EFTA00027884

JCB3DOEC UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK x JANE DOE, 4 Plaintiff, New York, N.Y. 5 v. 19 CV 8673 (KPF) 6 DARREN K. INDYKE, et al., 7 Defendants. 8 x Conference 9 December 11, 2019 11:30 a.m. 10 Before: 11 HON. KATHERINE POLK FAILLA, 12 District Judge 13 14 APPEARANCES 15 16 KAPLAN HECKER & FINK LLP 17 Attorneys for Plaintiff BY: ROBERTA KAPLAN 18 ALEXANDRA CONLON KATE L. DONIGER 19 LOUIS FISHER 20 TROUTMAN SANDERS LLP Attorneys for Defendants 21 BY: BENNET J. MOSKOWITZ CHARLES GLOVER 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027884 JCB3DOEC THE DEPUTY CLERK: In the matter of Doe v. Indyke. Counsel, please state your name for the record beginning with plaintiff. 4 MS. KAPLAN: Good morning. Roberta Kaplan for 5 plaintiff from Kaplan Hecker & Fink. I am here with my 6 colleagues Kate Doniger, Alex Conlon, and Louis Fisher. 7 THE COURT: Good morning. 8 MR. MOSKOWITZ: Good morning. Bennet Moskowitz, 9 Troutman Sanders LLP, counsel for the co-executors of the 10 Estate of Jeffrey D. Epstein. 11 MR. GLOVER: And Charles Glover of the same firm. 12 THE COURT: First of all, I thank you very much for 13 your indulgence. As you could see, we did not know until we 14 knew that plaintiff in our prior case did not speak English. 15 He was comfortable with the dates of a conference and not more 16 than that. So I appreciate your patience. 17 Let me begin by noting that I'm surprised we are 18 having this conference, even though I am the one who convened 19 it. And that is because what I thought made sense from an 20 efficiency perspective was to have the discovery assigned to a 21 single magistrate judge, and which is what was done. The 22 reason that I'm having this conference, and Judge Freeman is 23 not, is it does not appear that the discussion of motions to 24 strike or motion practice is occurring in all of the cases. 25 And so for those in which it is happening, those judges have SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027885 JCB3DOEC decided to talk about it. I'm asking in the first instance to speak with Mr. Moskowitz, unless he wants to pass the mic over to 4 Mr. Glover. 5 Mr. Moskowitz, I had understood, from a very sort of 6 peripheral perspective, that the focus of your clients was on 7 setting up a fund to perhaps fund the settlement of these 8 claims. Am I correct? 9 MR. MOSKOWITZ: That's absolutely correct. 10 THE COURT: I'll ask you to stand only because there 11 is a monitor in front of you. 12 MR. MOSKOWITZ: I prefer it. Thank you. That's 13 absolutely correct. That is still a major focus of my clients. 14 In fact, it's full steam ahead. I understand that, as has been 15 described when we were before Judge Freeman and before then, I 16 understand that the administrators-to-be, Ken Feinberg, 17 , Camille Biyos, all leading people in the field of 18 claims administration, has been in touch with or have reached 19 out to various plaintiffs' counsel. And the administrators are 20 working on the protocol, which is basically the nuts and bolts 21 of that program. 22 It's our hope and expectation that all plaintiffs will 23 give it a shot. It doesn't require anything in terms of 24 waiving any rights. They can go through the whole claims 25 process, get an independent determination -- the estate doesn't SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027886 4 JCB3DOEC control the program administrators or designers -- and if given plaintiff doesn't like that determination, they can say, you know what, I don't like this, I am going back to concentrate on 4 my litigation. 5 I too, although, you know, I'm hoping people come 6 around, and I'm disappointed as of now no one has come to us 7 and said I am going to give it a shot, let's stay the 8 litigation in the meantime. But it's not required. The 9 administrators aren't requiring that. 10 THE COURT: This is the fork in the road where you and 11 I diverge. I would have thought given your focus was on 12 setting up a fund for claims administration you would not be 13 focusing on motions to strike, which to me seemed to be a -- 14 not a distraction, but a detour in the path to resolution of 15 the case. 16 MR. MOSKOWITZ: I see. If I can, I gather, but I'll 17 ask the question, your Honor is wondering that based on your 18 Honor's understanding of what the law is, on whether what we 19 are talking about here is, as Ms. Kaplan asserted in her letter 20 a motion to strike, or as I'll gladly briefly go over is 21 actually, no, a motion to dismiss. 22 And the reason we made the motion is because I would 23 have loved to push the time out more. But plaintiff's counsel 24 wasn't willing to do that. We have preserved our rights. A 25 critical threshold issue for us, I have six points to briefly SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027887 JCB3DOEC touch upon, I'll be very quick, that will address that. But, it's very important to us that we be able to move to dismiss, which is what it is, the punitive damages claims. 4 THE COURT: Okay. But, that wouldn't get rid of all 5 of the claims. 6 MR. MOSKOWITZ: No. 7 THE COURT: I am trying to figure out why expend -- _ 8 am not using the term waste -- why expend the resources when, 9 at some point, perhaps, we can have a discussion about whether 10 or not Virgin Islands permits law permits punitive damages or 11 not. 12 I am just trying to understand, because things were 13 going so well, I thought. You've had your initial conference 14 before Judge Freeman, there are discussions that I imagine were 15 going on. There was, I presume, the establishment of protocols 16 for discovery. And this, again, just seems like something that 17 is inconsistent with everything that's been going on before 18 her. 19 So perhaps I need to hear some or all of your six 20 points and I will listen to you. 21 MR. MOSKOWITZ: Sure. Well, plaintiff's counsel 22 generally, not all of them, but plaintiff's counsel here today 23 included has made it clear to us that they are not yet sold, 24 that's my wording, on the program. And unless and until they 25 tell us otherwise, they are moving full steam ahead with their SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027888 JCB3DOEC litigation. So we are basically having to react to that. In terms of making motions, your Honor is correct, we've again, if we had it our way, we wouldn't have to engage 4 in this practice on either side. We would stay everything. 5 But we're here, and the reason moving to dismiss punitive 6 damages in this case is so important to us and worth the time 7 and energy now we are already halfway there to briefing and 8 having this issue decided is two fold. 9 Number one, the scope of discovery, ever since the 10 2015 amendments, now expressly as I think it did previous to 11 that contemplates that the amount in controversy is directly 12 relevant to the scope of discovery. This is a very different 13 case, from our perspective, because no punitive damages are 14 available than plaintiff, if they do, we think incorrectly 15 believe punitive damages are available. 16 People, as I'm sure your Honor is aware, make very 17 large claims for punitive damages. That's out of the case and 18 should be as a threshold. 19 The second is going to the claims program, or any 20 other settlement because, you know, Judge Freeman asked me 21 this, well, can someone talk to you about settlement separate 22 from the claims program. Absolutely. They all have my phone 23 number. Nothing is off the table. We hope everyone will give 24 that claims program a shot. Why wouldn't you. I don't see 25 why. In the meantime, if someone wants to talk about SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027889 JCB3DOEC settlement, fine. How can the parties in this case see eye to eye if plaintiffs, again, I think clearly and incorrectly say and we 4 are entitled to X millions punitive versus we are saying we are 5 talking about compensatory damages. Let's have a discussion 6 about that. 7 THE COURT: Let's be clear. Assuming, as you'd like me 8 to do, the exclusion of punitive damages, the claim's not going 9 to be for ten dollars. It is going to be for millions upon 10 millions of dollars. And do you really think the scope of 11 discovery is going to change, given the nature of the damages 12 sought and the nature of the claims raised? 13 MR. MOSKOWITZ: Well, I do -- part of the clarity that 14 I don't have, which I welcome to get, not trying to make my own 15 questions, don't have clarity on how much is plaintiff claiming 16 is owed to her in terms of punitive versus compensatory 17 damages. It's not clear to me from the complaint. I haven't 18 heard that yet, so it's hard for me to answer that question. 19 But, I'm happy to answer questions in the order that your Honor 20 desires. 21 There is one other, I mentioned I had these six 22 points. It Is often the case we don't come in and do things 23 how I want. I want to raise another critical threshold issue 24 that came up entirely because of what was in the contents of 25 plaintiff's counsel's response to my letter, and that is if SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027890 JCB3DOEC they are correct that USVI law applies, this action is time barred. Every cause of action that is asserted in their complaint says it is timely because of the New York Child 4 Victims Act. Well, it stands to reason that if U.S. Virgin 5 Islands law applies in this case, then the plaintiff cannot 6 avail herself of the New York Child Victims Act. That is 7 certainly something that I also now need to brief, and would, 8 like I said, that's a key threshold issue even more so than 9 punitive damages. There can be no case if there is no New York 10 Child Victims Act applying. It's time barred. 11 THE COURT: Not to put words in your mouth, but what 12 I'm understanding is that you believe your premotion letter is 13 not inconsistent with your desire to have a claims resolution 14 process. It is, rather, something you feel is thrust upon you 15 by the fact that today, not all of the plaintiffs' counsel are 16 interested in participating in the program that you're setting 17 up. 18 MR. MOSKOWITZ: Yes. Let me clarify that, too. 19 That's correct, but various plaintiffs' lawyers have indicated 20 to me that they are interested. In fact, and a big issue 21 before Judge Freeman was various plaintiffs' lawyers reached 22 out to me and others that represent the executors before these 23 actions got filed in the case, certainly before they began in 24 earnest, to say they wanted a kind of claims program. It was 25 something we were already thinking about on our end. This was SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027891 JCB3DOEC not something that was just thrust out here. I don't want to rehash during Judge Freeman's hearing there was a disagreement about the way it's unfolded, etc., and 4 that's not why we're here. 5 Your Honor is correct, having the final motion to 6 dismiss now, I wish we could put it off for three months and 7 see if the claims program works and save the dockets, but here 8 we are. And again, we think that punitive damages and now 9 again USVI law applies as being time barred. These are key 10 issues we can't avoid. These are straightforward legal issues. 11 These will not be 50-page briefs. The motions I filed in other 12 cases have all been on the concise side I'll call it, which I'm 13 sure is something your Honor would appreciate. This can be 14 done on a relatively short time frame. 15 These are threshold issues. Certainly the time bar 16 aspect, and I still argue the punitives and subject to I'd love 17 to know what is plaintiff asking for in terms of punitive 18 damages. 19 Based on a collective, not in this case, what I've 20 heard from the plaintiffs' side is, for example, there is one 21 case out there where two plaintiffs, not this firm, claim $100 22 million. They don't say what part is which, they don't even 23 allege they were underage at the time of the alleged harms to 24 them, but we have the complaint at the time. We request $100 25 million or another amount to be determined. That tells me we SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027892 IC JCB3DOEC need to set clarity where we can on the front end to make things more efficient going forward. THE COURT: Thank you. 4 Ms. Kaplan, I'll hear from you in response. 5 MS. KAPLAN: Yes, your Honor. So, I think I heard 6 Mr. Moskowitz say that various plaintiffs' lawyers are not yet 7 sold on the proposed settlement process. 8 THE COURT: That's the word that was used, yes. 9 MS. KAPLAN: That might be the understatement of the 10 day, your Honor. First of all, there is no fund. In response 11 to questions from the plaintiffs, Mr. Moskowitz responded by 12 saying that no amount of money is actually being set aside by 13 the estate to settle these claims. That is something that is 14 very, very concerning to the plaintiffs. It's one thing to 15 agree to participate in a fund when you know that, say, 300 or 16 400 million of the 577 million in the estate is being set 17 aside. But they have said that no amount is being set aside. 18 They just want to settle claims, presumably, so they can settle 19 as low as possible and have the rest for the estate. That's a 20 huge problem. It is going to be a huge problem for the 21 plaintiffs' lawyers. 22 Number two, as Judge Freeman admonished Mr. Moskowitz 23 when we met, settlement is a two-way street. There has to be 24 consultation. The settlement -- the discussions that 25 Mr. Moskowitz referred to, I was part of those, and I said to SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027893 JCB3DOEC the estate that the plaintiffs needed to be involved. That these women who, many of whom, like my client, were horribly abused as young children, have to have agency. And they have 4 to help pick the administrator, be involved in who the 5 administrator is. None of that has happened. 6 Mr. Moskowitz and the estate picked Ken Feinberg on 7 their own. There was no consultation with us. We have now 8 asked them to put on an administrator on a panel that the 9 plaintiffs select. We've gotten no answer to that. 10 With all respect, your Honor, I'm someone who has 11 settled cases for decades in this district. This does not look 12 to me like a case that's going to settle. 13 If your Honor would like, I can move on to the merits 14 issues. 15 THE COURT: Please. 16 MS. KAPLAN: With respect to this motion, whether it's 17 styled as a motion to dismiss under 12(b)(6) or a motion to 18 strike under 12(f), I've made those motions, I've always made 19 them as 12(f) motions. I've never won one, but I've made them. 20 However it's styled, your Honor said the fundamental important 21 point here, which is not that it doesn't dismiss one claim, it 22 dismisses no claims. We have compensatory damage sought in 23 connection with all four of our claims. They have no motions 24 to dismiss compensatory damage. They have no motion to dismiss 25 any of the four underlying tort claims. SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027894 12 JCB3DOEC For that reason, your Honor, there is really no reason not to get started. We are happy to have a conference with Judge Freeman, but the problem is the cases are in all 4 different kind of configurations. There are many cases that 5 don't require even responses until late January. There are 6 cases with different defendants. There are cases with federal 7 trafficking statutory claims. This is a simple diversity 8 claim, common law claim. We are ready to get started. We 9 don't think we should be delayed. 10 With all respect to the Southern District, the way 11 this has been set up where there is one magistrate but I think 12 at least nine, maybe a dozen different judges now, give the 13 plaintiffs all the disadvantages of consolidation and none of 14 the advantages of consolidation. Because various issues are 15 being decided by various district court judges, most of the 16 judges are deciding pseudonymity. Your Honor has deferred that 17 to Judge Freeman. It's kind of a big mess. 18 We understand that Judge Freeman has jurisdiction over 19 discovery. We would just like to start, and maybe if we could 20 set a trial date today that would help get that underway. 21 THE COURT: I'm not setting a trial date today. 22 MS. KAPLAN: Let me talk about the scope of discovery. 23 I will hereby make representation there is nothing about the 24 damages claim that will affect the scope of discovery. 25 We expect this case will have at most four witnesses. SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027895 JCB3DOEC Maybe five. Our plaintiff, the two women who booked meetings -- that's not a right term. But massages with Mr. Epstein. I expect both of those women to take the Fifth, 4 so that won't take very long, and maybe two experts. 5 In terms of the documents that we are seeking, your 6 Honor, again, it will be very limited. We don't know if they 7 have written evidence about our client. We understand that 8 these transactions were done in cash. I don't know if they 9 kept records of who he met with when. Obviously, if he has 10 that record, we'd like it. We don't expect a lot of documents 11 from the plaintiff. 12 And I should also add that we have opened a 13 conversation with the U.S. attorney's office for the Southern 14 District who may have one or two documents that corroborate our 15 client's claims. They are thinking about how they can get 16 those to us subject to grand jury requirements. And obviously 17 the minute we get them, we will share them with the estate. 18 The final issue, your Honor, has to do with choice of 19 law and time bar. The issues are distinct. So whether Virgin 20 Islands law applies to issues relating to what you can get from 21 the estate, whether that's an estate choice of law issue, is 22 entirely different from the question of what state substantive 23 law applies to the underlying torts. 24 I think there can be no question that given this 25 happened on the streets of New York City, in his mansion, that SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027896 14 JCB3DOEC the law, the substantive law of tort applies New York law, and we clearly get the benefit of the New York statute on that. With respect to the estate and whether or not he 4 purposefully availed himself two days before his death of the 5 benefits Virgin Islands law, which he presumably thought was 6 going to be an advantage to Mr. Epstein, and in fact it has 7 been. It is incredibly difficult for us to deal with the 8 Virgin Islands court, to get Virgin Island lawyers to file 9 papers. There are 100 advantages to the estate being in the 10 Virgin Islands. 11 Having sought those advantages, they don't get to pick 12 and choose and say for purposes of the punitive damages, we 13 want New York law to apply. We're happy to brief that issue. 14 Courts in the Southern District in civil cases apply different 15 laws to different issues of cases in a single case all the 16 time. There is nothing out of the ordinary about that, and 17 there is no rule that requires that one state's law applies to 18 all issues in the case, particularly when you have a 19 particularized issue about estate law like this. 20 I am happy to address anything else your Honor would 21 want to address. 22 Couple more points. Again, we don't think that 23 discovery in this case should take very long, given the limited 24 number of documents and witnesses. We would be willing to 25 waive a jury trial, your Honor, to help expedite things. And SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027897 JCB3DOEC again, we are very much eager to get things to happen here as quickly as possible. Our client has lived with this for many, many years, she's really desirous of putting this behind her, 4 and I'm sure your Honor can appreciate that. 5 THE COURT: Just before you sit down. I am 6 understanding, as you began this discussion, the problems that 7 you see and that your client sees in the process that's been 8 identified by defense. I am assuming you've had the 9 discussions with them, because you've told me that you have, 10 regarding increased plaintiff involvement in the administration 11 process. 12 If they agreed, might you change your mind about the 13 futility or not of the claims administration process? 14 MS. KAPLAN: I think if they were willing to have a 15 panel of administrators, at least one of whom, maybe there 16 would be two, Mr. Feinberg is the one chosen by the plaintiffs 17 and a third neutral, I certainly would be open to 18 participating. But I am not open in participating in something 19 that's been done entirely by them, completely in secret, by 20 someone they chose, and without denominated amounts that they 21 are setting aside. 22 THE COURT: There's two stumbling blocks. One is the 23 composition of the panel and the other is the need for some 24 defined amount. 25 MS. KAPLAN: It is very hard for the plaintiffs to SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027898 1 JCB3DOEC figure out what they can expect without understanding what the denominator is, if you will. THE COURT: Understood. Thank you. Mr. Moskowitz. 4 MR. MOSKOWITZ: Thank you. Your Honor, it's 5 interesting. First, as to the motion, we think we have a 6 fundamental right to make and intend to make. Plaintiff's 7 counsel does not dispute that under New York law, punitive 8 damages are not available. USVI law appears to me to be in 9 accord with that. By the way -- 10 THE COURT: No. Let me understand why you think it's 11 in accord. I found it, I found it an interesting issue. I 12 didn't see much in the way of cases in the Virgin Islands that 13 dealt with the issue. I thought I understood that the Virgin 14 Islands law tends to be accepting of common law and the law of 15 other jurisdictions that doesn't seem to conflict. 16 MR. MOSKOWITZ: What you'll find is many Virgin 17 Islands cases, and I will tell you I'm not -- I can brief it, 18 but I cannot tell you now the current state of Virgin Islands 19 law with respect to restatement. You will find cases, 20 including from as recent as 2009, that refer to the restatement 21 on the issue of punitive damage against an estate, and the 22 restatement as well as the majority of U.S. jurisdictions, 23 because we looked into this, are in accord. 24 THE COURT: So this will be Section 908 and Section 25 926? SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027899 JCB3DOEC SPEAKER: I believe that's correct. I don't have it in front of me. I'm happy to pull that if I can after I finish speaking. But, there is Hamilton v. Dowson Holding, 51 VI 619, 4 628 (DVI 2009); there is Booth v. Bowen, 2008 WL 220067, at *5 5 (DVI Jan. 10, 2008). 6 Candidly not Supreme Court USVI cases, but they are 7 the authority that you will find on this issue in the USVI, and 8 they are supportive of that restatement position. Which is not 9 surprising. When someone's dead, you are not trying to punish 10 them. Others would argue what about deterrence. The few cases 11 I found work in our favor saying deterrence doesn't work like 12 that. When someone is alive thinking if they die perhaps their 13 estate will be impacted by this. This is not some obscure 14 position. This is statutory law in a lot of places, including 15 New York. 16 In terms of the time issue, plaintiff's counsel also 17 doesn't deny that if U.S. -- if New York law doesn't apply to 18 that issue, this action is time barred. I'm surprised and I 19 agree with Ms. Kaplan, this should be briefed. It should be 20 briefed now. I am surprised to hear that it's routine that you 21 get to pick and choose from one part of the case that X law 22 applies -- 23 THE COURT: I think that's an overstatement of what 24 her argument was. I didn't hear the word "routine" mentioned 25 at all. I have had cases, I'm sure you have as well, even SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027900 18 JCB3DOEC basic contract cases where there are certain provisions that are subject to one jurisdiction of law and other claims that could be made on the same contract that would be under a 4 different jurisdiction of law. 5 MR. MOSKOWITZ: What I've seen, your Honor, is splits 6 between procedural law and substantive law. We are talking 7 about two very substantive issues here. Availability of a kind 8 of damages and a right to revive a claim under New York 9 statutory law that's part of a new trend but is, 10 notwithstanding that, it relates to a reviving statute of 11 limitations, gives it new vested substantive right to people to 12 bring a claim that was otherwise previously time barred. 13 THE COURT: To be clear, when you call it new trend, 14 I'm sure you mean the law that actually provides for it. Tt ' s 15 not like someone just woke up and decided let's do this. 16 MR. MOSKOWITZ: Correct. 17 THE COURT: Do you really think the tort issues in 18 this case would be decided by Virgin Islands law? 19 MR. MOSKOWITZ: No. That's why we were surprised to 20 hear that in the response to our letter, which is why we came 21 here, point number one was going to be that surprised us. But 22 because of that suggestion, we number one need to brief it, 23 because, as I said, and as has been denied, if USVI law applies 24 wholesale or even to the two issues we are talking about, the 25 action is time barred. Certainly that's a threshold issue that SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027901 19 JCB3DOEC needs to be decided now. THE COURT: I understand. I wouldn't be -- I wouldn't be so sure that it is time barred. 4 I guess my question is, if you are hellbent on 5 bringing this motion -- that's the legal term -- and it appears 6 that you are, is it your belief that I should not have 7 discovery while the motion is pending because, at most, well, 8 you think possibly that instead of hitting the single of 9 getting rid of punitive damages, you would hit the home run of 10 getting rid of the case in its entirety? 11 MR. MOSKOWITZ: Certainly something we would brief. 12 Having heard it for the first time, in the response to our 13 letter, and not wanting to do something which I don't like when 14 other people do, which is seek leave to submit an unauthorized 15 reply to your Honor, it's something we think needs to be dealt 16 with now. But we think both issues need to be dealt with now. 17 THE COURT: Let's step back. While your motion is 18 being briefed, which, by the way, I haven't allowed just yet, 19 what is the status of discovery? 20 MR. MOSKOWITZ: So, number one -- 21 THE COURT: What do you think it should be? 22 MR. MOSKOWITZ: Oh sure. If it is limited, all the 23 more reason not to get going with it now. Nothing is going to 24 change in six weeks that's going to impact the plaintiff's 25 rights. Look, I get it -- SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027902 20 JCB3DOEC THE COURT: What is the six weeks that you are thinking? MR. MOSKOWITZ: Sorry. That was a ballpark 4 guesstimation, if we're briefing, I don't know how long it will 5 take to brief -- 6 THE COURT: You haven't figured out my schedule yet, 7 which is not six weeks, but okay, nice try. 8 MR. MOSKOWITZ: Noted. And some judges look at me the 9 other way if you say three weeks versus nine. Good to know. 10 But in terms of discovery, Magistrate Freeman, number 11 one, has ordered the parties to report back to her on 12 January 10 including about the claims program and discovery. 13 So that issue's to be determined. I am hoping we can come to 14 some agreement. I know Judge Freeman threw out some ideas on 15 the transcript, I don't have that transcript in front of me. 16 She was in good control of that issue. 17 If I can, I'd like to take a brief moment to set some 18 things clear about the claims program. It's the opposite of 19 what plaintiff's counsel has asserted. That's correct, we 20 haven't said only X million is devoted. What we have said in 21 writing numerous times there is no aggregate cap on the amount 22 that the independent administrator can deem appropriate to pay 23 to people. If you say 10 million is in it, then it's 10 24 million spread across however many joined. We are saying, no, 25 we want people to join this program. Everything we are doing SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027903 JCB3DOEC is we want people to join. Choosing Ken Feinberg. Ms. Kaplan did express extreme interest in having one person and one person only who was not 4 Ken Feinberg. We vetted and interviewed many people, including 5 that person. We made our own decision, that's true. Ken 6 Feinberg has impeccable credentials. And this notion of 7 appointing someone to a panel, this is not arbitration or 8 mediation. This is an independent claims program. 9 The estate -- we have no control at the end of the day 10 over when Ms. who is the designer and administrator of 11 the fund, when she makes a determination that I think this 12 person should get X, we can't veto that. We can't impact that. 13 All we can do is, when we hear about a claim, is say here's 14 what we know about this claim that we think you should know 15 about, and Ms. , just like she gets whatever evidence 16 claimants make, can do what she wants with it. She can find 17 what we say not important. And she makes a determination. 18 So I am hearing this notion like we put two people, 19 two or three people up there, first of all, it's one. And she 20 is independent. I mean, these people have, that we've 21 selected, and we were so careful about it. I am just shocked, 22 and this is perhaps the only case where I've heard repeated 23 objections to Ken Feinberg being -- 24 THE COURT: I know who he is. 25 MR. MOSKOWITZ: Right. So candidly, I hear words get SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027904 22 JCB3DOEC thrown out. I'm honestly mystified by that. Who else better to ensure a successful claims program. It is not like we went out and hired our cousin. These are the leading people. 4 , not as well known, worked on the 9/11 Fund for 5 many, many years, just left the fund to do this program. She's 6 very compassionate. She cares. They want this program to work 7 and so do we. Various plaintiffs have told me they are 8 interested too. 9 THE COURT: To be clear, you don't have to sell me on 10 it because I'm not participating one way or the other. 11 Whatever PR work you are doing has failed, because here we are. 12 And we are at motions practice and we are going with litigation 13 because the efforts to sell folks on the claims resolution 14 proceeding have not worked. 15 MR. MOSKOWITZ: I don't think that's correct, your 16 Honor. The time to sign up hasn't opened yet. 17 THE COURT: All right. Why are you bringing this -- 18 is it because there is otherwise a response due that you are 19 not waiting to hear whether the folks at the front table are 20 joining in the process or not? 21 MR. MOSKOWITZ: I'm sorry. I don't think I understood 22 the question. 23 THE COURT: You just said to me now that people do not 24 have to elect to participate or not participate today, they 25 have a period of time. Correct? SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027905 23 JCB3DOEC MR. MOSKOWITZ: Correct. THE COURT: Is that period of time the 10th of January or some date sooner than that? 4 MR. MOSKOWITZ: I'm not certain. I know the protocol 5 comes out very soon. Like in days or a week or so. And then 6 shortly thereafter, it is a matter of months, so I don't have 7 the exact date. But it's soon, it's very soon, it's not months 8 from now. 9 THE COURT: My understanding is that, first of all, 10 you'd like more plaintiffs and their counsel to participate in 11 the program. But, in the absence of that, you need to do 12 something, and if it's to proceed with the litigation, you will 13 proceed with the litigation. 14 I was trying to understand, and I was trying to 15 understand when I began this conference, why it was that you 16 were bringing the motion now, if you are in the process of 17 trying to persuade, encourage, entice people to participate in 18 the claims resolution process. And I am assuming it is because 19 otherwise you are going to be in default, and you have to do 20 something. 21 MR. MOSKOWITZ: That's right. I would have loved 22 again to put off the date. But this to us, and I have cases, 23 Judge Batts, Judge Buchwald, Judge Sweet, it is a motion to 24 dismiss. We had to move. We had to respond to the complaint, 25 and this is an important motion for us to make. SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027906 JCB3DOEC Yes, in fact, the last time we adjourned the date, 1- was without consent. We've been saying since the start, hey, let's save resources on both sides. Let's get the claims 4 program going. 5 Again, I do want to be clear, it's not been -- I know 6 your Honor said maybe it was a PR failure. I don't think 7 that's the accurate way to look at it. Again, we've heard 8 various plaintiffs express that they are very interested. Time 9 to actually make that public -- or sorry, not public. Make 10 that official hasn't happened yet. 11 THE COURT: Okay. Ms. Kaplan, are you not going to 12 join in? I just want to know. 13 MS. KAPLAN: I think it's very unlikely, your Honor. 14 They keep referring to them as independent. I don't know how 15 they properly use that adjective to describe Mr. Feinberg and 16 his colleague Ms. here. They were chosen by the 17 estate, they are being paid for by the estate, there was no - 18 not only was there no participation by us, but any opportunity 19 for us to weigh in on that was declined. And they have a 20 fiduciary duty not to our clients, but to the estate. That's 21 not independent under any definition of the word. 22 And what I am hearing from him frankly causes me 23 greater concern. This protocol, this is what we've heard all 24 along. I don't know, maybe a week. Maybe two weeks. Maybe 25 three weeks. We were supposed to participate in the protocol. SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027907 JCB3DOEC What's he talking about? So we have very, very low confidence in the process, in the integrity of the process, in the ability of these women 4 to have agency in their fates, and I think my client is very 5 likely to go forward with litigation. 6 THE COURT: All right. 7 MS. KAPLAN: Highly likely. 8 THE COURT: I didn't want to set a motion schedule. 9 If we are going forward with the litigation, the folks at the 10 back table have to respond. 11 MS. KAPLAN: Understood. But nothing about their 12 response is relevant to the motion about punitive damages. 13 Again, it does not dismiss a single claim in the case. It 14 doesn't relate to a single one of the one through 86 paragraphs 15 of factual allegations in the complaint. All it relates to are 16 three words in the prayer for relief at the end of the 17 complaint, and we all acknowledge sitting here today that our 18 client is entitled to compensatory damage. So I'm completely 19 willing to brief the issue, your Honor. And I can talk about 20 how the choice of law analysis would work here. But it 21 shouldn't delay anything, frankly, your Honor. Because it 22 won't change anything in terms of moving forward with 23 discovery, and trial in the case. 24 THE COURT: All right. I don't know I need to hear 25 anything else. Mr. Moskowitz, last words? SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027908 26 JCB3DOEC MR. MOSKOWITZ: Yes. If I can just give three cites where judges in this district, again, I think I referred to them earlier, Batts, Buchwald, and Sweet did dismiss on 4 12(b)(6) motions claims for punitive damages. Happy to do so. 5 If you want us to save it for the brief. 6 THE COURT: That's fine. Well, I haven't yet 7 scheduled the brief, and I want to think about the degree to 8 which discovery runs concurrent with the brief. It is only for 9 the punitive damages; is that not correct? 10 MR. MOSKOWITZ: And the time bar issue which since 11 THE COURT: We are back to that again. 12 MR. MOSKOWITZ: It was a surprise to us. 13 THE COURT: Of course. I make no final decisions but 14 you're observing the skepticism with which I heard the time bar 15 issue. Because I'm incapable of not expressing my emotions. 16 So I understand that. But I don't think that's going to be 17 carrying the day any time soon. 18 I think I have what I need to go back and think about 19 the issue and set a schedule. But I don't want to deprive 20 either side the opportunity to say final words to me. 21 Ms. Kaplan, anything else you wish me to know? 22 MS. KAPLAN: Just briefly. I've become a student of 23 the law of punitive damages and Mr. Moskowitz is right that the 24 majority rule is to bar it, as we do in New York. But the 25 jurisdictions that do that, at least in the United States, are SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027909 JCB3DOEC all based on statute. New York has a statute that prohibits punitive damages against an estate. Virgin Islands has no such statute. We are not aware of any case, we researched the issue 4 too in Virgin Islands, saying one way or the other whether that 5 is the law. Although of course in other contexts, the courts 6 in Virgin Islands refer to the restatement. 7 The factors that courts would look to in deciding this 8 issue is kind of the traditional factors. So the purpose of 9 punitive damages in a case is deterrence of future wrongdoing. 10 It's really honestly hard to imagine a case in which deterrence 11 of future wrongdoing is not a stronger interest, particularly 12 given the fact that Mr. Epstein can no longer be prosecuted 13 criminally. There is nothing more important than deterring 14 criminal sexual acts against young children. 15 The countervailing perspective is whether it's unfair 16 to punish the estate for the acts of the decedent. Typically, 17 your Honor, as you can imagine, that comes up in the context of 18 children. There is that famous line from Exodus in the Bible 19 about punishing the children for the sins of the fathers. And 20 since the Enlightenment in our country and in our world, we 21 believe that you shouldn't punish children for the sins of the 22 father. 23 There is no children at issue in this estate. They 24 have identified the sole beneficiary as Mr. Epstein's brother. 25 At least since Mr. Epstein was prosecuted in Florida, his SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027910 28 JCB3DOEC brother was fully aware of what Mr. Epstein did, and in fact, we have reason to believe his brother lives in a building owned partly owned by him, partly owned by Mr. Epstein, in which the 4 the two women who did the booking of massages for these girls 5 also lived. So, the idea that Mr. Epstein's brother is somehow 6 innocent here, or should have the full benefits of the estate, 7 based on those policy reasons, makes very, very little sense. 8 And obviously, deterrence is really a huge factor 9 here. This should never happen to any young girl ever again, 10 certainly anywhere in New York or anywhere in this country. 11 THE COURT: Thank you. Mr. Moskowitz, final thoughts? 12 MR. MOSKOWITZ: Yes. I have various law in front of 13 me that I'm happy to brief that, number one, show there are 14 plenty of jurisdictions that not based on statute bar punitive 15 damages against an estate. I have cases such as Lohr v. Byrd, 16 522 So 2d 845, 846 (Fla. 1988), which is a Florida case that 17 refutes any notion that deterrence is served by punishing a 18 tortfeasor. And I am happy to brief all of those. 19 THE COURT: All right. I will get back to the parties 20 as soon as I can. I'm imagining one side or the other will be 21 getting a transcript of this. If you do so, I'll receive it 22 automatically. So I'll just imagine one of you will do that. 23 Thank you very much. 24 (Adjourned) 25 SOUTHERN DISTRICT REPORTERS, P.C. EFTA00027911