURT: We are back to that again. MR. MOSKOWITZ: It was a surprise to us. THE COURT: Of course. I make no final decisions but you're observing the skepticism with which I heard the time bar issue. Because I'm incapable of not expressing my emotions. So I understand that. But I don't think that's going to be carrying the day any time soon. I think I have what I need to go back and think about the issue and set a schedule. But I don't want to deprive either side the opportunity to say final words to me. Ms. Kaplan, anything else you wish me to know? MS. KAPLAN: Just briefly. I've become a student of the law of punitive damages and Mr. Moskowitz is right that the majority rule is to bar it, as we do in New York. But the jurisdictions that do that, at least in the United States, are SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027909 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 all based on statute. New York has a statute that prohibits punitive damages against an estate. Virgin Islands has no such statute. We are not aware of any case, we researched the issue too in Virgin Islands, saying one way or the other whether that is the law. Although of course in other contexts, the courts in Virgin Islands refer to the restatement. The factors that courts would look to in deciding this issue is kind of the traditional factors. So the purpose of punitive damages in a case is deterrence of future wrongdoing. It's really honestly hard to imagine a case in which deterrence of future wrongdoing is not a stronger interest, particularly given the fact that Mr. Epstein can no longer be prosecuted criminally. There is nothing more important than deterring criminal sexual acts against young children. The countervailing perspective is whether it's unfair to punish the estate for the acts of the decedent. Typically, your Honor, as you can imagine, that comes up in the context of children. There is that famous line from Exodus in the Bible about punishing the children for the sins of the fathers. And since the Enlightenment in our country and in our world, we believe that you shouldn't punish children for the sins of the father. There is no children at issue in this estate. They have identified the sole beneficiary as Mr. Epstein's brother. At least since Mr. Epstein was prosecuted in Florida, his SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027910 28 JCB3DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 brother was fully aware of what Mr. Epstein did, and in fact, we have reason to believe his brother lives in a building owned partly owned by him, partly owned by Mr. Epstein, in which the the two women who did the booking of massages for these girls also lived. So, the idea that Mr. Epstein's brother is somehow innocent here, or should have the full benefits of the estate, based on those policy reasons, makes very, very little sense. And obviously, deterrence is really a huge factor here. This should never happen to any young girl ever again, certainly anywhere in New York or anywhere in this country. THE COURT: Thank you. Mr. Moskowitz, final thoughts? MR. MOSKOWITZ: Yes. I me that I'm happy to brief that, plenty of jurisdictions that not have various law number one, show based on statute in front of there are bar punitive damages against an estate. I have cases such as Lohr v. Byrd, 522 So 2d 845, 846 (Fla. 1988), which is a Florida case that refutes any notion that deterrence is served by punishing a tortfeasor. And I am happy to brief all of those. THE COURT: All right. I will get back to the parties as soon as I can. I'm imagining one side or the other will be getting a transcript of this. If you do so, I'll receive it automatically. So I'll just imagine one of you will do that. Thank you very much. (Adjourned) SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027911