EFTA00800982.pdf

1 IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT, IN AND FOR PALM BEACH COUNTY, FLORIDA Case No. 502009CA040800XXXXMB JEFFREY EPSTEIN, Plaintiff, VS. SCOTT ROTHSTEIN, individually, BRADLEY EDWARDS, individually, Defendants/Counter-Plaintiffs. TRANSCRIPT OF PROCEEDINGS DATE TAKEN: Thursday, December 7th, 2017 TIME: 10:01 a.m. - 12:57 p.m. PLACE 205 N. Dixie Highway, Room 11B West Palm Beach, Florida BEFORE: Donald Hafele, Presiding Judge This cause came on to be heard at the time and place aforesaid, when and where the following proceedings were reported by: Sonja D. Hall Palm Beach Reporting Service, Inc. 1665 Palm Beach Lakes Boulevard, Suite 1001 West Palm Beach, FL 33401 Palm Beach Reporting Service, Inc. EFTA00800982  2 1 2 APPEARANCES: 3 For Plaintiff/Counter-Defendant: 4 LINK & ROCKENBACH, P.A. 1555 Palm Beach Lakes Boulevard, Suite 301 West Palm Beach, FL 33401 By KARA BERARD ROCKENBACH, ESQUIRE 6 By SCOTT J. LINK, ESQUIRE 7 For Defendant/Counter-Plaintiff: 8 SEARCY, DENNEY, SCAROLA, BARNHART & SHIPLEY, P.A. 9 2139 Palm Beach Lakes Boulevard West Palm Beach, FL 33409 10 By JACK SCAROLA, ESQUIRE By DAVID P. VITALE, JR. 11 12 For Jeffrey Epstein: 13 DARREN K. INDYKE, PLLC 575 Lexington Avenue 14 New York, NY 10022 By DARREN K. INDYKE, ESQUIRE 15 16 17 18 19 20 21 22 23 24 25 Palm Beach Reporting Service, Inc. EFTA00800983  3 1 THE COURT: Have a seat. Today we are 2 going to go first with the Fifth Amendment 3 issues dealing with the transcripts and the 4 discovery responses of Mr. Epstein. Are we prepared to proceed with that? 6 MR. SCAROLA: I am, Your Honor, yes. 7 MS. ROCKENBACH: Your Honor, if we 8 could, there were just two quick issues that 9 we could clean up on the omnibus motion. 10 I think Your Honor has tangentially 11 discussed them. They're items D and E. I 12 think we need a definitive ruling, and I 13 don't believe it would take more than five 14 minutes. 15 THE COURT: What is it that you are 16 speaking about? I didn't bring -- it is a 17 large binder and I didn't bring it with me. 18 MS. ROCKENBACH: Your Honor, issue D on 19 page 27, is that the Court should excluded 20 references to any cases against Epstein 21 which were not prosecuted by Edwards. 22 You previously have stated on the 23 record that we would constructively try 24 other sexual abuse or assault claims. And 25 you did indicate that Mr. Epstein's suits Palm Beach Reporting Service, Inc. EFTA00800984  4 1 that were brought by Edward's clients -- 2 E.W., L.M. and Jane Doe -- were relevant. 3 So I just wanted, for the record, to be 4 definitive, in that, we are not trying the other claims that may have been represented 6 by other attorneys -- like Mr. Scarola, 7 Mr. Josefsberg -- because they would be not 8 only irrelevant, they would be very 9 prejudicial to my client receiving a fair 10 trial. 11 THE COURT: Mr. Scarola. 12 MR. SCAROLA: It is not my intent to 13 get into the merits of any of the other 14 claims. 15 However, because motive is clearly 16 relevant and material, and because malice is 17 relevant and material, both with regard to 18 the primary claim and with regard to the 19 punitive damages claim, we respectfully 20 suggest that it is error if we were not 21 permitted to talk about what Mr. Epstein's 22 motive was for taking the extraordinary step 23 of filing a baseless claim against Bradley 24 Edwards. 25 THE COURT: Well, until we get into, Palm Beach Reporting Service, Inc. EFTA00800985  5 1 obviously, what may or may not be asked of 2 Mr. Edwards and Mr. Epstein principally on 3 these cases or these issues, the global 4 order of the Court would be that those individual claims would not be subject to 6 discussion as to the merits, as Mr. Scarola 7 has stipulated. 8 However, as it relates to both probable 9 cause, i.e., motive and malice, the number 10 of claims -- that is, speaking in terms of 11 volume -- that Mr. Epstein was facing at the 12 time that he brought the suit and continued 13 the prosecution of that suit would be 14 relevant. So that's the distinction being 15 drawn by the Court, the detail, the merits, 16 whatever may have been discovered as it 17 relates to those cases would not be 18 individually admissible in evidence, or any 19 of those details from those cases. 20 However, as I said, the sheer number of 21 cases may be relevant, i.e., to tend to 22 prove or disprove a material fact as it 23 relates to probable cause and malice. So 24 that's the decision. 25 Next issue, please. Palm Beach Reporting Service, Inc. EFTA00800986  6 1 MR. SCAROLA: Excuse me. May I also 2 ask for this clarification, Your Honor? 3 Will we be permitted to discuss the 4 fact that Mr. Edwards had taken a leadership role in coordinating the prosecution of all 6 of those claims, that is, that it was a 7 it was a unified effort on the part of 8 multiple law firms that Mr. Edwards was 9 playing a leadership role, which then led to 10 a basis to focus upon Mr. Edwards because of 11 that leadership role? 12 THE COURT: If that's based on fact, 13 then I believe it would be -- you would be 14 able to introduce that, yes. 15 MR. SCAROLA: Thank you, sir. 16 THE COURT: Because, again, it tends to 17 prove or disprove a material fact, i.e., 18 probable cause, motive, malice. 19 Again, whether or not the jury accepts 20 that -- it's going to be up to the jury to 21 accept it, reject it, give it the weight it 22 deserves, or to infer anything that they 23 reasonably believe would be inferrible as a 24 result of that information. 25 The next issue, please. Palm Beach Reporting Service, Inc. EFTA00800987  7 1 MS. ROCKENBACH: Thank you, Your Honor. 2 The next -- I think based on that 3 ruling, Your Honor would preclude the 4 settlements of any of the claimants, including the settlement amounts of the 6 three that were represented by Mr. Edwards. 7 And in our motion in limine, we cited 8 the Florida Evidence Code 90.408, which 9 precludes the admissibility or evidence of 10 offers to compromise or settlements to prove 11 liability or absence of liability. 12 The cases settle all the time for many 13 different reasons. And I know that value 14 has become an issue in this case of 15 Mr. Edwards' three claimants, but certainly 16 not of any of the other claims that 17 Mr. Epstein may have settled. So that's the 18 first issue. Any other cases that he may 19 have settled are wholly irrelevant and 20 should be precluded. 21 THE COURT: Let me understand. The 22 issue of any settlements outside of the 23 three people, I don't have a problem with in 24 terms of introducing that information. 25 In other words, I don't intend to allow Palm Beach Reporting Service, Inc. EFTA00800988  8 1 that information to be introduced, unless I 2 can be persuaded otherwise. 3 MR. SCAROLA: I don't intend to attempt 4 to persuade you at this point in time. 5 I don't mean to interrupt the Court, 6 but I thought it might abbreviate things. 7 THE COURT: That's fine. 8 MR. SCAROLA: I don't intend to attempt 9 to convince the Court at this point in time 10 that that evidence is admissible. I can, 11 however, foresee that it becomes relevant 12 and material. 13 THE COURT: You are talking about those 14 individuals outside of the three -- 15 MR. SCAROLA: Yes, Your Honor. 16 THE COURT: -- that we have been 17 speaking about at length. 18 MR. SCAROLA: And I am only raising 19 that now, because, although I don't intend 20 to contest admissibility at this point, I 21 foresee the potential that it may be 22 admissible and therefore it should be 23 discoverable. 24 We should be able to discover what 25 Mr. Epstein's economic motive was to attempt Palm Beach Reporting Service, Inc. EFTA00800989  9 1 to avoid liability in all of those other 2 cases, because his economic motive in 3 attempting to avoid liability -- not only of 4 the three cases settled for $5.5 million, but for the liability in all of the other 6 cases as well -- could become relevant and 7 material, since it's reasonably calculated 8 to lead to discoverable evidence. 9 I would ask -- and this may or may not 10 be the appropriate time to address this, but 11 it relates directly, so I think that it 12 is -- I would ask that Mr. Epstein be 13 compelled to respond to discovery with 14 regard to each of those settlements. 15 THE COURT: All right. Do you know how 16 many cases were actually filed against him 17 for the same or similar activities that were 18 alleged by the three individuals here? 19 MR. SCAROLA: Right now I would only be 20 guessing, Your Honor. 21 THE COURT: I know Mr. Kuvin had 22 several, if my memory is correct, in my 23 division. 24 MR. SCAROLA: Sid Garcia had a number 25 that he was prosecuting as well. There Palm Beach Reporting Service, Inc. EFTA00800990  10 1 were -- I think it was close to 20. I think 2 there were approximately 20. I think we 3 have listed each of the case numbers. 4 THE COURT: I won't hold you to the exact number. It is really for anecdotal 6 information. 7 MR. SCAROLA: I think it was about 20. 8 Also, there were a substantial number 9 of additional victims with whom settlements 10 were negotiated in the context of the 11 non-prosecution agreement. Those were all 12 of the victims that were represented by 13 Mr. Josefsberg. 14 THE COURT: So they were claims that 15 were settled without the formal filing of a 16 lawsuit? Is that what you are suggesting? 17 MR. SCAROLA: I think that 18 Mr. Josefsberg may have filed some lawsuits, 19 but I believe he also settled some claims 20 under the terms of the non-prosecution 21 agreement simply by asserting the claims 22 under the federal statute and coming to an 23 agreement with regard to how those were to 24 be resolved without the necessity of filing 25 formal legal proceedings. Palm Beach Reporting Service, Inc. EFTA00800991  11 1 But I'm pretty sure that some cases 2 were filed by Mr. Josefsberg. 3 THE COURT: Thank you. 4 Ms. Rockenbach, so as far as the collateral claims are concerned -- by no 6 means am I minimizing those by using that 7 terminology. It's just to distinguish the 8 three cases that are at the heart of this 9 case as it relates to the malicious 10 prosecution claim as opposed to those other 11 folks -- those other young women, in 12 particular, who had either brought suit or 13 made claims that were paid by Mr. Epstein. 14 The ruling of the Court is that I am 15 going to find at this point -- again, 16 subject to further inquiry at a later time 17 and whether or not that becomes an issue is 18 going to be subject to further scrutiny -- 19 but I'm going to find that that information 20 would be discoverable, i.e., what was the 21 total amount of payments made by 22 Mr. Epstein? 23 At this point I am withholding my 24 ruling -- or deferring ruling on 25 admissibility, just for the record -- Palm Beach Reporting Service, Inc. EFTA00800992  12 1 because you all are far better aware of the 2 standard than I -- but the standard being 3 because discovery is broader than what may 4 be admissible at trial, the total amount 5 paid, again, goes back to that place in time 6 when Mr. Epstein would have brought this 7 lawsuit at or near the time of 8 Mr. Rothstein's arrest; at or near the time 9 of federal and perhaps state agents raiding 10 the offices of the firm; at or near the time 11 of these cases reaching a crescendo as far 12 as discovery was transpired; and then 13 ultimately -- at least these three cases 14 settling less than a year thereafter, as I 15 recall. You can correct me if I am wrong. 16 So the motive, malicious, probable 17 cause issues that we have talked about at 18 length in the past, again, because of the 19 nature of discovery being broader than what 20 may be admissible at trial, I am going to 21 require that information be provided, so I'm 22 deferring as to its admissibility. 23 Any confidentiality matters that may 24 have attached to those settlement offers -- 25 strike that -- to those settlement payments Palm Beach Reporting Service, Inc. EFTA00800993  13 1 would also have to be discussed at a later 2 time. 3 Section 90.408, for the record, states, 4 though, "Evidence of an offer to compromise a claim which was disputed as to validity or 6 amount, as well as any relevant conduct or 7 statements made in negotiations concerning a 8 compromise, is inadmissible to prove 9 liability or absence of liability for the 10 claim or its value. End quote. 11 So this is concerning, obviously, in 12 light of the statute, as to not only the 13 global settlement number that may be 14 involved, but also as it relates to the 15 three individuals. 16 Now, that's not squarely before me 17 today. And I would rather be able to deal 18 with that at some other time so that it's 19 fully briefed and we know where we are going 20 on this, because Mr. Scarola has his own 21 rationale for insisting that the $5.5 22 million figure associated between the three 23 individuals involve directly here would, in 24 his view, be admissible. 25 Mr. Epstein largely hanging his hat on Palm Beach Reporting Service, Inc. EFTA00800994  14 1 section 90.408 takes a different view. 2 Similar to the hearsay rule, there are 3 noted and notable exceptions to 90.408, 4 meaning that, in the hearsay context, if the 5 information is not being used to prove the 6 truth of the matter asserted, there are 7 other ways in order to get that information 8 in. 9 Similarly, I am at least generically 10 aware that there have been exceptions that 11 have been stated under the law to 90.408. 12 So again, I would prefer to talk about 13 them at a later time. So I think that, 14 Ms. Rockenbach, what I would suggest you do 15 is separate out, as part of the motion in 16 limine -- my apologies -- if it is, I would 17 ask simply to separate it out and set it for 18 a half-hour special set hearing and we will 19 take it up at another time. 20 I would rather get into, now, these 21 issues of Fifth Amendment privilege that 22 have been scheduled. 23 MS. ROCKENBACH: Yes, Your Honor. 24 Thank you. 25 MR. LINK: Your Honor, may I make one Palm Beach Reporting Service, Inc. EFTA00800995  15 1 clarification, please? 2 THE COURT: Sure. Of course. 3 MR. LINK: Judge, I think I heard you 4 say that we are required to produce, on 5 Mr. Scarola's ore tenus motion, the 6 settlement agreements. 7 THE COURT: No, I didn't say settlement 8 agreements. I said the gross settlement 9 amount. 10 MR. LINK: Gross amount. 11 Your Honor, for further clarification, 12 would that amount only include those 13 settlements that took place on or after the 14 date that Mr. Epstein filed his Complaint? 15 If you look at their argument, the 16 exposure that still existed is what they 17 believe helps them show motive or malice. 18 Anything settled beforehand, obviously, had 19 been taken care of and should not fit within 20 the description that they gave the Court. 21 THE COURT: Mr. Scarola, your position 22 on that? 23 MR. SCAROLA: First, Your Honor, I'm 24 not sure we're arguing over any practical 25 significance because I don't think any of Palm Beach Reporting Service, Inc. EFTA00800996  16 1 the cases settled before this lawsuit -- the 2 malicious prosecution claim -- was filed. 3 MR. LINK: They did in fact, Your 4 Honor. MR. SCAROLA: Well, I stand corrected, 6 then. 7 But at any rate, we respectfully should 8 get discovery that may be admissible with 9 regard to the extent to which these claims 10 were, quote, ginned up, unquote, as a 11 consequence of anything that Mr. Edwards 12 did. 13 And what we have heard repeatedly is, 14 we're talking about things Mr. Edwards did 15 while he was at Rothstein, Rosenfeldt 16 Adler. So settlement of claims before then 17 as compared to settlement of claims after 18 that, and settlement of claims following the 19 disclosure of the alleged misconduct at RRA, 20 would be at least discoverable with regard 21 to whether these claims were somehow ginned 22 up. 23 THE COURT: We no longer need to use 24 the term alleged in terms of the misconduct 25 at RRA. Palm Beach Reporting Service, Inc. EFTA00800997  17 1 MR. SCAROLA: I was referring to -- 2 THE COURT: There was misconduct at 3 RRA. 4 MR. SCAROLA: -- Mr. Edwards. 5 THE COURT: Whether there was 6 misconduct on behalf of Mr. Edwards, that 7 is, in fact, still a matter of allegation. 8 MR. SCAROLA: Yes, sir. And that's the 9 only misconduct I was referring to. 10 THE COURT: Absolutely. 11 I agree with Mr. Scarola, not only as 12 to his argument, but also as it relates to 13 Mr. Epstein's state of mind, i.e., probable 14 cause to bring this claim in the first 15 place. 16 It can be argued -- and I expect you to 17 argue that -- that being Mr. Mr. Link and 18 Ms. Rockenbach and his other counsel -- that 19 he clearly had probable cause to bring these 20 claims. 21 On the other hand, an argument -- a 22 piece of the argument that will be made on 23 behalf of Mr. Epstein is that he was looking 24 at this in a vengeful fashion, that he was 25 looking at this as a way to get back at Palm Beach Reporting Service, Inc. EFTA00800998  18 1 Edwards for not only his pecuniary lost, but 2 some of the other things that we have 3 discussed as it relates to motive, i.e., 4 probable cause, i.e., malice. So that's the reason behind the Court's 6 ruling that the global settlement amount may 7 be potentially admissible or discoverable, 8 in my view certainly. Because, again, the 9 issue of relevancy is much of a broader 10 discussion and much more of a broader view 11 on the part of the appellate courts as it 12 relates to admissibility. 13 So for now, that's the ruling of the 14 Court. 15 MR. LINK: I understand that. We want 16 to comply with the Court's order. Two 17 things. One, you're asking us to provide a 18 gross number of the total amount of 19 settlements, correct? And we ask the Court 20 that that number be subject to 21 confidentiality. We are disclosing 22 confidential settlement amounts -- 23 THE COURT: That would be for, at this 24 point, Counsel and his client's eyes only, 25 and shall not be disclosed. Palm Beach Reporting Service, Inc. EFTA00800999  19 1 MR. SCAROLA: May we get a breakdown as 2 to -- because of the argument that's been 3 made and Your Honor's comments -- the number 4 of cases settled prior to the filing of the 5 malicious prosecution claim against 6 Mr. Edwards, that total gross; then the 7 number of cases settled while at -- while 8 Mr. Edwards was at RRA, that gross; the 9 number of the cases settled post RRA's 10 implosion and that gross? 11 THE COURT: Mr. Link or Ms. Rockenbach? 12 MR. LINK: Judge, I think that -- as I 13 said, I don't want to dispute the Court's 14 ruling, but now breaking it down into 15 segments has a whole different potential 16 relevance. It's no longer discovery. We 17 are looking at, then, finding individual 18 folks who may have resolved their cases, 19 where if we give you a gross number -- if I 20 understand Mr. Scarola's argument -- it's 21 the gross exposure that was hanging over 22 Mr. Epstein's head that caused him to do 23 this. 24 THE COURT: That's precisely the word I 25 was going to use, and that's the reason Palm Beach Reporting Service, Inc. EFTA00801000  20 1 behind the Court's ruling, is that the issue 2 of exposure is one that, in my respectful 3 view, would be the relevancy of potentially 4 admitting that information. MR. SCAROLA: And knowledge of 6 Mr. Epstein's exposure would clearly be 7 based upon what he had to pay even before he 8 filed the lawsuit. I had to pay X number of 9 dollars and I'm really mad at Bradley 10 Edwards now for the role he has played in 11 causing me to expend that much money so far. 12 I'm going to put a stop to this. I'm going 13 to sue Edwards and scare off everybody else. 14 THE COURT: Again, for discovery 15 purposes only at this point, I'm going to 16 require, then, simply a breakdown of what 17 was paid prior to December 9th, 2009. Happy 18 anniversary in two days: the gift that keeps 19 on giving. 20 MR. SCAROLA: Actually, apparently 21 today is the anniversary day. Pearl Harbor. 22 Sneak attack. 23 MR. LINK: Justified filing. We can 24 sit out here and hurdle things to the court 25 reporter, Your Honor. Palm Beach Reporting Service, Inc. EFTA00801001  21 1 THE COURT: We have been speaking with 2 smiles on our faces, knowing that despite 3 the seriousness of everything that has gone 4 on here, the attorneys and the Court, at least, can have moments of brevity that is 6 not disrespectful to any of the litigants or 7 any of those who may have been subject to 8 the prior cases. I want to make clear that 9 that is in fact the case in this brief 10 moment. 11 I think that I am at least reasonably 12 convinced that any prior settlements that 13 were made within a two-year period of 14 December 7th, 2009 -- and then that would be 15 broken down. And then anything paid after 16 would be broken down. 17 I think it's a relatively simple 18 exercise that won't cause any type of 19 overburden or onerous type of requirement on 20 the part of Mr. Epstein and/or his prior 21 counsel. 22 MR. LINK: We understand the Court's 23 ruling. Thank you, Judge. 24 THE COURT: Thank you, again. And 25 that's the reason behind the ruling that -- Palm Beach Reporting Service, Inc. EFTA00801002  22 1 in fact, the nail was hit on the head by 2 Mr. Link, is one of mindset of Mr. Epstein 3 going to, again, what may be reasonably 4 calculated to lead to the discovery of 5 admissible evidence, and that is, relating 6 to issues of probable cause and malice as it 7 pertains to the potential total exposure, 8 the best -- a consideration of best 9 evidence, not so much under the rule -- 10 What I'm saying is, a way to portray 11 that mindset would be one of the exposure 12 Mr. Epstein faced, not only at the time, but 13 potentially in the future so-called proof of 14 the pudding axiom that ultimately resulted 15 in the amount of money that was paid. 16 MR. LINK: Your Honor, should we 17 prepare an order on that to include the 18 attorneys'-eyes-only confidentiality ruling? 19 MR. SCAROLA: Attorneys and client. 20 THE COURT: Attorneys' and clients' 21 eyes only, not to be disclosed in any 22 fashion outside of this litigation. 23 MR. LINK: Actually, Mr. Edwards is one 24 of his own attorneys, isn't he? 25 MR. SCAROLA: He is. Yes. Palm Beach Reporting Service, Inc. EFTA00801003  23 1 THE COURT: Thank you. 2 All right, let's get to, now, the Fifth 3 Amendment issues, if we could please. I 4 have gone through the materials. Thank you, 5 particularly to Mr. Scarola and his office 6 for culling these out and -- pursuant to the 7 court order -- which I have never had a 8 situation in the many years I have been 9 doing this that Mr. Scarola -- for that 10 matter, Ms. Rockenbach -- to a lesser 11 degree, to the extent that Mr. Link has not 12 appeared before me that often -- to ever 13 knowingly transgress the Court's order. In 14 any event, I commend them for doing what 15 they have done to cull this out. 16 So my thinking is -- I think I asked 17 that both of you try to get together and see 18 if there's any common ground here to avoid 19 the Court's involvement. 20 Have there been any agreements with 21 respect to any of these questions and 22 answers? 23 MR. SCAROLA: We have been told every 24 one is challenged, Your Honor. 25 And if I might make a preliminary Palm Beach Reporting Service, Inc. EFTA00801004  24 1 statement. 2 THE COURT: Ms. Rockenbach you may as 3 well. 4 MR. SCAROLA: Your Honor, the defense has cited case law that an element of a 6 civil claim may not be proved based solely 7 upon the inference that arises from the 8 assertion of the Fifth Amendment. We agree. 9 That is not a point of contention. 10 The defense has also asked for a jury 11 instruction to be given at the time that the 12 Fifth Amendment, I assume, is initially 13 asserted in the jury's presence by 14 Mr. Epstein -- in all likelihood through 15 playing excerpts of his deposition -- his 16 videotaped depositions -- and we have no 17 objection to that. 18 I think that both sides can get 19 together and fashion an appropriate jury 20 instruction that informs the jury that while 21 in the context of a criminal case, an 22 individual's assertion of a Fifth Amendment 23 right may not be used against him. 24 In the context of a civil case, an 25 adverse inference may be drawn from the Palm Beach Reporting Service, Inc. EFTA00801005  25 1 assertion of the Fifth Amendment privilege. 2 However, the jury may not base a finding 3 upon that assertion alone. There must be 4 some independent evidence to support the adverse inference that's drawn. 6 That's -- obviously I'm paraphrasing. 7 But I think that's where we are. I think we 8 are in agreement with regard to those 9 matters. 10 Your Honor has also told us that we 11 should focus our offer of evidence with 12 regard to the assertion of the Fifth 13 Amendment on issues directly related to the 14 three plaintiffs who were represented by 15 Bradley Edwards. And we have culled down 16 the many assertions of Fifth Amendment and 17 attempted to do just that. 18 I'm, quite frankly, surprised in light 19 of those ruling and the agreement that we 20 have with regard to those basic principles 21 that there's anything left to challenge, but 22 apparently there's everything left to 23 challenge. 24 So if Your Honor has our notice of 25 filing deposition transcript excerpts and Palm Beach Reporting Service, Inc. EFTA00801006  26 1 discovery responses by Jeffrey Epstein 2 implicating the Fifth Amendment, the best 3 way to do this is to go through these one at 4 a time, and we are prepared to do that. THE COURT: I understand. 6 Ms. Rockenbach, your initial comments. 7 MS. ROCKENBACH: Yes. Thank you, Your 8 Honor. This is a very significant issue to 9 the fairness of this trial. 10 And just to be clear, there is no 11 agreement that there should be a jury 12 instruction. In fact, that is the very 13 issue of whether this Court is going to rule 14 that even an adverse inference is given or 15 not. 16 An adverse inference, based on the case 17 law that we cited in our revised omnibus 18 motion in limine is not automatic. This is 19 a discretionary call by this Court. 20 And in fact, Your Honor, there is no 21 Florida reported case -- or else you would 22 have been provided with it -- that says you 23 automatically get a jury instruction on 24 adverse inference. 25 Rather, what this Court must do is Palm Beach Reporting Service, Inc. EFTA00801007  27 1 carefully balance the competing interest of 2 the party asserting the privilege -- 3 Mr. Epstein -- and the party whom against 4 the privilege is asserted -- Mr. Edwards. You must carefully balance and prevent the 6 detriment to the party asserting it. It 7 should be no more than is necessary to 8 prevent unfair and unnecessary prejudice to 9 the other side. 10 So, Your Honor, the case law that we 11 cited essentially says that there is a 12 tension between the Fifth Amendment right 13 and the right to a fair proceeding. That's 14 the tension. And this is in the civil 15 context, because we know from the US Supreme 16 Court and Baxter, they indicated that, yes, 17 you can have -- and can preserve your Fifth 18 Amendment right in a civil context. 19 But in the In Re: Carp decision that we 20 cited, courts -- lower courts -- and I'm 21 talking federal courts, because that's where 22 this issue most typically arises they 23 have consistently held that there's no 24 requirement that this Court draw an adverse 25 inference. So that's the threshold issue Palm Beach Reporting Service, Inc. EFTA00801008  28 1 that the Court must decide. 2 And how do you determine -- by what 3 criteria do you measure whether you take 4 these Fifth Amendment issues questions and 5 answers and allow an adverse inference or 6 not? I suggest to the Court the very first 7 issue is what is relevant to this action. 8 If Mr. Epstein was asked a question in 9 the three-hour -- he was deposed twice -- in 10 the first deposition he was deposed for 11 approximately three hours -- answered 12 abundant questions with regard to the 13 information -- the facts and 14 circumstances -- the information he 15 reasonably relied upon to establish probable 16 cause in instituting the original 17 proceeding, he abundantly gave that 18 information. He then gave it in two 19 affidavits, which were filed with the Court. 20 Had Mr. Epstein been asked the 21 question, Did you review this November 9th 22 newspaper article saying that Edwards had no 23 -- it doesn't exist, but 24 THE COURT: I don't want to get into 25 the specifics right now. I was just giving Palm Beach Reporting Service, Inc. EFTA00801009  29 1 you a global opportunity to talk about the 2 law briefly. 3 MS. ROCKENBACH: Thank you, Your Honor. 4 The basic principle is that the questions and answers must have some 6 probative value. And the case I'm citing 7 relying on is out of the Fourth District 8 Court of Appeal. 9 I mentioned to Your Honor on 10 November 29th, the Frazier decision, where 11 the Fourth District Court of Appeal limited 12 adverse inferences against parties to when 13 they refuse to testify in response to 14 probative evidence offered against them. 15 So the question is, what is probative 16 evidence in this case? And we submit to 17 Your Honor -- I think Mr. Link will go 18 through the questions showing how they are 19 not probative of the issues relating to 20 malicious prosecution and the probable cause 21 element that is the threshold for Your 22 Honor's decision. 23 The other law that we would submit to 24 the Court to guide Your Honor is that there 25 has to be -- when there is an adverse Palm Beach Reporting Service, Inc. EFTA00801010  30 1 inference, it can only be -- I emphasize and 2 underline the word only -- straight from 3 Baxter -- be drawn when independent evidence 4 exists of the fact to which the party refuses to answer. 6 So the silence must be countered by 7 or -- having an existence, outside of the 8 silence, independent evidence, and it must 9 obviously be relevant. 10 So the careful balancing that this 11 Court must exercise, as you are guided by 12 this case law, starts with, really, what is 13 relevant, and what Fifth Amendment questions 14 that were raised and asserted in the 15 depositions or for discovery are relevant to 16 the issues in this case. 17 Thank you, Your Honor. 18 THE COURT: Okay. Thanks a lot, 19 Ms. Rockenbach. I appreciate that. 20 All right. So this is essentially 21 Mr. Scarola's, on behalf of Mr. Edwards 22 proffer, so I'm going to give him the 23 opportunity to proceed first. And I will 24 give you my initial inclination first. If 25 there's an agreement, fine, which I don't Palm Beach Reporting Service, Inc. EFTA00801011  31 1 expect there to necessarily be. 2 MR. LINK: Your Honor, why would I be 3 standing here? 4 THE COURT: I am going to give you that first, and tell you what my initial 6 inclination is as if we were sitting here 7 and these questions were being asked at 8 trial. It would be a whole lot shorter 9 because all I would have to say is sustained 10 or overruled, but I don't have that luxury 11 right now. 12 MR. LINK: You are struck with us right 13 now. 14 THE COURT: We will go through this. 15 We will start at page eight, lines 11 16 through 19 -- this is the March 17, 2010 17 deposition of Jeffrey Epstein. 18 Mr. Scarola, the first one -- the first 19 two questions, my inclination is to permit 20 those questions to be asked, finding, 21 consistent with Frazier and its progeny, 22 that such information will be able to be 23 proffered or testified to outside of the 24 mere invocation of the Fifth Amendment 25 privilege by Mr. Epstein as to questions Palm Beach Reporting Service, Inc. EFTA00801012  32 1 that read, quote, When and under what 2 circumstances did you first meet the 3 individual referenced by the initials L.M.? 4 The next question being, quote, Do you know the individual named L.M. -- identified 6 by the initials L.M.? End quote. 7 So my inclination is to allow those 8 questions to be asked, because L.M. is 9 listed as a witness. And either she or 10 someone who is able to testify concerning 11 events associated with her will be 12 available. 13 MR. LINK: Yes. 14 THE COURT: Mr. Link, your position. 15 MR. LINK: Yes, Your Honor. It is not 16 the question. 17 THE COURT: And by the way -- so as to 18 save us a brief amount of time, that same 19 ruling would apply, at least until I hear 20 your position. But my inclined position, if 21 you will, will apply to the same or similar 22 questions that were asked as it relates to 23 E.W. and as results to Jane Doe that's at 24 issue here. 25 MR. LINK: I understand that, Judge. Palm Beach Reporting Service, Inc. EFTA00801013  33 1 I want to be really clear about this. 2 It's not the question in and of itself that 3 I have a problem with. This is what bothers 4 me. Simply showing the jury cumulative 5 question after question after question where 6 my client asserts Fifth Amendment is 7 prejudicial. So in looking at the facts -- 8 THE COURT: There's always going to be 9 prejudice. And as many judges have stated 10 to me when I was practicing law -- and I 11 mentioned the anecdotal experience with 12 Justus Reid where all he often had to say 13 was prejudicial and it would be sustained 14 after I had gotten done -- and we were 15 co-counsel -- after I had gotten done with a 16 manila folder filled with cases and giving 17 an argument that I thought was a good one, 18 and being overruled, all he would have to 19 say was prejudicial and it would be 20 sustained. That was the point I was trying 21 to make the other day. 22 So I don't mean to interrupt you, but 23 you've mentioned that often. And 24 Ms. Rockenbach has often also used the word 25 prejudicial. We are not going to be able to Palm Beach Reporting Service, Inc. EFTA00801014  34 1 rewrite history in this case. 2 MR. LINK: I understand that. I do. 3 THE COURT: And that's a major 4 undertaking that you and Ms. Rockenbach took on when you decided to get involved in this 6 process very late in the game. 7 I am not being critical of that. I'm 8 not taking any position whatsoever. It's 9 just, the reality is that this case comes 10 froth with prejudicial issues. And there's 11 going to be prejudice. There's no question 12 about it. It's not who ran a red light and 13 whether someone has a whiplash injury as a 14 result of that running of the red light. 15 This is a case that is froth with sexual 16 issues, sexual issues involving minors, as 17 alleged, and for which, at least one of the 18 guilty pleas was for the procurement of a 19 minor for prostitution. 20 As much as I want to and intend to 21 sanitize the case to the extent that there's 22 a level playing field from the inception, 23 and because of your and Ms. Rockenbach's 24 maturity in the manner in which you've 25 written your response papers and some motion Palm Beach Reporting Service, Inc. EFTA00801015  35 1 papers as well, is the very realization that 2 there is no getting away from many of these 3 things that are, in fact, going to be 4 potentially prejudicial to Mr. Epstein when it comes to the sheer information based upon 6 the nature of these cases. It's just no 7 getting away from it. And you realize that 8 by virtue of the papers that you signed. 9 So I wanted to stop you there and 10 explain that to you. What has to be 11 demonstrated to the Court, however, that 12 when using the term prejudicial, it has to 13 come, in most situations, for the 403 14 analysis, to where any probative value is 15 materially outweighed by the prejudice. 16 Simply saying something is prejudicial, 17 as has been somewhat of the course thus far, 18 is not enough to persuade the Court. It has 19 to be to the extent that I have explained 20 under 402 -- better explained by Professor 21 Ehrhardt in his treatise. 22 So against that backdrop, tell me what 23 you want to say. 24 MR. LINK: And I appreciate that. And 25 the prejudice that I want to describe is Palm Beach Reporting Service, Inc. EFTA00801016  36 1 different. I want to address one of the 2 things the Court said. 3 Your Honor, we understand -- I have 4 said it probably at every hearing so far -- you can't sanitize this case completely. It 6 cannot be done. 7 In fact, frankly, we have to embrace on 8 our side of the table some of the issues 9 that you just described. They are part of 10 this case. We have to embrace them. We 11 have to deal with them. We know that. So 12 we are not asking you to eliminate all sex 13 and all reference to minors and things of 14 that nature. We are not asking the Court to 15 do that. 16 This is special. When you make a Fifth 17 Amendment determination and do balancing, 18 what I meant by prejudicial is this. The 19 first one is a great example. It is not 20 going to be a disputed fact at trial. We, 21 in fact, would stipulate that Mr. Epstein 22 knew L.M. 23 So if we are willing to stipulate 24 that -- they are also going to call L.M. Is 25 there a less prejudicial, less Fifth Palm Beach Reporting Service, Inc. EFTA00801017  37 1 Amendment way of getting that information to 2 the jury? There are certainly questions in 3 here that I'm going say to you we might 4 challenge. But this first one, for example, 5 what is the benefit to the jury to simply 6 hear the answer of the Fifth Amendment when 7 we will stipulate to the fact? 8 That's what you want the jury to 9 understand. Did he know L.M. He knew L.M. 10 So how does it help the jury? How does it 11 help this Court in maintaining the level 12 playing ground to have that question and 13 answer read to the jury? And it is not the 14 question -- 15 THE COURT: This time I am not going to 16 answer. This time I let Mr. Scarola talk 17 about that overarching issue. 18 MR. SCAROLA: Thank you. 19 Your Honor, a primary focus of the 20 probable cause contention that is now being 21 made is that Jeffrey Epstein had reason to 22 conclude that Bradley Edwards was a knowing 23 participant in the Ponzi scheme because of 24 the way in which he was conducting discovery 25 while at RRA and what he was seeking to Palm Beach Reporting Service, Inc. EFTA00801018  38 1 discover while at RRA. 2 Had Jeffrey Epstein offered the 3 stipulation that has just been offered for 4 the very first time in this courtroom, that, 5 yes, I knew L.M; yes, I met L.M. at this 6 particular time; yes, she was a guest in my 7 home frequently; she was there 156 times 8 had that -- 9 MR. LINK: That was none of those 10 questions that we are talking about. 11 THE COURT: Let him. 12 Mr. Scarola, finish. 13 MR. SCAROLA: Had those acknowledgments 14 been made by Jeffrey Epstein, then perhaps 15 some of the discovery that was being 16 conducted by Bradley Edwards would have been 17 unnecessary. 18 But in fact, Jeffrey Epstein 19 stonewalled all of the discovery in the 20 civil cases. He refused to acknowledge even 21 that he had ever met L.M. He refused to 22 acknowledge, having stated in the presence 23 of Bradley Edwards and the court reporter, 24 "I like L.M. I liked her back then." 25 He was asserting the Fifth Amendment Palm Beach Reporting Service, Inc. EFTA00801019  39 1 with regard to all of those matters. And 2 the reasonableness of what Brad Edwards was 3 doing must be judged in that context. 4 And the fact that a stipulation is being offered right now, thank you but no 6 thank you. It's far too late. I don't want 7 the stipulation. I want the jury to know 8 what Jeffrey Epstein was doing at the time. 9 And they are entitled to know what Jeffrey 10 Epstein was doing at the time, and continued 11 to do even after he filed the lawsuit 12 alleging that Brad Edwards fabricated these 13 claims. He wouldn't even acknowledge that 14 he knew L.M. 15 So for those reasons, it's relevant, 16 it's material. Its probative value is not 17 outweighed by any prejudice. And Your 18 Honor's ruling as you were inclined -- as 19 you announced