EFTA01166186.pdf

1 1 IN THE CIRCUIT COURT OF THE 15th JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA 2 CASE NO. 502009CA040800XXXXMBAG 3 4 JEFFREY EPSTEIN, 5 Plaintiff, 6 -vs- 7 SCOTT ROTHSTEIN, individually, and BRADLEY J. EDWARDS, individually, 8 Defendants. 9 10 11 12 TRANSCRIPT OF HEARING 13 PROCEEDINGS 14 15 DATE TAKEN: Monday, January 27, 2014 TIME: 3:00 p.m. - 4:23 p.m. 16 PLACE: Palm Beach County Courthouse 205 N. Dixie Highway 17 Courtroom 9C West Palm Beach, FL 33401 18 BEFORE: Donald Hafele, Circuit Judge 19 20 21 22 This cause came on to be heard at the time and place 23 aforesaid, when and where the following proceedings were stenographically reported by: 24 Robyn Maxwell, RPR, FPR, CLR 25 Realtime Systems Administrator EFTA01166186  2 1 APPEARANCES: 2 3 On behalf of the Plaintiff: W. CHESTER BREWER, JR., P.A. 4 250 South Australian Avenue Suite 1400 5 West Palm Beach, FL 33401 6 BY: W. CHESTER BREWER, JR., ESQUIRE 7 8 ATTERBURY, GOLDBERGER & WEISS, PA 250 South Australian Avenue 9 Suite 1400 FL 33401 10 BY: JACK A. GOLDBERGER, ESQUIRE 11 12 TONJA HADDAD, PA 13 315 SE 7th Street Suite 301 14 Fort Lauderdale, FL 33301 MEMEMMEMOMMill 15 BY: TONJA HADDAD COLEMAN, ESQUIRE 16 17 On behalf of Bradley J. Edwards: 18 SEARCY, DENNEY, SCAROLA, BARNHART & SHIPLEY, P.A. 2139 Palm Beach Lakes Boulevard 19 West Palm Beach, FL 33409 20 BY: JACK SCAROLA, ESQUIRE JSX@searcylaw.com 21 BY: WILLIAM B. KING, ESQUIRE Wbk@searcylaw.com 22 23 24 25 EFTA01166187  3 1 Thereupon, 2 the following proceedings began at 3:00 p.m.: 3 THE COURT: Good afternoon, everybody. 4 Thank you so much. Have a seat. Welcome. 5 MR. BREWER: Good afternoon, Your Honor. 6 THE COURT: I had the opportunity to read 7 the binder and the materials sent to me by 8 respective counsel. I don't think the case should 9 take two hours. 10 MR. BREWER: No. 11 THE COURT: So what I'm going to ask you to 12 do is kindly tailor your arguments to one-half 13 hour apiece. And the movant may split up the time 14 to save some moments for rebuttal. And I think 15 that should more than adequately deal with the 16 matter. 17 I think the United States Supreme Court 18 heard the Brown vs. Board Of Education and gave 19 20 minutes a side. So if that can be done in that 20 amount of time, I think we can take care of this. 21 And, of course, you all realize -- and I 22 don't think this has anything whatsoever to do 23 with the matter, but I should let you know that I 24 handled the state claims that involved Mr. Epstein 25 when I was in Division B. So I have a significant EFTA01166188  4 1 amount of familiarity with the claims that were 2 made. However, until I met with Judge Crow 3 involving this case, I had no knowledge whatsoever 4 that a separate and independent action had been 5 brought by Mr. Epstein against the Rothstein 6 entities and Mr. Edwards. So to that extent, I 7 just to want let you know, as you probably already 8 did already know, that I handled those cases I 9 believe to their conclusion, at or near the time 10 that I left that division two years ago or so. 11 Okay. So are you Ms. Haddad? 12 MS. HADDAD: I am. 13 THE COURT: Will you be arguing on behalf 14 Mr. Epstein? 15 MS. HADDAD: No, Judge. I don't have -- 16 Mr. Brewer will be arguing on our behalf because, 17 as you can hear, I have a cold. 18 THE COURT: All right. 19 Mr. Scarola, did you want to say something? 20 MR. SCAROLA: I did, Your Honor. I just 21 wanted to clarify one matter which I believe to be 22 of some significance. 23 THE COURT: Sure. Of course. 24 MR. SCAROLA: And that is Your Honor 25 referenced a claim against the Rothstein entities EFTA01166189  5 1 and that is not the case. 2 THE COURT: It was just Rothstein 3 individually? 4 MR. SCAROLA: It was just against 5 Mr. Rothstein individually. That claim has never 6 really been defended and -- against Mr. Edwards. 7 And the focus of these motions is only on 8 Mr. Edwards' claims for abuse of process and 9 malicious prosecution. 10 THE COURT: The later I knew. My apologies 11 for misstating the number of defendants involved. 12 MR. SCAROLA: No apology necessary, sir. 13 THE COURT: The only defendants involved 14 and they may have been voluntarily dismissed 15 without prejudice; is that accurate? 16 MR. SCAROLA: There was a voluntary 17 dismissal of the initial claims brought against 18 Mr. Edwards, that's correct, sir, on the eve of 19 summary judgment hearing. 20 THE COURT: I remember that being written 21 in your papers. 22 MR. SCAROLA: Yes, sir. 23 THE COURT: So is Epstein's claim against 24 Rothstein still viable at this juncture? 25 MS. HADDAD: Yes, Your Honor, it is. EFTA01166190  6 1 THE COURT: So the dismissed case without 2 prejudice was to -- was as to Mr. Edwards only. 3 MR. SCAROLA: The claims against LM, one of 4 victims of Mr. Epstein's conduct, those claims are 5 also dismissed. 6 THE COURT: Okay. Thank you for that 7 clarification. I much appreciate it. 8 Mr. Brewer. 9 MR. BREWER: Yes, sir. Well, first of all, 10 Your Honor, I'm Chester Brewer appearing on behalf 11 of Jeffrey Epstein. 12 We have before you today a motion for 13 summary judgment filed on behalf Mr. Epstein with 14 regard to a counterclaim that was filed by 15 Mr. Edwards. The case is currently set before 16 Your Honor, specially set I might say, for a 17 three-week or proposed three-week trial, and it is 18 currently set for May the 6th of this year. 19 One thing that I did want to talk to the 20 Court about before going into the procedural 21 history is in the package that was provided to you 22 by counsel for Mr. Edwards there is a statement or 23 interview that is with a young lady by the name of 24 Now, I don't know whether you 25 have had an opportunity to read it or not. EFTA01166191  7 1 THE COURT: I didn't. I saw the reference 2 to Ms. Roberts. Who is she? 3 MR. BREWER: Ms. Roberts was an alleged 4 victim of Mr. Epstein. There was an interview 5 taken of her by Mr. Scarola and I believe 6 Mr. Edwards. There's a transcript of that 7 interview which is neither sworn to nor even 8 signed. It's something that could not be used for 9 any purpose in the trial of this matter, even for 10 impeachment. So if Your Honor has not read it, I 11 won't go into it. 12 THE COURT: No, I have not read it. I just 13 saw the name bandied about on 14 several different occasions, so that's all I know. 15 And as you can tell, I didn't know her 16 relationship to the case. 17 MR. BREWER: Okay. Your Honor, the 18 procedural history here is there were a number of 19 claims brought by alleged victims of Mr. Epstein. 20 There were a number of different attorneys that 21 were involved. And a number of different cases 22 were filed both in federal court and in state 23 court on behalf of these alleged victims. The 24 cases proceeded, as you've said, some of them were 25 before you. They have all now -- per my EFTA01166192  8 1 information, they have now all concluded although 2 there may still be some investigations. 3 THE COURT: Mr. Edwards at his latest 4 deposition indicated that there's still the 5 victim's case that's going on in the federal 6 court. 7 MR. BREWER: Nothing has happened on that 8 for a quite some period of time now. 9 The -- 10 MR. KING: Judge, if I may, in response to 11 your question. I'm not sure what victim's case 12 that's referencing. All -- all of the cases -- 13 THE COURT: This was a federal statutory -- 14 MR. KING: I -- 15 THE COURT: -- that Mr. Edwards indicates 16 he's doing pro bono on behalf of two of the 17 alleged victims. 18 MR. KING: You're correct. 19 THE COURT: In the Epstein matters. 20 MR. KING: That's correct. Sorry for the 21 interruption. 22 THE COURT: That's okay. 23 MR. BREWER: During the course of those 24 cases, there was some rather unusual discovery 25 that was taking place. And it was learned, and I EFTA01166193  9 1 I'll get into this towards the end of my 2 presentation, but there were a number of things 3 that were learned by Mr. Epstein in and around 4 November of 2009 -- November/December 2009. He 5 filed a lawsuit against Mr. Rothstein, 6 Mr. Edwards, and LM who is one of the alleged 7 victims. One of the counts in that was for 8 malicious -- I believe it's -- he only had abuse 9 of process along with some other counts. 10 In response to that complaint, Mr. Scarola 11 on behalf of Mr. Edwards filed a counterclaim. 12 That counterclaim went through several amendments, 13 but the fourth amended counterclaim speaks to two 14 causes of action; that is abuse of process and 15 malicious prosecution. So those are what we're 16 here to talk about today, is abuse of process and 17 malicious prosecution as it relates to 18 Mr. Epstein's original claim against Mr. Edwards. 19 In response to Mr. Edwards' counterclaim, 20 there were a number of affirmative defenses 21 raised, but one of them that was raised was the 22 litigation privilege. And we are here today to 23 talk with you about the litigation privilege and 24 its current state as espoused by the Florida 25 Supreme Court and the Third District Court Of EFTA01166194  10 1 Appeals and, in fact, the Fourth District Court Of 2 Appeals. 3 THE COURT: One thing I wanted to interrupt 4 you on is this Wolfe case and its current status 5 and the -- I'll call the -- I'll call it the 6 Edwards side to make things be easier. But the 7 Edwards side has raised the issue that apparently 8 this Wolfe case is still in rehearing and 9 therefore of no precedential value to the court. 10 Mr. King, did you want to speak briefly to 11 that? 12 MR. KING: Yeah. We submitted a notice of 13 correction to Judge Sasser the other day who stood 14 in for you on the page extension. 15 THE COURT: Right. 16 MR. KING: We gave her that and asked her 17 to turn that over to you. 18 THE COURT: I didn't get it. 19 MR. KING: Okay. What's actually happened 20 is -- and it's confusing because Westlaw's whole 21 history on this, and Mr. Brewer also understands 22 this because he ran into the same problem. 23 My reading of the history that Westlaw 24 contains indicates that the mandate has issued but 25 they still use the caveat "this is a Westlaw EFTA01166195  11 1 citation only, it's not in the final published 2 format, and therefore it can be changed at any 3 time." But with the issuance of the mandate, that 4 signifies that it is -- the rehearing is denied 5 and it is now final. 6 THE COURT: Okay. Thank you for that. I 7 did not know that until right now. 8 MR. BREWER: So let's get into the Wolfe 9 case. That's where we're headed next. And really 10 there's a trilogy of cases. There's the Levin 11 case, the Echevarria case, if I'm somewhere close 12 to pronouncing that correctly, and the Wolfe case. 13 All of them deal with litigation privilege which 14 dates back to 1917. And I think that we are all 15 most familiar with the standard that defamation 16 cases, if the, quote, alleged defamation occurred 17 during the course of a judicial proceeding would 18 be protected by the litigation privilege and no 19 action could be taken on them. 20 Over the years different courts looked at 21 it. There was an attempt -- there were attempts 22 made to determine how far and to which causes of 23 action the litigation privilege would apply. 24 The seminal case now for us, I guess, now 25 is Levin. This was Levin, Mabie suing. It was EFTA01166196  12 1 actually a tortious interference case. But the 2 case went up to the Florida Supreme Court. And 3 the issue before them was how far is this 4 privilege or to what causes of action should this 5 privilege apply? 6 And the Levin court came out and said that 7 it would apply to all torts, including the one 8 that was before them which was tortious 9 interference. And that the standard for 10 determining whether the action complained of would 11 be whether that action had some relation to the 12 proceeding, the judicial preceding. 13 Later on the question came up, Well, should 14 that -- it's the -- we've already determined that 15 it applies to all torts. And so, does it also 16 apply to statutory violations or cases involving 17 statutory violations? And that's the Echevarria 18 case, also in front of the Florida Supreme Court, 19 some 13 or 14 years after Levin, and they found, 20 yes, that it does apply to, essentially, all civil 21 judicial proceedings. 22 Now, the issues before us are the 23 litigation privilege as it applies to abuse of 24 process and malicious prosecution. That was all 25 brought to a head in the Wolfe case. In the Wolfe EFTA01166197  13 1 case, the Third District Court Of Appeal was faced 2 with the issue of do the -- does the litigation 3 privilege apply in those two causes of action. 4 The answer was yes. The Wolfe case or the 5 Wolfe court went back and essentially referred 6 back to and analyzed the Levin and Echevarria 7 cases. And that's why I say it's kind of a 8 trilogy. 9 And in the Wolfe case it was determined 10 that this was not -- not only was it privileged 11 for any actions that were related to the judicial 12 process, it was an absolute privilege. 13 Now, in our case, we have exactly the same 14 issue. We've got a complaint that was filed that 15 is alleged in the counterclaim to be malicious 16 prosecution. We also have the pleadings, 17 everything that was filed after the initiation of 18 the judicial pleading -- judicial process. It's 19 claimed to be an abuse of process. 20 In fact, in answers to interrogatories and 21 all of the discovery that has been had from the 22 Edwards side, they have said that the filing of 23 the complaint was in itself it was untrue, the 24 information that was there was untrue; Epstein 25 should have known it was untrue, and that he had a EFTA01166198  14 1 bad purpose in filing which was to intimidate or 2 extort Mr. Edwards and his client. 3 That's been put to bed in the Wolfe case 4 because the litigation privilege absolutely 5 applies and is absolute. The Wolfe case states 6 that they could think -- or the Wolfe court stated 7 they could think of no action that would be more 8 related to the judicial process than the filing of 9 a complaint. So a complaint, the filing of the 10 complaint is privileged. 11 Then going back, and then as they related 12 to the Levin case and the Echevarria case, they 13 said anything that was related to the judicial 14 process -- discovery, depositions, 15 interrogatories -- as long as they were related, 16 they were protected by -- the participants were 17 protected by the litigation privilege. 18 They -- in the trilogy, and I forget which 19 one of the cases it was, but they go even further 20 and clarify that the claim "a bad motive" is 21 really irrelevant to these causes of action when 22 you were talking about the litigation privilege. 23 The -- let me see, where am I here? 24 In the Wolfe case it was a motion for 25 judgment on the pleadings. In some of these other EFTA01166199  15 1 cases it was motion for summary judgment. And in 2 all of these cases they found that the litigation 3 privilege barred the causes of action that were 4 being claimed. 5 The argument has been made by the other 6 sides that because Mr. Edwards -- or, excuse me, 7 because Mr. Epstein had no reason to file the 8 original complaint that he filed, that somehow or 9 another the litigation privilege should not apply. 10 And that because he shouldn't have filed the 11 original complaint, everything that he did 12 thereafter was an abuse of process. 13 We would put it to Your Honor that's not 14 the standard as espoused by the Third District 15 Court Of Appeal, the Fourth District Court Of 16 Appeal, or the Florida Supreme Court. The 17 standard is: Did the action have some relation to 18 the judicial proceeding? 19 THE COURT: I think at least in trying to 20 distinguish Wolfe, but at the same time taking a 21 more global approach, the Edwards' side is 22 suggesting that timing and the length of time 23 subsequent to the settlement of the pending claims 24 and his continuing to prosecute the suit more so 25 on the malicious prosecution side would distance EFTA01166200  16 1 itself from Wolfe, because in Wolfe I believe the 2 court made clear that it was a brief prosecution 3 of the action and was not protracted. How do you 4 respond to that concern? 5 MR. BREWER: I respond by quoting the 6 Florida Supreme Court, which is: If the action -- 7 and whether they're talking one action, 20 actions 8 or 40 actions, if the action is related to the 9 judicial preceding, then you have a litigation 10 privilege. 11 THE COURT: And that can go on essentially 12 forever in your mind? 13 MR. BREWER: I don't know that it can go on 14 forever because also they were talking, 15 particularly in the Levin case, about protections 16 that would be afforded to litigants. But those 17 protections would not be through a cause of action 18 for malicious prosecution or abuse of process; 19 rather, it would be through the court with 20 contempt proceedings, perhaps. It would be 21 through the Florida Bar for, you know, 22 inappropriate actions taken by an attorney. It 23 could be perjury for a litigant which would be 24 handled by the state. 25 THE COURT: I don't think perjury. Not if EFTA01166201  17 1 it's guised in the litigation privilege, but 2 perhaps you're right that it could be met with 3 57.105 standards. 4 MR. BREWER: 57.105 was the one I was just 5 getting ready to get to, Your Honor. So there are 6 protections against what you're talking about, but 7 again, I have to go back to what did the Supreme 8 Court tell us. 9 I did want to touch also on another point 10 that was raised in our motion, which is that the 11 Complaint, at least insofar as malicious 12 prosecution, has to fail because there is probable 13 cause demonstrated for Mr. Epstein to have filed 14 or at least have reason to believe that he could 15 file -- properly file the claim that he -- that he 16 did file. 17 THE COURT: Is probable cause always a 18 legal -- purely legal determination? 19 MR. BREWER: No. No. If there are 20 questions of fact that are involved with the 21 probable cause, the questions of fact are for the 22 determination of the jury. The jury -- the judge 23 then takes those determinations of the jury to 24 make a finding of probable cause. But it is in 25 the -- at the end of the day the court -- the EFTA01166202  18 1 issue of probable cause is a matter of law for 2 determination by the court. 3 But the threshold for establishing probable 4 cause in a civil action is really rather low. 5 Because it is whether the defendant could have 6 reasonable -- what the -- what the defendant could 7 have reasonably believed at the time of asserting 8 the claim. 9 So I want to go briefly through what 10 Mr. Epstein knew or was available to him at the 11 time November/December of 2009. 12 First, undisputed, Mr. Edwards was a 13 partner at the Rothstein firm. It's also 14 undisputed and it had been admitted by 15 Mr. Rothstein that this firm was the front for one 16 of the largest Ponzi schemes in Florida history. 17 At the time, Mr. Edwards was the lead attorney for 18 three cases that were being brought by the 19 Rothstein firm against Mr. Epstein. 20 During the litigation there were numerous 21 discovery attempts which appeared to be unrelated 22 to those; and that was trying to get flight 23 manifests, take depositions of people who may have 24 been on flights on Mr. Epstein's planes, some 25 very, very prominent names. And these things were EFTA01166203  19 1 escalating during that time period. And it was 2 very, very strange. 3 In late November of 2009 there was an 4 explanation as to why those things were going on. 5 And the Rothstein firm imploded. And there was a 6 complaint that was brought by Bill Scherer I 7 believe down -- I don't know if it was Broward 8 County or Dade County. 9 THE COURT: Yeah, I'm familiar with all 10 that. 11 I remember that day. Do you remember that 12 day, Mr. Edwards? 13 MR. EDWARDS: I remember it like yesterday. 14 MR. BREWER: In any event, he filed a 15 complaint on behalf of a group of investors that 16 we refer to as Razorback. And if I can find it. 17 Here we go. One of allegations in the complaint 18 in Razorback was, additionally, "Rothstein used 19 RRA's representation in the Epstein case to pursue 20 issues and evidence unrelated to the underlying 21 litigation but which was potentially beneficial to 22 lure investors into the Ponzi scheme." 23 THE COURT: You -- five out of the six of 24 you know me very well, and I always am very 25 receptive to argument. You guys know that. The EFTA01166204  20 1 only one is Ms. Haddad. I think -- I'm not sure 2 if we met before. But I just feel like the 3 probable cause aspect just carries with it too 4 many factual issues for me to rule as a matter of 5 law, so I don't think that I can grant relief on 6 the probable cause issue vel non. So if you will, 7 please move on to 8 MR. BREWER: On that note, because I was 9 I will close. 10 THE COURT: Okay. Thank you very much, 11 Mr. Brewer. 12 MR. BREWER: No, I will close by -- 13 THE COURT: On that issue? 14 MR. BREWER: I will close on that issue. 15 THE COURT: Very well. 16 MR. BREWER: But I would like to close by 17 quoting a very prominent attorney. 18 THE COURT: Sounds like a plan. 19 MR. BREWER: This is something that was 20 before Judge Crow. 21 And it begins out of the attorney saying, 22 "Tab 4, Levin vs. Middle -- Levin vs. Middlebrook 23 is the Tab No. 18?" 24 Judge Crow says, "I read it a thousand 25 times." EFTA01166205  21 1 The attorneys says, "Yes, sir, I'm sure you 2 have." 3 "THE COURT: You have to give it to me 4 again, though." 5 ATTORNEY: "I will be happy to do that." 6 "THE COURT: This deals with the litigation 7 privilege?" 8 The attorney then goes on to say, "Yes, 9 sir, it does deal with litigation privilege. 10 Echevarria also deals with the litigation 11 privilege. Delmonico stands for the proposition 12 that the issues with regard to privilege are some 13 issues of law for the court to determine. And I 14 provided Your Honor with highlighted copies. I'm 15 providing opposing counsel with highlighted copies 16 as well. 17 "THE COURT: Okay." 18 THE ATTORNEY: "Basic point here, Your 19 Honor, is that the litigation privilege is an 20 absolute privilege. Once it is established that 21 the actions occur within the course and scope of 22 the litigation, the privilege applies absolutely 23 as a matter of public policy. 24 "The basis of those decisions, that if 25 there's misconduct in the course of litigation -- EFTA01166206  22 1 if you're talking about improper discovery, if 2 you're filing improper motions -- there are 3 remedies that are available to the court through 4 the court's inherent power to control its own 5 litigation; through the contempt powers of the 6 court through Florida Statute 57.105, and through 7 the filing of bar grievances. And it will cripple 8 the system if litigants are obligated to respond 9 to separate litigation just because somebody has 10 alleged you noticed the deposition that shouldn't 11 have been noticed. You filed a motion that 12 shouldn't have been filed." 13 That prominent attorney is Mr. Scarola. 14 THE COURT: In an unrelated case? 15 MR. BREWER: In this case. In this case 16 when they were arguing that Mr. Edwards was 17 entitled to the litigation privilege with regard 18 to Mr. Epstein's complaint. 19 THE COURT: Okay. Who -- 20 Off the record for a minute. 21 (Discussion off the record.) 22 THE COURT: Okay. Mr. King, please. 23 MR. KING: Thank, Your Honor. William King 24 and Jack Scarola, Your Honor, for Mr. Edwards who 25 is seated with us at the table. EFTA01166207  23 1 May it please the Court. 2 THE COURT: Please. 3 MR. KING: In light of the Court's ruling 4 on the probable cause issue, I am not going to get 5 into all of the facts with which we did not have 6 an opportunity to identify in detail. I'll simply 7 say to the Court that there still exists the issue 8 of the bona fide determination they have not 9 raised here today. And so, the submission of the 10 facts that we have submitted, that we've prepared 11 for you, would bear on that unless they have -- 12 likewise, because of factual disputes, they're 13 basically taking the position that is no longer -- 14 that's no longer an issue either for purposes of 15 this summary judgment. 16 Pursuant -- 17 THE COURT: Let me stop you, Mr. King, so 18 that you're not confused by my preliminary 19 statements to Mr. Brewer. And that is, that the 20 global issue that's covered by, as Mr. Brewer puts 21 it, the trilogy of cases, the Levin, Echevarria, 22 and now this Wolfe case is not being disposed of 23 or is not being ceded by Mr. Brewer here. They're 24 still claiming that both counts are covered by the 25 Wolfe, Levin, and Echevarria cases. EFTA01166208  24 1 My statement is only if, in fact, those 2 cases are, and now the Wolfe case which is now, in 3 my view, on point relative to both abuse of 4 process and malicious prosecution claims globally, 5 if that case for some reason doesn't cover that, 6 then the elements of the malicious prosecution 7 claim are off the table. In other words, I would 8 not grant the motion because of at least those two 9 reasons; that is that I believe that there are 10 questions of fact related to the probable cause 11 issue, as well as the bona fide determination 12 issue additionally. 13 MR. KING: And I understand the Court's 14 ruling in that regard. 15 THE COURT: Okay. 16 MR. KING: My only point was they raised in 17 their initial brief an issue of whether there was 18 a bona fide termination. That, likewise, is very 19 fact specific. 20 THE COURT: I agree and that's why I want 21 to make clear that that standing alone, the 22 elements of the malicious prosecution claim as 23 opposed to the abuse of process claim, which I 24 will handle separately, will not muster in summary 25 judgment in my view. EFTA01166209  25 1 MR. KING: Thank you. 2 Then let me focus, then, on the litigation 3 privilege, Judge, since that's the key issue that 4 the Court is dealing with today. 5 THE COURT: Thank you. 6 MR. KING: It is our position that a 7 conflict currently exists with regards to the 8 issue whether the litigation privilege bars a 9 malicious prosecution claim. And I have cited to 10 the case Olson vs. Johnson, 961 So2d. 356, the 11 Second DCA's opinion in 2007, after both Levin and 12 Echevarria. And it holds that malicious 13 prosecution claims are not barred by the 14 litigation privilege. 15 Then you have Wolfe that stands in 16 contradistinction to that which holds that it 17 does. Although, as I'll point out in a few 18 moments, one of -- Judge Shepherd in his 19 concurring opinion doesn't -- he doesn't rely on 20 that, on that theory. 21 Our position is that Olson vs. Johnson sets 22 forth the accurate and more persuasive 23 proposition; that is that it does not bar a 24 malicious prosecution claim. Even though Olson 25 vs. Johnson dealt with complaints by a complaining EFTA01166210  26 1 witness in a case that only resulted in a 2 malicious prosecution claim leading to a wrongful 3 arrest, doesn't -- the facts of the case itself do 4 not go so far as to address issues of what happens 5 once a civil complaint is filed. But the 6 proposition that that Olson states is unequivocal; 7 that is the litigation privilege does not apply to 8 malicious prosecution. 9 Now, when we get to Judge Sasser's opinion, 10 which I submit in all of the cases that have been 11 cited by everyone, Judge Sasser's opinion is the 12 most cogent, most well-reasoned, and rejects those 13 very propositions that two judges in the Wolfe 14 case adopt. 15 So let me -- let me just suggest to the 16 Court -- 17 THE COURT: Which Judge Sasser? I'm trying 18 to figure out which one you are talking about. 19 MR. KING: That is the decision in -- bear 20 with me, Judge. 21 THE COURT: No problem. 22 MR. KING: That is the decision in Johnson 23 vs. Libow, a 2012 -- Westlaw 4068409 in 2012. 24 THE COURT: Okay. 25 MR. KING: It is concise. It's to the EFTA01166211  27 1 point. And I'll address that in just a few 2 moments. 3 THE COURT: All right. Thanks. 4 MR. KING: Now, what's interesting about 5 Wolfe, and what's almost inexplicable about Wolfe, 6 is that it ignores its own prior precedent by 7 Judge Cope in his concurring decision in Boca 8 Investors Group vs. Potash, 835 So2d. 273. 9 THE COURT: That was a concurring opinion? 10 MR. KING: Yes, that was his concurring 11 opinion. 12 THE COURT: Okay. 13 MR. KING: Of course, as you know, 14 Judge Cope is very well-respected and his opinions 15 are very articulate, but it also ignores a 16 Third DCA's full panel's decision in SCI Funeral 17 Servcies Inc. vs. Henry, 839 So2d. 702 at Note 4, 18 Third DCA opinion in 2000, both of which both 19 Judge Cope and the panel in the SCI case note that 20 the Supreme Court's citation in Levin to Wright 21 vs. Yurko, which I cited in the memorandum, which 22 was a Fifth DCA decision back in 1984, implicitly 23 recognizes -- that is the Supreme Court itself 24 implicitly recognizes that malicious prosecution 25 claims are not subject to the litigation EFTA01166212  28 1 privilege. 2 And if you read Wright vs. Yurko, you read 3 Judge Cope's concurring opinion, and you read the 4 panel's footnote in SCI, one should not come up 5 with any other conclusion other than that's what 6 the Supreme Court did. So you have Wolfe standing 7 in contradistinction to its own -- to its own 8 precedent, which they don't address at all in 9 Wolfe, and it stands importantly in 10 contradistinction to the Supreme Court's own 11 position on that -- on that doctrine. 12 I -- I would dare say that the Third 13 District will always stand alone on that 14 proposition. Any other district court which is 15 going to undertake this issue will not follow that 16 ruling. And the Supreme Court itself, if it ever 17 gets on the cert's jurisdiction, will not either. 18 Other courts have likewise commented that 19 the litigation privilege would not bar a malicious 20 prosecution claim. I have cited you to the 21 decision of Judge Corrigan in North Star Capital 22 Acquisition, LLC vs. Krig, 611 F.Supp.2d 1324 23 (M.D. Fla. 2009), another decision that was 24 decided after Levin and Echevarria. And the court 25 in that case discussed -- let me just for a moment EFTA01166213  29 1 here -- 2 Well, the bottom line is Judge Corrigan 3 commented about the litigation privilege and 4 stated that neither malicious prosecution nor 5 abuse of process would be barred by the litigation 6 privilege. 7 I have also cited the Cruz vs. Angelides, 8 the Middle District of -- I'm sorry, 9 574 So2d. 278, Second DCA 1991, which also 10 suggests that malicious prosecution would not be 11 barred by the litigation privilege. 12 But as I've indicated, the most cogent and 13 well articulated opinion on this subject is 14 Judge Sasser's opinion in Johnson vs. Libow. She 15 expressly revoked the arguments that are raised by 16 Wolfe, which arguments, of course, are opposed by 17 the assertion in Olson. The court noted the 18 following -- and these are the very compelling 19 reasons why Wolfe would not apply to a malicious 20 prosecution claim. 21 As she said, "Levin involved actions taken 22 during the course of proceedings" and as you 23 remember what Levin was; that was a situation 24 where there was a motion to disqualify counsel. 25 Then ultimately, when they didn't call counsel, EFTA01166214  30 1 they filed a separate interference claim and the 2 court barred that on the litigation privilege. 3 But the court stated that when you're dealing with 4 the malicious prosecution lawsuit, it's 5 fundamentally different. It involves the filing 6 of a baseless action against a defendant. And the 7 purpose of a malicious prosecution action is to 8 prevent vexatious prosecution or litigation. 9 "The purpose of the litigation privilege," 10 she stated expressly, "is not to preclude the tort 11 of malicious prosecution. And if the litigation 12 privilege was applicable to the filing of a suit, 13 the tort of malicious prosecution would not 14 survive." 15 And as the Court is well aware, the 16 malicious prosecution has been recognized as -- 17 it's an ancient tort in Florida. It's always been 18 around. The Supreme Court has addressed it in the 19 past specifically. And one cannot lightly accept 20 the proposition that the Supreme Court, which 21 itself has indicated -- implicitly indicated at 22 least that the litigation privilege would not bar 23 a malicious prosecution claim. That the Supreme 24 Court itself would not adhere to the those rulings 25 and overturn a century of law recognizing the tort EFTA01166215  31 1 of malicious prosecution. 2 We also submit that Wolfe is 3 distinguishable because the litigation privilege 4 was applied to the attorneys in that case. The 5 attorneys were involved, and I need not go over 6 all of the facts of the case, but it was a very, 7 very brief involvement by the lawyers. As I 8 suggested in the brief, lawyers may end up being 9 given a broader immunity under the litigation 10 privilege because of their obligations to their 11 clients to carry out their legal and ethical 12 responsibilities. 13 And the facts of that case are somewhat 14 compelling in that the attorneys who make a brief 15 appearance shouldn't be exposed to all of this. 16 Maybe their -- maybe the thought process was 17 something along the lines, well, we don't want to 18 put the attorneys through this. This should be 19 cut out right at the beginning. 20 THE COURT: Off the record for one second. 21 MR. KING: Yes. 22 (Discussion off the record.) 23 MR. KING: And I cited the Taylor case, 24 which was a Supreme Court of Idaho decision, which 25 discusses that issue and which shows that for EFTA01166216  32 1 those very reasons that I identified, lawyers 2 should have a greater opportunity to -- 3 opportunity to seize upon immunity which would cut 4 off their liability early on. So whether it's a 5 qualified immunity or absolute immunity discussed 6 in that decision, whatever, perhaps that was 7 the -- a factor or although they don't cite to 8 Taylor, but maybe that's a factor in Wolfe. 9 THE COURT: I guess I understand your 10 position that you're taking in terms of in the 11 Wolfe context, because as I indicated to 12 Mr. Brewer during his argument, the court made it 13 a point to indicate the very brief involvement of 14 the Kenny Knachwalter firm. But since I did ask 15 my question off the record, I'll indicate what I 16 did ask was whether or not Mr. Epstein was 17 represented at all times material to the 18 allegations now made by Mr. Edwards. And Mr. King 19 has answered in the affirmative. 20 I'm having difficulty then with trying to 21 reconcile why the claim was only brought against 22 Mr. Epstein as opposed to his attorneys, 23 especially where the emphasis has been made quite 24 strongly that despite the settlements that went on 25 Epstein, essentially himself as related to the EFTA01166217  33 1 court, was the guiding influence here in 2 proceeding against Mr. Edwards in a -- for a 3 for a time period that you believe is actionable. 4 MR. KING: Well, one response, without 5 going into the entire tortured history of 6 Mr. Epstein's actions and the various machinations 7 that he undertook, the initial complaint which 8 charged Mr. Edwards with all sorts of horrific 9 crimes -- fraud, perjury, conspiracy to commit 10 perjury, securities fraud, general fraud, 11 extorsion, all -- all specific crimes that were 12 alleged against him, the lawyers who were involved 13 in that case withdrew. They abandoned those 14 claims. 15 Well, we can't ask them why, but I submit 16 that what happens is the evolution of that case 17 then becomes a case involving merely -- I 18 shouldn't say merely abuse of process, abuse of 19 process. So one response is that's a situation 20 that -- that you -- that is sort of suggested by, 21 perhaps, the court in Wolfe and in desiring to 22 protecting lawyers who recognize what happened and 23 then get out of the case. 24 They realize that whatever they were told 25 by their client, and we submit that, for example, EFTA01166218  34 1 the attorneys would not necessarily know what 2 Mr. Epstein had in his mind. We know what Epstein 3 had in his mind because I have outlined somewhat 4 in the papers here the huge amount of evidence 5 accumulated by not only Mr. Edwards but the 6 federal government, by the state government which 7 showed that not only was -- did he abuse 8 Mr. Edwards' clients repeatedly from the time they 9 were 14 and 15 years old, he was abusing girls as 10 young as 12 years old. He was having -- he was 11 having orgies on his airplane, one of those 12 indications that they may have had reference to in 13 their papers and earlier made reference here about 14 why was discovery pursued by Mr. Edwards. 15 But they -- the lawyers are just not -- A, 16 they're not sued. That's not a situation that 17 we're facing here. 18 THE COURT: I know that. 19 MR. KING: And for the very reasons that 20 Taylor talks about, it's just unwise, it seems to 21 me, to pursue lawyers in a case where you may know 22 inside what's going on with Epstein and why he's 23 doing what he's doing. 24 And that's a fine line that the lawyers 25 have to face in every case; when do I step out? EFTA01166219  35 1 The original lawyers in this case did step out. 2 And those claims were all abandoned. And I think 3 that speaks volumes. All of that, of course, goes 4 in part to the issues of malicious prosecution, 5 which we would ultimately argue if I had to get 6 into those facts. 7 I hope that answers your question. I mean, 8 Epstein stands in our -- from our standpoint, in a 9 completely different position than the lawyers at 10 this stage of the proceedings despite the fact 11 that after he settles the claims he then continues 12 to pursue the allegations. 13 And to us, your review of the size of those 14 settlements would have an impact on all of the 15 issues, not on this particular issue that we're 16 talking about now. But if we had to get into 17 those facts and the court took a look at what 18 those settlements were in camera, then we would 19 believe that that would be -- that's a strong 20 indication that all of this stuff that he seized 21 upon, that Edwards seized upon 22 MR. BREWER: Excuse me, Your Honor. Motion 23 For Summary Judgment is supposed to be something 24 that is in evidence and in record and it's not. 25 THE COURT: Yeah, I have no plans on EFTA01166220  36 1 reviewing the size of the settlement amounts. 2 They don't phase me at all. And I -- I don't -- 3 it seems since they agreed to be confidential, I 4 think we should respect that. 5 MR. KING: And I understand, and since 6 we're not even discussing these, and I may be 7 going further than what your concerns were about 8 the lawyer's involvement in the case and why they 9 wouldn't be sued in a case like this. 10 THE COURT: What I'm saying is I can 11 understand both sides' argument. But on the one 12 hand, it's interesting that the line of cases here 13 on this immunity issue often bears on the facts of 14 the cases. Meaning, the most repugnant they 15 take -- there's a more liberal approach. The 16 Wolfe case where the Kenny Knachwalter firm 17 abandoned the claims immediately, there's a more 18 conservative approach. And I tend to -- tended -- 19 tended to notice that while I was reviewing the 20 cases, which is understandable, certainly. 21 But the -- the -- what I said about both 22 sides is, yes, I can see in a situation where the 23 attorneys quickly abandoned the case there's the 24 indication that a claim would not lie. However, 25 where I -- where I have the representation made EFTA01166221  37 1 without controvert that E