DS9 Document EFTA00809620

5 7 obviously, what may or nay not be asked of 2 Mr. Edwards and Mr. Epstein principally on 3 these cases or these Issues, the global 4 order of the Court would be that those 5 individual claims would not be subject to 6 discussion as to the merits, as Mr. Scarola 7 has stipulated. However, as it relates to both probable 9 cause, i.e., motive and malice, the number 10 of claims -- that is, speaking in terms of 11 voltme -- that Hr. Epstein was facing at the 12 time that he brought the suit and continued 13 the prosecution of that suit would be 14 relevant. So that's the distinction being 15 drawn by the Court, the detail, the merits, 16 whatever may have been discovered as it 22 related to those cases would not be 38 individually admissible in evidence, or any 20 of those details from those cases. 20 However, as I said, the sheer number of 21 cases nay be relevant, i.e., to tend to 22 prove or disprove a materiel fact as it 22 r 00000 a to probable cause and malice. So 24 that's the decision. 25 Next issue, please. 1 MS. ROCKENBACH: Thank you, Your Honor. She next -- I think based on that 3 rullnq, Your Honor Would preclude the a settlenents of any of the claimants, a including the settlement amounts of the a three that were represented by Hr. Edwards. 7 And in our notion in 11M/60, mo cited o the Florida Evidence Code 90.408, which 9 precludes the admissibility or evidence of 10 offers to compromise or settlements to prove 11 liability or absence of liability. 12 She cases settle all the tine for many 13 different reasons. And I know that value 14 has become an issue in this case of 25 Mr. Edwards' three claimants, but certainly 26 not of any of the other claims that 27 Mr. Epstein may have settled. So that's the 28 first issue. Any other cases that he may 29 have settled are wholly irrelevant and 20 should be precluded. 21 THE COURT: Let me understand. The 22 issue of any settlements outside of the 22 three people, I don't have a problem with in 24 terms of introducing that information. 25 In other words, I don't intend to allow 2 3 4 5 6 0 30 21 21 IS 24 15 16 )7 10 19 20 21 22 23 24 25 HR. SCAROLA: Excuse ma. Hay I also ask for this clarification, Your Honor? Will we be permitted to discuss the fact that Mr. Edwards had taken a leadership role In coordinating the prosecution of all of those claims, that Ls, that it was a -- it was a unified effort on the part of multiple law firms that Hr. Edwards was playing a leadership role, which then led to a basis to focus upon Mr. Edwards because of that leadership role? THE COURT: If that's based on fact, then I believe it would be -- you would be able to introduce that, yes. MR. SCAROLA: Thank you, sir. THE COURT: Because, again, it tends to prove or disprove a material fact, i.e., probable cause, motive, malice. Again, whether or not the jury accepts that -- it's going to be up to the jury to accept it, reject it, give it the weight it deserves, or to infer anything that they reasonably believe would be inferrible as a result of that information. The next issue, please. 6 9 20 21 21 29 24 35 16 17 10 19 20 21 22 23 24 25 that information to be introduced, unless I can be persuaded otherwise. HR. SCAROLA: I don't intend to attempt to persuade you at this point In time. I don't mean to interrupt the Court, but I thought it might abbreviate things. THE COURT: That's fine. MR. SCAROLA: I don't intend to attempt to convince the Court at this point in time that that evidence is admissible. I can, however, foresee that it becomes relevant and material. THE COURT: You are talking about those individuals outside of the three -- HR. SCAROLA: Yes, Your Honor. THE COURT: -- that we have been speaking about at length. HR. SCAROLA: And I am only raising that now, because, although I don't intend to contest admissibility at this point, I foresee the potential that it may be admissible and therefore it should be discoverable. Me should be able to discover what Mr. Epstein's economic active was to attempt 8 Palm Beach Reporting Service, Inc. EFTA00809620 9 11 1 to avoid liability in all of those other • But III pretty sure that some cases 2 cases, because his economic motive in 2 were filed by Mr. Josefsberg. 3 attempting to avoid liability -- not only of 3 THE COURT: Thank you. 4 5 the three cases settled for $S.S million, but for the liability in all of the other 4 Ms. Rockenbach, so as far as the collateral claims are concerned -- by no 6 cases as well -- could become relevant and a means am I minimizing those by using that 7 material, since it's reasonably calculated ' terminology. It's just to distinguish the 8 to load to discoverable evidence. . three cases that aro at the heart of this 9 I would ask -- and this may or may not 3 case as it relates to the malicious 10 bo the appropriate time to address this, but 10 prosecution claim as opposed to those other 11 it relates directly, so I think that it II folks -- those other young woman, in 12 is -- I would ask that Kr. Epstein be 12 particular, who had either brought suit or 13 compelled to respond to discovery with 11 made claims that were paid by Mr. Epstein. 14 regard to each of those sattloments. 24 The ruling of the Court is that I am 25 THE COURT: All right. Do you know how IS going to find at this point -- again, 26 many cases wore actually filed against him 16 subject to further inquiry at a later time 17 for the same or similar activities that wore 1, and whether or not that becomes an issue is 28 alleged by the three individuals hero? IS going to be subject to further scrutiny -- 29 MR. SCAROLA: Right now I would only bo 19 but I'm going to find that that information 20 guessing, Your Honor. 20 would be discoverable, i.o., what was the II THE COURT: I know Kr. Kuvin had 2: total amount of payments made by 22 several, if my memory is correct, in my 22 Mr. Epstein? 29 division. 23 At this point I am withholding fly 24 MR. SCAROLA: Sid Carcia had a number IA ruling -- or deferring ruling on 25 that he was prosecuting as well. There II admissibility, just for the record -- 10 12 I were -- I think it was close to 20. I think 1 because you all aro far bettor aware of the 2 there were approximately 20. I think wo 2 standard than I -- but the standard being 9 have listed each of the case numbers. 2 because discovery is broader than what may 4 THE COURT: I won't hold you to the 4 bo admissible at trial, the total amount 5 exact number. It is really for anecdotal h paid, again, goes back to that place in tiro 4 information. 4 when Mr. Epstein would have brought this 7 MR. SCAROLA: I think it was about 20. a lawsuit at or near the time or 0 Also, there were a substantial number 0 Mr. Rothstein's arrest' at or near the Ciao 9 of additional victims with whom settlements 8 or rederal and perhaps state agents raiding 20 were negotiated in the context of the 20 the offices or the rim; at or near the tiro 2I non-prosecution agreement. Those wore all 21 or those cases reaching a crescendo as far 22 of the victims that wore represented by as as discovery was transpired; and then 29 Mr. Josefsberg. es ultimately -- at least these three cases -- 24 THE COURT: So they were claims that OA settling loss than a year thereafter, as I 25 wore settled without the formal filing of a oh recall. You can correct ma if I am wrong. 16 lawsuit? Is that what you aro suggesting? 16 So the motive, malicious, probable 17 MR. SCAROLA: I think that 07 cause issues that we have talked about at 18 Mr. Josefsberg nay have filed some lawsuits, II length in the past, again, because of the 19 but I believe he also settled some claims LI nature of discovery Doing broader than what 20 under the terms of the non-prosecution CO may be admissible at trial, I an going to 21 agreement simply by asserting the claims el require that Information bo provided, so . 22 under the federal statute and coming to an SI deferring as to its admissibility. 23 agrooment with regard to how those were to 23 Any confidentiality matters that may 24 be resolved without the necessity of filing MB have attached to those settlement offers -- 25 formal legal proceedings. MI strike that -- to those settlement payments Palm Beach Reporting Service, Inc. EFTA00809621 13 15 2 4 5 6 7 8 9 10 11 12 13 14 as 96 27 28 29 20 22 22 29 24 25 would also have to be discussed at Saga time. Section 90.408, for the record, states, though, •Evidence of an offer to compromise a claim which was disputed as t0 validity or amount, as well as any relevant Conduct or statements made In negotiations concerning a compromise, is inadmissible to prove liability or absence of liability for the claim or its value. End quote. So this is concerning, obviously, In light of the statute, as to not only the global settlement number that may be involved, but also as it relates to the three individuals. Now, that's not squarely before mo today. And I would rather be able tO deal with that at SORB Other time so that it's fully briefed and we know where w0 are going on this, because Mr. Scarola has his own rationale for insisting that the 55.5 million figure associated between the three individuals involve directly here would, in his view, be admissible. Mr. Epstein largely hanging his hat on clarification, please? 2 THE COURT: Sure. Of course. 3 MR. LINK: Judge, I think I heard you a say that we are required to produce, on Mr. Scarola's ore tenus motion, the settlement agreements. THE COURT: No, I didn't say settlement agreements. I said the gross settlement 9 amount. 10 HR. LINK: Gross amount. 11 Your Honor, for further clarification, 12 would that amount only include those 13 settlements that took place on or after the 14 date that Mr. Epstein filed his Complaint? 25 If you look at their argument, the 26 exposure that still existed is what they 27 believe helps them show motive or malice. 28 Anything settled beforehand, obviously, had 29 been taken care of and should not fit within 20 the description that they gave the Court. 22 THE COURT: Mr. Scarola, your position 22 on that? 29 MR. SCAROLA: First, Your Honor, I'm 24 not sure we're arguing over any practical 25 significance because I don't think any of 2 5 8 6 20 21 22 29 24 Is 16 )7 18 19 20 21 22 23 24 25 14 Section 90.408 takes a different view. Similar t0 the hearsay rule, there aro noted and notable exceptions to 90.408, meaning that, in the hearsay context, if the information is not being used to prove the truth of the matter asserted, there aro other ways in order to get that information in. Similarly, I am at least generically aware that there have boon exceptions that have boon stated under the law to 90.408. So again, I would prefer to talk about them at a later time. So I think that, Ms. Rockenbach, what I would suggest you do is separate out, as part of the motion in ',rano -- my apologies -- if it is, I would ask simply to separate it out and set It for a half-hour special set hearing and we will take it up at another time. I would rather get into, now, these issues of Fifth Amendment privilege that have been scheduled. HS. ROCKEHBACH: Yes, Your Honor. Thank you. HR. LINK: Your Honor, may I make ono 2 9 20 ii 22 29 24 is 16 17 10 19 20 21 22 23 THE COURT: Ne no longer need to use 24 the term alleged in terms of the misconduct 25 at RRA. 16 the cases settled before this lawsuit -- the malicious prosecution claim -- was filed. MR. LINK: They did in fact, Your honor. MR. SCAROLA: Well, I stand corrected, then. But at any rate, we respectfully should get discovery that may be admissible with regard to the extent to which these claims wore, quote, ginned up, unquote, as a consequence of anything that Hr. Edwards did. And what we have hoard repeatedly la, we're talking about things Mr. Edwards did while he was at Rothstein, Rosonfeldt Adler. So settlement of claims before then as compared to settlement of Clain/5 after that, and settlement of claims following the disclosure of the alleged misconduct at RRA, would be at least discoverable with regard tO ashother these claims were somehow ginned Palm Beach Reporting Service, Inc. EFTA00809622 17 19 2 3 6 8 10 11 12 13 14 25 26 23 28 19 20 22 22 22 24 25 MR. SCAROLA: I was referring to -- THE COURT: There was misconduct at RRA. MR. SCAROLA: -- Mr. Edwards. THE COURT: Whether there was misconduct on behalf of Kr. Edwards, that is, in fact, still a matter of allegation. MR. SCAROLA: Yes, air. And that's the only misconduct I was referring to. THE COURT: Absolutely. I aurae with Mr. Scarola, not only as to his argument, but also as it related to Mr. Epstein's state of mind, i.a., probable cause to bring this claim in the first place. It can be argued -- and I expect you to argue that -- that being Mr. Mr. Link and Ms. Rockenbach and his other counsel -- that he clearly had probable cause to bring these claims. On the other hand, an argument -- a piece of the argument that will be made on behalf or Mr. Epstein is that he was looking at this In a vengeful fashion, that he was looking at this as a way to get back at 10 11 12 13 14 25 26 21 28 29 20 21 22 22 24 25 MR. SCAROLA: May we get a breakdown as to -- because of the argument that•a bean made and Your Honor's comments -- the number of cases settled prior to the filing of the malicious prosecution claim against Mr. Edwards, that total grossi than the number of cases settled while at -- while Mr. Edwards was at RRA, that gross; the number of the cases settled post RRA's Implosion and that gross? THE COURT: Mr. Link or Ms. Rockenbach? MR. LINK: Judge, I think that -- as I said, I don't want to dispute the Court's ruling, but now breaking it down into segments has a whole different potential relevance. It's no longer discovery. We aro looking at, then, finding individual folks who may have resolved their cases, where if we give you a gross number -- if I understand Mr. Scarola'a argument -- It's the gross exposure that was hanging over Mr. Epataln's head that caused him to do this. THE COURT: That's precisely the word I was going to use, and that's the reason 1 2 a 5 • 9 20 Alb 29 24 25 18 Edwards for not only his pecuniary lost, but some or the other things that we have discussed as lc relates to motive, i.e., probable cause, 1.o., malice. So that's the reason behind the Court's ruling that the global sett loran amount nay be potentially admissible or discoverable, in my view certainly. Because, again, the issue or relevancy is ouch of a broader discussion and much more or a broader viol. on to part or the appellate courts as it r aaaaa a to admissibility.. So :or row. that's the ruling of the Court. MR. LINK: I understand that. We want 16 to comply with the Court's order. Two 17 18 19 20 21 22 23 24 23 things. One, you're asking us to provide a gross number of the total amount of settlements, correct? And we ask the Court that that number be subject to confidentiality. Wo aro disclosing confidant ial Stitt lament amounts -- THE COURT: That would be for, at this point,. Counsel and his client's eyes only, and shall not be disclosed. 9 20 II 22 29 24 20 20 behind the Court's ruling, is that the issue of exposure is one that. In my respectful view, would be the relevancy of potentially admitting that information. MR. SCAROLA: And knowledge of Mr. Epataln's exposure would clearly be based upon what he had to pay even before he filed the lawsuit. I had to pay x number of dollars and I'm really mad at Bradley Edwards now for the role he has played in causing ma to expend that much money so far. I'm going to put a stop to this. I'm going to sue Edwards and scare off everybody else. THE COURT: Again, for discovery purposes only at this point, I'm going to require, then, simply a breakdown of what was paid prior to December 9th, 2009. Happy anniversary 1n two days: the girt that keeps on giving. MR. SCAROLA: Actually, apparently 21 today is the anniversary day. Pearl Harbor. 22 Sneak attack. 23 MR. LINK: Justified filing. We can 24 sit out hare and hurdle things to the court 25 rep , Your Honor. Palm Beach Reporting Service, Inc. EFTA00809623 21 23 1 THE COURT: We have boon speaking with 2 smiles on our faces, knowing that despite 3 the seriousness of everything that has gone 4 on here, the attorneys and the Court, at 5 least, can have moments of brevity that is 6 not disrespectful to any of the litigants or 7 any of those who may have been subject to the prior cases. I want to make clear that 9 that is In fact the case in this brief 10 =mane. 11 I think that I as at least reasonable♦ 12 convinced that any prior settlenents thole 13 wore made within a two-year period of. 14 December 7th. 2009 -- and then chat would to as broken down. And then anything paid after would be broken do'w'n. 27 : chink it's a relatively sine,e exorcise that won't cause any typo of if overburden or onerous type of requirement qg 20 the part of Mr. Epstein and/or his prior OM counsel. 22 HR. LINK: Ka understand the Court's 29 ruling. Thank you, edge. 24 THE COURT: Thank you, again. And IS that's the reason behind the ruling that en 10 11 12 13 14 25 26 27 20 29 20 21 22 29 24 25 THE COURT: Thank you. All right, let's get to, now, the Fifth Amendment issues, if we could please. I have gone through the materials. Thank you, particularly to Mr. Se aaaaa and his office for culling these out and -- pursuant to the court order -- which I have never had a situation in the many years I have been doing this that Mr. Scarola -- for that matter, Ma. Rockenbach -- to a lessor degree, to the extent that Mr. Link has not appeared before and that often -- to over knowingly transgress the Court's order. In any event, I commend them for doing what they have done to cull this out. So my thinking is -- I think I asked that both of you try to get together and see if there's any cannon ground here to avoid the Court's involvement. Have there boon any agreements with respect to any of these questions and answers? HR. SCAROLA: We have been told every one is challenged, your Honor. And if I might make a preliminary e a • :0 II 22 23 24 25 al 17 Is 19 20 21 22 23 24 25 22 in fact, the nail was hit on the head by Mr. Link, is ono of mindset of Mr. Epstein going to, again, what may be reasonably calculated to load to the discovery of admissible evidence, and that is, relating co issues of probable cause and nalico as ic pertains to the potential total exposure, the bast -- a consideration or best evidence, not so much under the rule -- What I'm saying is, a way co portray that mindset would be one of the exposure Mr. Epstein faced, not only at the tine, but potentially in the future so-called proof of the pudding axiom that ultimately resulted in the amount of money that was paid. MR. LINK: Your Honor, should we prepare an order on that to include the attorneys'-eyes-only confidentiality ruling? HR. SCAROLA: Attorneys and client. THE COURT: Attorneys' and clients' eyes only, not to be disclosed in any fashion outside of this litigation. MR. LINK: Actually, Mr. Edwards is one of hie own attorneys, isn't he? MR. SCAROLA: He is. yes. 2 :0 II 22 23 14 36 16 17 10 19 20 21 22 23 24 25 State'bent. THE COURT: Ms. Rockenbach you may as well. 24 HR. SCAROLA: Your Honor, the defense has cited case law that an element of a civil claim may not be proved based solely upon the inference that arises from the assertion of the Fifth Amendment. NO agree. That is not a point of contention. The defense has also asked for a jury instruction to be given at the time that the Fifth Amendment, I assume, is initially asserted in the jury's presence by Mr. Epstein -- in all likelihood through playing excerpts of his deposition -- his videotaped depositions -- and we have no objection to that. I think that both sides can get together and fashion an appropriate jury instruction that informs the jury that while In the context of a criminal case, an individual's assertion of a Fifth Amendment right may not be used against him. In the context of a civil case, an adverse inference may be drawn from the Palm Beach Reporting Service, Inc. EFTA00809624