EFTA00596449.pdf

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x IN MATTER OF APPLICATION OF BRADLEY : Index No. 112345/2010 JAMES EDWARDS SEEKING CPLR 3102(e) . (Justice Goodman) ORDER FOR DAILY NEWS... TO PRODUCE TAPE RECORDING . Motion Seq. No. 1 x DAILY NEWS, L.P.'S MEMORANDUM OF LAW IN OPPOSITION TO MOTION FOR CPLR 3102(e) ORDER TO PRODUCE TAPE RECORDING DAVIS WRIGHT TREMAINE LLP 1633 Broadway — 271h Floor New York, New York 10019 Tel: (212) 489-8230 Fax: (212) 489-8340 DWT 15845345,3 3970112-000042 EFTA00596449  TABLE OF CONTENTS peg PRELIMINARY STATEMENT 1 STATEMENT OF RELEVANT FACTS 5 A. The Jane Doe Action 5 B. The Unpublished Epstein Interview 6 C. The Vacated District Court Order in the Jane Doe Action 7 D. The Ponzi Scheme Action 9 E. The Present Motion to Compel I0 ARGUMENT 11 I. EDWARDS MAY NOT RELY ON THE VACATED DISTRICT COURT ORDER FROM THE JANE DOE ACTION 12 II. EDWARDS FAILS TO MEET THE REQUIREMENTS FOR DISCOVERY OF A NON-PARTY UNDER CPLR 3101(a) 14 A. The Epstein Interview Does Not Have Heightened Relevance to the Issues in the Ponzi Scheme Action 15 B. Edwards Admits That the Information He Seeks Is Available From An "Overwhelming" Number of Other Sources 19 III. THE UNPUBLISHED EPSTEIN INTERVIEW IS PRIVILEGED FROM DISCOSURE UNDER THE NEW YORK SHIELD LAW 22 A. The Epstein Interview Is Not Highly Material And Relevant To The Claims In The Ponzi Scheme Action 23 B. The Epstein Interview Is Not Critical Or Necessary To Any Claim In The Ponzi Scheme Action 24 C. The Information Sought Is Available From Numerous Alternative Sources 26 IV. RUSH DID NOT WAIVE THE REPORTER'S PRIVILEGE 27 CONCLUSION 30 MI 1584534593 3970112-000042 EFTA00596450  'F.1B1.I.: OF At Ill()RITIES Page(s) CASES Artubel v. Colonial Bank Group, Inc., 2008 WL 3411785 (el Fla. Aug. 8, 2008) 18 Ash v. Bd. ofManagers ofthe 155 Condominium, 2006 WL 5376806 (Sl.t. t. fl Co. Oct. 25, 2006), rev'dinpart on other grounds, 44.3d 324, 843 =2d 218 (1st Dep't 2007) 15 Associated Gen. Contractors ofConn., Inc. v. City ofNew Haven, 41 F.3d 62 (2d Cir. 1994) 13 Baxter v. Palmigiano, 425 U.S. 308 (1976) 21 Buttner v. Berg & Dorf, 138 ad 439, 525 MI.2d 858 (2d Dep't 1988) 19 Branzburg v. Hayes, 408 U.S. 665 (1972) 23 Brown & Williamson Tobacco CSE. v. Wigand, 1996 WL 350827 (Sup. Ct. OS Co. Feb. 28, 1996), affd, 228 ..2r1187, 643 92 (I st Dep't 1996) 25, 26, 27 Brown & Williamson Tobacco Corp. v. Wigand, 228 lad 187 (1st Dep't 19%) 25, 26 Cazares v. Church ofScientology ofCalif, Inc., 444 So.2d 442 (Fla. Dist. Ct. App. 1983) 18 Damiano v. Sony Music Entm 'I, Inc., 168 M. 485 (M. 1996) 27 Della-Donna v. Nova University, Inc., 512 So.2d 1051 (FIa. Dist. Ct. App. 1987) 18 DePalma v. DePalma, 538 So.2d 1290 (FIa. Dist. Ct. App. 1989) 21 E.I. Dupont de Nemours & Co. v. Invista B.V, 473 F.3d 44 (2d Cir. 2006) 13 ii Dwr 15845345v) 3970112-000042 EFTA00596451  Flores v. Cooper Tire & Rubber Co., 178 P.3d 1176 (Ariz. CI. App. 2008) 29 Flynn v. NYP Holdings, 235..2d 907, 652M.2d 833 (3d Dep't 1997) 25 Fraser v. Park Newspapers Lawrence Inc., 257..2d 961, 684 .2d 332 (3d Dep't 1999) 14,19 In re ABC, 189 Misc.2d 805, 735=.2d 919 (Sup. Ct... Co. 2001) 22,24 In re Application to Quash Subpoena to NBC 79 F.3d 346 (2d Cir. 1996) 21,25 In re Behar, 779 F. Supp. 273 1991) 26 In re CBS Inc., 232..2d 291, 648 .2d 443 (1st Dep't 1996) 26 In re Pennzoil Co.. 108.1.2d 666, 485 .2d 533 (1st Dep't 1985) 12 In re Sheehan, 2008 WL 2148403 (Sup. Ct... Co. May 9, 2008) 12,25 In re Taylor, 193 A.2d 181 (Pa. 1963) 29 In re Venezia, 922 A.2d 1263 (2007) 28,29 In re Zallie, 2009 WL 2844429 (Sup. Ct. M. Co. Aug. 13, 2009) 12, 15, 21 Johnson Law Group v. limadebt USA, LLC, 2010 WL 2035284 (M. Fla. May 24, 2010) 18 Kirkland & Ellis v. Chadl e & Parke LLP, 176 Misc.2d 73, 670 .2d 753 (Sup. Ct. Co. 1998) 12 Kooper v. Kooper, 74 El3d 6, 901 2d 312 (2d Dep't 2010) 14, 15, 16 McGarry v. University ojSan Diego, 64 Cal. Rptr. 3d 467 (Cal. Ct. App. 2007) 28, 29 iii D14'71584534593 3970112-000042 EFTA00596452  O'Connor v. Donaldson, 422 U.S. 563 (1975) 13 O'Neill v. Oakgrove Coast. Inc., 71 1.2d 521, 528 ad 1 (1988) 1, 2, 22 People ex reL Scott v. Silverstein, 412 II2d 692 (III. App. Ct. 1980), rev d on other rounds, 429 M2d 483 (1981) 29 People v. Griffin, 1992 WL 474518 (Sup. Ct. ig Co. Nov. 12, 1992) 24, 26 People v. Royster, 43 .U1758, 842 ad 12 (1st Dep't 2007) 26 Pugh v. Avis Rent A 1997 WL 669876 ( Oct. 28, 1997) 27 Rollins Burdick Hunter of N. Y., Inc. v. Euroclassics Ltd., 502 So.2d 959 (Fla. Dist. Ct. App. 1983) 21 Russman v. Bd. of Ed., 260 F.3d 114 (2d Cir. 2001) 13 S&I Investments v. Payless Flea Market, Inc., 36 So.3d 909 (Fla. Dig. Ct. App. 2010) 18 Saxton v. Arkansas Gazette Co., 264 Ark. 133 (1978) 29 Smith v. Moore, 31 III3d 628, 818 2d 603 (2d Dep't 2006) 22 Tannenbaum v. City of New York, 30..3d 357, 819 Eig2d 4 (1st Dep't 2006) 15, 19 US. v Burke, 700 F.2d 70 (2d Cir. 1983) 26 U.S v. Marcos, 1990 WL 74521 ( June I, 1990) 26 U.S. v. Munsingwear, 340 U.S. 36 (1950) 13 Ulrich v. Coast Dental Servs., Inc., 739 So.2d 142 (FIa. Dist. Ct. App. 1999) 30 iv DINT 15845345v3 3970112.000042 EFTA00596453  Valdes v. GAB Robins North Am., Inc., 924 So.2d 862 (Fla. Dist. Ct. App. 2006) 17 Vasquez v. State, 777 So.2d 1200 (Fla. Dist. Ct. App. 2001) 21 Wainscot: v.. Dunn, 1994 WL 732093 (S.C. Ct. Common Pleas July 20, 1994) 29 Yoder v. Adriatic°, 459 So.2d 449 (Fla. Dist. Ct. App. 1984) 18 STATUTES CPLR 3101(a)(4) passim CPLR 3102(e) 11, 1 2 MI Civil Rights Law § 79-h passim OTHER AUTHORITIES Carl C. Monk, Evidentiary Privilegefor Journalists' Sources: Theory and Statutory Protection, 51 Mo. L. Rev. 1, 60 (1986) 27 Heiress Quizzed in Sex Suits, POST, Oct. 12, 2009 29 Merriam-Webster Online (2010), /off-the-record 23 Const. art. I, § 8 22 Susan Spencer-Wendel, Judge Agrees to Unseal Epstein's Sex Scandal Deal, PALM BEACH (Fla.) POST, June 26, 2009 29 Susan Spencer-Wendel, Hearing Set to Consider Secrecy ofPlea Bargain (Fla.) SUN- SENTINEL, June 15, 2009 29 Dwr 1584534343 3970112-000042 EFTA00596454  Daily News, II, publisher of the New York Daily News, respectfully submits this memorandum of law in opposition to Bradley J. Edwards' motion to compel the Daily News to produce a tape recording that news reporter George Rush made of a confidential unpublished interview of Jeffrey Epstein. PRELIMINARY STATEMENT In this ancillary discovery proceeding, a civil litigant — Edwards — seeks to compel a non- party member of the New York press to turn over to him an off-the-record unpublished interview for use in his private litigation in Florida. As such, Edwards' motion strikes at the very heart of the reporter's privilege codified in lig Civil Rights Law § 79-h (the "Shield Law") — a privilege that "can[s] for particular vigilance by the courts of this State in safeguarding the free press against undue interference." O'Neill v. Oakgrove Conn. Inc., 71I.2d 521, 526, 529, 528 III2c11, 3, 5 (1988) ("The autonomy of the press would be jeopardized if resort to its resource materials, by litigants seeking to utilize the newsgathering efforts of journalists for their private purposes, were routinely permitted.") (internal citations omitted). Edwards' motion to compel must be denied for several reasons. First, the Court need not even reach the Shield Law privilege since Edwards does not satisfy the minimum standards for non-party disclosure under CPLR 3101(aX4) — which requires that even non-privileged evidence must have heightened relevance and be otherwise unobtainable from alternative sources before it may be subpoenaed from any non-party in New York. In fact, Edwards concedes in his own Florida court filings that the Epstein interview is, at best, cumulative of "overwhelming evidence" he has already obtained from several alternative sources. Second, even if Edwards were able to satisfy the heightened showing for non-party disclosure under CPLR 3101(a)(4), his motion to compel would not be able to overcome the still higher bar erected by the Shield Law. The content of the unpublished Epstein interview is confidential, and the Shield Law provides an absolute DWI 1584534591 3970112-000042 EFTA00596455  privilege against compelled disclosure of "any news obtained or received in confidence." Ill Civil Rights Law § 79-h(b). Even assuming arguendo that the unpublished Epstein interview constitutes non-confidential newsgathering material, Edwards — by his own admissions — does not remotely make the rigorous "clear and specific" showing that Section 79-h(c) of the Shield Law mandates before a litigant may compel the press to disclose non-confidential, unpublished material — namely, he does not meet his heavy burden under the Shield Law of demonstrating that the Epstein interview is not just "highly material and relevant," but also "critical or necessary" to defending the claims at issue in his current lawsuit. Id. Third and finally, Edwards' contention that Rush waived the reporter's privilege is without merit and, indeed, Edwards fails to apprise this Court that he unsuccessfully tried to make this very waiver argument in a prior proceeding. Illustrating the very disruption to news organizations caused by "unhampered ... repeated demands for [their] resource materials" (O'Neill, 71 ■.2d at 526), which the Shield Law is designed to prohibit, this discovery motion marks the second time that movant and Florida attorney Bradley J. Edwards has demanded that the Daily News produce reporter Rush's off-the- record unpublished interview of billionaire financier Jeffrey Epstein. The first attempt was in a federal District Court action on behalf of an unnamed "Jane Doe" client (the "Jane Doe Action"), one of three young women Edwards represented in suing Epstein for sexual abuse of minors. Edward's argument that Rush had waived the reporter's privilege by disclosing brief portions of the Epstein interview to other sources during the newsgathering process (the same failed waiver argument Edwards tries to recycle in this proceeding) was rejected; instead, the federal court applied the federal qualified reporter's privilege that governs non-confidential newsgathering material in federal proceedings. Applying the qualified federal privilege (which provides significantly less protection to the press than does the rigorous.. Shield Law standard at issue 2 DWT 15845345,3 3970112-000042 EFTA00596456  here), the District Court concluded that Jane Doe had overcome the federal privilege because a small portion of the Epstein interview was "of likely relevance to a significant issue in Jane Duets]" sexual abuse case — i.e., whether Epstein had had sex with her when she was a minor — and was not reasonably obtainable from other sources since Epstein had invoked the Fifth Amendment in refusing to testify. The net result of this federal action, however, was that the Daily News was not required to produce the Epstein interview tape in the Jane Doe Action because, on appeal, the decision below was vacated — rendering the District Court decision a total nullity with no res judicata or precedential effect whatsoever — when the sexual abuse lawsuits brought by Jane Doc and Edwards' two other clients settled. In this second round, Edwards now seeks production of the Epstein interview for use in an entirely different litigation in which he himself — not Jane Doc — is a party. Specifically, in January 2010 the managing partner of Edwards' former law firm, Scott Rothstein, pled guilty and was sentenced to 50 years in prison for a massive "Ponzi" scheme in which he defrauded investors of $1.2 billion by convincing them to purchase fictitious settlement agreements. Seeking to capitalize on this event, Epstein brought a civil lawsuit against Edwards in Florida state court in which he alleges that Edwards was involved in, or knew or should have known about, Rothstein's Ponzi scheme, and pleads claims against Edwards for fraud and violation of Florida's racketeering statute as well as an abuse of process claim alleging that Edwards engaged in abusive discovery practices during the course of the sex abuse litigation against Epstein. Epstein v. Rothstein, No. 50 2009 CA 040800XXXXMBAG (Fl. Cir. Ct., Palm Beach Co.) (the "Ponzi Scheme Action"). In response, Edwards filed an abuse of process counterclaim alleging that Epstein filed the Ponzi Scheme Action for the improper purpose of intimidating Edwards from pursuing his clients' claims. In his present motion to compel, Edwards once again attempts to drag the Daily News into 3 DWT 151145345v3 3970112-000042 EFTA00596457  the fray, now seeking Rush's unpublished interview of Epstein for use in the Ponzi Scheme Action. Simply put, in his motion papers here, Edwards confuses and improperly conflates the fraud claims now at issue in the Ponzi Scheme Action against him with his former clients' settled sex abuse claims against Epstein — in a misguided attempt to ride the coat tails of the vacated District Court production order from the Jane Doe Action. This action (the Ponzi Scheme Action), however, involves different parties (Edwards, not plaintiffJane Doe), entirely different causes of action (whether Edwards participated in Rothstein's fraudulent Ponzi scheme, not whether Epstein sexually abused Jane Doe) and entirely different law (New York's stringent Shield Iaw, not the less protective federal reporter's privilege). And the unpublished Epstein interview, which was conducted months before the Edwards-Epstein litigation even arose, has nothing to do with Edwards' and Epstein's claims against each other in the Ponzi Scheme Action, which are the only claims at issue here.' Indeed, the summary judgment motion that Edwards has just filed in the Florida Ponzi Scheme Action compellingly demonstrates that the unpublished Epstein interview does not come close to being "critical or necessary" to maintenance of his defenses and claims in that action and that Edwards has a wealth of "alternative sources" of evidence. One, Edwards himself is the key witness — he unequivocally states in his summary judgment brief that "Edwards was simply not involved in any Ponzi scheme, he has provided sworn testimony and an affidavit in support of that assertion, and there is not (and never could be) any contrary evidence."2 Two, even with respect to the wholly peripheral issue of whether Epstein sexually abused Edwards' three clients, ' At oral argument of this motion, the Daily News will submit the Epstein interview recording, and a written transcript thereof, to this Court for in camera review. 2 See Edwards' Motion for Final Summary Judgment in the Ponzi Scheme Action ("SJ Motion") at 6, annexed as Exhibit F to the accompanying Affirmation of Robert D. Dalin, dated Nov. 1.2010 ("Balin AM"). 4 DWT 15845345v3 3970112-000042 EFTA00596458  Edwards (once again contrary to his assertions here) confirms in his summary judgment brief that there is "overwhelming evidence [from which] the Court can see for itself that all of the facts alleged by Edwards [in the three sexual abuse complaints against Epstein] were true" — including Epstein's guilty plea to soliciting minors for prostitution. SJ Motion at 12 (emphasis added). Three, Edwards makes clear in his summary judgment motion that Epstein's invocation of the Fifth Amendment in refusing to testify about his basis for bringing fraud/abuse of process claims against Edwards requires dismissal of his Ponzi Scheme Action (since, under settled law, Epstein cannot bring affirmative civil claims while at the same time refusing to testify as to those claims) and also entitles Edwards to conclusive adverse inferences against Epstein. SJ Motion at 20-23. In short, as Edwards himself acknowledges, Epstein's invocation of the Fifth Amendment is a litigation bonanza for Edwards. In sum, by his own admissions, Edwards clearly cannot satisfy the stringent showing required by the New York Shield Law for production of the unpublished Epstein interview or even the lesser showing required before discovery is permitted from any non-party under CPLR 310I(aX4). His motion should be denied. STATEMENT OF RELEVANT FACTS A. The Jane Doe Action The Jane Doe Action arose from a widely-publicized scandal in which Palm Beach billionaire Jeffrey Epstein was investigated by the FBI and charged by Florida state authorities with having paid numerous underage girls for sexual acts in the early to mid-2000s. See Balin Aft Ex. I (Non-Prosecution Agreement ("NPA")). Under a non-prosecution agreement with federal authorities, in 2008 Epstein pled guilty to one state criminal charge of soliciting minors to engage in prostitution (requiring Epstein to register as a sex offender) and to a second state charge of soliciting prostitution, in exchange for which the federal authorities agreed not to 5 DWT 15845345v33970112.000042 EFTA00596459 prosecute Epstein on federal charges. NPA at 3-5. After Epstein's guilty plea in 2008, more than 20 sexual abuse suits were commenced against him by young women who had been his victims. See Balin Aff. Ex. G (Statement of Undisputed Facts ("SUF") in Ponzi Scheme Action)¶¶ 48-49. Edwards, an attorney in Florida, filed three such suits on behalf of three of Epstein's victims - "Jane Doe", a." and "E.W."3 B. The Unpublished Epstein Interview George Rush was a Daily News journalist who covered the unfolding sex abuse scandal surrounding Epstein. Balin Aff. Ex. J (Affidavit of George Rush, sworn to April 6, 2010 ("Rush Aff.")),1 1. In pursuing the ongoing story, Rush developed contacts and sources among various lawyers and others close to the case — including attorney Edwards — who could provide tips and information to assist his reporting. Rush Aff. ¶¶ 3, 6-7. In October 2009, Rush obtained a telephone interview with Epstein to talk about the status of the civil cases against him. See Rush Aff. ¶ 4; Balin Aff. Ex. L (Supplementary Affidavit of George Rush, sworn to April 30, 2010 ("Rush Supp. Aff.")), ¶ 2. Epstein and Rush agreed at the outset that the interview was "off-the-record" — in other words, that the contents of the interview (though not the fact of it) were "confidential and not to be published." Rush Aff. ¶ 5. The interview lasted approximately 22 minutes and was recorded by Rush on a digital recording device. Id. During the interview, Epstein made no material admissions regarding the young women suing him for sexual abuse. Rush Supp. Aff. ¶¶ 4-5. So too, because the interview took place months before Epstein filed the Ponzi Scheme Action (and before Rothstein was even publicly charged), the interview contains absolutely no statements about the Ponzi Scheme Action. 3 See Jane Doe v. Epstein, No. 9:08-cv-80893 (United States District Court 502008CA02805 I XXX XMBAB (Fl. Cir. Ct.); E W. v. Epstein, Case No. 50 pg Ha.); 8CA02 v. Epstein, Case No. XXMBAB (Fl. Cir. Ct.). 6 DWT 15845345v3 3970112-000012 EFTA00596460  Several days later, Rush met with three individuals he regarded as valuable news sources — a filmmaker investigating child sex trafficking, an activist concerned with social policy issues arising from the Epstein sex scandal and an attorney following the case. Rush Aff. ¶ 6. "[tinder an agreement of strict secrecy" (id. ¶ 6), Rush played two of them a three-to-four minute excerpt from the beginning of the Epstein interview in exchange for information to assist his reporting. Id. ¶ 6; Rush Supp. METE 6-7. In covering the story, Rush also regularly spoke by telephone with Edwards, who was an important source to Rush for comment and newsgathering about the case. Rush Aft ¶ 7. Rush used some of the information he had learned from the Epstein interview as the basis for questions to Edwards. Id At a later point, Rush told Edwards that he (Rush) had conducted a recorded interview of Epstein and, as part of an exchange of information with Edwards, apprised Edwards of a procedural development in another victim's case that had been related by Epstein. Id. In a later call, Edwards asked for a copy of the Epstein interview. Rush declined, informing Edwards that the interview had been off-the-record and, moreover, would be of no help to his clients. Id. 8. Thereafter, on October 22, 2009, Rush also had a call with Michael Fisten, an investigator employed by Edwards on the sexual abuse cases, during which Rush paraphrased aspects of the Epstein interview. Moving Affidavit of Michael Fisten, sworn to Sept. 14, 2010,1 8. Fisten also requested a copy of the Epstein interview, which request was likewise refused. Id. ¶ 10. The Daily News has not published any articles publicly quoting from the off-the-record Epstein interview. Rush Supp. Aff. 17. C. The Vacated District Court Order in the Jane Doe Action In March 2010, in connection with the Jane Doe Action pending in the Southern District of Florida, Edwards, as attorney for plaintiff Jane Doe, served the Daily News and Rush with Southern District ofNew York subpoenas calling for production of the Epstein interview for use 7 DWI 15845345v3 3970112.000042 EFTA00596461  at the then-upcoming trial of the Jane Doe Action. See Balin Aff. Ex. M (Memorandum & Order dated May 18, 2010 ("Dist. Ct. Op.")), at 1. Thereafter, the Daily News and Rush instituted an ancillary proceeding in the Southern District ofNew York to quash the subpoenas on the ground (among others) that Jane Doe could not overcome the federal reporter's privilege. In opposition to the motion to quash, Edwards (on behalf ofhis client) argued that Rush had waived sa applicable reporter's privilege by disclosing brief portions of the Epstein interview to third parties (Balin Aff. Ex. K (Jane Doe's Response in Opposition to Motion of Daily News, to Quash Subpoena), at 6-13) — the same exact waiver argument he makes here. The federal District Court (McKenna, J.) did not accept Edwards' waiver argument; but, instead, ruled that, since Epstein was known to be the source for the interview, he was a non- confidential source and his unpublished interview therefore fell within the federal qualified privilege that governs non-confidential news material in the Second Circuit. Dist. Ct. Op. at 4 (quoting Gonzales v. NBC, 194 F.3d 29, 36 (2d Cir. 1999)). Applying the federal qualified privilege standard (which is significantly less demanding than the more rigorous Shield a Law privilege), the District Court concluded that, given Jane Doe's need to prove the allegations of her sexual abuse claim, Jane Doe had overcome the federal qualified privilege in her case because "portions of the recording 'are of likely relevance to a significant issue in [the Jane Doe Actionl,' ... or, rather, depending on how used, two issues, liability and damages" and because Epstein refused to testify regarding whether he had had sex with Jane Doe. Dist. Ct. Op. at 4-5. The Daily News and Rush thereafter appealed the District Court decision to the Second Circuit. While the appeal was pending, the Jane Doe Action (as well as the ■. and E.W. suits) settled. See Moving Affirmation of Robert Y. Lewis, dated Sept. 15, 2010 ("Lewis Aff."), ¶ 7. The Daily News and Rush then moved the Second Circuit to vacate the District Court decision. 8 DWT 15114534593 3970112.000042 EFTA00596462  On July 28, 2010, the Second Circuit granted their motion to vacate (see Balin Aff. Ex. N (Vacatur Order)) — with the result that the vacated District Court decision has no legal force. D. The Ponzi Scheme Action It is the claims in the Ponzi Scheme Action — and only those claims — that have any bearing on the pending discovery motion. The facts underlying that action are briefly as follows: Scott Rothstein was the managing partner and CEO of Rothstein, Rosenfeldt and Adler ('RRA"), a 70-lawyer firm in Fort Lauderdale, Florida. Balin Aft Ex. A, Ex. 1 ("Rothstein Information") ¶¶ 1-2; id., Ex. 2 (Amended Complaint for Dissolution) at I and 113-5. In early December 2009, the U.S. Attorney for the Southern District of Florida charged Rothstein with criminal racketeering, money laundering, wire fraud and mail fraud. See Rothstein Information. At the heart of the criminal case against Rothstein was a massive Ponzi scheme in which, from 2005 through November 2009, Rothstein and unindicted co-conspirators defrauded investors of $1.2 billion by selling them (at a discount) fictitious settlement agreements from non-existent whistle-blower and sexual harassment cases. Rothstein Information 11 6, 11; SUFI 86. In January 2010, Rothstein pled guilty and was sentenced to 50 years in jail. See Balin Aff. Ex. O. Neither Edwards (who worked at RRA for eight months in 2009) nor any other RRA attorney besides Rothstein was ever indicted or implicated in the Ponzi scheme. SUFI 88. Nonetheless, in December 2009, Epstein filed his civil Ponzi Scheme Action against Rothstein and Edwards in Florida state court. In his motion to compel, Edwards repeatedly asserts that Epstein supposedly claims in the Ponzi Scheme Action "that the three civil suits Edwards filed against him [for sexual abuse] were somehow fabricated[.]" Moving Brief ("Moving Br.") at 14. That is a patently inaccurate misdescription. Nowhere in his complaint in the Ponzi Scheme Action does Epstein allege that the sex abuse suits brought by Jane Doe,. and E.W. were fabricated. Instead, what the complaint actually alleges is that Rothstein used 9 DWI 1584534543 3970112.000042 EFTA00596463  these three legitimate lawsuits and other real lawsuits "as bait. That's the way [Rothstein] raised all the money. He would use [real] cases as bait for luring investors into fictional cases." Balin Aff. Ex A (Complaint in Ponzi Scheme Action ("Ponzi Scheme Complaint")), ¶ 20; id. at ¶ 25 (alleging that Rothstein told investors that "in addition to the [three real] Civil Actions another fifty (50) plus [fictitious] anonymous females were represented by RRA, with the potential for hundreds of millions of dollars in settlements"); id. at ¶¶ 28-30. Alleging that Edwards "knew or should have known that Rothstein was utilizing RRA as a front for [his] massive Ponzi scheme," Epstein's complaint alleges claims against Rothstein and Edwards for fraud, violation of Florida's civil racketeering statute and violation of Florida's Civil Remedies for Criminal Practices Act. Ponzi Scheme Complaint ¶¶ 26, 54-68, 73-78.4 The complaint also pleads an abuse of process claim alleging that after the thrce sex abuse suits were filed, Edwards engaged in harassing press conferences and abusive discovery tactics (such as listing public figure friends of Epstein as potential witnesses) in order to embarrass Epstein and drive up the settlement value of the cases. Id. ¶¶ 38-42, 69-72. Edwards thereafter asserted a counterclaim against Epstein for abuse of process, alleging that the "sole purpose" of Epstein's claims against him was to "intimidate" Edwards into not pursuing his clients' suits. Balin Aff. Ex. B (Edwards' Ponzi Scheme Counterclaim), ¶ 9. On September 22, 2010, Edwards filed a motion for summary judgment to dismiss the Ponzi Scheme Action on several grounds — a motion which (as discussed below) repeatedly contradicts the assertions made by Edwards to this Court. That motion is pending. E. The Present Motion to Compel On July 19, 2010, Edwards filed a one-page motion with the Florida state court in the Although was initially named as a defendant, she was dismissed from the Ponzi Scheme Action as pan of the overall settlement of her claims. See BalM Aff. Ex. Ii, at pp. 19.20 (Dkt. Nos. 102.103 in Ponzi Scheme Action). 10 DWI 15845345O 3970112-000042 EFTA00596464  Ponzi Scheme Action asking for appointment of a commissioner to take "the deposition duces tecum of the Records Custodian of The New York Daily News." Balin Aff. Ex. D (Edwards' Motion to Appoint Commissioner) at 1. The Daily News was not made a party to the Florida motion nor given any opportunity to raise challenges in the Florida court. On August 3, 2010, the Florida court granted the motion and issued an order appointing a commissioner to take "the deposition duce [sic] tecum of the Records Custodian of The New York Daily News." Balin Aff Ex. E (Order on Defendant's Motion to Appoint Commissioner) at 1. The Florida order makes no mention of the Epstein interview, and Edwards submits nothing indicating that the Florida court ever considered the propriety ofits production. Nonetheless, armed with this Florida order that does not even mention the Epstein interview, on September 20, 2010, Edwards filed this motion under CPLR 3102(e) requesting an order compelling the Daily News to produce "the audio tape recording of the conversation between Daily News reporter George Rush and Jeffrey Epstein." Lewis Aff. Ex. 2. ARGUMENT Where, as here, a party has secured a commission from an out-of-state court for discovery from a non-party who resides in New York, that out-of-state discovery commission is not, of course, self-executing. Instead, under CPLR 3102(e), the party must request that a New York Court issue an order directing the requested discovery in this state. And as recently noted by Justice York, it is well settled that Section 3102(e) does not permit a New York court to: rubber stamp a foreign court's Letters Rogatory. Instead, ... a court retains the power to quash subpoenas due to, inter alia, legislatively enacted privileges, an independent determination that the material at issue is neither critical nor necessary and a desire to prevent unnecessary harassment. Thus, this Court must make its own determination as to the validity of [the non-party's] challenges [to discovery].... [T]his is especially true where, as here, the nonparties had no notice of the [out-of-state discovery] hearing and no opportunity to raise the [discovery] challenges before the [out-of-state] court. 11 DWT 151145345v3 3970112-000042 EFTA00596465  In re Zallie, 2009 WL 2844429 (Sup. Ct.M. Co. Aug. 13, 2009) (emphasis added) (refusing to enforce out-of-state letters rogatory since information sought to be discovered from New York non-party was available from other sources); Kirkland & Ellis v. Chadbourne & Parke LLP, 176 Misc.2d 73, 77, 670.I.2d 753, 756 (Sup. Ct.M. Co. 1998) (under CPLR 3102(e), "[t]his Court may not simply rubber stamp the decision of the Minnesota court"); In re Pennzoil Co., 108..2d 666, 667, 485.1.2d 533, 535 (Ist Dep't 1985) (under Section 3102(e), quashing portion of subpoena seeking unpublished material from New York journalist for use in Texas proceeding since the unpublished material was privileged under New York Shield Law); In re Sheehan, 2008 WL 2148403 (Sup. Co. May 9, 2008) (denying Section 3102(e) motion for deposition of New York journalist for use in Florida action since requested testimony was privileged under New York Shield Law)! Here, Edwards' Section 3102(e) motion to compel must be denied since the unpublished Epstein interview is clearly privileged under the New York Shield Law; and, even without regard to the Shield Law privilege, Edwards cannot even make the showing required for general non- party discovery in New York. I. EDWARDS MAY NOT RELY ON THE VACATED DISTRICT COURT ORDER FROM THE JANE DOE ACTION As a threshold matter, throughout his moving brief Edwards heavily relies on the vacated District Court production order from the Jane Doe Action as the basis for his argument that he too is similarly entitled to production of the Epstein interview for use in the Ponzi Scheme $ As Pennzoil and Sheehan illustrate, where (as here) a party files a New York proceeding seeking discovery of newsgathering material from a New York news organization for use in an out-of-state-proceeding, the courts of this state apply the evidentiary privilege ofNew York's Shield Law as the governing state law privilege. In this regard, Edwards concedes in his motion that New York's Shield Law is the privilege standard that applies in this case. See Moving Br. at 14 (citing New York Shield Section 79-h as governing standard). 12 DINT 15&45345v3 3970112-000042 EFTA00596466  Action. Moving Br. at 2, 7-8, 18. This reliance is clearly misplaced for several reasons. First and foremost, as a matter of settled law, having been vacated by the Second Circuit, the District Court decision in the Jane Doe Action is a nullity which has absolutely no res judicata or precedential effect. Because the settlement of the Jane Doe Action mooted the Daily News' pending appeal from the District Court's decision, the Second Circuit exercised its discretion to vacate the decision to ensure that the Daily News (stymied in its effort to appeal) would not be prejudiced and so that others (like Edwards) would not be able to rely on the decision. Indeed, the very purpose of vacatur is "to prevent a judgment, unreviewable because of mootness, from spawning any legal consequences." U.S. v. Munsingwear, 340 U.S. 36, 41 (1950), cited in O'Connor v. Donaldson, 422 U.S. 563, 577 n.I2 (1975) (vacatur "deprives [the lower] court's opinion of precedential effect"); see also Associated Gen. Contractors ofConn., Inc. v. City ofNew Haven, 41 F.3d 62, 67 (2d Cir. 1994) (vacatur ensures that a party will "not suffer ... adverse res judicata effects"). And, in this proceeding, Edwards tries to do precisely what is prohibited —"to pursue [new subpoenas] on the basis of a district court decision" that has been vacated. El. Dupont de Nemours & Co. v. Invista B. V., 473 F.3d 44, 48 (2d Cir. 2006).6 Second and equally important, besides being vacated, the District Court's analysis in the Jane Doe decision is completely irrelevant to the question here of whether Edwards is entitled to production of the Epstein interview for use in the current Ponzi Scheme Action. The decision in the Jane Doe Action involved different parties (plaintiffJane Doe, not defendant/counterclaimant Edwards); it involved entirely different causes of action and issues (sexual abuse claims against Epstein, not Ponzi scheme fraud claims against Edwards); and it involved an entirely different 6 Edwards would have this Court believe that the settlement of the Jane Doe Action resulted in a routine, "automatic vacation of the district court ruling." Moving Br. at 2. In fact, far from being "automatic," the Daily News had to move the Second Circuit for vacatur; Edwards consented to the vacatur and the decision of whether or not to grant vacatur falls within the discretion of the Second Circuit. Russman v. Bd. ofEd, 260 F.3d 114, 121 (2d Cir. 2001). 13 DVIT 15/145345v3 3970112-000042 EFTA00596467  reporter's privilege (the less demanding federal qualified privilege, not the more stringent New York Shield law privilege that applies in this case). Compare Dist. Ct. Op. at 4 (to overcome federal qualified privilege for non-confidential materials, litigant need only show "that the materials at issue are of likely relevance to a significant issue in the case, and are not reasonably obtainable from other available sources" (quoting Gonzales, 194 F.3d at 36)) with.. Civil Rights Law § 79-h(c) (to overcome state Shield Law privilege for non-confidential material, party must make "a clear and specific showing" that the material at issue "(i) is highly material and relevant; (ii) is critical or necessary to the maintenance of a party's claim [or] defense ...; and (iii) is not obtainable from any alternative source"). In short, it is legally meritless for Edwards to rely on the vacated result in the Jane Doe Action. Instead, he must independently establish that ! (not Jane Doe) is entitled to the Epstein interview in connection with the claims now at issue in the Ponzi Scheme Action. And that is what he fails to do. 11. EDWARDS FAILS TO MEET THE REQUIREMENTS FOR DISCOVERY OF A NON-PARTY UNDER CPLR 310160 As discussed below, the unpublished Epstein interview was and remains clearly privileged under the New York Shield Law. (See Points III and IV, infra.) Yet, this Court does not even need to reach the Shield Law privilege. For, even without regard to the privilege, the Epstein interview is not discoverable under the general non-party disclosure requirements of CPLR 3101(a)(4). under CPLR 310I(a)(4), "[m]ore than mere relevance and materiality is necessary to warrant disclosure from a nonparty." Kooper v. Kooper, 74 M.3d 6, 17-18, 901-.2d 312, 323 (2d Dep't 2010); Fraser v. Park Newspapers ofSt. Lawrence Inc.,257111.2d 961, 14 I)WT 15845345O 3970112-000042 EFTA00596468 962, 6841.I.2d 332, 334 (3d Dep't 1999) (same). This heightened relevancy requirement for non-party disclosure exists because "nonparties ordinarily should not be burdened with responding to subpoenas for lawsuits in which they have no stake or interest unless the particular circumstances of the case require their involvement." Kooper, 74M.3d at 18 (emphasis added). Second, even where evidence has heightened relevance, a party seeking disclosure from a non-party must also demonstrate that "the disclosure sought cannot be obtained from sources other than the nonparty." Kooper, 74.1.3d at 16-17 (quashing non-party subpoenas). Indeed, courts in the First Department routinely deny non-party disclosure on this ground. See, e.g., Tannenbaum v. City ofNew York, 30..3d 357, 359, 819.1.2d 4, 6 (1st Dep't 2006) (denying request to depose non-party witness where party seeking disclosure failed to demonstrate the information sought "could not be obtained from other sources"); Zallie, 2009 WL 2844429 ("the party seeking the [non-party] subpoena must show that the information sought is ... unobtainable from other sources") (quashing non-party subpoena); Ash v. Bd. of Managers ofthe 155 Condominium, 2006 WL 5376806 (Sup. Ct.M. Co. Oct. 25, 2006) ("a party seeking disclosure from a non-party witness must first demonstrate ... that the information sought ... can not be obtained from other sources") (quashing non-party subpoenas), rev'd in part on other grounds, 44..3(1324, 843 .2d 218 (1st Dep't 2007). A. The Epstein Interview Does Not Have Heightened Relevance to the Issues in the Ponzi Scheme Action Here, Edwards wholly fails to satisfy either of the strict requirements for non-party discovery. The Epstein interview simply has no relevance (let alone the required heightened relevance and materiality) to the fraud and abuse of process claims that are at issue in the Ponzi Scheme Action. Indeed, the October 2009 Epstein interview was conducted two months before Rothstein was even indicted by authorities for his Ponzi scheme fraud in December 2009 (and 15 DM' 1584534501970112-000042 EFTA00596469 two months before the Ponzi Scheme Action was filed). Accordingly, as this Court can readily see for itself from the interview transcript, nowhere in the interview does Epstein discuss Rothstein's Ponzi scheme — which had not yet even been made public. In his summary judgment motion, Edwards acknowledges that "[t]he bulk of Epstein's claims against Edwards hinge on the premise that Edwards was involved in a Ponzi scheme run by Scott Rothstein." SJ Motion at 6; see also Ponzi Scheme Counterclaim ¶ 10 (acknowledging that the gist of Epstein's claims is that Edwards was "a knowing participant in a civil theft and criminal enterprise"). Since nothing in the Epstein interview — nothing — discusses or refers to the Ponzi scheme, to any participation by Edwards in the Ponzi scheme or to Epstein's motive for bringing the Ponzi Scheme Action against Edwards, the interview obviously does not have heightened relevance and materiality (or indeed any relevance) to the claims at issue in the Ponzi Scheme Action. Edwards is simply on a fishing expedition — which CPLR 3101(aX4) prohibits. Kooper, 74II.3clat 18 (where party cannot establish that sought after evidence has "more than mere relevance," a non-party "should not be burdened with responding to subpoenas"). Unable to credibly demonstrate that