EFTA01069703.pdf

2 16 11 Motion to Continue Jury Trial before Judge Crow.txt 1 1 IN THE CIRCUIT COURT OF THE 15TH JUDICIAL CIRCUIT IN AND FOR PALM 2 BEACH COUNTY, FLORIDA 3 CIVIL DIVISION 4 CASE NO. 502009CA040800XXXXMBAG 5 JEFFREY EPSTEIN, 6 Plaintiff, 7 vs. 8 SCOTT ROTHSTEIN, individually and BRADLEY J. EDWARDS, individually, 9 Defendants. 10 11 12 HEARING BEFORE HONORABLE DAVID F. CROW PLAINTIFF'S MOTION TO CONTINUE TRIAL 13 14 DATE: February 16th, 2011 15 TIME: 9:11 a.m. - 9:28 a.m. 16 PLACE: Palm Beach County Courthouse 205 North Dixie Highway 17 Courtroom 9C west Palm Beach, Florida 33401 18 REPORTED 19 BY: Alexandria Kaan Court Reporter 20 Notary Public, State of Florida 21 PRESENT: Joseph L. Ackerman, Jr., attorney for Plaintiff 22 Jack Scarola, Esquire, attorney for Defendants 23 (ATTENDING BY TELEPHONE) 24 25 2 1 PROCEEDINGS 2 BAILIFF: Mr. Scarola? Page 1 EFTA01069703  2 16 11 Motion to Continue Jury Trial before Judge Crow.txt 3 MR. SCAROLA: Yes. 4 BAILIFF: Judge Crow calling on Epstein vs. 5 Rothstein. 6 MR. SCAROLA: Thank you very much. 7 JUDGE CROW: Sir, you're on the speaker 8 phone, opposing counsel is on the courtroom. If you 9 want to step up closer so he can hear you. 10 MR. ACKERMAN: Yes, sir. 11 MR. SCAROLA: Good morning, Your Honor. 12 Thank you for accommodating me by telephone. 13 JUDGE CROW: Not a problem. What do you 14 got? 15 MR. ACKERMAN: Your Honor, we represent 16 Jeffrey Epstein. This is a motion to continue the jury 17 trial. Presently it's set for jury trial on calendar 18 call on February 25th which is an eight-week docket 19 beginning march 7th. Even though there have been orders 20 entered by the bankruptcy court to prepare a privilege 21 log, we received this privilege log -- which has to be 22 addressed -- with 24,000 documents. There is one entry 23 relating to all of them so we have a hearing scheduled 24 with the special master today to address that and other 25 issues. we have filed a motion for relief in the 1 bankruptcy court relating to the fact that the privilege 2 log hasn't been timely complied with in a legally 3 sufficient form. 4 As we've pointed out to the court in our 5 motion for summary judgment, we haven't been able to 6 obtain documents from the defendant and from the 7 bankruptcy trustee. we've taken one deposition and Page 2 EFTA01069704  2 16 11 Motion to Continue Jury Trial before Judge Crow.txt 8 we've scheduled others in February and march. The 9 trustee in the bankruptcy hasn't produced records 10 related for our subpoena on the Fortress Service System 11 although they initially told us that they had. Also, 12 they were ordered to produce documents from the Q-task. 13 A Q-task is privileges owned by former members of RRA. 14 The Rothstein Firm is in contempt for not producing 15 those documents and all of those requested materials in 16 preparation of our claim. we believe that it is about 17 8,000 documents at this point subject to receiving the 18 Fortress and the Q-task documents that may be subject to 19 an in-camera review. So we don't have enough time to 20 conduct that discovery, properly prepare for the hearing 21 that's resolved that could be needed on the in-camera 22 hearings. Mr. scarola has scheduled two hearings for 23 tomorrow to compel mediation and compel a more 24 definitive exhibit list in compliance with this court's 25 order but we really can't prepare a definitive exhibit 4 1 list until we complete this discovery process with the 2 documents. 3 In addition, the court has set Mr. Edwards' 4 motion to assert a claim for punitive damages on 5 March 30th. There is a motion the court has set for 6 reconsideration relating to our objection for discovery 7 request which if the court grants on march 31st that 8 will cause additional issues to be injected into this 9 court case based on discovery that the defendant wants 10 to conduct and we believe should not be conducted. we 11 have an amended motion and supplemental motion to Page 3 EFTA01069705  2 16 11 motion to Continue Jury Trial before Judge Crow.txt 12 overrule plaintiff's objections to questions and compel 13 answers on deposition. That's scheduled for April 1st. 14 On April 5th we have a motion to compel and have the 15 court rule on objections to request to produce that we 16 have submitted and to determine if privileged claims 17 asserted as it relates to documents requested of Edwards 18 in his possession as opposed to those of the bankruptcy 19 trustee because the failure to prepare log had been 20 waived. We also have several lawyers involved in this 21 case are on trial dockets beginning next week through 22 early march. And I know that does not necessarily 23 effect how the court sets a case but it does have a 24 bearing on our ability to be prepared. we're requesting 25 the case be set in September because we really believe 5 1 that until these documents are released and we can 2 conduct this discovery with those documents, as we've 3 pointed out to the court before, and with the 4 difficulties we're having just basically getting a 5 legally sufficient privilege log. special master's 6 already sent an e-mail out indicating he doesn't believe 7 this log purports with what the requirements are under 8 the TIG Insurance case and we've had some arguments 9 about whether or not we can proceed with an in-camera 10 review in spite of the lack of a privilege log. 11 So as you can see, there's a number of 12 issues that preclude us from being properly prepared for 13 trial in the present docket and we're asking the court 14 to continue it. 15 JUDGE CROW: Let me just ask you one 16 question. The privilege log we're talking about here Page 4 EFTA01069706  2 16 11 Motion to continue Jury Trial before Judge Crow.txt 17 was a little unclear to me originally. The documents 18 that we're talking about are documents in the possession 19 of whom the privilege log is being filed, are these in 20 the possession of the trustee or are these in possession 21 of a successor law firm? 22 MR. ACKERMAN: Your Honor, there's two 23 privilege logs that are at issue. 24 JUDGE CROW: Right. 25 MR. ACKERMAN: One of the privilege logs 1 that x gave you are the documents that are in the 2 possession of the trustee. Initially the bankruptcy 3 court, when he ordered the motion to compel and the 4 preparation of a privilege log, directed the special 5 master to prepare the law. The special master came 6 before the bankruptcy court about a month later and 7 asked that order to be clarified because he told him he 8 couldn't adequately prepare log and claim the privileges 9 without the assistance of the Farmer Jaffe Firm and 10 mr. Edwards. The bankruptcy courts granted that motion, 11 documents were given on disk based on search terms from 12 the trustee to the special master and to the Edwards and 13 Farmer Jaffe Law Firm to prepare the log. Then we had 14 subsequent motions where they felt that they couldn't 15 prepare the log based on the disk so at our expense we 16 copied the documents, all had them bates stamped, we did 17 not keep copies, we turned them over to the special 18 master and Mr. Edwards' firm so that they could prepare 19 this privilege log. Then in December they came in and 20 said there's 74,000 documents, in fact they've later Page 5 EFTA01069707  2 16 11 Motion to Continue Jury Trial before Judge Crow.txt 21 said there's only 24,000. 22 JUDGE CROW: Let me back up. The documents, 23 he's got a bates stamp on all of these so you have 24 received the documents which are any documents? 25 MR. ACKERMAN: (Shakes head) we've received 7 1 two boxes of documents. 2 JUDGE CROW: Okay, the ones that are bates 3 stamped are not objected. 4 MR. ACKERMAN: No, the ones that are bates 5 stamped they're claiming privileges on. 6 JUDGE CROW: I understand that. But the 7 ones that are not bates stamped, like he's got 01018 8 objection, and then the next one is 01080, so there's 9 obviously a whole bunch of documents in between there, 10 right? 11 MR. ACKERMAN: I don't know that, Your 12 Honor. we have received two boxes of documents and 13 don't believe those are the bates-stamped documents. 14 It's my understanding based on what they've told us -- 15 JUDGE CROw: Is this going to ever end in 16 the bankruptcy court? This is one of the concerns that 17 I had when I entered in the order quite frankly was once 18 I lose control of the documents. 19 MR. ACKERMAN: well, here's what we're 20 talking about doing. There are some underlying issues 21 that need to be addressed. At the time this subpoena 22 was issued, as I previously advised the court, there was 23 no objection filed in state court to this subpoena. 24 within a month after the subpoena being served on the 25 trustee the bankruptcy court asserted jurisdiction over Page 6 EFTA01069708  2 16 11 Motion to Continue Jury Trial before Judge Crow.txt 8 1 because it believed in the bankruptcy cases and codes 2 stated it has a jurisdiction over property in the hands 3 of the trustee. Now, I believe and this is our position 4 that while we are attempting to get documents from the 5 trustee and while there are presently orders for 6 privilege logs, those issues rest with bankruptcy 7 trustee, once we are at the point of having the special 8 master conduct the hearing on the privileges stuff and 9 him issuing his report x believe that we have underlying 10 issues to address that should come to you and you 11 determine whether or not the objections if any to the 12 report are applicable or not. And that's the way I 13 believe and would be our position. We have some 14 underlying issues that have to be addressed with that. 15 JUDGE CROW: when is this ever going to be 16 resolved, that's what I'm asking? I mean, you say 17 September. This thing has been going on for two years 18 now and t can't -- 19 MR. ACKERMAN: Your Honor, when we filed the 20 subpoena we moved to compel in July, had the hearing in 21 August, the judge required that this privilege log be 22 prepared in 30 days. when the special master came in 23 and asked for clarification they were given another 24 30 days. That was November. In November they said we 25 can't do without the bates stamps, we gave him until the 2 9 1 end of December. 2 JUDGE CROW: Let me stop you. This is not Page 7 EFTA01069709  2 16 11 Motion to Continue Jury Trial before Judge Crow.txt 3 casting blame. What I'm trying to find out is when do 4 you reasonably anticipate if ever this is going be 5 resolved by the bankruptcy or the special master? It 6 seems to me we're just -- 7 MR. ACKERMAN: The problem is we don't have 8 a privilege log that purports with the requirements. we 9 believe if we had that we could be undertaking those 10 proceedings right now. Bankruptcy court from my reading 11 of its orders is about to hold the principals and Q-task 12 in contempt and incarcerate them for not complying with 13 orders that have been outstanding for over a year. 14 JUDGE CROW: Mr. Scarola, what's your 15 position, sir? 16 MR. SCAROLA: The problems of which 17 Mr. Ackerman complains are problems of the plaintiff's 18 own making. As he acknowledged at the outset of this 19 conference before Your Honor they have taken one 20 deposition and that deposition was taken last week of 21 one of the Rothstein Ponzi scheme investors. That 22 investor testified under oath clearly and unequivocally 23 I've never heard of Brad Edwards, I've never worked with 24 Brad Edwards, I don't know a thing about Brad Edwards, 25 my contact was with Rothstein and Rothstein told me he 10 1 was personally prosecuting these claims. In order for 2 them to ever overcome any assertion of attorney/client 3 privilege on the basis of a crime-fraud exception they 4 must demonstrate that the client to whom the privilege 5 belongs, that is the Epstein child molestation victims, 6 those clients were participants in a crime or a fraud. 7 They have never attempted to allege it, they've made no Page 8 EFTA01069710  2 16 11 Motion to Continue Jury Trial before Judge Crow.txt 8 effort to try to prove it. All of this is a journey 9 into delay and is solely for purposes of delaying the 10 ultimate resolution of this claim. 11 with regard to the work product privilege, we 12 have offered to turn over to the special master every 13 single work product document because that's our 14 privilege for the special master's review to make the 15 determination as to whether anything whatsoever is 16 discoverable or probative with regard to the claims that 17 have been made. We have a hearing today in front of the 18 special master that begins at 10 o'clock this morning. 19 He has repeatedly taken the position in written 20 communications with the plaintiff that the plaintiff has 21 failed to even attempt to carry its burden, that they 22 have been delaying, that they have been rejecting 23 reasonable offers to resolve these issues. we have 24 offered to have Your Honor appoint the bankruptcy's 25 special master so that these issues can be resolved in 11 1 the state court where Your Honor has appropriately 2 stated they need to be resolved. 3 At the last hearing before Your Honor with regard 4 to these issues Mr. Ackerman represented that there were 5 other pending discovery requests within the bankruptcy 6 court relating to these documents and that that was the 7 reason why the bankruptcy judge had taken control over 8 these issues, appointed a special master, and was 9 seeking to resolve these issues in the bankruptcy court. 10 That representation was not accurate. There is one and 11 only one discovery request pending, it is the subpoena Page 9 EFTA01069711  2 16 11 Motion to Continue Jury Trial before Judge Crow.txt 12 issued out of the state court for these documents. As 13 Your Honor has observed in your last order, the 14 discoverability of the evidence in this pending case is 15 for Your Honor's determination and Your Honor's 16 determination only. The bankruptcy judge has no 17 jurisdiction over those issues. Its sole motivation in 18 appointing a special master was to protect the interest 19 of the trustee so that the trustee was not wasted on 20 this issue, attorney-overprivileged documents that 21 should not be turned over at the consequence of the 22 subpoena issued out of the state court. 23 This case from our perspective is ready for 24 trial. If it's not ready for trial from the plaintiff's 25 perspective it's because the plaintiff has failed to do 12 1 what the plaintiff should have been doing in an effort 2 to try to prepare this baleful claim for trial. And the 3 only thing that's happening right now is that we are 4 running around in circles because the plaintiff has 5 chosen to move in circles. we ask that this motion be 6 denied at least, at least pending the outcome of today's 7 hearing so that Your Honor can hear directly from the 8 bankruptcy special master, Judge Carney, who is going to 9 report both to you and to Judge Ray. Thank you, sir. 10 MR. ACKERMAN: Your Honor, a brief response. 11 I don't know if it's appropriate now but we did send a 12 letter to Mr. Farmer in an effort to resolve some of 13 these issues and were told we're going before the 14 bankruptcy special master today, he didn't agree with 15 it. Also, the subpoena that we sent to the bankruptcy 16 trustee except for one paragraph is specifically related Page 10 EFTA01069712  2 16 11 Motion to Continue Jury Trial before Judge Crow.txt 17 to documents naming third parties. The motion for 18 protective order filed by Farmer says the entire 19 subpoena asked for privileged documents. So they are 20 claiming various privileges on request that are clearly 21 not covered by any privilege because they specifically 22 name the subject matter of Epstein and Rothstein with 23 third parties, these investors. And that's part of the 24 reason why we need the privilege log because they are 25 attempting to cast four or five privileges on behalf of 13 1 LM, Mr. Edwards himself, the work product privilege, the 2 joint defense privilege, and the others listed there 3 without putting them down on an item-by-item, 4 document-by-document basis. In the last e-mail last 5 night from the special master said in citing a case that 6 he believes that a proper privilege log needs to be 7 prepared based on the case authority that the 8 crime-fraud exception can't be examined in total, it has 9 to be done on a document-by-document basis. 10 JUDGE CROW: Okay, guys. I'm going to have 11 to look at this. I'll let you enter an order, we'll go 12 out this afternoon. I've got a final argument, some 13 cases. I'll look at it this afternoon and you'll get an 14 order in the mail and we'll deal with it. okay, thank 15 you. 16 MR. ACKERMAN: Thanks, Your Honor. 17 MR. SCAROLA: Thank you. 18 (Proceedings before Judge David F. Crow concluded at 9:27 a.m.) 19 20 Page 11 EFTA01069713  2 16 11 Motion to Continue Jury Trial before Judge Crow.txt 21 22 23 24 25 14 1 CERTIFICATE OF REPORTER 2 STATE OF FLORIDA 3 COUNTY OF PALM BEACH 4 S I, ALEXANDRIA KAAN, Shorthand Reporter and Notary 6 Public, State of Florida, HEREBY CERTIFY that I was 7 authorized to and did stenographically report the 8 proceedings in the included transcript and the foregoing 9 transcript, pages 1 through 13, is a true and accurate 10 record of my stenographic notes. 11 I FURTHER CERTIFY that I am not a relative, employee, 12 attorney, or counsel of any of the parties, nor am I a 13 relative or employee of any of the parties' attorney or 14 counsel connected with the action, nor am I financially 15 interested in the action. 16 Dated this 16th day of February, 2011. 17 18 19 20 21 ALEXANDRIA KAAN, CCR, Notary Public, State of Florida at Large 22 23 24 25 Page 12 EFTA01069714