EFTA00801275.pdf

1 IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT, IN 2 AND FOR PALM BEACH COUNTY, FLORIDA 3 Case No. 502009CA040800XXXXMB 4 5 JEFFREY EPSTEIN, 6 Plaintiff/Counter-Defendant, 7 vs. 8 SCOTT ROTHSTEIN, individually; BRADLEY EDWARDS, individually, 9 Defendants/Counter-Plaintiffs. 10 11 12 TRANSCRIPT OF PROCEEDINGS 13 14 DATE TAKEN: THURSDAY, MARCH 7th, 2018 15 TIME: 10:07 a.m. - 12:08 p.m. PLACE 205 N. Dixie Highway, Room 10D 16 West Palm Beach, Florida BEFORE: Donald Hafele, Presiding Judge 17 18 19 20 This cause came on to be heard at the time and 21 place aforesaid, when and where the following proceedings were reported by: 22 23 Sonja D. Hall Palm Beach Reporting Service, Inc. 24 1665 Palm Beach Lakes Boulevard, Suite 1001 West Palm Beach, FL 33401 25 PALM BEACH REPORTING SERVICE, INC. EFTA00801275 1 2 APPEARANCES: 3 For Plaintiff/Counter-Defendant: 4 LINK & ROCKENBACH, P.A. 1555 Palm Beach Lakes Boulevard, Suite 301 5 West Palm Beach, FL 33401 By KARA BERARD ROCKENBACH, ESQUIRE 6 By SCOTT J. LINK, ESQUIRE 7 For Defendant/Counter-Plaintiff: SEARCY, DENNEY, SCAROLA, BARNHART & 8 SHIPLEY, P.A. 2139 Palm Beach Lakes Boulevard 9 West Palm Beach, FL 33409 By JACK SCAROLA, ESQUIRE 10 By DAVID P. VITALE JR., ESQUIRE By KAREN TERRY, ESQUIRE 11 12 For Defendant/Counter-Plaintiff: 13 HATCH, JAMES & DODGE, P.C. 10 West Broadway, Suite 400 14 Salt Lake City, UT 84101 By PAUL G. CASSELL, ESQUIRE 15 16 For Jeffrey Epstein: 17 DARREN K. INDYKE, PLLC 575 Lexington Avenue 18 New York, NY 10022 By DARREN K. INDYKE, ESQUIRE 19 20 For Jeffrey Epstein: 21 ATTERBURY, GOLDBERGER & WEISS, P.A. 250 Australian Ave. South, Suite 1400 22 West Palm Beach, FL 33401 By JACK A. GOLDBERGER, ESQUIRE 23 24 25 PALM BEACH REPORTING SERVICE, INC. EFTA00801276  1 THE COURT: Good morning. Have a seat. 2 Thank you. 3 Needless to say the recent barrage, as 4 opposed to flurry, of activity that has 5 transpired is of extreme consternation to 6 the court. It has caused me to have to 7 engage in an inordinate amount of time to 8 the exclusion of other matters that needed 9 my attention. 10 While the Court understands the gravity 11 of the issues that have transpired, it is 12 with extreme consternation and concern that 13 they have transpired on the eve of trial, a 14 trial that has already been continued once, 15 matters that could have been avoided had 16 timely action been taken. And the burden on 17 the Court to try to get through what would 18 be approximately four feet of documents is 19 extensive and onerous. I have done the best 20 that I can to go through the materials, and 21 I had some assistance, which I appreciate, 22 from one of our staff attorneys, in trying 23 to simply wade through the extensive, 24 complicated, and in many situations, years' 25 old documents, some that go back almost a PALM BEACH REPORTING SERVICE, INC. EFTA00801277  1 decade in terms of their age, and much of 2 which I'm reviewing for the first time. 3 So it's against that backdrop we will 4 proceed. We will hear the motion filed by 5 Epstein to remove the case from the trial 6 docket relative to Florida Rule of Civil 7 Procedure 1.440 first. 8 MR. SCAROLA: Good morning, Your Honor. 9 With the Court's permission, believe it or 10 not, there is one agreed matter that we 11 would ask the Court to address first. 12 I would like to introduce to Your Honor 13 University of Utah Law Professor Paul 14 Cassell, former Federal Judge Paul Cassell, 15 who will present that matter to the court. 16 MR. CASSELL: Good morning, Your Honor. 17 Since this is an unopposed motion, it will 18 just take 10 seconds to present. 19 I'm here pro hac vice, which I'm not 20 sure the Court is concerned about. We do 21 have a motion to seal the pleading and 22 related emails. It's unopposed. We ask 23 that it be granted. Temporarily sealed 24 until you reach a ruling. 25 THE COURT: That's fine. I will need PALM BEACH REPORTING SERVICE, INC. EFTA00801278  1 an order in that regard, please. 2 All right, Ms. Rockenbach. 3 MS. ROCKENBACH: Thank you. May it 4 please the Court. Good morning. 5 Your Honor mentioned the barrage that 6 the Court has received. And it's the exact 7 words that I have on the top of my yellow 8 pad to describe the email flurry that has 9 occurred within the last four days, which 10 have truly made me sick. I could not wait 11 for this hearing to occur because of the 12 fact that I know this Court does not need 13 any more paperwork. You need to see the 14 attorneys and understand the chain of 15 evidence and how it was reprehensible that 16 either I or my law partner has been accused 17 of stealing documents. That has made me 18 sick. 19 So I look forward to discussing the 20 privileged nature of the documents. And I 21 thank Mr. Cassell for being here today. 22 Your Honor, this is Mr. Epstein's 23 motion to remove this case from the trial 24 docket. It was prompted by Mr. Edwards' 25 motion to separate the trials, which was PALM BEACH REPORTING SERVICE, INC. EFTA00801279  1 filed on Friday, I believe, for the first 2 time identifying that the fact that the 3 default that Mr. Epstein has against 4 Mr. Roth was on the original complaint and 5 it no longer applied. 6 Mr. Edwards pointed out to this Court 7 and to Mr. Epstein -- he is absolutely 8 correct -- that Mr. Epstein's operative 9 complaint is the Second Amended Complaint to 10 which there is no default. 11 What rule 1.440 tells this Court to do 12 is to look at the time that Mr. Edwards 13 moved -- it's maybe a notice to set trial. 14 In this case it was a motion to set cause 15 for trial -- was the case at issue. 16 Rule 1.440 is one of the most strictly 17 complied with mandatory rules of civil 18 procedure, which has been recognized by the 19 Fourth District Court of Appeal, and it's 20 one of those rare instances when a petition 21 for writ of mandamus is appropriate when 22 it's not complied with. 23 So we need to look at the pleadings and 24 not try this case twice. This case was not 25 at issue when Mr. Edwards filed his PALM BEACH REPORTING SERVICE, INC. EFTA00801280  1 motion -- for the obvious reason, when he 2 filed his motion to set the case in the 3 above-styled cause of action for trial on 4 May 24th, 2017. There is no dispute. 5 And Mr. Edwards has actually pointed it 6 out, Mr. Epstein did not have a default 7 against Mr. Rothstein. 8 Contrary to what Mr. Edwards' 9 suggestion is, is to cure this issue -- 10 THE COURT: Mr. Epstein did not have a 11 default against Mr. Rothstein. 12 MS. ROCRENBACH: Rothstein, thank you 13 very much. 14 Contrary to what Mr. Edwards has 15 suggested, there is no cure for a defective 16 motion to set a cause for trial. You cannot 17 cure it. 18 There are some cases that have been 19 cited. In fact, both sides. I cited Labor 20 Ready from the Fourth District Court of 21 Appeal in my motion. And I understand 22 Mr. Edwards intends to rely upon it. But 23 this was an authored decision by Judge 24 Melanie May from the Fourth DCA. And that 25 case has great language to guide this Court PALM BEACH REPORTING SERVICE, INC. EFTA00801281  1 on. 2 In that case Judge May wrote, "We do 3 not quarrel with those cases or their 4 holdings." 5 Your Honor, would the Court like a copy 6 of this case to follow? 7 THE COURT: Sure. 8 MS. ROCKENBACH: Thank you. May I 9 approach? 10 THE COURT: Yes. 11 MS. ROCKENBACH: I have a similarly 12 highlighted copy for counsel. 13 So in that case, the Fourth DCA has 14 said, "We don't quarrel with genuine parts 15 of prior Fourth DCA case recognizing the 16 mandatory nature and compliance, strict 17 compliance with Rule 1.440." Judge May 18 wrote, "We don't quarrel with Bennett versus 19 Continental Chemicals." 20 However, we point out that none of 21 those cases involve the case that has been 22 pending at issue for years. Those cases 23 were at issue. Meaning, they had a default. 24 They had an answer. They had a final 25 pleading. Twenty days had run. Another 30 PALM BEACH REPORTING SERVICE, INC. EFTA00801282  1 days had run. Compliance with rule 1.440, 2 check the box. 3 What Judge May said in this case, the 4 Labor Ready case, there was a last minute 5 technical amendment to the complaint. And 6 guess what, they went to trial. It was 7 waived. 8 That case does not apply. Those facts 9 do not control. What you have before Your 10 Honor is a -- no waiver, no waiver. You 11 have an objection that Mr. Edwards has 12 pointed out, rightfully so, the case is not 13 at issue. 14 What I filed with the Court 15 immediately, simultaneously with the motion 16 to remove this case from the docket was a 17 proper motion for default against Rothstein. 18 There is no case that supports 19 Mr. Edwards' position to this Court about 20 severing a case in order to retroactively 21 make it at issue. That doesn't happen in 22 the law. 23 The law says, in rule 1.440 in the 24 Bennett case and the Gawker case from the 25 Second DCA, says that this Court has to look PALM BEACH REPORTING SERVICE, INC. EFTA00801283  10 1 at May 24th -- and that is the salient date 2 that this Court must look at -- because 3 that's when Mr. Edwards hastily moved this 4 case and set the above-styled caused of 5 action for trial, May 24th. 6 To be clear, Your Honor, Mr. Edwards 7 did not move to sever at that time. This 8 case has been pending for some eight plus 9 years. He has never before tried to sever. 10 He, at that time, on May 24th, instead 11 of pointing out the lack of at issue, and by 12 the way, you need a default, he moved the 13 case. He didn't even move his counterclaim 14 to set for trial, he moved the case. 15 And then further, to evidence 16 Mr. Edwards' intent to try this case 17 globally, main claim and counterclaim 18 which is appropriate, because the 19 counterclaim arises from the main claim -- 20 he entered into a joint stipulation 21 indicating that that's how the case is going 22 to be tried. 23 So it was not Mr. Epstein who caused 24 this last-minute, 11th-hour, oh, my gosh, we 25 are not at issue, it was Mr. Edwards who PALM BEACH REPORTING SERVICE, INC. EFTA00801284  11 1 pointed it out. 2 I researched it over the weekend. And 3 on the very next business day, as soon as I 4 possibly could, I filed the motion to remove 5 the case from the docket. 6 I then immediately moved to default. I 7 have an order for the Court to sign to enter 8 a default. Served it on Mr. Rothstein's 9 counsel of record, Marc Nurik. And we will 10 then be ready once this Court enters the 11 default, and presumably either party notices 12 it for trial in 20 days when it is then at 13 issue, this Court can then set it no less 30 14 days. That is the mandatory nature of the 15 rule. 16 I regret we're here, but this is a 17 strict compliance rule and we have to be at 18 issue. 19 And, Your Honor, the last thing either 20 side or this Court wants is to try this case 21 twice. 22 THE COURT: Despite the representation, 23 Ms. Rockenbach, that you made in your motion 24 to continue, that Plaintiff and his trial 25 counsel will not seek another continuance. PALM BEACH REPORTING SERVICE, INC. EFTA00801285  12 1 We will be to ready to try the case in 90 2 days -- 3 MS. ROCKENBACH: Yes. 4 THE COURT: -- quote, end quote. 5 MS. ROCKENBACH: Yes. 6 THE COURT: Why was that not pointed 7 out to me upon a review of the docket, 8 presumably a review of the docket, to 9 determine whether or not there was, in fact, 10 a need to strike the trial notice at that 11 time, instead of gearing up, instead of 12 spending an inordinate amount of court 13 resources, and now taking the position that 14 because what in essence was dilatory conduct 15 on the part of the Epstein trial counsel 16 team, dating back to 2011, now constitutes 17 reason for this case to be stricken? 18 Does that not sound inequitable? Does 19 that not sound inappropriate? Does that not 20 sound specifically contrary to the quoted 21 language that I have just indicated here? 22 MS. ROCKENBACH: The quoted language as 23 you indicated, Your Honor, I made knowing 24 that there was a default. 25 Mr. Edwards at that time never said PALM BEACH REPORTING SERVICE, INC. EFTA00801286  13 1 that default does not apply to the operative 2 complaint. And I never, ever thought that 3 it did not. 4 THE COURT: Isn't that your 5 responsibility? Isn't that the 6 responsibility -- before you make that 7 statement to this Court and make the 8 representation that in light of the fact 9 that you guys were getting up to speed, that 10 part of getting up to speed, would have been 11 your responsibility to check the adequacy of 12 the pleadings -- and as the case that has 13 been cited -- at least one of them indicate, 14 the responsibility would have been to file a 15 motion to strike the case -- strike that. A 16 motion to strike the notice setting trial or 17 the trial order seasonably and timely so 18 that we would not have been in this position 19 in the first place? 20 It would seem to me that you are 21 essentially creating the error yourselves by 22 not doing due diligence. 23 MS. ROCKENBACH: I wish I had seen it. 24 I knew there was a default against 25 Mr. Rothstein, and that he was in federal PALM BEACH REPORTING SERVICE, INC. EFTA00801287  14 1 prison. Never before did Mr. Edwards raise 2 this issue that he raised on Friday. 3 And by the way, Your Honor, the fact 4 that Mr. Edwards has raised it, he is using 5 it as an excuse to sever the trial, which 6 does not cure the defect, and is an 7 appropriate manner to try this case in any 8 event. 9 Mr. Edwards is the one who pointed out 10 the improper defect, who could have raised 11 it much sooner. 12 Your Honor, I wish I had seen it. I 13 wish I had seen it. And we are ready to try 14 the case, but that's not the issue. 15 Mr. Edwards having raised the defect 16 now, we could go through this trial, get a 17 verdict for Mr. Epstein, and I believe we 18 would, and then Mr. Edwards could appeal on 19 the defect because he has raised it. 20 So there is but one action that the 21 Court can take, and that is -- 22 THE COURT: If that transpires, then I 23 quit. Then I am resigning my position. 24 Because if I can't trust what was written 25 already here by you, that you -- that PALM BEACH REPORTING SERVICE, INC. EFTA00801288  15 1 Mr. Epstein, as the Plaintiff, and his trial 2 counsel, will not seek another continuance, 3 and be will be ready to try the case in 90 4 days -- quoted language, pledging to this 5 Court that otherwise this case is ready to 6 go -- and now we are faced with this defect 7 after all of the time and expense that has 8 been made here and spent here, is really a 9 travesty. 10 And while I say that tongue in cheek in 11 terms of my resignation, this would -- it 12 would be astounding to me if that was, in 13 fact, the case. 14 MR. LINK: Your Honor, may I have 15 permission to stand next to my partner on 16 this? 17 THE COURT: Sure. Of course. 18 MR. LINK: Thank you. 19 Judge, I want to make sure that the 20 record is clear. We are not asking for a 21 continuance. The words that we gave you, we 22 are standing by. This is not a motion for a 23 continuance. And the words that my partner 24 told this Court were absolutely true when 25 she said them. They are absolutely true PALM BEACH REPORTING SERVICE, INC. EFTA00801289  16 1 today. This is not us not being ready. 2 This a legal defect that cannot be cured. 3 And I apologize to the Court for where 4 we are and what we have done. And I'm 5 afraid we are going to spend a lot more time 6 together on this case. 7 But I want this Court to understand 8 that when my law firm says something, we 9 mean it. We absolutely do. And we are not 10 moving for continuance. 11 But this case cannot go to trial with 12 this defect, that's just the law. But I 13 don't want this Court to think for one 14 second that my partner or I would ever 15 mislead you or say something we didn't mean. 16 I have been accused of enough of that this 17 week. 18 THE COURT: The point that I'm 19 making -- nobody is accusing you. 20 MR. LINK: Not you, Your Honor. I've 21 been accused of stealing documents and a 22 crime. 23 THE COURT: I understand. 24 MR. LINK: And that's the first time in 25 32 years. PALM BEACH REPORTING SERVICE, INC. EFTA00801290  17 1 THE COURT: And I appreciate that. I 2 understand everybody's emotions are rather 3 high, based upon the fact that all of this 4 has transpired in such a short amount of 5 time. 6 But again, at the same time, as I said 7 before, it seems to me to be highly 8 inequitable -- and I understand your 9 argument is legal in nature -- but highly 10 inequitable to come before the Court and 11 suggest that by way of dilatory conduct on 12 the part of the Epstein trial team in not 13 securing the technicality that we are 14 speaking about, and that is a default 15 against an individual who will remain in 16 prison for the rest of his life. Who is, to 17 my knowledge, based anecdotally, only based 18 on anecdotal evidence, is penniless and has 19 been disgorged of any assets that he has and 20 that his family has, that somehow because of 21 this technicality we're caused to put this 22 case back and not try the case after, again, 23 an inordinate amount of time and expense, 24 which is in essence taxpayer money, of which 25 this Court has been and continues to be a PALM BEACH REPORTING SERVICE, INC. EFTA00801291  18 1 steward of those expenses and time. 2 Again, coupled with the fact that it 3 was represented to this Court that there 4 would be no further delays and that the case 5 would be ready to try. That tells me and 6 that represents to me, that counsel has done 7 their due diligence. 8 Part of the motion said, "We have heard 9 the Court loud and clear, now we" -- Link 10 and Rockenbach -- "are on the case, with 11 support from the Gunster firm, and we will 12 not allow the same type of conduct that 13 transpired earlier, which the Court was 14 critical of, happen again." 15 That pledge to this Court means 16 something to this Court. That means that 17 the docket has been assiduously reviewed, 18 and that everything else, short of gearing 19 up for trial on the substantive issues that 20 are before this forum, have been resolved, 21 rectified, and that certainly we are not 22 going to be reaching back seven years on a 23 technicality to somehow thwart the efforts 24 of the Court in trying to moved forward on 25 behalf of both sides to resolve a case that PALM BEACH REPORTING SERVICE, INC. EFTA00801292  19 1 has drawn a significant amount of public 2 interest and that has been pending for -- 3 MR. LINK: Nine years. 4 THE COURT: Nine years is too simple. 5 Three thousand and thirteen days, as of 6 today. 7 MR. LINK: Yes, sir. 8 Your Honor, if I may. Because what is 9 really important to me, more than anything 10 in this case, is our reputation. And I want 11 this Court to understand that we are not 12 moving for a continuance. 13 THE COURT: I didn't say that was your 14 position, which is why there is a 15 frustration here. 16 Continuances are discretionary under 17 the law. I have wide discretion. The Rule 18 of Judicial Administration of this state -- 19 and I do my best to follow them. And you 20 have probably heard me at 8:45s make this 21 statement, at least if not expressly, 22 impliedly, that the trial courts of this 23 state shall have a firm continuance policy. 24 Now, while that may not be popular 25 amongst the bar when the Court enforces that PALM BEACH REPORTING SERVICE, INC. EFTA00801293  20 1 rule, it is nonetheless a rule of the 2 Florida Supreme Court, and I do my best to 3 follow the law, despite popularity concerns, 4 of which I have none. 5 MR. LINK: And we appreciate that, Your 6 Honor. 7 THE COURT: So -- 8 MR. LINK: Sorry, I thought you were 9 done. 10 THE COURT: I am not exonerating the 11 movant here, by any means. You're the first 12 one -- 13 MS. ROCKENBACH: The movants being 14 Edwards or Epstein? 15 THE COURT: I'm talking about Edwards. 16 The movant setting the case for trial. 17 MS. ROCKENBACH: Understood. 18 THE COURT: Because Edwards has the 19 same responsibility to the Court, to this 20 community, to the taxpayers, to the public, 21 to my constituency, to assiduously review 22 the docket, to ensure that the notice is 23 being provided in accordance with rule 24 1.440. 25 So by no means am I exonerating anyone PALM BEACH REPORTING SERVICE, INC. EFTA00801294  21 1 here. It's just, again, a cumulation of 2 having to go through what we have gone 3 through together. Up to now, what I have 4 tried to maintain, a civil, professional and 5 efficient atmosphere despite the nature of 6 the case, despite pejorative comments that 7 were made earlier, which the Court has 8 indicated will not be tolerated, and that 9 has been followed carefully by all 10 concerned, and I appreciate that very much. 11 But here we are. I am familiar with 12 the law. I am familiar with the statute 13 -- strike that. 14 I am familiar with the rule. I am 15 familiar with the comments to the rule. I 16 am familiar with the case law pertaining to 17 the rule. 18 I will allow you time for rebuttal, if 19 needed. 20 MS. ROCKENBACH: Thank you, Your Honor. 21 MR. LINK: Judge, thank you for letting 22 me come up here. 23 THE COURT: Mr. Scarola, again, I share 24 my frustration with you and the Edwards' 25 legal team, as well, as far as this PALM BEACH REPORTING SERVICE, INC. EFTA00801295  22 1 conundrum. 2 It is disappointing that a firm of your 3 stature, an attorney of your stature, of 4 which I have an abiding respect for all of 5 those who are serving their clients in this 6 case, that, again, the docket was not 7 assiduously combed, and we are left here 8 today with the very real possibility of this 9 case not being tried as scheduled. 10 Your response, please. 11 MR. SCAROLA: Yes, sir. Your Honor, 12 let me first of all point out that rule 13 1.440 only permits a party to notice a 14 matter for trial once at issue. 15 And at the time our notice was filed, 16 we were not a party to the case that was 17 pending against Mr. Rothstein. And quite 18 frankly, had no concern about that case. It 19 was simply not a matter that we cared about, 20 and quite frankly believed, for the reasons 21 that Your Honor has referenced, that it 22 would never really be tried. 23 This is a defendant who has absolutely 24 no ability whatsoever to ever respond to a 25 judgment against him. PALM BEACH REPORTING SERVICE, INC. EFTA00801296  23 1 And our concern with regard to 2 Rothstein arose when we were informed of the 3 witnesses that were intended to be called 4 ostensibly in the case against 5 Mr. Rothstein, which was a damage only claim 6 for a conspiracy to commit abuse of process, 7 a claim, which if it had been defended, 8 would have been thrown out because there is 9 no tort because of the litigation privilege 10 for conspiracy to commit abuse of process, 11 and there could not possibly, under any 12 conceivable version of the facts, ever be a 13 claim for damages by Mr. Epstein in 14 connection with that. 15 Nonetheless, we are told that there are 16 going to be -- there's going to be testimony 17 from Mr. Rothstein -- excuse me. From 18 Mr. Epstein's victims in that portion of the 19 case, that Mr. Edwards is going to be called 20 in that portion of case. 21 And what became apparent to us is, that 22 an effort was going to be made to use the 23 rouse of a claim against Rothstein as to 24 which we would have no standing to object, 25 to insert into the record information that PALM BEACH REPORTING SERVICE, INC. EFTA00801297  24 1 would never be admissible in the claim of 2 Bradley Edwards against Mr. Epstein. 3 It became a particular concern to us, 4 because once a default is entered, the jury 5 is obliged to assume the truthfulness of the 6 facts that are alleged in the complaint. 7 We are obviously contesting those 8 facts. So what was going to happen if there 9 was going to be a focus on the underlying 10 allegations -- 11 THE COURT: Against Rothstein? 12 MR. SCAROLA: Against Rothstein -- is 13 that the same jury was going to be told, you 14 must accept these allegations; and then they 15 were going to be told, you can't accept 16 those allegations. And that obviously in 17 and of itself created a need for us to 18 approach the Court and ask that these claims 19 be severed. 20 We then determined that there was no 21 valid default ever entered against 22 Mr. Rothstein. It didn't happen. And 23 that's not something, again, that was ever a 24 concern to us. 25 I don't represent him. I never want to PALM BEACH REPORTING SERVICE, INC. EFTA00801298  25 1 represent him. I am uncomfortable about the 2 idea of having to be involved in a trial in 3 which I might have to be raising objections 4 that would appear to be objections on behalf 5 of Rothstein to what's going on in that 6 first portion of the case. 7 So we found out about the procedural 8 defect. Now the issue becomes, does Your 9 Honor have the ability to address those 10 problems? And the answer to that question 11 is clearly yes. 12 Severance of a permissive 13 counterclaim -- and there is no doubt about 14 the fact that this is a permissive 15 counterclaim -- rests within the sound 16 discretion of the Court. 17 THE COURT: The question that I had 18 was, in reviewing the material, is this 19 still a counterclaim at all, albeit 20 technically brought as same, because Edwards 21 no longer is a defendant in the matter 22 brought by Epstein? 23 The sole defendant, as I understand it, 24 on a one-count issue is Rothstein. 25 MR. SCAROLA: Yes, sir. I refer to it PALM BEACH REPORTING SERVICE, INC. EFTA00801299  26 1 as a counterclaim only because that's the 2 procedural posturing in which it arose. 3 But, when a voluntary dismissal was 4 taken with regard to all claims against 5 Bradley Edwards, it's no longer a 6 counterclaim. It's now our claim against 7 Mr. Epstein. 8 THE COURT: And while it has its 9 genesis in the original action filed by 10 Epstein against Rothstein, Edwards and III 11 the fact that simply because it has its 12 genesis there, as I was trying to think this 13 through among the other materials that I had 14 to review -- and they were substantial -- is 15 that can it not be argued that the only 16 connection between Rothstein's claim bought 17 against him -- strike that. 18 Epstein's claim brought against 19 Rothstein, the only connection that is even 20 arguable, is that, in fact, the Edwards' 21 case had its genesis in the fact that 22 Epstein originally brought the claim against 23 Rothstein, Edwards and III., and then 24 voluntarily dismissed the case at the eve of 25 summary judgment. PALM BEACH REPORTING SERVICE, INC. EFTA00801300  27 1 I.e., is there any law that supports 2 the proposition that this would, in fact, be 3 a separate action at this juncture having no 4 technical, even legal connection, between 5 the claim brought by Epstein against 6 Rothstein for some type of conspiracy issue, 7 and what is now a separate malicious 8 prosecution claim -- albeit having its 9 genesis in the original Epstein action -- 10 but having nothing shared at this juncture, 11 either technically or legally, other than a 12 case number? 13 MR. SCAROLA: Your Honor, I think that 14 that is flawless logic. We are here to try 15 our claim against Epstein on a fourth 16 amended, quote, unquote, counterclaim that 17 is really a separate action. 18 But while I understand the Court's 19 reasoning and agree with it, we don't need 20 to try to technically call this something 21 other than what it was derived from, and 22 that is a counterclaim. 23 Because the law is very clear that this 24 Court has the discretion to sever for 25 separate trials a counterclaim. And that's PALM BEACH REPORTING SERVICE, INC. EFTA00801301  28 1 the second -- excuse me -- that's the Third 2 DCA case that we cited to Your Honor, Turner 3 Construction Company versus ENF Contractors. 4 And let me hand -- let me hand the 5 other copy of that to Your Honor. 6 So we can assume -- without needing to 7 reach the argument as to whether this is or 8 is not still a counterclaim -- we can assume 9 that it is a counterclaim. There is no 10 question about the fact that it's a 11 permissive counterclaim. 12 And we are in a position, whereas the 13 Third District Court of Appeal observed, it 14 is within a trial judge's discretion to 15 sever a permissive counterclaim from the 16 main claim if there is no evidence of 17 prejudice. 18 And I was very pleased to hear Mr. Link 19 and Ms. Rockenbach stand before the Court 20 and tell you, We are ready for trial. 21 Because that's what they told you. They 22 told you that back -- they told you they 23 would be ready back in December, and they 24 are telling you again, We are ready for 25 trial. We are not asking for a continuance. PALM BEACH REPORTING SERVICE, INC. EFTA00801302  29 1 We only want to remove a technical defect 2 that might have us try this case twice. 3 Well, I assure Your Honor, there could 4 not be a clearer example of waiver on our 5 part of any technical difficulty than I am 6 asserting to the Court right now that could 7 never and will never be the basis for any 8 appellate argument on our part. 9 So, next, the Court goes on to say, "An 10 appellate court will not interfere with 11 procedural rulings of a trial judge, unless 12 a party is deprived of a substantial right 13 by the procedure employed." 14 So let's look at the procedure 15 employed, and what the unanimous Fourth 16 District Court of Appeal told us in Labor 17 Ready versus the Australian Warehouses 18 Condominium Association. 19 THE COURT: And again, the mule of me 20 wading through these documents, if you can 21 hand me cases as we go along, I will 22 appreciate it. 23 MR. SCAROLA: Absolutely. 24 THE COURT: Thank you. 25 MR. SCAROLA: This is our appellate PALM BEACH REPORTING SERVICE, INC. EFTA00801303  30 1 court speaking through Judge May, as I said, 2 an unanimous opinion joined in by Judge 3 Gunther and Judge Farmer. And I am looking 4 at the third page, the last page of this 5 copy, Your Honor, and it's the highlighted 6 language. 7 "This is not a case where the case had 8 never been at issue." Nor is this. "This 9 is not a case where the parties did not have 10 sufficient time to prepare." Nor is this. 11 "This is not a case where anyone was 12 prejudiced by the technical amendments to 13 the complaint." There they were talking 14 about adding a punitive damage claim to the 15 complaint. 16 "In situations where the parties have 17 received actual timely notice of the trial, 18 they are precluded from arguing prejudice 19 based upon a technical violation." 20 Here we don't concede that there is any 21 technical violation at all. But even if 22 there were to be, the Fourth DCA says not a 23 basis to disturb a trial court decision when 24 there is no evidence of prejudice. And we 25 are being told no prejudice. PALM BEACH REPORTING SERVICE, INC. EFTA00801304  31 1 THE COURT: Speak to me again about the 2 issue where, in a setting such as this, if 3 both matters were to be tried together, the 4 position that your client would be in having 5 to prosecute his claim and in essence try 6 potentially try to defend Rothstein at the 7 same time. 8 MR. SCAROLA: Yes, sir. I think that 9 that's really clear. The allegations 10 against Mr. Rothstein are, even in this 11 later version of the complaint, basically 12 identical to the allegations that were made 13 against Mr. Edwards. It is the complaint 14 upon which a voluntarily dismissal was taken 15 as to Mr. Edwards. 16 So the jury is told in a default 17 circumstance all of the allegations must be 18 accepted as true. And the only issues that 19 arise are issues with regard to causation 20 and damages. 21 We are contending that there could 22 be -- first of all we are contesting the 23 underlying allegations. The jury is being 24 told accept them with regard to Rothstein. 25 You can't accept them with regard to PALM BEACH REPORTING SERVICE, INC. EFTA00801305  32 1 Epstein, they are contested. 2 So that's the first problem. One jury 3 being told to assume two different things. 4 The other problem is, we are contending 5 that there could be no damages incurred by 6 Mr. Epstein as a result of anything that 7 went on with regard to a Ponzi scheme in 8 which he was not an investor. 9 We are also contending nothing about 10 what went on at Rothstein, Rosenfeldt & 11 Adler can form the basis for a claim because 12 of the litigation privilege, absolute 13 immunity of the litigation privilege. 14 So the defense -- excuse me -- the 15 plaintiff in the Epstein versus Rothstein 16 case begins their case by putting on proof 17 about how Mr. Epstein was alleged to have 18 been damaged by these absolutely immune 19 activities. 20 What do I do at that point? I must 21 stand up every time any of that evidence is 22 being adduced before the jury, and I must 23 object on the basis that this cannot apply 24 to Mr. Edwards. I'm in the position of 25 defending Mr. Rothstein, of objecting on the PALM BEACH REPORTING SERVICE, INC. EFTA00801306  33 1 causation grounds, of objecting that no 2 injury could have been caused, of objecting 3 on the basis that this is all absolutely 4 privileged information. And from the 5 perspective of the jury, I am now defending 6 this man who is sitting in federal prison 7 for 50 years. 8 And that simply creates extraordinary 9 prejudice to my client. It creates 10 confusion on the part of the jury, and it is 11 absolutely unnecessary; and, indeed, under 12 these circumstances procedurally precluded 13 because there is no default against 14 Mr. Rothstein. 15 So this Court has discretion to solve 16 the problem. You simply sever the 17 permissive counterclaim or the separate 18 action, and you allow us to proceed to trial 19 on a case that Mr. Epstein's lawyers have 20 said they are ready to try. 21 Let's do it. Let's go to trial. They 22 said they are ready. The Court has the 23 ability to cure whatever obstacle 24 conceivably exists to trying this case. 25 My client finally deserves the PALM BEACH REPORTING SERVICE, INC. EFTA00801307  34 1 opportunity after 3,000 whatever it is days 2 to be exonerated publicly of the terrible 3 charges that were lodged against him and 4 hang out in the air and hang out in the 5 cloud and hang out in the Internet some nine 6 million point six hundred thousand times. 7 We would like our day in court, sir. 8 I am pleased to answer any other 9 questions Your Honor may have. But clearly 10 the Court has got discretion to do what we 11 would like you to do. Justice demands that 12 you do what we would like you to do. Thank 13 you, sir. 14 THE COURT: Thank you, Mr. Scarola. 15 Mr. Link. 16 MR. LINK: Yes, sir. 17 THE COURT: As I mentioned, and I want 18 to give you the opportunity to comment on 19 this point. 20 In trying to think this through and 21 rationally engage in a discussion, quote, 22 technically and practically, I start with a 23 proposition that the last amendment to the 24 complaint that was filed on behalf of 25 Epstein was solely against Rothstein on a PALM BEACH REPORTING SERVICE, INC. EFTA00801308  35 1 singular count. 2 MR. LINK: Yes, sir. 3 THE COURT: Clearly that was done after 4 what was termed in quotation marks that I am 5 using, a counterclaim filed by Edwards at a 6 time when Edwards was, in fact, a named 7 defendant in that particular action by 8 virtue of Epstein's decision through 9 counsel, presumably, to no longer include 10 Edwards as a defendant in that action, the 11 terminology and the trappings that would 12 otherwise go along with a pleading entitled 13 counterclaim would dissipate, would legally 14 disappear, in other words, had Mr. Edwards 15 and counsel decided to file a separate 16 action. 17 MR. LINK: Yes, sir. 18 THE COURT: Had this case gone away in 19 its entirety -- let's say, just for the heck 20 of it, that Epstein decided to completely 21 walk away from the lawsuit in its entirety, 22 just walk away -- 23 MR. LINK: Could have happen. 24 THE COURT: -- as many do, okay, there 25 was no longer a counterclaim, it is now -- PALM BEACH REPORTING SERVICE, INC. EFTA00801309  36 1 and has really always been, since the time 2 that Epstein -- strike that. 3 That Edwards was no longer a defendant 4 in the case, a separate action, no longer a 5 counterclaim, technically or practically, 6 because there was no pending claim against 7 Edwards, at least as late as the second 8 amended or whatever iteration of the 9 complaint that was filed in September of 10 2011. 11 MR. LINK: Yes, sir. I understand 12 that. It's really easy. On Friday 13 Mr. Scarola figured this out. We have had 14 this case for nine years. His client was 15 dismissed in 2012. Why didn't he come here 16 in 2012 and say, Judge, this is no longer a 17 counterclaim, I want my own suit? If he had 18 preceded -- 19 THE COURT: I don't think he needed to 20 do that