EFTA01141657.pdf

1 IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT 2 IN AND FOR PALM BEACH COUNTY, FLORIDA CASE NO. 502009CA040800XXXXMBAG 3 4 5 JEFFREY EPSTEIN, 6 7 Plaintiff, -vs- 8 SCOTT ROTHSTEIN, individually, 9 BRADLEY J. EDWARDS, individually, and L.M, individually, 10 11 Defendants. 12 13 HEARING HELD BEFORE THE HONORABLE DAVID F. CROW 14 15 16 Monday, September 16, 2013 17 3:30 p.m. - 4:05 p.m. 18 19 20 205 North Dixie Highway West Palm Beach, FL 33401 21 22 23 24 Reported By: Pamela Pittman Gunn, FPR 25 Notary Public, State of Florida EFTA01141657  2 1 APPEARANCES: 2 On behalf of the Plaintiff: 3 TONJA HADDAD COLEMAN, ESQ. TONJA HADDAD P.A. 4 5 6 7 On behalf of the Defendant Bradley J. Edwards: 8 JACK SCAROLA, ESQ. SEARCY, DENNEY, SCAROLA, BARNHART & 9 HIPLEY P.A 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 EFTA01141658 1 PROCEEDINGS 2 3 Hearing taken before Pamela Pittman Gunn, Court 4 Reporter and Notary Public in and for the State of 5 Florida at Large, in the above cause. 6 - - - 7 THE COURT: Okay, this is the Epstein 8 versus Rothstein case. It's the plaintiff -- 9 excuse me, counter plaintiff's motion to 10 determine entitlement to adverse inferences and 11 also prohibit the induction of evidence. I 12 read the response. I read the motion and 13 response. Counsel just hand delivered 14 something to me today that evidentially I have 15 never seen before. It was a supplemental 16 memorandum I received. 17 MS. COLEMAN: Your Honor, Mr. Scarola 18 filed it at 10:30 this morning. I haven't had 19 a chance to review it. I was in court on 20 another matter. I haven't reviewed it either. 21 THE COURT: Let me ask a question before 22 we begin so I get my perspective back again. I 23 entered an order some time ago in this case and 24 I guess dealing with some of the privileged 25 objections. Do y'all recall that? EFTA01141659  4 1 MS. COLEMAN: Yes. 2 THE COURT: And I think I asked for some 3 kind of privilege log. Is there anything I'm 4 supposed be doing or is that on appeal? 5 MR. SCAROLA: I believe there are 6 outstanding privileges as you said, Your Honor, 7 that is still not yet determined. 8 THE COURT: Okay, because I didn't know 9 that. I thought I was waiting for something 10 from you guys. 11 MR. SCAROLA: I don't think so. 12 THE COURT: I'm going to have to have a 13 status conference and figure everything because 14 I went back and looked at it and something's 15 wrong. Okay. Good enough. 16 MR. SCAROLA: To put that in context, Your 17 Honor. 18 THE COURT: What is that, ma'am? 19 MS. COLEMAN: I'm sorry? 20 THE COURT: What did you say? 21 MS. COLEMAN: Nothing, Judge. I was 22 speaking -- I was just coming up to be part of 23 it. 24 THE COURT: Go ahead. 25 MR. SCAROLA: Your Honor may recall that EFTA01141660 1 there have been multiple privileges asserted 2 with regard to a variety of issues. And we 3 have over the course of these proceedings been 4 attempting to narrow valid privileged 5 assertions and distinguish them from invalid 6 privileged assertions. That primarily means 7 that while we have acknowledged that 8 Mr. Epstein has a valid Fifth Amendment 9 privilege because he does clearly remain in 10 jeopardy with regard to the underlying criminal 11 activity that resulted in both a state 12 prosecution and a Federal non-prosecution 13 agreement. 14 We believe that other privileges were 15 invalid. And the practical implications of 16 making that distinction are that we cannot draw 17 an adverse inference from the assertion of, for 18 example, an attorney/client privilege. But we 19 are under the case law clearly permitted to 20 draw an adverse inference from the assertion 21 of the Fifth Amendment, the right to remain 22 silent. 23 So we need to eliminate the invalid 24 assertion, assertions of privilege from our 25 perspective. Leave in place the valid EFTA01141661  6 1 assertion of privilege, which then permits us 2 to draw an adverse from the valid assertions of 3 privilege. Your Honor has under consideration 4 some of those challenged privileged assertions. 5 That's by way of an answer to Your Honor's 6 question. It doesn't have anything to do with 7 today's motion. 8 Because today's motion relates only to 9 those circumstances where the only privilege 10 asserted by Mr. Epstein is a Fifth Amendment 11 privilege, his right to remain silent pursuant 12 to the Fifth, Sixth and Fourteenth Amendments 13 of the US Constitution that have been 14 repeatedly asserted by him throughout the 15 discovery in this case and in response to 16 request to production and in response to 17 interrogatories. And dozens and dozens and 18 dozens of times in response to questions posed 19 during the course of his deposition. 20 What we are seeking today, by way of what 21 really is a motion in limine is, in fact, a 22 determination that where the only privilege 23 asserted by Mr. Epstein is, the only valid 24 privilege asserted by Mr. Epstein, is a Fifth 25 Amendment privilege assertion. That we are EFTA01141662  7 1 entitled to a jury instruction that will inform 2 the jury that the assertion of that privilege 3 allows them to draw an adverse inference. That 4 is that had an answer been given, those answers 5 would be unfavorable to Mr. Epstein. We have 6 not laid out the precise wording of that jury 7 instruction and if that's necessary at this 8 point. But we are simply looking for a 9 confirmation of that basic principal. 10 The second part of this motion is that as 11 to those matters as to which Mr. Epstein has 12 over the course of four years that, almost four 13 years that this case has been prosecuted, 14 consistently asserted a Fifth Amendment 15 privilege. He is not going to be able to get 16 up there during the course of trial and change 17 his position and suddenly begin testifying 18 about matters in which he has consistently 19 refused to provide information in pretrial 20 discovery. 21 So those are two parts. That's what we're 22 asking for. We don't want to be surprised by 23 Mr. Epstein coming and attempting to take the 24 witness stand and to give testimony that he has 25 consistently withheld. EFTA01141663 1 THE COURT: Is this matter set for trial? 2 MR. SCAROLA: We are set for trial, yes, 3 sir. We're getting to the point now where -- 4 THE COURT: When is it set? 5 MS. COLEMAN: We're on calendar call, 6 Judge, October 18 for the trial commencing 7 October 28th. 8 THE COURT: Yeah, that sounds right. 9 Okay. 10 MR. SCAROLA: Now the principal response 11 that we have gotten to this motion is that the 12 Baxter (phonetics) case, which we have cited in 13 support of our position is a case that arose in 14 a context where an individual took the witness 15 stand and asserted his Fifth Amendment 16 privilege in the presence of the jury. 17 And the contention in the 18 counter-defendant's response is we would be 19 required to call Mr. Epstein to the witness 20 stand. He would be obliged to assert his Fifth 21 Amendment privilege in the presence of the jury 22 before we would be entitled to any adverse 23 implication instruction. That simply is wrong. 24 And it's wrong because Rule 1.330(a) renders 25 that distinction meaningless. Rule 1.330(a) is EFTA01141664  9 1 the rule of civil procedure that talks about 2 the use of depositions at trial. And it 3 provides expressly that at trial a deposition 4 may be used, in this case, against an opposing 5 party as though the witness were then present 6 and testified. 7 So we already have the basis upon which to 8 draw the adverse inference. It isn't necessary 9 that either we or Mr. Epstein -- call 10 Mr. Epstein to the witness stand and have him 11 repeat what he has already consistently said 12 and that is that he refuses to answer these 13 questions. So the distinction that they 14 attempt to draw that this is procedurally 15 premature because he has not yet taken the 16 stand in front of the jury is rendered moot by 17 virtue of Florida Rules of Civil Procedure 18 which requires that his deposition testimony be 19 treated in the same manner as trial testimony 20 would be. That's basically our position, Your 21 Honor. 22 THE COURT: Okay. Yes. 23 MS. COLEMAN: Good afternoon, Judge. To 24 address the issues with which Mr. Scarola has 25 discussed I would point out the following to EFTA01141665  10 1 the Court. First, this motion is premature at 2 best for several reasons. First of which is 3 Mr. Epstein is now set for deposition by 4 counter plaintiff on October 21st and I presume 5 will be asked further questions to which he may 6 or may not assert the Fifth Amendment. So to 7 preemptively presume that he will assert it or 8 not assert it and make a ruling based on an 9 adverse inference on something that hasn't yet 10 happened is inapplicable. 11 Second, Judge, with respect to discovery 12 that has gone on in this case over the past 13 four years there are many, many, many questions 14 sadly which are not spelled out in the bulk of 15 this motion. Questions that have been posed to 16 Mr. Epstein that irrefutably have absolutely 17 nothing to do with this case. All that is 18 evident from everything that has been filed in 19 this case, that the parties, the counter 20 plaintiff, would like to re-litigate the cases 21 that were being prosecuted by him against 22 Mr. Epstein several years ago. This is a 23 simple abuse of process and malicious 24 prosecution case, Judge. So with respect to 25 the negative or adverse inference to which EFTA01141666 1 counter plaintiff may or may not be entitled, 2 this Court needs to conduct a far more detailed 3 analysis into those questions and answers other 4 than the blanket assertion made by this motion. 5 Judge, for example, to be entitled to a 6 negative inference, the party seeking it must 7 prove that the information cannot be benefited 8 or received from obtaining -- I'm sorry, let me 9 start that sentence over. The inference may 10 not be drawn unless there's a substantial need 11 for the information and there is not another 12 less burdensome way of obtaining that 13 information. That's the first step. And I 14 appreciate this is not fully -- this is like I 15 received their memo this morning and I was 16 under the misguided conception we were arguing 17 the two cases he cited but I will lay this out 18 for the Court anyway since we're here. The 19 Court has discretion -- 20 MR. SCAROLA: I don't mean to interrupt 21 but that's all I have argued. I have not 22 argued the supplemental memo at all. 23 MS. COLEMAN: The rule to which he 24 referred is not cited in his motion with 25 respect to the use of the deposition. But what EFTA01141667  12 1 this Court has to do before it can determine -- 2 THE COURT: Let me ask a basic question. 3 MS. COLEMAN: Yes, you can. 4 THE COURT: There is bunch of cases where 5 someone has waived Fifth Amendment and it 6 happens all the time in DUI cases and then in 7 civil lawsuits. I've never had anybody ask me 8 for an actual jury instruction like you do in a 9 spoliation case. What they do is they ask the 10 question, the person denies it or -- excuse me, 11 they take the Fifth Amendment. And says 12 weren't you drunk on the night of the accident, 13 and they answer I refuse on the basis of 14 incrimination. Then they argue to the jury, he 15 admitted it and 16 MS. COLEMAN: That's exactly my point, 17 Judge. 18 THE COURT: I've never seen a case where 19 it says you're entitled to an actual 20 instruction. In the cases you cited, the two 21 cases cited, at least I didn't see that in the 22 case you cited. Is there actually a case in 23 Florida where if you take the Fifth Amendment, 24 you're entitled to an adverse inference 25 instruction like a spoliation case where EFTA01141668 1 there's specific instruction approved by the 2 Fourth District? 3 MS. COLEMAN: It's his motion, Judge, 4 but -- 5 THE COURT: I didn't see anything like 6 that. 7 MS. COLEMAN: No, I didn't see anything 8 either but again my understanding is, as I 9 said, all the cases to which counter plaintiff 10 referred clearly states that the witness is 11 available, he's coming. He's listed on both 12 witness lists. He's the defendant. He'll be 13 here. He'll be testifying. 14 In every case that I've read, state and 15 Federal, indicates that it occurs at trial. We 16 don't know what questions are going to be 17 asked. We don't know what's going to happen. 18 THE COURT: The jury can draw an adverse 19 inference since nobody is pleading the Fifth 20 Amendment and -- 21 MS. COLEMAN: Only if you base your 22 findings on a particular set of information 23 delineated. For example, should Mr. Epstein 24 I'm hypothetically speaking -- take the stand 25 and answer a question to which he's previously EFTA01141669  14 1 asserted the Fifth, you can strike that answer. 2 And then, and only then, would the issue of the 3 negative inference become applicable. At this 4 point we respectfully feel the plaintiff has 5 the cart before the horse because we're not at 6 trial. I don't think even Mr. Scarola can 7 determine what evidence is going to come out at 8 trial. I've never seen a jury instruction 9 drafted before discovery is even finished. 10 He's taken Mr. Epstein's deposition. 11 THE COURT: Only time I have ever done 12 sorry to interrupt you. I've never given a 13 written one in the context of the Fifth 14 Amendment. It's always been in the context of 15 discovery violations or failure to comply with 16 discovery requests or spoliation issues. And 17 then we drafted instructions under -- I can't 18 remember the name of the case. 19 MS. COLEMAN: It's Rule 1.380. 20 THE COURT: Actually, a case where you 21 approve a specific, it's not a presumption, 22 it's an inference. You give the presumption 23 it's irrelevant, not to say stupid, something 24 like that. I'm not really sure what you want 25 me to rule to be honest with you. EFTA01141670 1 MR. SCAROLA: There are two things I want 2 you to rule, Your Honor. I want you first to 3 rule that Mr. Epstein will not be permitted to 4 give testimony or to produce evidence that he, 5 himself, has withheld as a consequence of his 6 consistent assertion of the Fifth Amendment 7 privilege during the course of the four years 8 that this matter has been in pretrial 9 discovery. He should not be permitted after 10 having refused to give that evidence in 11 pretrial discovery, to present that evidence at 12 trial. That's part one. 13 Part two, we should be entitled to an 14 instruction after we publish Mr. Epstein's 15 deposition testimony to the jury in which he 16 has refused to answer questions, that his 17 silence may be held against him. 18 Now I can't tell Your Honor that I have at 19 hand a Florida case that approves a specific 20 form of instruction. But the law is quite 21 clear that we are entitled to jury instructions 22 that support our theory of the case. And it is 23 a proper statement of the law, that a statement 24 -- excuse me -- that an assertion of privilege 25 in the context of a civil case may be used by EFTA01141671  16 1 the jury to draw an adverse inference, 2 inference against the person who refuses to 3 testify. 4 Now the common experiences of jurors who 5 watch TV and read magazines and read books is 6 that you may not hold an individual's right to 7 remain silent against him. Because jurors are 8 generally educated about such matters in the 9 context of criminal proceedings. So to 10 disabuse jurors who may believe that it is 11 improper to hold an assertion of Fifth 12 Amendment privilege against someone, we should 13 be entitled to an instruction that says what 14 the law is. 15 And the law is that you may indeed hold 16 the assertion of the right to remain silent in 17 the context of a civil case against the person 18 who is making that assertion. There are very 19 strong statements in support of that position 20 in the cases that we have cited to Your Honor. 21 Including the United States Supreme Court that 22 has talked about the probative value of an 23 assertion of a right to remain silent in the 24 context of civil cases. 25 So it is on that basis that we are asking EFTA01141672 1 the Court to do those two things. Tell us 2 right now that since Mr. Epstein's refused to 3 give evidence pretrial, he's not going to be 4 permitted to recede from that. And secondly, 5 tell us that the jury will be informed of the 6 basic legal principle that the assertion of the 7 right to remain silent in the context of a 8 civil case can be used against the person 9 asserting that right to remain silent. 10 THE COURT: Okay, you get the last word. 11 MS. COLEMAN: Thank you, Judge. I was 12 unable to address section two or part two of 13 Mr. Scarola's motion in which he asks that we 14 be precluded at offering certain evidence at 15 trial. First, Judge, I would submit that we 16 had filed weeks ago our trial exhibit list and 17 witness list. And if there's specific items 18 contained on our exhibit list in which 19 Mr. Scarola takes issue, he should bring it up 20 at the proper time and object to it, which 21 we're required to do pursuant to your Court 22 order. If there is something listed on our 23 exhibit list that violates what he's asking 24 for, that's the proper time to raise it. 25 Furthermore, Judge, your order EFTA01141673  18 1 specifically delineates, I believe in paragraph 2 H, that if we haven't provided it to opposing 3 counsel, we can't use it. It's that simple. 4 Obviously, if we tried to submit evidence that 5 we have not provided to the plaintiff in this 6 case, we wouldn't be permitted to use it. 7 THE COURT: So there's a difference under 8 the Binger analysis. There's two different 9 things there. One I can -- certainly I don't 10 have to do Binger analysis and the sanction. I 11 want to know what I haven't done, okay. 12 Because I've evidentially missed something 13 along the way. Because I entered an order 14 basically saying I required you to file 15 privilege logs which identify each document, 16 what the privilege is to that document and so I 17 can look at them and determine which ones more 18 I have to look at. I don't recall. Did I get 19 that? 20 MS. COLEMAN: No, what happened, Judge, 21 what we did we amended our answers to 22 THE COURT: I must be losing my mind. 23 MS. COLEMAN: We amended our answers to 24 all that discovery and only asserted the Fifth 25 Amendment to those that we were asserting a EFTA01141674  19 1 privilege. So there was no other privilege 2 raised. 3 THE COURT: What am I supposed to be 4 ruling on? 5 MS. COLEMAN: Right now? His motion. 6 THE COURT: No. No, I thought -- again, 7 I'm sorry, guys I'm confused. I thought there 8 was things out -- Mr. Scarola said there are 9 things outstanding. 10 MS. COLEMAN: But there's still our issue 11 with the privilege log filed by Mr. Edwards 12 with respect to our discovery requests as well. 13 THE COURT: I'm talking about with regard 14 to Mr. Epstein. Is there anything I need to 15 rule on with him? 16 MS. COLEMAN: No. 17 MR. SCAROLA: That wasn't my understanding 18 but quite frankly, Your Honor, I didn't 19 specifically review that for purposes of 20 responding to that question. 21 THE COURT: I'm sorry for interrupting 22 you. The only reason I did that is to prepare 23 for today's hearing. I looked at the file and 24 one of the last things I did was that order I 25 entered on where I determined that I will EFTA01141675  20 1 require you to file the detailed privileged log 2 so I can determine based on Mr. Scarola's 3 argument on the Fifth Amendment you can't get 4 but the other stuff, you know, can be 5 sanctionable. I thought I was kind of waiting 6 because I didn't hear anything. You're telling 7 me there is not a privileged log out there or 8 there is one that I need to rule on? 9 MS. COLEMAN: No, your order said that you 10 needed to be able to rule on the other 11 non-fifth amendment privilege which we raised. 12 Every other privilege we raised has now been 13 withdrawn and all the discovery has been 14 amended. Anywhere we asserted a privilege, we 15 asserted the Fifth along with other privileges. 16 All the other privileges were taken out. So 17 it's only the Fifth Amendment. So there's 18 nothing to review. 19 THE COURT: Some of the case law I read in 20 Federal court says even the Fifth Amendment 21 sometimes the court can look at in-camera to 22 determine if it's 23 MS. COLEMAN: If you would like us to 24 do -- 25 THE COURT: No, I never asked for EFTA01141676  z. 1 in-camera inspection if I don't need to do one. 2 I'm just asking what it is I need to do that I 3 haven't done in regards to the privilege log in 4 regard to Mr. Epstein. We're just dealing with 5 this. 6 MR. SCAROLA: I will accept Ms. Coleman's 7 representation on the record that all of the 8 discovery that has been withheld has been 9 withheld solely on the basis of the Fifth 10 Amendment privilege. 11 THE COURT: There's been a privilege log 12 filed or not? 13 MS. COLEMAN: No, Judge. The answer it's 14 all net-worth discovery. The discovery that 15 was at issue is the net-worth discovery for the 16 punitive damages. 17 THE COURT: This is probably unfair to you 18 guys. I'm asking questions because it concerns 19 me if there's something out there I'm supposed 20 to be ruling on and I might have to do that. 21 Is there something pending on me that I'm 22 supposed to rule on? 23 MR. SCAROLA: Not if the only privilege 24 that's being asserted is a Fifth Amendment 25 privilege. Your Honor may recall that what you EFTA01141677  22 1 did talk about at the time of that last hearing 2 was that some of the financial information that 3 was requested was corporate financial 4 information. And you correctly observed a 5 corporation has no Fifth Amendment privilege. 6 So I don't know -- Your Honor asks the 7 rhetorical question. I don't know how you can 8 be asserting a Fifth Amendment privilege with 9 regard to the corporate records. 10 THE COURT: It has to be testimonial even 11 if it's an individual. I remember that. 12 MR. SCAROLA: Correct. And those were the 13 concerns that Your Honor expressed. And it was 14 my understanding that that shifted the burden 15 back to the counter defendant to provide 16 something else to Your Honor with regard to 17 those matters. But I will repeat, if the 18 position of the counter defendant is that 19 everything that has been withheld in discovery 20 has been withheld on the basis of the Fifth 21 Amendment privilege, I'll accept that 22 representation. 23 THE COURT: I'm asking you. I don't want 24 to get -- 25 MS. COLEMAN: That is not what I said, EFTA01141678 1 Judge. 2 THE COURT: Hang on. I'm going to set a 3 status conference. You guys can talk about 4 this. See what the status of discovery is at. 5 What I need you to do is I need that fairly 6 quickly. Probably next week or so you all are 7 coming up on trial here. And see what I need 8 to get done before you all walk into the 9 courtroom. You said there's also stuff and so 10 are you waiting for me to rule on -- 11 MS. COLEMAN: Judge, you were taking -- it 12 was quite a while back. That we had a motion 13 with respect to the privileged log filed by 14 Mr. Edwards first from (inaudible) then from 15 Farmer Jaffe. There is some documents that 16 were alleged by them to be confidential, just 17 communications, such as communication with the 18 press and the government that have not yet been 19 ruled on. The hearing was supposed to be 20 continued. 21 THE COURT: I don't recall. I have 22 nothing in here, at least that I know, that 23 hasn't been ruled on. 24 MS. COLEMAN: I'll refile the motion, 25 Judge. EFTA01141679  24 1 THE COURT: Or reschedule it or whatever. 2 I don't have any in-camera that I haven't done 3 so far. 4 MS. COLEMAN: If you're not making a 5 ruling right now on this motion, we would like 6 to be afforded the opportunity to respond to 7 the thirteen-page memorandum that Barnhart, 8 Scarola provided a couple of hours ago. 9 THE COURT: How quickly can you respond? 10 MS. COLEMAN: Judge, the hearing was set 11 he set this hearing on July 17th and it was 12 given to me today. A week? 13 THE COURT: You think you can do it a 14 little early? Can you have it by Friday? 15 MS. COLEMAN: No, Judge, I have to be in 16 Tavernier and Marathon on Thursday and Friday. 17 THE COURT: Do you know who would love to 18 be in the Keys? 19 MS. COLEMAN: Not on this case, Judge. 20 I'm back here at 8:45 tomorrow morning in 21 front of you again on this case. 22 THE COURT: You know I'm joking. I 23 apologize, guys. 24 MS. COLEMAN: It's unfair for a five-day 25 requirement. EFTA01141680  25 1 MR. SCAROLA: I have no problem. 2 MS. COLEMAN: Five day. 3 THE COURT: Next week. How about next 4 Monday, next Tuesday? 5 MS. COLEMAN: Next Tuesday would be good. 6 THE COURT: Next Tuesday by 5 p.m. Tell 7 you what I want you to do to make it easy. 8 Call my JA or have someone call my JA and get 9 an address. You can e-mail, maybe emailing it 10 to me and the same to Mr. Scarola so I get it 11 on Tuesday. Can you do that? 12 MS. COLEMAN: Yes. 13 MR. SCAROLA: Will it be necessary for me 14 to resubmit what I hand delivered? 15 THE COURT: No, I'll take what I got and 16 wait for her. Okay, I'll get an order out as 17 soon as I receive a response. 18 MR. SCAROLA: Thank you very much. 19 THE COURT: I want you guys to sit down 20 and talk about what you need to do. I'm going 21 to schedule a conference to see what needs to 22 be done. I got an easy feeling that things 23 need to be done before this October 28. Thank 24 you. 25 (The hearing was concluded at 4:05 p.m.) EFTA01141681  26 1 CERTIFICATE 2 3 STATE OF FLORIDA 4 COUNTY OF PALM BEACH 5 6 7 I, Pamela Pittman Gunn, Court Reporter, State 8 of Florida at large, certify that I was authorized 9 to and did stenographically report the foregoing 10 hearing, pages 1-25; proceedings were held on 11 September 16, 2013 and that the transcript is a true 12 and complete record of my transcription. 13 Dated this 23rd day of October, 2013. 14 15 16 17 Pamela Pittman Gunn, Court Reporter 18 19 20 21 22 23 24 25 EFTA01141682