EFTA01069715.pdf

1 IN THE FIFTEENTH JUDICIAL CIRCUIT COURT IN AND FOR 2 PALM BEACH COUNTY, FLORIDA 3 CASE NO. 502009CA040800XXXXMBAG 4 5 JEFFREY EPSTEIN, 6 Plaintiff, 7 vs. 8 SCOTT ROTHSTEIN, individually, BRADLEY 9 J. EDWARDS, individually, and III. 10 individually, 11 Defendants, 12 13 14 - - 15 PROCEEDINGS HELD BEFORE 16 THE HONORABLE DAVID F. CROW 17 18 19 Palm Beach County Courthouse West Palm Beach, Florida 33401 20 February 17, 2011 9:13 A.M. - 9:25 A.M. 21 Before Antoinette Garza, R.P.R. Notary Public, State of Florida 22 Appearances on Page 2. 23 24 25 ORANGE REPORTING 800.275.7991 EFTA01069715  2 1 APPEARANCES: 2 3 SEARCY, DENNEY, SCAROLA, BARNHART & SHIPLEY 4 BY JACK SCAROLA, ESQUIRE 5 2139 Palm Beach Lakes Blvd. 6 West Palm Beach, Florida 33409 7 Appearing on behalf of the Plaintiff. 8 9 FOWLER, WHITE, BURNETT, P.A. 10 BY JOSEPH L. ACKERMAN, JR., ESQUIRE 11 901 Phillips Point West 12 777 S. Flagler Drive 13 West Palm Beach, Florida 33401-6170 14 Appearing on behalf of the Defendant. 15 16 17 18 19 20 21 22 23 24 25 ORANGE REPORTING 800.275.7991 EFTA01069716  3 1 BE IT REMEMBERED that the following 2 proceedings were had before the HONORABLE DAVID F. CROW 3 at the Palm Beach County Courthouse, in the City of 4 West Palm Beach, County of Palm Beach, beginning at the 5 hour of 9:13 A.M., on February 17, 2011, with 6 appearances as hereinabove noted, to wit: 7 ** *** ** 8 PROCEEDINGS 9 ** *** ** 10 THE COURT: Yes, sir. Go ahead. 11 MR. SCAROLA: Your Honor, this is the 12 defendant, Bradley Edwards' Motion to Compel 13 Compliance with Your Honor's pretrial order. 14 Attached to the motion is a copy of Mr. Epstein's 15 exhibit list. If you take a look at the exhibit 16 list, I think you will find that it clearly on its 17 face fails to identify documents with sufficient 18 particularity for us to know what the documents 19 are or how we can frame objections to those 20 documents. There are broad categories that don't 21 identify anything, which is further indication of 22 the fact that there isn't anything but... 23 THE COURT: And I guess your position is 24 that you don't have them yet so, therefore, you 25 can't specifically identify them. ORANGE REPORTING 800.275.7991 EFTA01069717  MR. ACKERMAN: Yes, sir. Those are all the documents as framed upon the subpoenas that we 3 sent to the trustee. THE COURT: I will tell you what I did, guys. I went back yesterday and I looked at this file again and I took your motion into consideration and I granted the motion and removed 8 the case from the trial docket, but what I did was I set a pretrial or a conference requiring you to 10 comply with the rule regarding complex litigation. 11 So I want you guys to get together, and the order 12 will say it when you prepare that, and it sets 13 forth what you have to do and when you are going 14 to do it. If you can't agree, I will set up a 15 criteria or a time frame or something. 16 This case, this is like the third time it's 17 been continued, or the second time, at least, it's 18 been continued, and I know the reasons but we have 19 got to get to this case at some point, and I don't 20 want to get held up because of what is happening 21 in the bankruptcy if it can be helped. So we're 22 going to have to, I want something to set out in 23 an order that gets us to the point where we know 24 where we're going to go and when you are going to 25 do things. Okay? Because the way we're going ORANGE REPORTING 800.275.7991 EFTA01069718  5 1 right now is just haphazard and it's 2 disconcerting. This case needs to get to trial. 3 So I'm going to deny the motion because 4 essentially the trial is off -- no, I'm not. I'm 5 going to grant your motions and I'm not requiring 6 you to do anything at this time because obviously 7 you can't list things like this, that is number 8 one. 9 MR. ACKERMAN: I understand that, Judge. 10 And he is correct, I understand what the rule is, 11 but that is the best that we can describe them 12 until we get the records. And when we do, we will 13 comply with the Court's order requiring 14 specificity. 15 THE COURT: What happened yesterday in the 16 bankruptcy, are we any further along? 17 MR. ACKERMAN: Well, what happened, we had 18 a meeting yesterday, a hearing with a special 19 master. We reached some tentative agreements that 20 we're going to try and work out in terms of, I 21 understand they are going to produce the proper 22 privilege log by next Wednesday. The following 23 Friday we are to make any objections to it. We're 24 working on a proposed deadline of either 10 to 15 25 days where we will identify the documents that we ORANGE REPORTING 800.275.7991 EFTA01069719  6 claim are not privileged for whatever reason and 2 have a briefing schedule list as to what the 3 standard is. 4 Mr. Scarola's clients will then provide a 5 response. If we can't agree on the process -- 6 THE COURT: These are tentative agreements? MR. ACKERMAN: We are finalizing them 8 today. 9 THE COURT: Not going into the detail of 10 it, is there a time frame this is going to get 11 decided by somebody? 12 MR. SCAROLA: May I make a suggestion, Your 13 Honor? 14 THE COURT: Yes, sir. 15 MR. SCAROLA: That cuts through all of 16 this. The only reason the bankruptcy court has 17 been involved in these production issues is 18 because the bankruptcy trustee had custody of 19 documents. Those documents have now been turned 20 over to Mr. Edwards. 21 THE COURT: So why can't I rule on this 22 then? 23 MR. SCAROLA: That is the point that I 24 tried to make to Your Honor last time. And quite 25 frankly, I think what happened was, because ORANGE REPORTING 800.275.7991 EFTA01069720  7 1 Mr. Ackerman represented that there were other 2 pending discovery issues that the bankruptcy court 3 was dealing with other than this Court's subpoena, 4 Your Honor felt obliged to defer to the bankruptcy 5 judge. The only outstanding discovery request 6 directed to the trustee was the third party 7 subpoena issued in this case. 8 If Your Honor were to direct the plaintiff 9 to file a Request to Produce to Brad Edwards in 10 this case, since Mr. Edwards is the defendant, now 11 has custody of those documents, and were to 12 appoint Judge Carney, who is willing to serve as 13 special master, as special master to deal with the 14 discovery issues before this court, all of the 15 procedural concerns that have been a hang up 16 disappear. 17 And to repeat briefly, and I'm sorry if I'm 18 saying things that Your Honor has heard before or 19 remembers. The primary issues here are 20 attorney/client privilege and work product 21 privilege. In order for the attorney/client 22 privilege to be waived it is the client who must 23 be a participant in the crime or fraud. What that 24 means is the plaintiff has got to show not that 25 Mr. Rothstein was committing a crime or fraud, ORANGE REPORTING 800.275.7991 EFTA01069721  8 they must show that the client, Rothstein's child victims were participants in a crime or fraud in order for the privilege that belongs to that child to have been waived. If the child wasn't a participant, the child retains the protection of the attorney/client privilege, the lawyer can't waive it. With regard to the work product privilege, we have agreed we'll turn over every document to 10 the special master to take a look at it. The 11 special master can determine whether there is one 12 shred of evidence that tends to indicate that Brad 13 Edwards was a participant in some kind of 14 wrongdoing and turn it over. We'll waive a right 15 to appeal with regard to those issues if the 16 special master says, I think this could be 17 probative, give it to them. 18 The one thing we don't want to happen is 19 because we have other claims that are being 20 prosecuted against Mr. Epstein is to have 21 everything that has been done in the prior cases, 22 which clearly relate to the subsequent 23 prosecutions as well, turned over to the defendant 24 in those other claims. That clearly would be 25 inappropriate. ORANGE REPORTING 800.275.7991 EFTA01069722  9 So I think it's an extremely easy solution. 2 It gives Your Honor the control Your Honor has 3 recognized in prior orders that Your Honor has 4 over the discovery in your case. It relieves Your 5 Honor of the burden of having to do an In camera 6 review of tens of thousands of documents because 7 this subpoena is so broad that it covers every 8 piece of paper that was generated during the 9 period of time that this Ponzi scheme was ongoing. 10 So I don't know that there is any easier way to do 11 it. 12 THE COURT: I'm not going to rule on that 13 this morning, but that is something we will 14 consider and take up at the time of the hearing. 15 MR. ACKERMAN: Your Honor, we have been 16 through this. I don't want to rehash it, but I 17 have to respond to a couple of things. 18 First of all, there was an outstanding 19 subpoena of the bankruptcy trustee from Razor 20 Back. Every time someone sends a subpoena to the 21 bankruptcy trustee, the trustee either enters into 22 a stipulated protective order or we go forward 23 with Judge Rey, every time there is a subpoena. 24 Now there are two, as I said before, there 25 are two other sets of documents that, possibly ORANGE REPORTING 800.275.7991 EFTA01069723  1 three that we have not received from the trustee 2 which still necessitates, the Q-test documents and 3 the Fortress documents, which the trustee has 4 acknowledged they have not been produced. So to 5 that extent Judge Rey needs to be in it. 6 Now yesterday we were talking about, and I 7 believe we reached an outline, we're going to put 8 it in writing in the next day or so to see if we 9 can have Judge Carney produce a recommendation as 10 to how we're going to proceed with the rest of 11 these documents. 12 THE COURT: I understand you all -- 13 MR. ACKERMAN: The other thing is that 14 Mr. Scarola -- I'm sorry, Judge. I don't mean to 15 interrupt. 16 THE COURT: I'm really not interested in 17 the posturing right now. What I'm interested in 18 is you guys putting this together and you are 19 required to give me a pre -- I don't know what 20 they call it -- stipulation or statement or 21 whatever they call it under the rule now. 22 MR. SCAROLA: Case management plan. 23 THE COURT: Case management or statement or 24 something like that. And I have used it in these 25 complex cases to a real benefit because it ORANGE REPORTING 800.275.7991 EFTA01069724  11 1 requires you guys to sit down and give me ahead of 2 time something that I could look at and really 3 understand this case before you ever walk in here 4 and then be able to set some parameters based on 5 an order entered at that time. So that is the 6 reason I did that, so we could get this flushed 7 out. 8 I still believe that ultimately I have to 9 make the decisions in this case as to what 10 documents are or are not relevant, one, 11 discoverable, two, and whether or not there are or 12 not any privileges associated with any of these 13 documents, and if so, whether there has been a 14 waiver of any privilege. And that not only 15 concerns the bankruptcy documents, the documents 16 of Mr. Edwards, but also your client's testimony. 17 I have to make determinations on that as well. 18 MR. ACKERMAN: I understand. Mr. Scarola, 19 when we sent the original Request to Produce out 20 to his client for documents within his possession, 21 we have had a bunch of objections that are set for 22 hearing in April. So there is more to this than 23 is being presented. 24 THE COURT: I know it's not easy. We're 25 going to have a hearing and hopefully get some of ORANGE REPORTING 800.275.7991 EFTA01069725  a.2 these things in order, at least get a road map of where we could go. Thank you, guys. If you could get that to me, Mr. Scarola, I'd really appreciate it. MR. SCAROLA: I will. (The proceedings were concluded at 9:25 a.m.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ORANGE REPORTING 800.275.7991 EFTA01069726  13 1 CERTIFICATE 2 3 THE STATE OF FLORIDA, ) 4 ) 5 COUNTY OF PALM BEACH. ) 6 7 I, Antoinette Garza, Court Reporter, certify 8 that I was authorized to and did stenographically 9 report the foregoing proceedings and that the 10 transcript is a true and complete record of my 11 stenographic notes. 12 13 DATED this 17th day of February 2011. 14 15 16 17 18 19 ANTOINETTE GARZA, RPR 20 21 22 23 24 25 ORANGE REPORTING 800.275.7991 EFTA01069727  1 WORD INDEX appoint 7:12 clients 6:4 determinations appreciate 12:4 client's 11:16 11:17 < 1> April 11:22 committing 7:25 determine 8:11 10 5:24 associated 11:12 Compel 3:12 direct 7:8 13 1:20 3:5 Attached 3:14 complete 13:10 directed 7:6 15 5:24 attorney 7:20, 21 complex 4:10 10:25 disappear 7:16 17 1:20 3:5 8:6 Compliance 3:13 disconcerting 5:2 17th 13:13 authorized 13:8 comply 4:10 5:13 discoverable 11:11 concerns 7:15 discovery 7:2, 5, 14 <2> <B> 11:15 9:4 2 1:21 back 4:5 9:20 concluded 12:6 docket 4:8 2011 1:20 3:5 bankruptcy 4:21 conference 4:9 document 8:9 13:13 5:16 6:16, 18 7:2, consider 9:14 documents 3:17, 18, 2139 2:5 4 9:19, 21 11:15 consideration 4:7 20 4:2 5:25 6:19, 25 1:20 12:6 BARNHART 2:3 continued 4:17, 18 19 7:11 9:6, 25 based 11:4 control 9:2 10:2, 3, 11 11:10, <3> BEACH 1:2, 19, 19 copy 3:14 13, 15, 15, 20 33401 1:19 2:13 2:5, 6, 13 3:3, 4, 4 correct 5:10 Drive 2:12 33409 2:6 13:5 COUNTY 1:2, 19 beginning 3:4 3:3, 4 13:5 <E> <5> behalf 2:7, 14 couple 9:17 easier 9:10 502009CA040800XXX believe 10:7 11:8 COURT 1:1 3:10, easy 9:1 11:24 XMBAG 1:3 belongs 8:3 23 4:4 5:15 6:6, 9, EDWARDS 1:9 benefit 10:25 14, 16, 21 7:2, 14 3:12 6:20 7:9, 10 <6> best 5:11 9:12 10:12, 16, 23 8:13 11:16 6170 2:13 Blvd 2:5 11:24 13:7 either 5:24 9:21 Brad 7:9 8:12 Courthouse 1:19 entered 11:5 <7> BRADLEY 1:8 3:12 3:3 enters 9:21 777 2:12 briefing 6:2 Court's 5:13 7:3 EPSTEIN 1:5 8:20 briefly 7:17 covers 9:7 Epstein's 3:14 <9> broad 3:20 9:7 crime 7:23, 25 8:2 ESQUIRE 2:4, 10 9 1:20, 20 3:5 12:6 bunch 11:21 criteria 4:15 essentially 5:4 901 2:11 burden 9:5 CROW 1:16 3:2 evidence 8:12 BURNETT 2:9 custody 6:18 7:11 exhibit 3:15, 15 <A> cuts 6:15 extent 10:5 A.M 1:20, 20 3:5 <C> extremely 9:1 12:7 call 10:20, 21 <D> able 11:4 camera 9:5 DATED 13:13 < F> ACKERMAN 2:10 Carney 7:12 10:9 DAVID 1:16 3:2 face 3:17 4:1 5:9, 17 6:7 CASE 1:3 4:8, 16, day 10:8 13:13 fact 3:22 7:1 9:15 10:13 19 5:2 7:7, 10 9:4 days 5:25 fails 3:17 11:18 10:22, 23 11:3, 9 deadline 5:24 February 1:20 3:5 acknowledged 10:4 cases 8:21 10:25 deal 7:13 13:13 agree 4:14 6:5 categories 3:20 dealing 7:3 felt 7:4 agreed 8:9 certify 13:7 decided 6:11 FIFTEENTH 1:1 agreements 5:19 child 8:1, 3, 4, 5 decisions 11:9 file 4:6 7:9 6:6 CIRCUIT 1:1 Defendant 2:14 finalizing 6:7 ahead 3:10 11:1 City 3:3 3:12 7:10 8:23 find 3:16 Antoinette 1:21 claim 6:1 Defendants 1:11 First 9:18 13:7, 19 claims 8:19, 24 defer 7:4 Flagler 2:12 appeal 8:15 clearly 3:16 8:22, DENNEY 2:3 FLORIDA 1:2, 19, Appearances 1:21 24 deny 5:3 21 2:6, 13 13:3 2:1 3:6 client 7:20, 21, 22 describe 5:11 flushed 11:6 Appearing 2:7, 14 8:1, 6 11:20 detail 6:9 following 3:1 5:22 ORANGE REPORTING 800.275.7991 EFTA01069728  2 foregoing 13:9 identify 3:17, 21, 25 presented 11:23 forth 4:13 5:25 <N> pretrial 3:13 4:9 Fortress 10:3 Inappropriate 8:25 necessitates 10:2 primary 7:19 forward 9:22 indicate 8:12 needs 5:2 10:5 prior 8:21 9:3 FOWLER 2:9 indication 3:21 Notary 1:21 privilege 5:22 7:20, frame 3:19 4:15 individually 1:8, 9, noted 3:6 21, 22 8:3, 6, 8 6:10 10 notes 13:11 11:14 framed 4:2 interested 10:16, 17 number 5:7 privileged 6:1 frankly 6:25 interrupt 10:15 privileges 11:12 fraud 7:23, 25 8:2 Involved 6:17 <O> probative 8:17 Friday 5:23 Issued 7:7 objections 3:19 procedural 7:15 further 3:21 5:16 Issues 6:17 7:2, 14, 5:23 11:21 proceed 10:10 19 8:15 obliged 7:4 PROCEEDINGS <G> its 3:16 obviously 5:6 1:15 3:2 12:6 13:9 Garza 1:21 13:7, 19 Okay 4:25 process 6:5 generated 9:8 <.1> ongoing 9:9 produce 5:21 7:9 give 8:17 10:19 JACK 2:4 order 3:13 4:11,23 10:9 11:19 11:1 JEFFREY 1:5 5:13 7:21 8:3 produced 10:4 gives 9:2 JOSEPH 2:10 9:22 11:5 12:1 product 7:20 8:8 Go 3:10 4:24 9:22 JR 2:10 orders 9:3 production 6:17 12:2 Judge 5:9 7:5, 12 original 11:19 proper 5:21 going 4:13, 22, 24, 9:23 10:5, 9, 14 outline 10:7 proposed 5:24 24, 25 5:3, 5, 20, 21 JUDICIAL 1:1 outstanding 7:5 prosecuted 8:20 6:9, 10 9:12 10:7, 9:18 prosecutions 8:23 10 11:25 <K> protection 8:5 grant 5:5 kind 8:13 <P> protective 9:22 granted 4:7 know 3:18 4:18, 23 P.A 2:9 provide 6:4 guess 3:23 9:10 10:19 11:24 Page 1:21 Public 1:21 guys 4:5, 11 10:18 PALM 1:2, 19, 19 put 10:7 11:1 12:3 2:5, 6, 13 3:3, 4, 4 putting 10:18 1:9 13:5 <H> Lakes 2:5 paper 9:8 < () > hang 7:15 lawyer 8:6 parameters 11:4 quite 6:24 haphazard 5:1 list 3:15, 16 5:7 participant 7:23 happen 8:18 6:2 8:5, 13 <R> happened 5:15, 17 litigation 4:10 participants 8:2 R.P.R 1:21 6:25 log 5:22 particularity 3:18 Razor 9:19 happening 4:20 look 3:15 8:10 party 7:6 reached 5:19 10:7 heard 7:18 11:2 pending 7:2 real 10:25 hearing 5:18 9:14 looked 4:5 period 9:9 really 10:16 11:2 11:22, 25 Phillips 2:11 12:4 HELD 1:15 4:20 CM> piece 9:8 reason 6:1, 16 11:6 helped 4:21 management 10:22, Plaintiff 1:6 2:7 reasons 4:18 hereinabove 3:6 23 7:8, 24 received 10:1 Honor 3:11 6:13, map 12:1 plan 10:22 recognized 9:3 24 7:4, 8, 18 9:2, 2, master 5:19 7:13, Point 2:11 4:19, 23 recommendation 3, 5, 15 13 8:10, 11, 16 6:23 10:9 HONORABLE 1:16 mean 10:14 Ponzl 9:9 record 13:10 3:2 means 7:24 position 3:23 records 5:12 Honors 3:13 meeting 5:18 possession 11:20 regard 8:8, 15 hopefully 11:25 morning 9:13 possibly 9:25 regarding 4:10 hour 3:5 Motion 3:12, 14 posturing 10:17 rehash 9:16 4:6, 7 5:3 pre 10:19 relate 8:22 <I > motions 5:5 prepare 4:12 relevant 11:10 ORANGE REPORTING 800.275.7991 EFTA01069729  3 relieves 9:4 sit 11:1 try 5:20 REMEMBERED 3:1 solution 9:1 turn 8:9, 14 remembers 7:19 somebody 6:11 turned 6:19 8:23 removed 4:7 sorry 7:17 10:14 two 9:24, 25 11:11 repeat 7:17 special 5:18 7:13, report 13:9 13 8:10, 11, 16 <U> Reporter 13:7 specifically 3:25 ultimately 11:8 represented 7:1 specificity 5:14 understand 5:9, 10, request 7:5, 9 standard 6:3 21 10:12 11:3, 18 11:19 State 1:21 13:3 required 10:19 statement 10:20, 23 <V> requires 11:1 stenographic 13:11 victims 8:2 requiring 4:9 5:5, stenographically vs 1:7 13 13:8 respond 9:17 stipulated 9:22 <w> response 6:5 stipulation 10:20 waive 8:7, 14 rest 10:10 subpoena 7:3, 7 waived 7:22 8:4 retains 8:5 9:7, 19, 20, 23 waiver 11:14 review 9:6 subpoenas 4:2 walk 11:3 Rey 9:23 10:5 subsequent 8:22 want 4:11, 20, 22 right 5:1 8:14 sufficient 3:17 8:18 9:16 10:17 suggestion 6:12 way 4:25 9:10 road 12:1 Wednesday 5:22 ROTHSTEIN 1:8 <T> Well 5:17 8:23 7:25 take 3:15 8:10 11:17 Rothstein's 8:1 9:14 went 4:5 RPR 13:19 talking 10:6 we're 4:21, 24, 25 rule 4:10 5:10 tell 4:4 5:20, 23 10:7, 10 6:21 9:12 10:21 tends 8:12 11:24 tens 9:6 West 1:19 2:6, 11, <S> tentative 5:19 6:6 13 3:4 saying 7:18 terms 5:20 WHITE 2:9 says 8:16 test 10:2 willing 7:12 SCAROLA 2:3, 4 testimony 11:16 wit 3:6 3:11 6:12, 15, 23 Thank 12:3 work 5:20 7:20 8:8 10:14, 22 11:18 thing 8:18 10:13 working 5:24 12:4, 5 things 4:25 5:7 writing 10:8 Scarola's 6:4 7:18 9:17 12:1 wrongdoing 8:14 schedule 6:2 think 3:16 6:25 scheme 9:9 8:16 9:1 <y> SCOTT 1:8 third 4:16 7:6 yesterday 4:5 5:15, SEARCY 2:3 thousands 9:6 18 10:6 second 4:17 three 10:1 see 10:8 time 4:15, 16, 17 sends 9:20 5:6 6:10, 24 9:9, sent 4:3 11:19 14, 20, 23 11:2, 5 serve 7:12 today 6:8 set 4:9, 14, 22 11:4, transcript 13:10 21 trial 4:8 5:2, 4 sets 4:12 9:25 tried 6:24 SHIPLEY 2:3 true 13:10 show 7:24 8:1 trustee 4:3 6:18 shred 8:12 7:6 9:19, 21, 21 sir 3:10 4:1 6:14 10:1, 3 ORANGE REPORTING 800.275.7991 EFTA01069730