EFTA00788035.pdf

Peer I 1 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA 2 3 4 IN RE: CASE NO. 09-34791-RBR 5 ROTHSTEIN ROSENFELDT ADLER, PA, 6 7 Debtor. 8 9 ECF #6421, 6440, 6455, 6456, 6457 10 September 27, 2018 11 12 The above-entitled cause came on for hearing 13 before the Honorable RAYMOND B. RAY, one of the Judges in 14 the UNITED STATES BANKRUPTCY COURT, in and for the 15 SOUTHERN DISTRICT OF FLORIDA, at 299 E. Broward Blvd., 16 Fort Lauderdale, Broward County, Florida on September 27, 17 2018, commencing at or about 10:00 a.m., and the following 18 proceedings were had. 19 20 21 22 23 Transcribed from a digital recording by: Cheryl L. Jenkins, RPR, RMR 24 25 OUELLETTE & MAULDIN COURT REPORTERS. INC. (305) 358-8875 EFTA00788035  Rwc 2 1 2 APPEARANCES: 3 4 SEARCY DENNY SCAROLA BARNHART & SHIPLEY, by DAVID VITALE, Esquire 5 On behalf of Bradley J. Edwards 6 LINK & ROCKENBACH, by 7 SCOTT LINK, Esquire and 8 RICE PUGATCH ROBINSON STORFER & COHEN, by CHAD P. PUGATCH, Esquire 9 On behalf of Jeffrey Epstein 10 CARLTON FIELDS, BY 11 NIALL McLACHLAN, Esquire On behalf of Fowler White Barnett, P.A. 12 13 PAUL G. CASSELL, Esquire (via telephone) On behalf of L.M., E.W. and Jane Doe 14 15 EDWARDS POTTINGER, by BRITTANY HENDERSON, Esquire 16 On behalf of Farmer Jaffe Weissing 17 ALSO PRESENT 18 19 ECRO - Electronic Court Reporting Operator 20 21 22 23 24 25 OUELLETTE & MAULDIN COURT REPORTERS. INC. (305) 358-8875 EFTA00788036  Page 3 1 THE COURT: Rothstein Rosenfeldt & Adler. 2 MR. McLACHLAN: Good morning, your Honor. 3 Niall McLachlan from Carlton Fields on behalf of Fowler 4 White Barnett. 5 MR. PUGATCH: Good morning, your Honor. 6 Chad Pugatch, P-u-g-a-t-c-h, on behalf of Jeffrey Epstein. 7 Co-counsel, Scott Link -- 8 MR. LINK: Over here. 9 MR. PUGATCH: -- is here with me, L-i-n-k. 10 MR. LINK: Good morning, Judge. 11 THE COURT: Good morning. 12 MR. VITALE: Good morning, your Honor. 13 David Vitale, V, as in Victor, i-t-a-l-e, on behalf of 14 Mr. Edwards. 15 MS. HENDERSON: Good morning, your Honor. 16 Brittany Henderson on behalf of Farmer Jaffe Weissing. 17 MR. CASSELL: Good morning, your Honor. 18 This is Paul Cassell, C-a-s-s-e-1-1, appearing by phone 19 for intervenors L.M., E.W. and Jane Doe. 20 THE COURT: And, Ms. Henderson, you're 21 representing who? 22 MS. HENDERSON: Farmer Jaffe Weissing, 23 your Honor. 24 THE COURT: All right. Mr. McLachlan. 25 MR. McLACHLAN: Yes, thank you, Judge, and OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788037  Page 4 1 just for the court reporter, my last name is 2 M-c-L-a-c-h-1-a-n. I omitted that earlier. 3 Judge, we have several matters on the 4 calendar this morning. We have the continued hearing on 5 Fowler White's motion for protective order, that's Docket 6 Entry 6421. 7 You may recall we had a hearing earlier, and 8 the Court indicated that it would give, it would give 9 Mr. Edwards time to file a response. He filed that 10 response at 6437, and Fowler White filed a reply at 6443. 11 We also have a couple motions by 12 Mr. Epstein, but the other motion of Fowler White, apart 13 from the ones of Mr. Epstein, that Fowler White joined, is 14 Fowler White's motion for order bifurcating proceedings, 15 which is Docket Entry Number 6455, to which most of the 16 parties have re -- or I think all of the parties have 17 responded. 18 I'm not sure which order you'd like to take 19 these in. The motion for protective order actually 20 relates to documents they're seeking, I think, for 21 really for liability purposes. So we probably need to 22 address that regardless of how your Honor rules on the 23 bifurcation motion, but however you want -- whatever order 24 you prefer, Judge. 25 THE COURT: Well, I think if we try the OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788038  Page 5 1 motion to strike first, that will determine who will be 2 involved in the proceeding. 3 MR. McLACHLAN: Correct, yes, Judge. 4 THE COURT: Then we'll deal with the motion 5 to bifurcate as to liability and as to damages, and then 6 we'll get into the discovery issues and damages. So we'll 7 deal with bifurcation first. 8 MR. McLACHLAN: With bifurcation first? 9 THE COURT: I'm sorry, no, no, with the 10 motion to strike. 11 MR. McLACHLAN: Very good. Thank you, 12 Judge. 13 MR. PUGATCH: Good morning, your Honor. 14 Again, Chad Pugatch, as co-counsel for Jeffrey Epstein. 15 Judge, it's our motion to strike. This is 16 directed toward the intervenors, and it's directed toward 17 their standing to proceed in this matter, other than that 18 you've entered an order allowing them to intervene with 19 regard to the issue of liability and the issue of the 20 documents, but this is directed to their ability to seek 21 damages, and to make it clear, there are three 22 intervenors, there is L.W., and then there are two others, 23 it's E.R. and Jane Doe, and --- 24 THE COURT: E.R.? 25 MR. PUGATCH: E.W., I'm sorry, E.W. and OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788039  Page 6 1 Jane Doe. Those two were not parties to the original 2 motion that led to your November 2010 order, they were not 3 parties to the order. 4 THE COURT: Well, let me stop you there for 5 a minute. Give me some background data. 6 Did E.W. and Jane Doe have pending state 7 court litigation against Epstein? 8 MR. PUGATCH: That Mr. Link would have to 9 answer. 10 MR. LINK: At which time, your Honor? Back 11 when the agreed order was entered? 12 THE COURT: Any time. 13 MR. LINK: They did, yes, sir. 14 THE COURT: So they've had a trial and 15 they've had an adjudication? 16 MR. LINK: Those cases were settled in June 17 or July of 2010, over eight years ago. 18 THE COURT: About the same time this 19 discovery was going down? 20 MR. LINK: Yes, sir, your Honor. Those 21 cases were fully resolved and -- and, I'm sorry, for the 22 court reporter, Scott Link, L-i-n-k. 23 ECRO: Make sure your microphone is on. 24 MR. LINK: Oh, I'm sorry, no. 25 MR. PUGATCH: It's on. I see the --- OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788040  Page 7 1 MR. LINK: I have a green light. 2 MR. PUGATCH: The light is on. 3 MR. LINK: It may not be plugged in. 4 Your Honor, may I approach? 5 THE COURT: Yes. 6 MR. LINK: I'm sorry about that, madam court 7 reporter. 8 Is that better? 9 ECRO: (No verbal response.) 10 MR. LINK: Great. 11 Your Honor, for the -- from a procedural 12 standpoint, all three of the intervenors' claims were 13 resolved by settlement and the exchange of releases. 14 There are no pending claims, and there have not been for 15 over eight years by the three folks that have intervened 16 in this case. 17 THE COURT: But Epstein brought a cause of 18 action against Edwards? 19 MR. LINK: Yes, sir. 20 THE COURT: What happened to that? 21 MR. LINK: So, that action was dismissed in 22 2012. Mr. Epstein still has a pending action against 23 Mr. Rothstein, but the action against Mr. Edwards was 24 dismissed in 2012, and Mr. Edwards filed a 25 THE COURT: As a claim in the Rothstein OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788041  Page 8 1 bankruptcy? 2 MR. LINK: No, sir. 3 THE COURT: A claim against Mr. Rothstein 4 individually? 5 MR. LINK: Individually, yes, sir, in the 6 state court, Palm Beach County, and in that action 7 Mr. Edwards has pending today a claim against Mr. Epstein 8 for malicious prosecution. 9 THE COURT: So, the pending litigation right 10 now is Edwards against Epstein for malicious prosecution? 11 MR. LINK: That's one, and the second is 12 Epstein against Rothstein. 13 THE COURT: But Rothstein is in prison for 14 50 years. 15 MR. LINK: Yes, he is. 16 THE COURT: And has -- 17 MR. LINK: There may not --- 18 THE COURT: -- incredible judgments against 19 him? 20 MR. LINK: Probably not collectible, 21 your Honor, but the case is still pending. 22 THE COURT: Well, it's going to be pending 23 for 50 years because Judge Cohn, when they moved to vacate 24 the sentence, said no. So apparently he's going to do his 25 full term. OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788042  Page 9 1 MR. LINK: I believe he is, yes, sir. 2 THE COURT: So the only litigation that's 3 actually pending -- 4 MR. LINK: The actual --- 5 THE COURT: -- is Edwards versus Epstein for 6 malicious prosecution? 7 MR. LINK: Yes, sir, and that is set on 8 Judge Hafele, the state court's trial docket -- 9 December 4th or 10th? December 4th, specially set. 10 THE COURT: So at the time the -- what was 11 it, 26 boxes of documents? 12 MR. LINK: Roughly, yes, sir. 13 THE COURT: (Inaudible) filed in 2010. The 14 law firm withdrew in 2012? 15 MR. LINK: Correct, that's right. 16 THE COURT: And they boxed the records, and 17 they sat there for six or eight years? 18 MR. LINK: Yes, sir, until they were 19 delivered to my office in 2018, this year. 20 THE COURT: And then when you got the 21 records, you found the disk, and attached it to some 22 discovery or exhibits, and it was brought to everyone's 23 attention. 24 MR. LINK: That's exactly right, Judge, 25 that's the chronology, yes, sir. OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788043  Page 10 1 THE COURT: All right. Mr. Pugatch, I 2 didn't mean to cut you off. 3 MR. PUGATCH: That's okay, Judge. 4 THE COURT: I wanted to make the record 5 clear. 6 MR. PUGATCH: I absolutely wanted it to be 7 clear, and there is no way that I could clarify it, as 8 Mr. Link just did. So --- 9 THE COURT: Thank you, Mr. Link. 10 MR. PUGATCH: Okay. 11 MR. LINK: You're welcome, your Honor. 12 MR. PUGATCH: So, we come back to why we're 13 here in Bankruptcy Court, Judge. We're here in Bankruptcy 14 Court because they brought a petition for order to show 15 cause why there should not be contempt and sanctions 16 against Jeffrey Epstein and Fowler White, and that is 17 based upon the allegation that your November 2010 order, 18 which ordered that these, that these records be -- and the 19 disk be not copied, and not be disseminated to anyone, 20 that that order was allegedly violated. 21 Now, in order to claim those rights, and to 22 claim damages flowing from, or sanctions flowing from 23 that, these parties need to be parties to your order, or 24 covered by the order, and clearly if you look at the 25 motion and you go back to your order, the only party that OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788044  Pale n 1 was covered in that was L.M., and of course Mr. Edwards 2 and the firm. 3 E.W. and Jane Doe were not parties to the 4 motion. They were not parties to the order. They're not 5 covered by the order. 6 Mr. Cassell moved to intervene on their 7 behalf. You allowed that intervention, we believe because 8 in the state court action there is this companion issue of 9 the attorney/client privilege related to these documents, 10 and so the issue --- 11 THE COURT: That's before the state court 12 judge. 13 MR. PUGATCH: It's before the state court 14 judge. 15 THE COURT: The intervenors have been 16 allowed to intervene in that state court proceeding -- 17 MR. PUGATCH: Yes, that's my understanding. 18 THE COURT: -- and they are being heard? 19 MR. PUGATCH: That's correct. 20 MR. LINK: That is correct, your Honor. 21 They're --- 22 THE COURT: And that judge has the documents 23 under his control. There is apparently a special master. 24 MR. LINK: It's not a special master. 25 Judge Hafele is doing it himself. OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788045  Page 12 1 THE COURT: So he's got both hands on? 2 MR. LINK: He's got both hands on. 3 THE COURT: All right. Continue. 4 MR. LINK: So the record is clear, the three 5 intervenors intervened in the state court action, not as 6 parties to the litigation, but for the limited purpose of 7 asserting an attorney/client privilege. 8 THE COURT: Which he has yet to rule on. 9 MR. LINK: Which he has not ruled on, that's 10 correct, Judge. 11 THE COURT: All right. 12 MR. PUGATCH: So, Judge, the simple issue 13 here is how can these parties, E.W. and Jane Doe, seek to 14 be covered by sanctions or damages for violation of an 15 order when they were not parties to the order? Plain and 16 simple. 17 So, we've asked that the order be entered 18 striking their standing to participate on that basis. 19 As you pointed out in suggesting this motion 20 be heard first, that would substantially limit the playing 21 field as to who can complain, and we can move on to the 22 other motions based upon that. 23 THE COURT: Well, I've read the two motions, 24 Docket Entry 6456, 6457, and the response, 6464. 25 Let me hear from the respondent. OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788046  Page 13 1 MR. CASSELL: Thank you, your Honor. This 2 is Paul Cassell on behalf of the three intervenors. 3 I think in terms of making the record clear, 4 an important piece of the puzzle has been left out. I 5 represent both L.M. and E.W. in an action that is in front 6 of Judge Marra in the U.S. District Court for the Southern 7 District of Florida. That was filed in July of 2008, and 8 it remains pending today. 9 Both L.M. and E.W. have summary judgment 10 motions pending in that action. That action is filed as 11 Jane Does' -- that is L.M. and E.W. -- versus United 12 States, but Mr. Epstein has moved to intervene, and 13 intervention has been granted. So he is an intervenor in 14 that case. 15 THE COURT: So there is litigation -- 16 MR. CASSELL: That's an important part --- 17 THE COURT: -- going in the District Court 18 between the three intervenors, the government and 19 Mr. Epstein? 20 MR. LINK: Your Honor --- 21 MR. CASSELL: Two intervenors, L.M. and E.W. 22 Jane Doe is not a party to that litigation, and the reason 23 that's important to be in the record, your Honor, is the 24 materials that are at issue in this case could be used by 25 Mr. Epstein in connection with that action, should he OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788047  Page 14 1 decide to file motions of various types there. 2 Now, with regard to the motion to strike 3 specifically, I think it's important, again, to recall why 4 we're here in front of you, rather than in front of 5 Judge Hafele. 6 We asked Judge Hafele to take jurisdiction 7 over Fowler White, and he said, I have no jurisdiction 8 over Fowler White. That is for the bankruptcy judge. And 9 so that is why we've ended up here in front of you. 10 Frankly, we're a bit surprised to see this 11 motion to strike being presented now. As your Honor is 12 aware, on March 30th of this year we filed -- that is E.W. 13 and Jane Doe filed a motion to intervene, and in that 14 motion they asked to intervene both as a matter of right 15 and permissibly to, quote, protect their privileges, 16 protections and confidentiality interests in the materials 17 covered by this order, and to seek sanctions for 18 violations of that order. That was their motion to 19 intervene, and there were, I think, approximately five 20 pages of explanation as to why E.W. and Jane Doe believe 21 they have an interest in the confidentiality and the 22 material that was covered by this Court's order. 23 And on April 16th, then this Court granted 24 the motion to intervene, that's Docket Entry 6360, and it 25 was granted not only as to L.M., but also as to E.W. and OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788048  Page 15 1 Jane Doe. 2 The motion that is in front of you right now 3 attempts to, in our view, relitigate your decision 4 allowing them to intervene in this case, and of course the 5 only issue that's presented in the current motion in front 6 of you is that E.W. and Jane Doe lack standing to proceed, 7 but in order to have standing all a litigant needs to do 8 is allege some actual injury resulting from the action in 9 question, and we have five pages of argument explaining 10 why E.W. and Jane Doe had actual injury resulting from the 11 breach of the order. 12 So we think the issue was already decided, 13 but if your Honor wants to revisit it, we think there are 14 five pages in the record very clearly explaining why E.W. 15 and Jane Doe have interest in the confidentiality order 16 that your Honor entered back in 2010. 17 MR. PUGATCH: Judge, there is a difference 18 between this is Chad Pugatch again. There is a 19 difference between having standing to argue about the 20 confidentiality or the attorney/client privilege related 21 to the documents, and having standing to seek damages by 22 virtue of a violation of an order when you were not party 23 to the motion and order, and there is a difference between 24 damages that you seek as an intervenor due to a course of 25 conduct, which is normally brought in a lawsuit, and OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788049  Page 16 1 sanctions that are being sought for alleged contempt of 2 court for violating a court order. We're here with regard 3 to the latter. 4 This is an action seeking contempt and 5 sanctions for violation of a court order, when these two 6 parties, these two intervenors were not parties to the 7 motion or the order. 8 Our understanding was, when this was all 9 pointed out to you, and you were aware of the state court 10 issues regarding attorney/client privilege, and 11 Mr. McLachlan, I believe, raised that very issue, and we 12 joined in that issue, and you said you were going to allow 13 the intervention because of the companion issues in the 14 state court. It was never an understanding that that was 15 determining the issue of whether these parties were 16 entitled to seek damages, and that's why we're here, and 17 that's why we filed the motion, limited to standing, and 18 their motion to strike the damage claims, and their two 19 separate motions to strike. We're really dealing with the 20 argument on both of them at this time, just so the record 21 is clear. There is the one that we started with, which is 22 6456, then there is 6457, the other motion to strike, 23 which relates to the damage claims. 24 And, again, there is nothing in the argument 25 that Mr. Cassell made that supports that those two OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788050  Page 17 1 intervenors have damage claims in this action, and that's 2 what we're seeking to limit. 3 THE COURT: Now, and Edwards' client at the 4 time this Bankruptcy Court order was entered was the 5 attorney for L.W.? 6 MR. PUGATCH: L.M. 7 THE COURT: L.M. 8 MR. PUGATCH: I misspoke, it's L.M., E.W. 9 and Jane Doe. 10 MR. McLACHLAN: Judge, if I may be heard -- 11 THE COURT: Yes. 12 MR. McLACHLAN: -- whenever it's convenient? 13 Niall McLachlan, again, for Fowler White. 14 And the reason I'd like to be heard, Judge, 15 is we joined -- Mr. Epstein raised this issue in a 16 footnote to his motion to compel discovery. 17 We then joined on that issue expressly in 18 our limited joinder to that after the intervenors' 19 claimed, well, it's insufficient to raise an issue by 20 footnote. 21 What we pointed out in our limited joinder, 22 which is at Docket Entry 6454, is that the agreed order 23 cancelling hearing, which is what this whole case is 24 about, and that's the order under which the Court reserved 25 jurisdiction to enter sanctions in favor of Farmer Jaffe, OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788051  Page 18 1 Brad Edwards and his client, singular, that order was 2 entered on L.M. and Brad Edwards' motion for relief of an 3 amended order, which is on Docket Entry Number 1120. 4 It was L.M. and Edwards who had sought the 5 relief on which the order, from which everyone is trying 6 to claim damages, was entered, and I just want that to be 7 very clear. I think that's why the order specifically 8 says, Mr. Edwards, Farmer Jaffe, or his client, singular, 9 because only one client had joined in any request for 10 relief. 11 THE COURT: Your motion to sever, 12 Mr. Pugatch, is directed to E.W. and Jane Doe? 13 MR. PUGATCH: The motion to strike. 14 THE COURT: Motion to strike. 15 MR. PUGATCH: Yes, the two motions to strike 16 are directed to those two parties, E.W. and Jane Doe, 17 your Honor, and so the record is clear, the original 18 November 10th order is Docket Entry 1068, and the language 19 that Mr. McLachlan just quoted from is in the order 20 itself, and it's cited in our motion to strike, Docket 21 Entry 6457, in the middle of Page 2. I'm sorry, the 22 agreed order is 1194. 23 MR. CASSELL: Your Honor, this is 24 Paul Cassell, if I may just briefly respond? 25 THE COURT: Yes. OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788052  Page 19 1 MR. CASSELL: Your Honor, going back to 2 2010, it's true the order related only to L.M., because 3 L.M. was the only of the -- the only one of the three 4 victims before the Court at that time. 5 However, the underlying documents at issue 6 involve three victims, and that is why, when the breach of 7 this Court's order became apparent earlier this year, the 8 three people who have confidentiality interests and 9 stakes, that is privileged, protections, work product 10 information, security concerns, all came -- all three of 11 them came before you to intervene, and I think what we 12 have -- 13 THE COURT: But they can protect those 14 rights in state court. 15 MR. CASSELL: Not against Fowler White, 16 your Honor. The state court judge indicated that he did 17 not have jurisdiction over Fowler White, which is why we 18 then came over to this Court, because the state judge had 19 told us that only you have jurisdiction over Fowler White, 20 and we raised all these issues in our motion to intervene, 21 and I think we have essentially a word game going on from 22 the other side. 23 We sought to intervene, quote, to seek 24 sanctions for violation, close quote, of the Court's 25 order. So we are now seeking sanctions for violation of OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788053  Page 20 1 the order, specifically damages, among other things, and 2 if we're not allowed to seek damages, I'm not clear as to 3 what sanctions the other side thinks that we would be 4 entitled to seek. 5 So all we're asking is that your Court 6 adhere to your early ruling, allowing all three of the 7 victims to intervene in this case for purposes of, quote, 8 seeking sanctions, close quote, for violation of the 9 Court's order. 10 THE COURT: There was no finding that there 11 was a violation of the Court's order. 12 MR. PUGATCH: That has not been litigated -- 13 MR. CASSELL: Correct. 14 MR. PUGATCH: -- yet, Judge. That's --- 15 THE COURT: All right. 16 MR. PUGATCH: That's what's set for trial. 17 THE COURT: Anything further from the 18 parties in reference to Docket Entry 6456, 6457? 19 MR. PUGATCH: No, sir. 20 MR. McLACHLAN: No, your Honor. 21 THE COURT: All right. I'm going to 22 MR. CASSELL: No, your Honor. 23 THE COURT: All right. I'm going to grant 24 the motion to strike, order by Mr. Pugatch, for the 25 reasons argued in the pleadings and the arguments today OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788054  Page 21 1 before me. 2 MR. PUGATCH: Thank you, Judge. 3 THE COURT: Mr. Pugatch, see to the order. 4 MR. PUGATCH: Yes, sir. 5 MR. VITALE: Your Honor? 6 THE COURT: Yes. 7 MR. VITALE: David Vitale, V-i-t-a-l-e. 8 May I have a clarification on that order? 9 Oh, I'm sorry, I apologize. 10 The striking of E.W. and Jane Doe for the 11 purposes of seeking damages, are they still -- are those 12 two parties still intervenors for purposes of liability? 13 Because my understanding from Mr. Pugatch's argument was 14 that they may have standing to argue for liability, but 15 because they're not parties to the order they don't have 16 standing to claim damages, and I just want to understand 17 that point, because I think it will be relevant to the 18 bifurcation issue. 19 THE COURT: Response. 20 MR. LINK: Yes, sir. I don't know how they 21 can have standing to argue about liability if they were 22 not party to that order. 23 Our position has been they certainly have 24 standing if they want to assert privilege. This Court has 25 said that issue is for the state court, and that issue is OUELLETTE & NIAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788055  Page 22 1 before the state court. 2 So, the only issue before this Court, the 3 very narrow issue is, was there a violation of the order 4 by Fowler White and by Mr. Epstein and, if so, were there 5 any damages to the parties to that order? So, these folks 6 are not parties, so I'm not sure --- 7 THE COURT: They're not parties to the 8 order. 9 MR. LINK: They're not parties to the order, 10 your Honor, for liability or damages. 11 Thank you, Judge, and thank you for letting 12 me speak. 13 THE COURT: Does that answer your question? 14 MR. CASSELL: Your Honor, this is 15 Paul Cassell. If I could just briefly be heard? 16 Back in April this Court granted both E.W. 17 and Jane Doe permission to intervene in this matter, 18 that's Docket Entry 63 --- 19 THE COURT: There was no finding that they 20 were entitled to damages or that they had a claim. 21 MR. CASSELL: We were entitled to --- 22 THE COURT: They asked to intervene and take 23 a position. 24 MR. CASSELL: We asked to intervene to seek 25 sanctions for violation of the Court's order and -- OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788056  Page 23 1 THE COURT: My ruling --- 2 MR. CASSELL: -- and to provide clarity --- 3 THE COURT: -- has been dictated into the 4 record. Mr. Pugatch, see to the order. 5 MR. PUGATCH: Thank you, your Honor. 6 THE COURT: Turning now to the motion to 7 bifurcate liability and damages, Docket Entry 6455, 8 response 6463, 6465, 6466. 9 MR. LINK: Your Honor, before we start on 10 that motion, can I just make the Court aware that your 11 ruling will moot Mr. Epstein's motion 12 THE COURT: To compel. 13 MR. LINK: -- to compel, yes, sir. 14 THE COURT: All right. I'm going to get to 15 that next. 16 MR. LINK: Okay. Thank you, Judge. 17 MR. McLACHLAN: Thank you, your Honor. 18 Niall McLachlan again for Fowler White. This is the 19 motion to bifurcate, Docket Entry 6455. All the parties 20 have responded to the motion. 21 I won't spend a lot of time on the motion. 22 THE COURT: Well, Epstein is the only person 23 that's objected. 24 MR. McLACHLAN: That's exactly what I was 25 about to say, Judge, that's right. OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788057  Page 24 1 MR. LINK: Would you like to hear from us, 2 your Honor? 3 THE COURT: Yes. 4 MR. PUGATCH: We can make the response very 5 quick, Judge. 6 Mr. Epstein didn't do anything wrong. 7 You've got already filed his sworn testimony, when we had 8 to comply with your pretrial order, that says I didn't 9 have it, I didn't disseminate it, I didn't do anything 10 with it, and so we want this over with. We don't want 11 this dragged out. It's already been dragged out for 12 months, and so you've set a trial date, and we want the 13 whole thing dealt with all at once. 14 So we're asking that if there is going to be 15 a trial, it deal very -- it will be very quick dealing 16 with the issue of who did what, and I agree the 17 depositions should determine whether there is liability 18 out there or not, and then if we get beyond that, we have 19 the day set aside, we should litigate the issue of 20 damages. 21 And for clarification purposes, our motion 22 to compel on the depositions is only mooted as to the two 23 parties where you just struck standing. There is still 24 one pending as to the one -- 25 THE COURT: That's why I was going to take OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788058  Page 25 1 it separately. 2 MR. PUGATCH: -- yes, remaining intervenor. 3 So, Judge, it's your discretion to do as you 4 will, but Mr. Epstein wants to make it clear, he wants to 5 get this over with. 6 Thank you. 7 THE COURT: Mr. McLachlan. 8 MR. McLACHLAN: Thank you, your Honor. 9 I think all of the parties want to get this 10 over with, but there are important issues of due process 11 at stake. 12 Fowler White, in order to defend any damage 13 claim, needs time to get discovery. The intervenors, in 14 particular, have been very coy, and have not indicated, 15 despite numerous requests, how do they intend to prove 16 their emotional distress claims, or now we are only down 17 to one, so I'll back off on that, I know there is only one 18 intervenor left, but intervenors' counsel has refused to 19 say whether they're going to hire an expert, whether 20 they're going an appear themselves. What he's actually 21 said so far, and he just put this in his response, I think 22 it was filed yesterday, is, well, we don't think we're 23 going to hire an expert, but they're going to be able to 24 prove their emotional distress damages -- the remaining 25 intervenor is going to be able to prove her emotional OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788059  Page 26 1 distress damages based purely on the testimony of 2 Mr. Epstein and Fowler White's representative. That's -- 3 let's just put it, it's unsupported, and it's an 4 unsupportable position. 5 So, given that the hearing is scheduled for 6 October 26th, we believe it would be both in the interest 7 of due process, which is paramount, but also, of course, 8 in the interest of judicial economy. Fowler White 9 continues to believe the Court will find, if not 10 compliance with the order, then substantial good faith 11 compliance and, therefore, no contempt. 12 And if that's the case, we don't need to go 13 into a day, or two, or three -- maybe two days of expert 14 testimony. We believe we need extensive discovery. We 15 also need discovery not only from the remaining intervenor 16 at this point, but also from the lawyers who are all 17 claiming attorney's fees, and there is simply no time for 18 that sort of discovery prior to October 26th, and so for 19 those two reasons, Judge, we respectfully maintain that 20 bifurcation would be in the parties' interest, Fowler 21 White's interest, certainly. 22 Thank you, Judge. 23 THE COURT: All right. The motion to 24 bifurcate, Docket Entry 6455, will be granted, order by 25 Mr. McLachlan. OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788060  Page 27 1 MR. McLACHLAN: Thank you, Judge. 2 THE COURT: All right. The motion to compel 3 intervenors, Docket Entry 6440 brought by Epstein. 4 MR. PUGATCH: Yes, Judge. We'll leave that 5 in your discretion. We could argue it now, or we could 6 await the outcome of the liability trial, now that 7 you've -- 8 THE COURT: No, we're going to -- 9 MR. PUGATCH: -- bifurcated it. 10 THE COURT: -- on the motion to compel, 11 we're going to strike E.W. and Jane Doe from the motion to 12 compel -- 13 MR. PUGATCH: Yes, sir. 14 THE COURT: -- because they're no longer at 15 issue in this case. 16 MR. PUGATCH: Yes, sir. So, we can argue it 17 now, or if you want to await the outcome of your liability 18 decision, because if you rule that there is no liability, 19 that would moot the need to even deal with this. So we're 20 prepared either way. 21 THE COURT: We'll continue L.M. to be heard 22 after the liability phase -- 23 MR. PUGATCH: Yes, sir. 24 THE COURT: -- has been determined. 25 MR. PUGATCH: Judge, may I suggest, maybe OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788061  Page 28 1 just for housekeeping, you want to carry that motion over 2 to October 26th, with the understanding that this is the 3 place saver, and then you can 4 THE COURT: Status conference. 5 MR. PUGATCH: Yes. 6 THE COURT: All right. Strike or deny the 7 motion to compel to E.W. and Jane Doe for the reasons 8 MR. PUGATCH: It's moot. 9 THE COURT: -- we're discussed, and continue 10 the motion to compel against L.M., to be heard at a later 11 date, and a status conference will be scheduled on the 12 motion -- 13 MR. PUGATCH: Right. 14 THE COURT: -- for whatever date we have. 15 MR. PUGATCH: Yes, sir. 16 And, Judge, if it wasn't clear, when I said 17 it was moot, I meant the motion to compel, not obviously 18 the motion to strike. 19 THE COURT: All right, that then takes us to 20 the motion for protective order, Docket Entry 6421, 21 response 6437, reply 6443. 22 MR. McLACHLAN: Thank you, Judge. 23 Niall McLachlan again for Fowler White. 24 We -- as I mentioned earlier, we briefed 25 this motion a few months ago. A couple months ago we had OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788062  Page 29 1 a preliminary hearing. It was set on just a few days 2 notice. So you Honor, after hearing argument, gave 3 Mr. Edwards an opportunity to file a response. He did 4 that. Fowler White then filed a reply at Docket 5 Entry 6443. Mr. Edwards' response is at 6437. 6 Judge, we believe the motion should be 7 granted based primarily on the motion for sanctions, which 8 wasn't just a motion for sanctions, it was called motion 9 for issuance of order to show cause why Fowler White and 10 Jeffrey Epstein should not be held in contempt, to permit 11 discovery, and for other relief. 12 We had a hearing on that motion, and the 13 parties' responses on April 13th, at which, and I've 14 quoted the transcript in depth, there was substantial 15 discussion about discovery, and your Honor said we're not 16 getting into all of that, you can have two depositions. 17 You can depose Mr. Epstein and you can depose Fowler 18 White's corporate representative on very limited issues, 19 and that was, chain of custody of the disk, and the 20 alleged violation of the agreed order -- I'm sorry, chain 21 of custody of documents on the disk, and the alleged 22 violation of the agreed order. 23 I think the ruling was fairly clear from the 24 Court's comments, and I've, as I said, quoted them 25 extensively in our motion. OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788063  Page 30 1 The order to show cause echoed the Court's 2 oral pronouncement, and that was two depositions -- it 3 actually said more, it said people at Fowler White who may 4 have knowledge of the custody of the disk, but there was 5 no reference to production of documents, as was 6 specifically requested in Mr. Edwards or Farmer Jaffe's 7 motion. 8 In addition, Judge, we believe that the 9 scope of what Mr. Edwards is seeking is almost 10 ridiculously overbroad. His request, essentially, are all 11 communications between Fowler White, Mr. Epstein and any 12 representative of Mr. Epstein which relate to the subject 13 disk, or any information derived from documents or data on 14 the disk. 15 Now, your Honor probably remembers that 16 there were 27,540 pages of documents produced. Over 17 21,500 pages, there was no dispute Fowler White was 18 supposed to get those because they were produced back to 19 Fowler White as non-privileged documents. There was only 20 approximately 6,400 documents which remain on the 21 privilege log. 22 So to ask for all documents which relate to 23 any information derived from documents or data on the 24 disk, especially during the period that Fowler White 25 represented Mr. Epstein, for about a year after the order OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788064  Page 31 1 was entered, by definition calls for attorney/client 2 privilege, because any lawyer, when discussing the status 3 of a case with his client, is going to discuss the 4 non-privileged materials that have been turned over, the 5 21,000 pages of non-privileged materials. 6 Now, Mr. Edwards in his response says, oh, 7 Judge, there is an admission for you, because if Fowler 8 White contends that there was any attorney/client 9 privilege materials, that's a gotcha, they must be talking 10 about the privileged documents. But as I just explained, 11 that couldn't be further from the truth. 12 Additionally, Mr. Edwards argued that 13 because your Honor's order to show cause talked about the 14 parties submitting exhibit binders, well, exhibits mean 15 documents and, therefore, you have to have anticipated 16 document production. 17 Well, that doesn't make sense, because it 18 was a standard order for an evidentiary hearing, and under 19 the local rule any exhibit binder would have to, at a 20 minimum, include written declarations of the direct 21 testimony, and if Mr. Edwards has documents which can show 22 that these were actually privileged materials, which were 23 filed in the state court, we think it's his burden, 24 obviously those documents would have to be in the file -- 25 in the exhibit binder. OUELLETTE & MAULDIN COURT REPORTERS, INC. (305) 358-8875 EFTA00788065