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MEMORANDUM
TO
RDC
FROM
JMB
RE
Epstein — Punitive Damages
DATE
April 8, 2009
Bob:
You requested that I put together a general overview/outline of issues which will present
themselves to us in connection with Plaintiffs' claims for punitive damages against our
client, Jeffrey Epstein. The following is not intended to be exhaustive and I am sure
specific issues will present themselves, which will require additional research and
briefing. The following is intended to be a general outline which will serve as a guideline
for us as we defend claims for punitive damages brought in State and Federal Court
against Mr. Epstein.
I.
STATE
State claims for punitive damages are generally regulated by F.S. 768.72; 768.725;
768.73 and 768.735.
A.
PLEADING
A claimant cannot plead for punitive damages at the outset in the State
proceeding. However, a claimant can amend, at a later date, to plead for punitive
damages if there is a reasonable showing by evidence in the record or proffered by the
claimant which would provide a reasonable basis for recovery of such damages.
B.
BURDEN OF PROOF
Claimant must establish by clear and convincing evidence the entitlement
to an award of punitive damages. With regard to the amount of damages, the greater
weight of the evidence — burden of proof applies.
C.
In Florida, the Rules of Civil Procedure shall be liberally construed so as to
allow the claimant discovery of evidence which appears reasonably calculated to lead to
admissible evidence on the issue of punitive damages.
EFTA00727535
Epstein Memo re: Punitive Damages
Page 2 of 6
No discovery of financial worth shall proceed until after pleading
concerning punitive damages is permitted.
It has been my experience that the defense can stipulate with the claimant
to allow the claimant to go forward with a claim for punitive damages to avoid the proffer
of harmful evidence which would then appear in the public record. The claimant does
not have to accept such a stipulation. On some occasions in the past I have proffered a
stipulation that the defendant can pay any award of punitive damages in order to avoid
the discovery of the client's finances. If the claimant insists, the court will allow financial
net worth discovery and there is no way to avoid this. However, it can be limited and
most courts are willing to listen to reasonable limitations on such discovery depending
on the ingenuity of defense counsel.
D.
LIMITATIONS
Punitive damages may not exceed the greater of three times the amount
of compensatory damages awarded to each claimant or the sum of $500,000.00,
whichever is greater.
However, where the fact finder determines that at the time of injury the
defendant had a specific intent to harm the claimant and determines that the
defendant's conduct did, in fact harm the claimant, there shall be no cap on punitive
damages.
E.
EXCEPTIONS
If the claim is one based upon child abuse, the judgment for the total amount of
punitive damages awarded to a claimant may not exceed three times the amount of
compensatory damages.
If any award exceeds the limitation specified above, the award is presumed to be
excessive and the defendant is entitled to remitter of the amount in excess of the
limitation, unless the claimant demonstrates to the court by clear and convincing
evidence that the award is not excessive in light of the facts and circumstances that
were presented to the trier of fact.
You should note that whether the claim involves one of "child abuse" will need to
be considered on a case by case basis and what tort theories are presented by each
claimant. The definition of "child abuse" under the criminal statutes of Florida seems to
cover most tort claims that one could bring. It is also important to note that if a claim
falls under the category of "child abuse", the burden of proof is not "greater weight of
the evidence" when it comes to amounts exceeding the limitation but, rather, clear and
convincing evidence".
EFTA00727536
Epstein Memo re: Punitive Damages
Page 3 of 6
F.
BIFURCATION
State law requires bifurcation of punitive damage issues from the main case and
thus it would be tried separately.
G.
At a minimum we should consider pleading the following affirmative defenses if a
claimant is allowed to plead for punitive damages:
1.
The limitations previously discussed herein;
2.
Bifurcation;
3.
Constitutional (State and Federal) argument such as:
(a)
violation of procedural due process;
(b)
violation of substantive due process;
(c)
violation of equal protection.
4.
Discovery;
(a)
violation of our client's right to privacy;
(b)
violation of the trade secret privilege
H.
The following is the most pertinent section from approved jury instructions which
would be given on punitive damages:
"Punitive damages are warranted if you find by clear
and convincing evidence that (name) was personally
guilty of intentional misconduct or gross negligence.
"Intentional misconduct" means that (name) had actual
knowledge of the wrongfulness of the conduct and the
high probability that injury or damage to (claimant)
would result and, despite that knowledge, intentionally
pursued that course of conduct, resulting in injury or
damage. "Gross negligence" means that the conduct
of (name) was so reckless or wanting in care that it
constituted a conscious disregard or indifference to
the life, safety, or rights of persons exposed to such
conduct".
EFTA00727537
Epstein Memo re: Punitive Damages
Page 4 of 6
"Clear and convincing evidence" differs from the
"greater weight of the evidence" in that it is more
compelling and persuasive. "Greater weight of the
evidence" means the more persuasive and
convincing force and effect of the entire evidence in
the case. In contrast, clear and convincing evidence
is evidence that is precise, explicit, lacking in
confusion, and of such weight that it produces a firm
belief or conviction, without hesitate, about the matter
at issue".
II.
FEDERAL
A.
PLEADING
Claimant can plead for punitive damages immediately without a proffer.
B.
BURDEN OF PROOF
The burden of proof for any Federal claim is a preponderance of the evidence
which is the same as the greater weight of the evidence in State court. If a Federal
lawsuit includes a State claim, punitive damages would be assessed in that claim
according to F.S. 768.72, which we discussed at length under State punitive damages.
In other words, entitlement would be by clear and convincing evidence and amount
would be by the greater weight of the evidence, except in cases of child abuse wherein
the burden of proof on both issues (entitlement and amount) would be clear and
convincing evidence. It is important to note that in those cases which include a RICO
claim, punitive damages would not be allowed since RICO involves the trebling of
compensatory damages, which the courts have ruled as punitive in nature anyway.
Even if there is a State claim included within the Federal lawsuit which also has a RICO
claim, then there can be no award of punitive damages on the State claim.
C.
See discussion under State. Net worth is discoverable. I have seen it limited to
the extent that the defendant was required to provide a one or two page summary of his
net worth broken down into general categories such as real estate, stock holdings, etc.,
etc.
EFTA00727538
Epstein Memo re: Punitive Damages
Page 5 of 6
D.
LIMITATIONS
There are no express statutory or procedural limitations on the amount of a
punitive damages award. However, the Supreme Court of the United States has
indicated that "few awards exceeding a single digit ratio between punitive and
compensatory damages will satisfy due process". The Supreme Court, in a different
case, has set forth three guide posts for courts reviewing punitive damages awards.
They are (1) the degree of reprehensibility of the defendant's conduct; (2) the disparity
between the actual or potential harm suffered by the plaintiff and the punitive damages
award; and (3) the difference between the punitive damages awarded by the jury and
the civil penalties authorized or imposed in comparable cases. The Supreme Court of
the United States has further indicated that a defendant is to be punished for only the
case in front of the court at the time and not for conduct related to other claimants in
other cases.
There are numerous exceptions to the "single digit rule" and it seems to be
related to the reprehensibility of the conduct involved.
In summary, any Federal court is going to look very hard at a punitive damages
award which exceeds the compensatory damages by eight or nine times. However,
there is a possibility that such an award could be sustained.
E.
BIFURCATION
Bifurcation is not automatic by statute or rule. However, one can argue for it
pursuant to
. 42.
F.
See discussion re: state affirmative defenses.
G.
A key section of the pattern jury instructions for the Eleventh Circuit provides as
follows:
When assessing punitive damages you must
be mindful that punitive damages are meant to
punish the Defendant for the specific conduct
that harmed the Plaintiff in the case and for
only that conduct. For example, you cannot
assess punitive damages for the Defendant
being a distasteful individual or business.
EFTA00727539
Epstein Memo re: Punitive Damages
Page 6 of 6
Punitive damages are meant to punish the
Defendant for this conduct only and not for
conduct that occurred at another time. Your
only task is to punish the Defendant for the
actions he took in this particular case.
III.
There are numerous potential mitigating factors with regard to any punitive
damage claim in any case. If there is an award of punitive damages in one of these
cases then there is an argument that our client has already been punished and cannot
be punished again and again and again for the same conduct. The cases do not seem
to favor an argument for mitigation based on the fact that the client has been convicted
of a crime and/or spent time in jail. There are many factual mitigating factors here,
such as the fact that many of these girls lied about their age. Further, many of these
girls returned again and again and again knowing full well what would be asked of
them. There is no evidence that our client ever forced himself on any of them. The list
of other mitigating factors on a factual basis is long. While we might not be allowed to
rely on them as a defense to abuse of a minor, they certainly would be pertinent in the
punitive damage phase of any case.
As I said at the outset, this memo is not intended to be exhaustive and I am sure that
many issues will present themselves which require additional thought and research as
we go through this.
c:
Jeffrey Epstein
Jack Goldberger
EFTA00727540