EFTA00801275

1 IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT, IN 2 AND FOR PALM BEACH COUNTY, FLORIDA 3 Case No. 502009CA040800XXXXMB 4 5 JEFFREY EPSTEIN, 6 Plaintiff/Counter-Defendant, 7 vs. 8 SCOTT ROTHSTEIN, individually; BRADLEY EDWARDS, individually, 9 Defendants/Counter-Plaintiffs. 10 11 12 TRANSCRIPT OF PROCEEDINGS 13 14 DATE TAKEN: THURSDAY, MARCH 7th, 2018 15 TIME: 10:07 a.m. - 12:08 p.m. PLACE 205 N. Dixie Highway, Room 10D 16 West Palm Beach, Florida BEFORE: Donald Hafele, Presiding Judge 17 18 19 20 This cause came on to be heard at the time and 21 place aforesaid, when and where the following proceedings were reported by: 22 23 Sonja D. Hall Palm Beach Reporting Service, Inc. 24 1665 Palm Beach Lakes Boulevard, Suite 1001 West Palm Beach, FL 33401 25 PALM BEACH REPORTING SERVICE, INC. EFTA00801275 1 2 APPEARANCES: 3 For Plaintiff/Counter-Defendant: 4 LINK & ROCKENBACH, P.A. 1555 Palm Beach Lakes Boulevard, Suite 301 5 West Palm Beach, FL 33401 By KARA BERARD ROCKENBACH, ESQUIRE 6 By SCOTT J. LINK, ESQUIRE 7 For Defendant/Counter-Plaintiff: SEARCY, DENNEY, SCAROLA, BARNHART & 8 SHIPLEY, P.A. 2139 Palm Beach Lakes Boulevard 9 West Palm Beach, FL 33409 By JACK SCAROLA, ESQUIRE 10 By DAVID P. VITALE JR., ESQUIRE By KAREN TERRY, ESQUIRE 11 12 For Defendant/Counter-Plaintiff: 13 HATCH, JAMES & DODGE, P.C. 10 West Broadway, Suite 400 14 Salt Lake City, UT 84101 By PAUL G. CASSELL, ESQUIRE 15 16 For Jeffrey Epstein: 17 DARREN K. INDYKE, PLLC 575 Lexington Avenue 18 New York, NY 10022 By DARREN K. INDYKE, ESQUIRE 19 20 For Jeffrey Epstein: 21 ATTERBURY, GOLDBERGER & WEISS, P.A. 250 Australian Ave. South, Suite 1400 22 West Palm Beach, FL 33401 By JACK A. GOLDBERGER, ESQUIRE 23 24 25 PALM BEACH REPORTING SERVICE, INC. EFTA00801276 1 THE COURT: Good morning. Have a seat. 2 Thank you. 3 Needless to say the recent barrage, as 4 opposed to flurry, of activity that has 5 transpired is of extreme consternation to 6 the court. It has caused me to have to 7 engage in an inordinate amount of time to 8 the exclusion of other matters that needed 9 my attention. 10 While the Court understands the gravity 11 of the issues that have transpired, it is 12 with extreme consternation and concern that 13 they have transpired on the eve of trial, a 14 trial that has already been continued once, 15 matters that could have been avoided had 16 timely action been taken. And the burden on 17 the Court to try to get through what would 18 be approximately four feet of documents is 19 extensive and onerous. I have done the best 20 that I can to go through the materials, and 21 I had some assistance, which I appreciate, 22 from one of our staff attorneys, in trying 23 to simply wade through the extensive, 24 complicated, and in many situations, years' 25 old documents, some that go back almost a PALM BEACH REPORTING SERVICE, INC. EFTA00801277 1 decade in terms of their age, and much of 2 which I'm reviewing for the first time. 3 So it's against that backdrop we will 4 proceed. We will hear the motion filed by 5 Epstein to remove the case from the trial 6 docket relative to Florida Rule of Civil 7 Procedure 1.440 first. 8 MR. SCAROLA: Good morning, Your Honor. 9 With the Court's permission, believe it or 10 not, there is one agreed matter that we 11 would ask the Court to address first. 12 I would like to introduce to Your Honor 13 University of Utah Law Professor Paul 14 Cassell, former Federal Judge Paul Cassell, 15 who will present that matter to the court. 16 MR. CASSELL: Good morning, Your Honor. 17 Since this is an unopposed motion, it will 18 just take 10 seconds to present. 19 I'm here pro hac vice, which I'm not 20 sure the Court is concerned about. We do 21 have a motion to seal the pleading and 22 related emails. It's unopposed. We ask 23 that it be granted. Temporarily sealed 24 until you reach a ruling. 25 THE COURT: That's fine. I will need PALM BEACH REPORTING SERVICE, INC. EFTA00801278 1 an order in that regard, please. 2 All right, Ms. Rockenbach. 3 MS. ROCKENBACH: Thank you. May it 4 please the Court. Good morning. 5 Your Honor mentioned the barrage that 6 the Court has received. And it's the exact 7 words that I have on the top of my yellow 8 pad to describe the email flurry that has 9 occurred within the last four days, which 10 have truly made me sick. I could not wait 11 for this hearing to occur because of the 12 fact that I know this Court does not need 13 any more paperwork. You need to see the 14 attorneys and understand the chain of 15 evidence and how it was reprehensible that 16 either I or my law partner has been accused 17 of stealing documents. That has made me 18 sick. 19 So I look forward to discussing the 20 privileged nature of the documents. And I 21 thank Mr. Cassell for being here today. 22 Your Honor, this is Mr. Epstein's 23 motion to remove this case from the trial 24 docket. It was prompted by Mr. Edwards' 25 motion to separate the trials, which was PALM BEACH REPORTING SERVICE, INC. EFTA00801279 1 filed on Friday, I believe, for the first 2 time identifying that the fact that the 3 default that Mr. Epstein has against 4 Mr. Roth was on the original complaint and 5 it no longer applied. 6 Mr. Edwards pointed out to this Court 7 and to Mr. Epstein -- he is absolutely 8 correct -- that Mr. Epstein's operative 9 complaint is the Second Amended Complaint to 10 which there is no default. 11 What rule 1.440 tells this Court to do 12 is to look at the time that Mr. Edwards 13 moved -- it's maybe a notice to set trial. 14 In this case it was a motion to set cause 15 for trial -- was the case at issue. 16 Rule 1.440 is one of the most strictly 17 complied with mandatory rules of civil 18 procedure, which has been recognized by the 19 Fourth District Court of Appeal, and it's 20 one of those rare instances when a petition 21 for writ of mandamus is appropriate when 22 it's not complied with. 23 So we need to look at the pleadings and 24 not try this case twice. This case was not 25 at issue when Mr. Edwards filed his PALM BEACH REPORTING SERVICE, INC. EFTA00801280 1 motion -- for the obvious reason, when he 2 filed his motion to set the case in the 3 above-styled cause of action for trial on 4 May 24th, 2017. There is no dispute. 5 And Mr. Edwards has actually pointed it 6 out, Mr. Epstein did not have a default 7 against Mr. Rothstein. 8 Contrary to what Mr. Edwards' 9 suggestion is, is to cure this issue -- 10 THE COURT: Mr. Epstein did not have a 11 default against Mr. Rothstein. 12 MS. ROCRENBACH: Rothstein, thank you 13 very much. 14 Contrary to what Mr. Edwards has 15 suggested, there is no cure for a defective 16 motion to set a cause for trial. You cannot 17 cure it. 18 There are some cases that have been 19 cited. In fact, both sides. I cited Labor 20 Ready from the Fourth District Court of 21 Appeal in my motion. And I understand 22 Mr. Edwards intends to rely upon it. But 23 this was an authored decision by Judge 24 Melanie May from the Fourth DCA. And that 25 case has great language to guide this Court PALM BEACH REPORTING SERVICE, INC. EFTA00801281 1 on. 2 In that case Judge May wrote, "We do 3 not quarrel with those cases or their 4 holdings." 5 Your Honor, would the Court like a copy 6 of this case to follow? 7 THE COURT: Sure. 8 MS. ROCKENBACH: Thank you. May I 9 approach? 10 THE COURT: Yes. 11 MS. ROCKENBACH: I have a similarly 12 highlighted copy for counsel. 13 So in that case, the Fourth DCA has 14 said, "We don't quarrel with genuine parts 15 of prior Fourth DCA case recognizing the 16 mandatory nature and compliance, strict 17 compliance with Rule 1.440." Judge May 18 wrote, "We don't quarrel with Bennett versus 19 Continental Chemicals." 20 However, we point out that none of 21 those cases involve the case that has been 22 pending at issue for years. Those cases 23 were at issue. Meaning, they had a default. 24 They had an answer. They had a final 25 pleading. Twenty days had run. Another 30 PALM BEACH REPORTING SERVICE, INC. EFTA00801282 1 days had run. Compliance with rule 1.440, 2 check the box. 3 What Judge May said in this case, the 4 Labor Ready case, there was a last minute 5 technical amendment to the complaint. And 6 guess what, they went to trial. It was 7 waived. 8 That case does not apply. Those facts 9 do not control. What you have before Your 10 Honor is a -- no waiver, no waiver. You 11 have an objection that Mr. Edwards has 12 pointed out, rightfully so, the case is not 13 at issue. 14 What I filed with the Court 15 immediately, simultaneously with the motion 16 to remove this case from the docket was a 17 proper motion for default against Rothstein. 18 There is no case that supports 19 Mr. Edwards' position to this Court about 20 severing a case in order to retroactively 21 make it at issue. That doesn't happen in 22 the law. 23 The law says, in rule 1.440 in the 24 Bennett case and the Gawker case from the 25 Second DCA, says that this Court has to look PALM BEACH REPORTING SERVICE, INC. EFTA00801283 10 1 at May 24th -- and that is the salient date 2 that this Court must look at -- because 3 that's when Mr. Edwards hastily moved this 4 case and set the above-styled caused of 5 action for trial, May 24th. 6 To be clear, Your Honor, Mr. Edwards 7 did not move to sever at that time. This 8 case has been pending for some eight plus 9 years. He has never before tried to sever. 10 He, at that time, on May 24th, instead 11 of pointing out the lack of at issue, and by 12 the way, you need a default, he moved the 13 case. He didn't even move his counterclaim 14 to set for trial, he moved the case. 15 And then further, to evidence 16 Mr. Edwards' intent to try this case 17 globally, main claim and counterclaim 18 which is appropriate, because the 19 counterclaim arises from the main claim -- 20 he entered into a joint stipulation 21 indicating that that's how the case is going 22 to be tried. 23 So it was not Mr. Epstein who caused 24 this last-minute, 11th-hour, oh, my gosh, we 25 are not at issue, it was Mr. Edwards who PALM BEACH REPORTING SERVICE, INC. EFTA00801284 11 1 pointed it out. 2 I researched it over the weekend. And 3 on the very next business day, as soon as I 4 possibly could, I filed the motion to remove 5 the case from the docket. 6 I then immediately moved to default. I 7 have an order for the Court to sign to enter 8 a default. Served it on Mr. Rothstein's 9 counsel of record, Marc Nurik. And we will 10 then be ready once this Court enters the 11 default, and presumably either party notices 12 it for trial in 20 days when it is then at 13 issue, this Court can then set it no less 30 14 days. That is the mandatory nature of the 15 rule. 16 I regret we're here, but this is a 17 strict compliance rule and we have to be at 18 issue. 19 And, Your Honor, the last thing either 20 side or this Court wants is to try this case 21 twice. 22 THE COURT: Despite the representation, 23 Ms. Rockenbach, that you made in your motion 24 to continue, that Plaintiff and his trial 25 counsel will not seek another continuance. PALM BEACH REPORTING SERVICE, INC. EFTA00801285 12 1 We will be to ready to try the case in 90 2 days -- 3 MS. ROCKENBACH: Yes. 4 THE COURT: -- quote, end quote. 5 MS. ROCKENBACH: Yes. 6 THE COURT: Why was that not pointed 7 out to me upon a review of the docket, 8 presumably a review of the docket, to 9 determine whether or not there was, in fact, 10 a need to strike the trial notice at that 11 time, instead of gearing up, instead of 12 spending an inordinate amount of court 13 resources, and now taking the position that 14 because what in essence was dilatory conduct 15 on the part of the Epstein trial counsel 16 team, dating back to 2011, now constitutes 17 reason for this case to be stricken? 18 Does that not sound inequitable? Does 19 that not sound inappropriate? Does that not 20 sound specifically contrary to the quoted 21 language that I have just indicated here? 22 MS. ROCKENBACH: The quoted language as 23 you indicated, Your Honor, I made knowing 24 that there was a default. 25 Mr. Edwards at that time never said PALM BEACH REPORTING SERVICE, INC. EFTA00801286 13 1 that default does not apply to the operative 2 complaint. And I never, ever thought that 3 it did not. 4 THE COURT: Isn't that your 5 responsibility? Isn't that the 6 responsibility -- before you make that 7 statement to this Court and make the 8 representation that in light of the fact 9 that you guys were getting up to speed, that 10 part of getting up to speed, would have been 11 your responsibility to check the adequacy of 12 the pleadings -- and as the case that has 13 been cited -- at least one of them indicate, 14 the responsibility would have been to file a 15 motion to strike the case -- strike that. A 16 motion to strike the notice setting trial or 17 the trial order seasonably and timely so 18 that we would not have been in this position 19 in the first place? 20 It would seem to me that you are 21 essentially creating the error yourselves by 22 not doing due diligence. 23 MS. ROCKENBACH: I wish I had seen it. 24 I knew there was a default against 25 Mr. Rothstein, and that he was in federal PALM BEACH REPORTING SERVICE, INC. EFTA00801287 14 1 prison. Never before did Mr. Edwards raise 2 this issue that he raised on Friday. 3 And by the way, Your Honor, the fact 4 that Mr. Edwards has raised it, he is using 5 it as an excuse to sever the trial, which 6 does not cure the defect, and is an 7 appropriate manner to try this case in any 8 event. 9 Mr. Edwards is the one who pointed out 10 the improper defect, who could have raised 11 it much sooner. 12 Your Honor, I wish I had seen it. I 13 wish I had seen it. And we are ready to try 14 the case, but that's not the issue. 15 Mr. Edwards having raised the defect 16 now, we could go through this trial, get a 17 verdict for Mr. Epstein, and I believe we 18 would, and then Mr. Edwards could appeal on 19 the defect because he has raised it. 20 So there is but one action that the 21 Court can take, and that is -- 22 THE COURT: If that transpires, then I 23 quit. Then I am resigning my position. 24 Because if I can't trust what was written 25 already here by you, that you -- that PALM BEACH REPORTING SERVICE, INC. EFTA00801288 15 1 Mr. Epstein, as the Plaintiff, and his trial 2 counsel, will not seek another continuance, 3 and be will be ready to try the case in 90 4 days -- quoted language, pledging to this 5 Court that otherwise this case is ready to 6 go -- and now we are faced with this defect 7 after all of the time and expense that has 8 been made here and spent here, is really a 9 travesty. 10 And while I say that tongue in cheek in 11 terms of my resignation, this would -- it 12 would be astounding to me if that was, in 13 fact, the case. 14 MR. LINK: Your Honor, may I have 15 permission to stand next to my partner on 16 this? 17 THE COURT: Sure. Of course. 18 MR. LINK: Thank you. 19 Judge, I want to make sure that the 20 record is clear. We are not asking for a 21 continuance. The words that we gave you, we 22 are standing by. This is not a motion for a 23 continuance. And the words that my partner 24 told this Court were absolutely true when 25 she said them. They are absolutely true PALM BEACH REPORTING SERVICE, INC. EFTA00801289 16 1 today. This is not us not being ready. 2 This a legal defect that cannot be cured. 3 And I apologize to the Court for where 4 we are and what we have done. And I'm 5 afraid we are going to spend a lot more time 6 together on this case. 7 But I want this Court to understand 8 that when my law firm says something, we 9 mean it. We absolutely do. And we are not 10 moving for continuance. 11 But this case cannot go to trial with 12 this defect, that's just the law. But I 13 don't want this Court to think for one 14 second that my partner or I would ever 15 mislead you or say something we didn't mean. 16 I have been accused of enough of that this 17 week. 18 THE COURT: The point that I'm 19 making -- nobody is accusing you. 20 MR. LINK: Not you, Your Honor. I've 21 been accused of stealing documents and a 22 crime. 23 THE COURT: I understand. 24 MR. LINK: And that's the first time in 25 32 years. PALM BEACH REPORTING SERVICE, INC. EFTA00801290 17 1 THE COURT: And I appreciate that. I 2 understand everybody's emotions are rather 3 high, based upon the fact that all of this 4 has transpired in such a short amount of 5 time. 6 But again, at the same time, as I said 7 before, it seems to me to be highly 8 inequitable -- and I understand your 9 argument is legal in nature -- but highly 10 inequitable to come before the Court and 11 suggest that by way of dilatory conduct on 12 the part of the Epstein trial team in not 13 securing the technicality that we are 14 speaking about, and that is a default 15 against an individual who will remain in 16 prison for the rest of his life. Who is, to 17 my knowledge, based anecdotally, only based 18 on anecdotal evidence, is penniless and has 19 been disgorged of any assets that he has and 20 that his family has, that somehow because of 21 this technicality we're caused to put this 22 case back and not try the case after, again, 23 an inordinate amount of time and expense, 24 which is in essence taxpayer money, of which 25 this Court has been and continues to be a PALM BEACH REPORTING SERVICE, INC. EFTA00801291 18 1 steward of those expenses and time. 2 Again, coupled with the fact that it 3 was represented to this Court that there 4 would be no further delays and that the case 5 would be ready to try. That tells me and 6 that represents to me, that counsel has done 7 their due diligence. 8 Part of the motion said, "We have heard 9 the Court loud and clear, now we" -- Link 10 and Rockenbach -- "are on the case, with 11 support from the Gunster firm, and we will 12 not allow the same type of conduct that 13 transpired earlier, which the Court was 14 critical of, happen again." 15 That pledge to this Court means 16 something to this Court. That means that 17 the docket has been assiduously reviewed, 18 and that everything else, short of gearing 19 up for trial on the substantive issues that 20 are before this forum, have been resolved, 21 rectified, and that certainly we are not 22 going to be reaching back seven years on a 23 technicality to somehow thwart the efforts 24 of the Court in trying to moved forward on 25 behalf of both sides to resolve a case that PALM BEACH REPORTING SERVICE, INC. EFTA00801292 19 1 has drawn a significant amount of public 2 interest and that has been pending for -- 3 MR. LINK: Nine years. 4 THE COURT: Nine years is too simple. 5 Three thousand and thirteen days, as of 6 today. 7 MR. LINK: Yes, sir. 8 Your Honor, if I may. Because what is 9 really important to me, more than anything 10 in this case, is our reputation. And I want 11 this Court to understand that we are not 12 moving for a continuance. 13 THE COURT: I didn't say that was your 14 position, which is why there is a 15 frustration here. 16 Continuances are discretionary under 17 the law. I have wide discretion. The Rule 18 of Judicial Administration of this state -- 19 and I do my best to follow them. And you 20 have probably heard me at 8:45s make this 21 statement, at least if not expressly, 22 impliedly, that the trial courts of this 23 state shall have a firm continuance policy. 24 Now, while that may not be popular 25 amongst the bar when the Court enforces that PALM BEACH REPORTING SERVICE, INC. EFTA00801293 20 1 rule, it is nonetheless a rule of the 2 Florida Supreme Court, and I do my best to 3 follow the law, despite popularity concerns, 4 of which I have none. 5 MR. LINK: And we appreciate that, Your 6 Honor. 7 THE COURT: So -- 8 MR. LINK: Sorry, I thought you were 9 done. 10 THE COURT: I am not exonerating the 11 movant here, by any means. You're the first 12 one -- 13 MS. ROCKENBACH: The movants being 14 Edwards or Epstein? 15 THE COURT: I'm talking about Edwards. 16 The movant setting the case for trial. 17 MS. ROCKENBACH: Understood. 18 THE COURT: Because Edwards has the 19 same responsibility to the Court, to this 20 community, to the taxpayers, to the public, 21 to my constituency, to assiduously review 22 the docket, to ensure that the notice is 23 being provided in accordance with rule 24 1.440. 25 So by no means am I exonerating anyone PALM BEACH REPORTING SERVICE, INC. EFTA00801294 21 1 here. It's just, again, a cumulation of 2 having to go through what we have gone 3 through together. Up to now, what I have 4 tried to maintain, a civil, professional and 5 efficient atmosphere despite the nature of 6 the case, despite pejorative comments that 7 were made earlier, which the Court has 8 indicated will not be tolerated, and that 9 has been followed carefully by all 10 concerned, and I appreciate that very much. 11 But here we are. I am familiar with 12 the law. I am familiar with the statute 13 -- strike that. 14 I am familiar with the rule. I am 15 familiar with the comments to the rule. I 16 am familiar with the case law pertaining to 17 the rule. 18 I will allow you time for rebuttal, if 19 needed. 20 MS. ROCKENBACH: Thank you, Your Honor. 21 MR. LINK: Judge, thank you for letting 22 me come up here. 23 THE COURT: Mr. Scarola, again, I share 24 my frustration with you and the Edwards' 25 legal team, as well, as far as this PALM BEACH REPORTING SERVICE, INC. EFTA00801295 22 1 conundrum. 2 It is disappointing that a firm of your 3 stature, an attorney of your stature, of 4 which I have an abiding respect for all of 5 those who are serving their clients in this 6 case, that, again, the docket was not 7 assiduously combed, and we are left here 8 today with the very real possibility of this 9 case not being tried as scheduled. 10 Your response, please. 11 MR. SCAROLA: Yes, sir. Your Honor, 12 let me first of all point out that rule 13 1.440 only permits a party to notice a 14 matter for trial once at issue. 15 And at the time our notice was filed, 16 we were not a party to the case that was 17 pending against Mr. Rothstein. And quite 18 frankly, had no concern about that case. It 19 was simply not a matter that we cared about, 20 and quite frankly believed, for the reasons 21 that Your Honor has referenced, that it 22 would never really be tried. 23 This is a defendant who has absolutely 24 no ability whatsoever to ever respond to a 25 judgment against him. PALM BEACH REPORTING SERVICE, INC. EFTA00801296 23 1 And our concern with regard to 2 Rothstein arose when we were informed of the 3 witnesses that were intended to be called 4 ostensibly in the case against 5 Mr. Rothstein, which was a damage only claim 6 for a conspiracy to commit abuse of process, 7 a claim, which if it had been defended, 8 would have been thrown out because there is 9 no tort because of the litigation privilege 10 for conspiracy to commit abuse of process, 11 and there could not possibly, under any 12 conceivable version of the facts, ever be a 13 claim for damages by Mr. Epstein in 14 connection with that. 15 Nonetheless, we are told that there are 16 going to be -- there's going to be testimony 17 from Mr. Rothstein -- excuse me. From 18 Mr. Epstein's victims in that portion of the 19 case, that Mr. Edwards is going to be called 20 in that portion of case. 21 And what became apparent to us is, that 22 an effort was going to be made to use the 23 rouse of a claim against Rothstein as to 24 which we would have no standing to object, 25 to insert into the record information that PALM BEACH REPORTING SERVICE, INC. EFTA00801297 24 1 would never be admissible in the claim of 2 Bradley Edwards against Mr. Epstein. 3 It became a particular concern to us, 4 because once a default is entered, the jury 5 is obliged to assume the truthfulness of the 6 facts that are alleged in the complaint. 7 We are obviously contesting those 8 facts. So what was going to happen if there 9 was going to be a focus on the underlying 10 allegations -- 11 THE COURT: Against Rothstein? 12 MR. SCAROLA: Against Rothstein -- is 13 that the same jury was going to be told, you 14 must accept these allegations; and then they 15 were going to be told, you can't accept 16 those allegations. And that obviously in 17 and of itself created a need for us to 18 approach the Court and ask that these claims 19 be severed. 20 We then determined that there was no 21 valid default ever entered against 22 Mr. Rothstein. It didn't happen. And 23 that's not something, again, that was ever a 24 concern to us. 25 I don't represent him. I never want to PALM BEACH REPORTING SERVICE, INC. EFTA00801298 25 1 represent him. I am uncomfortable about the 2 idea of having to be involved in a trial in 3 which I might have to be raising objections 4 that would appear to be objections on behalf 5 of Rothstein to what's going on in that 6 first portion of the case. 7 So we found out about the procedural 8 defect. Now the issue becomes, does Your 9 Honor have the ability to address those 10 problems? And the answer to that question 11 is clearly yes. 12 Severance of a permissive 13 counterclaim -- and there is no doubt about 14 the fact that this is a permissive 15 counterclaim -- rests within the sound 16 discretion of the Court. 17 THE COURT: The question that I had 18 was, in reviewing the material, is this 19 still a counterclaim at all, albeit 20 technically brought as same, because Edwards 21 no longer is a defendant in the matter 22 brought by Epstein? 23 The sole defendant, as I understand it, 24 on a one-count issue is Rothstein. 25 MR. SCAROLA: Yes, sir. I refer to it PALM BEACH REPORTING SERVICE, INC. EFTA00801299 26 1 as a counterclaim only because that's the 2 procedural posturing in which it arose. 3 But, when a voluntary dismissal was 4 taken with regard to all claims against 5 Bradley Edwards, it's no longer a 6 counterclaim. It's now our claim against 7 Mr. Epstein. 8 THE COURT: And while it has its 9 genesis in the original action filed by 10 Epstein against Rothstein, Edwards and III 11 the fact that simply because it has its 12 genesis there, as I was trying to think this 13 through among the other materials that I had 14 to review -- and they were substantial -- is 15 that can it not be argued that the only 16 connection between Rothstein's claim bought 17 against him -- strike that. 18 Epstein's claim brought against 19 Rothstein, the only connection that is even 20 arguable, is that, in fact, the Edwards' 21 case had its genesis in the fact that 22 Epstein originally brought the claim against 23 Rothstein, Edwards and III., and then 24 voluntarily dismissed the case at the eve of 25 summary judgment. PALM BEACH REPORTING SERVICE, INC. EFTA00801300 27 1 I.e., is there any law that supports 2 the proposition that this would, in fact, be 3 a separate action at this juncture having no 4 technical, even legal connection, between 5 the claim brought by Epstein against 6 Rothstein for some type of conspiracy issue, 7 and what is now a separate malicious 8 prosecution claim -- albeit having its 9 genesis in the original Epstein action -- 10 but having nothing shared at this juncture, 11 either technically or legally, other than a 12 case number? 13 MR. SCAROLA: Your Honor, I think that 14 that is flawless logic. We are here to try 15 our claim against Epstein on a fourth 16 amended, quote, unquote, counterclaim that 17 is really a separate action. 18 But while I understand the Court's 19 reasoning and agree with it, we don't need 20 to try to technically call this something 21 other than what it was derived from, and 22 that is a counterclaim. 23 Because the law is very clear that this 24 Court has the discretion to sever for 25 separate trials a counterclaim. And that's PALM BEACH REPORTING SERVICE, INC. EFTA00801301 28 1 the second -- excuse me -- that's the Third 2 DCA case that we cited to Your Honor, Turner 3 Construction Company versus ENF Contractors. 4 And let me hand -- let me hand the 5 other copy of that to Your Honor. 6 So we can assume -- without needing to 7 reach the argument as to whether this is or 8 is not still a counterclaim -- we can assume 9 that it is a counterclaim. There is no 10 question about the fact that it's a 11 permissive counterclaim. 12 And we are in a position, whereas the 13 Third District Court of Appeal observed, it 14 is within a trial judge's discretion to 15 sever a permissive counterclaim from the 16 main claim if there is no evidence of 17 prejudice. 18 And I was very pleased to hear Mr. Link 19 and Ms. Rockenbach stand before the Court 20 and tell you, We are ready for trial. 21 Because that's what they told you. They 22 told you that back -- they told you they 23 would be ready back in December, and they 24 are telling you again, We are ready for 25 trial. We are not asking for a continuance. PALM BEACH REPORTING SERVICE, INC. EFTA00801302 29 1 We only want to remove a technical defect 2 that might have us try this case twice. 3 Well, I assure Your Honor, there could 4 not be a clearer example of waiver on our 5 part of any technical difficulty than I am 6 asserting to the Court right now that could 7 never and will never be the basis for any 8 appellate argument on our part. 9 So, next, the Court goes on to say, "An 10 appellate court will not interfere with 11 procedural rulings of a trial judge, unless 12 a party is deprived of a substantial right 13 by the procedure employed." 14 So let's look at the procedure 15 employed, and what the unanimous Fourth 16 District Court of Appeal told us in Labor 17 Ready versus the Australian Warehouses 18 Condominium Association. 19 THE COURT: And again, the mule of me 20 wading through these documents, if you can 21 hand me cases as we go along, I will 22 appreciate it. 23 MR. SCAROLA: Absolutely. 24 THE COURT: Thank you. 25 MR. SCAROLA: This is our appellate PALM BEACH REPORTING SERVICE, INC. EFTA00801303 30 1 court speaking through Judge May, as I said, 2 an unanimous opinion joined in by Judge 3 Gunther and Judge Farmer. And I am looking 4 at the third page, the last page of this 5 copy, Your Honor, and it's the highlighted 6 language. 7 "This is not a case where the case had 8 never been at issue." Nor is this. "This 9 is not a case where the parties did not have 10 sufficient time to prepare." Nor is this. 11 "This is not a case where anyone was 12 prejudiced by the technical amendments to 13 the complaint." There they were talking 14 about adding a punitive damage claim to the 15 complaint. 16 "In situations where the parties have 17 received actual timely notice of the trial, 18 they are precluded from arguing prejudice 19 based upon a technical violation." 20 Here we don't concede that there is any 21 technical violation at all. But even if 22 there were to be, the Fourth DCA says not a 23 basis to disturb a trial court decision when 24 there is no evidence of prejudice. And we 25 are being told no prejudice. PALM BEACH REPORTING SERVICE, INC. EFTA00801304 31 1 THE COURT: Speak to me again about the 2 issue where, in a setting such as this, if 3 both matters were to be tried together, the 4 position that your client would be in having 5 to prosecute his claim and in essence try 6 potentially try to defend Rothstein at the 7 same time. 8 MR. SCAROLA: Yes, sir. I think that 9 that's really clear. The allegations 10 against Mr. Rothstein are, even in this 11 later version of the complaint, basically 12 identical to the allegations that were made 13 against Mr. Edwards. It is the complaint 14 upon which a voluntarily dismissal was taken 15 as to Mr. Edwards. 16 So the jury is told in a default 17 circumstance all of the allegations must be 18 accepted as true. And the only issues that 19 arise are issues with regard to causation 20 and damages. 21 We are contending that there could 22 be -- first of all we are contesting the 23 underlying allegations. The jury is being 24 told accept them with regard to Rothstein. 25 You can't accept them with regard to PALM BEACH REPORTING SERVICE, INC. EFTA00801305 32 1 Epstein, they are contested. 2 So that's the first problem. One jury 3 being told to assume two different things. 4 The other problem is, we are contending 5 that there could be no damages incurred by 6 Mr. Epstein as a result of anything that 7 went on with regard to a Ponzi scheme in 8 which he was not an investor. 9 We are also contending nothing about 10 what went on at Rothstein, Rosenfeldt & 11 Adler can form the basis for a claim because 12 of the litigation privilege, absolute 13 immunity of the litigation privilege. 14 So the defense -- excuse me -- the 15 plaintiff in the Epstein versus Rothstein 16 case begins their case by putting on proof 17 about how Mr. Epstein was alleged to have 18 been damaged by these absolutely immune 19 activities. 20 What do I do at that point? I must 21 stand up every time any of that evidence is 22 being adduced before the jury, and I must 23 object on the basis that this cannot apply 24 to Mr. Edwards. I'm in the position of 25 defending Mr. Rothstein, of objecting on the PALM BEACH REPORTING SERVICE, INC. EFTA00801306 33 1 causation grounds, of objecting that no 2 injury could have been caused, of objecting 3 on the basis that this is all absolutely 4 privileged information. And from the 5 perspective of the jury, I am now defending 6 this man who is sitting in federal prison 7 for 50 years. 8 And that simply creates extraordinary 9 prejudice to my client. It creates 10 confusion on the part of the jury, and it is 11 absolutely unnecessary; and, indeed, under 12 these circumstances procedurally precluded 13 because there is no default against 14 Mr. Rothstein. 15 So this Court has discretion to solve 16 the problem. You simply sever the 17 permissive counterclaim or the separate 18 action, and you allow us to proceed to trial 19 on a case that Mr. Epstein's lawyers have 20 said they are ready to try. 21 Let's do it. Let's go to trial. They 22 said they are ready. The Court has the 23 ability to cure whatever obstacle 24 conceivably exists to trying this case. 25 My client finally deserves the PALM BEACH REPORTING SERVICE, INC. EFTA00801307 34 1 opportunity after 3,000 whatever it is days 2 to be exonerated publicly of the terrible 3 charges that were lodged against him and 4 hang out in the air and hang out in the 5 cloud and hang out in the Internet some nine 6 million point six hundred thousand times. 7 We would like our day in court, sir. 8 I am pleased to answer any other 9 questions Your Honor may have. But clearly 10 the Court has got discretion to do what we 11 would like you to do. Justice demands that 12 you do what we would like you to do. Thank 13 you, sir. 14 THE COURT: Thank you, Mr. Scarola. 15 Mr. Link. 16 MR. LINK: Yes, sir. 17 THE COURT: As I mentioned, and I want 18 to give you the opportunity to comment on 19 this point. 20 In trying to think this through and 21 rationally engage in a discussion, quote, 22 technically and practically, I start with a 23 proposition that the last amendment to the 24 complaint that was filed on behalf of 25 Epstein was solely against Rothstein on a PALM BEACH REPORTING SERVICE, INC. EFTA00801308 35 1 singular count. 2 MR. LINK: Yes, sir. 3 THE COURT: Clearly that was done after 4 what was termed in quotation marks that I am 5 using, a counterclaim filed by Edwards at a 6 time when Edwards was, in fact, a named 7 defendant in that particular action by 8 virtue of Epstein's decision through 9 counsel, presumably, to no longer include 10 Edwards as a defendant in that action, the 11 terminology and the trappings that would 12 otherwise go along with a pleading entitled 13 counterclaim would dissipate, would legally 14 disappear, in other words, had Mr. Edwards 15 and counsel decided to file a separate 16 action. 17 MR. LINK: Yes, sir. 18 THE COURT: Had this case gone away in 19 its entirety -- let's say, just for the heck 20 of it, that Epstein decided to completely 21 walk away from the lawsuit in its entirety, 22 just walk away -- 23 MR. LINK: Could have happen. 24 THE COURT: -- as many do, okay, there 25 was no longer a counterclaim, it is now -- PALM BEACH REPORTING SERVICE, INC. EFTA00801309 36 1 and has really always been, since the time 2 that Epstein -- strike that. 3 That Edwards was no longer a defendant 4 in the case, a separate action, no longer a 5 counterclaim, technically or practically, 6 because there was no pending claim against 7 Edwards, at least as late as the second 8 amended or whatever iteration of the 9 complaint that was filed in September of 10 2011. 11 MR. LINK: Yes, sir. I understand 12 that. It's really easy. On Friday 13 Mr. Scarola figured this out. We have had 14 this case for nine years. His client was 15 dismissed in 2012. Why didn't he come here 16 in 2012 and say, Judge, this is no longer a 17 counterclaim, I want my own suit? If he had 18 preceded -- 19 THE COURT: I don't think he needed to 20 do that. Why did he have to make a 21 declaration of such, when by operation of 22 law -- again using September 11th, the last 23 iteration of the complaint filed by Epstein 24 against Rothstein only -- 25 MR. LINK: Yeah. PALM BEACH REPORTING SERVICE, INC. EFTA00801310 37 1 THE COURT: -- there is no longer the 2 trappings, the necessity of a counterclaim. 3 There is no pending claim against Edwards by 4 Epstein. It essentially -- it essentially 5 morphs, then or becomes -- better stated -- 6 a separate action, because counterclaim no 7 longer applies. It has no application 8 whatsoever. It's a separate action. 9 The only thing that it shares now -- 10 I will give you a chance in a moment. 11 I apologize. 12 MR. L/NK: No, you're doing great. 13 THE COURT: The only thing -- the only 14 thing that it now shares is a common case 15 number. That's it. Okay. 16 MR. LINK: That's no longer important. 17 THE COURT: There's no longer any 18 relationship -- 19 MR. LINK: Not true. 20 THE COURT: -- Epstein versus Rothstein 21 is separate and apart, and has absolutely no 22 connection at this stage of the game -- now 23 there may be some tangential things that are 24 shared in terms of the nature of the case, 25 and some may even suggest that if they were PALM BEACH REPORTING SERVICE, INC. EFTA00801311 38 1 both separately brought that it could 2 constitute a transfer. 3 MR. LINK: Yes, sir. 4 THE COURT: Because it involves, at 5 least arguably, the same transaction and 6 occurrences that may have transpired here. 7 It may even suggest the potentiality of 8 consolidation. Though, on further review if 9 it would come before me and there would be 10 argument against it, the likelihood -- and 11 I'm just speaking generically. I'm not 12 suggesting how I am going to rule on 13 anything that's not before the Court -- but 14 arguably, it could be denied because of -- I 15 wrote down here before Mr. Scarola mentioned 16 it -- confusion of issues before the jury 17 and the potential, the real potential of 18 prejudice when you inject a convicted felon 19 with the notoriety of Mr. Rothstein, who is 20 sitting in prison for the rest of his life, 21 that's made international news, that 22 continues to be shown on CNBC I forget 23 the name of the show that has to do with 24 greed -- and what's happened now with 25 Mr. Edwards, in terms of the separate action PALM BEACH REPORTING SERVICE, INC. EFTA00801312 39 1 that he has brought, albeit, again, having 2 the genesis of the original claim, that has 3 been dropped. But there's nothing that 4 would have prohibited him from bringing a 5 separate action, nothing that would 6 prohibited severance a long time ago that I 7 can think of, because of the fact that they 8 no longer have any interrelationship 9 legally. 10 Now, again, I will grant you that 11 factually there may be some overlap. I'm 12 not suggesting that. But from a purely 13 legal standpoint, this separate action, 14 there is nothing that I can think of that 15 would necessitate these two matters to be 16 tried together. 17 And the fact that substantial confusion 18 could be operable here -- as argued by 19 counsel and as written down by the Court, 20 even before the mention of the word -- and 21 the prejudice that would be done here, may 22 even create a better forum for each of the 23 parties to get their justice that they are 24 seeking, i.e., Mr. Epstein's damages against 25 Rothstein. I am not sure whether causation PALM BEACH REPORTING SERVICE, INC. EFTA00801313 40 1 becomes an issue or not. I think it's 2 simply a matter of damages, but that 3 Rothstein has the opportunity to defend 4 himself against. 5 But Edwards, on a totally separate 6 legal theory, and in a case that now bears 7 no semblance to a counterclaim, has his 8 right to seek justice in a timely fashion as 9 well. Why not? 10 MR. LINK: My turn? 11 THE COURT: Yes. 12 MR. LINK: Okay. So many things to 13 say. 14 First, Judge, you nailed it. In 2012 15 Mr. Scarola could have come to this Court 16 and said all the things you just said. 17 THE COURT: What is preventing him from 18 having it now? What's prevening it from 19 happening now? Why can't I follow what I 20 perceive to be, as often is the case, as I 21 mentioned this probably before, the 22 practical nature of a judge like Judge May 23 from the Fourth District of Court of Appeal, 24 taking the bull by horns, as she often does, 25 has the gift of being able to clarify and PALM BEACH REPORTING SERVICE, INC. EFTA00801314 41 1 distill often very complex matters, to 2 provide not only legally correct results, 3 but practically correct results, which is 4 why I admire her writing and the way she 5 goes about things. 6 MR. LINK: As do we, Judge. 7 THE COURT: Why is it that somehow this 8 technicality, which really is -- which has, 9 in my view, no bearing on the legal -- on 10 the legalities of the situation, whether 11 were technically oriented or were 12 practically oriented. 13 But there's no denial of the fact that 14 this is separate, that this really is no 15 longer a counterclaim and hasn't been for 16 the last seven to eight years. 17 MR. LINK: Judge, we disagree with 18 that. I don't think it's that simple, I 19 really don't. I think we're confusing two 20 issues, and let me start there. 21 There is the issue of severance. It is 22 clearly within this Court's discretion to 23 sever this case. We are not disputing that. 24 We are not saying you should. We thought we 25 were talking about whether the case was at PALM BEACH REPORTING SERVICE, INC. EFTA00801315 42 1 issue. 2 But we can talk about severance and 3 whether it makes sense or not. And this 4 Court needs to understand, no matter what 5 Mr. Scarola wants, Mr. Rothstein is going to 6 be part of this trial, whether we are suing 7 him or we are defending their counterclaim, 8 because this case is all about whether we 9 can demonstrate that there is a connection 10 between Mr. Edwards and Mr. Rothstein. 11 That's what he says caused him harm. 12 We're going to be looking at evidence 13 at some point in which we believe with 14 100 percent certainty we can make that 15 connection. 16 THE COURT: The connection between 17 what? 18 MR. LINK: Between Mr. Edwards and 19 Mr. Rothstein discussing the Epstein cases 20 and getting around court scrutiny. 21 THE COURT: And that's fine. Why 22 didn't you plead it and maintain the claim 23 when you had the opportunity to do that? 24 Instead there was a dismissal of the claim 25 against Edwards and an abandonment of those PALM BEACH REPORTING SERVICE, INC. EFTA00801316 43 1 claims back years and years ago. And a 2 choice was made to proceed only on a 3 one-count complaint against Rothstein as of 4 September 2011, thereby, as I indicated 5 earlier, losing any trappings, losing any 6 indicia of counterclaim, at least by that 7 point and likely before that, because there 8 were several iterations of the complaint 9 that were amended, subsequent to the 10 dropping of Edwards from the claim, thereby 11 no longer making it a counterclaim. It was 12 in name only. It had no legal significance 13 whatsoever, except by name. 14 MR. LINK: It does, Your Honor. The 15 legal significance, if I can approach, is 16 laid out in our pretrial stipulation. 17 And the case law is really clear. When 18 lawyers enter into a pretrial stipulation, 19 Your Honor should follow it. 20 THE COURT: And I am wholeheartedly in 21 agreement. 22 Let me stop you there, because, again, 23 you have argued it, and I don't want to make 24 a short trip to that. 25 Then Chief Judge Ciklin in a case PALM BEACH REPORTING SERVICE, INC. EFTA00801317 44 1 that slips my memory as far as its name is 2 concern -- spoke eloquently and at length 3 about the sanctity of the pretrial 4 stipulation. 5 So before I even read it, and what it 6 says here, you quoted from it, that's what I 7 read it. I didn't go back and look at the 8 pretrial stipulation itself, among the -- 9 just so everybody knows -- among the 1,239 10 docket entries here. So I don't want 11 anybody to suggest that it was simply by 12 virtue of laxity that I did not review the 13 actual brief. 14 MR. LINK: Judge, there's none of us in 15 this courtroom that have any doubt about how 16 much time you have put into this case. 17 And unfortunately there are probably 18 papers filed that you haven't even received 19 yet; filed before we got the notice. 20 THE COURT: You got my rather brief 21 response. 22 MR. LINK: The brevity was hard to 23 miss. We got it. And we filed these 24 before. 25 But the reason this joint pretrial stip PALM BEACH REPORTING SERVICE, INC. EFTA00801318 45 1 is important, Judge, is you keep saying they 2 are not the counterclaim Plaintiff, and 3 Mr. Scarola and I negotiated this together. 4 We wrote it together, we made changes 5 together. And every part of this pretrial 6 stip and the jury instructions and 7 everything we submitted to the Court sets 8 this case up to be tried, Epstein against 9 Rothstein, first issue to be cited, says 10 right in there. 11 The second issue to be cited, Edwards 12 versus Epstein. We've laid out how we're 13 going to try this case. We've attached 14 exhibit lists, witness lists. We do 15 stipulated facts, Your Honor. 16 So there is no part of the pretrial 17 that we entered into, long before 18 Mr. Scarola's motion at 5:00 on Friday 19 asking to sever this case, that was ever 20 contemplated by the parties. 21 We entered into an agreement, two 22 lawyers. That's what a stipulation is. We 23 entered into an agreement, Judge, on how we 24 would try this case. Now Mr. Scarola wants 25 to change his mind. This is our contract. PALM BEACH REPORTING SERVICE, INC. EFTA00801319 46 1 THE COURT: But it's interesting, 2 because in this pretrial, here is what it 3 says. Quote, case against Rothstein. What, 4 if any, damages were sustained by Epstein 5 and proximally caused by Rothstein? 6 MR. LINK: Yes, sir. 7 THE COURT: Parenthetically, continue 8 the quoted provision. Edwards does not 9 agree with this language for the reason that 10 the issue as stated fails to tie causation 11 to Rothstein's operation of the Ponzi 12 scheme. 13 It is Edwards' position that failure to 14 limit the issue in this way as to Rothstein 15 has a potential of confusing the jury in 16 determining whether Epstein had any probable 17 cause to claim damages Edwards arising out 18 of the same circumstances, end of quote. 19 MR. LINK: Which means if you limit it, 20 that prejudice is gone. That's what he's 21 telling you. He agrees to this issue. He 22 doesn't like the way I framed it. That's 23 the difference. 24 If I put his language in, which tied it 25 to the Ponzi scheme, he wouldn't have added PALM BEACH REPORTING SERVICE, INC. EFTA00801320 47 1 that. So all he is saying is, Judge, I 2 agree it's going, but I don't like Link's 3 language. 4 That is not him saying I reserve the 5 right to not go forward with this claim. 6 And when you read through this contract 7 between me and Mr. Scarola, as two officers 8 of the court, and Judge Ciklin's opinion, 9 and everybody else's, we are supposed to be 10 bound by what we say here. 11 So that means, yes, you have discretion 12 to sever cases, you always do. Severing the 13 case, if that's a decision the Court makes, 14 doesn't change the fact, that when 15 Mr. Scarola noticed this case, the one we 16 have a pretrial stip on, Judge, the one you 17 entered an order on, which was the case, was 18 not at issue. We don't like it. It is what 19 it is. It's the law. 20 And one of the differences in what 21 Mr. Scarola say and what the law is, is that 22 every case where there was a waiver or 23 technicality was post jury trial. 24 The Fourth DCA has said mandamus is 25 appropriate, it requires no prejudice, it PALM BEACH REPORTING SERVICE, INC. EFTA00801321 48 1 requires you to follow the law. 2 THE COURT: So what Mr. Link is saying, 3 Mr. Scarola, is that if I grant the motion 4 for severance, this case is going to go up 5 on a writ or mandamus? 6 MR. LINK: I don't mean it in a 7 threatening way, Judge. 8 THE COURT: I don't take it that way. 9 MR. LINK: But that is the truth. 10 THE COURT: McLean Stevenson once said 11 to Frank Burns, "Frank, you've gone over my 12 head so many times, I have footprints on my 13 scalp." 14 MR. LINK: Here is the easy fix. We 15 don't need mandamus. If you decide to sever 16 the cases for whatever reason, 20 days from 17 today, Mr. Scarola can notice his case for 18 trial and you can set it for 30, and we will 19 be here to try the case, and we won't seek a 20 continuance. 21 I don't think you should sever them, 22 but that's within your discretion. But you 23 can't fix today what was wrong in May, 24 that's the problem. 25 THE COURT: The pretrial stipulation, PALM BEACH REPORTING SERVICE, INC. EFTA00801322 49 1 just for record, the case I keep on my bench 2 is Palm Beach Polo holdings, Inc., et. al 3 versus Broward Marine, Inc. I have the 4 original email from the Fourth District 5 Court of Appeal copy. So I don't have a 6 cite for you, but it's from 2015. That's 7 easily accessible if like to read it. 8 MR. LINK: Thank you. 9 I know Mr. Scarola said they're excited 10 to try the case, believe me, Judge, we are 11 really excited to try the case. 12 The evidence that we recently 13 discovered -- 14 THE COURT: Then waive the 15 technicality. If you are so excited about 16 it, then waive the technicality. 17 MR. LINK: I won't do that, Judge. 18 THE COURT: Well, repeatedly you 19 indicate that -- you have indicated today 20 how excited you are about trying the case. 21 MR. LINK: I am. 22 THE COURT: Yet -- 23 MR. LINK: With the best judge in the 24 circuit. 25 THE COURT: Thanks. PALM BEACH REPORTING SERVICE, INC. EFTA00801323 50 1 MR. LINK: For this case. How's that? 2 So I don't get in trouble with the other 3 judges. Did I save myself there? 4 THE COURT: Another TV show. Quit 5 telling her how beautiful she is, we all 6 know you are lying. You can figure that one 7 out yourself. But anyway -- that's the 8 husband speaking about. 9 MR. LINK: I am excitedly cautious and 10 I cannot waive the legal right. 11 THE COURT: Well, that's what I'm 12 trying to say about your excitement. The 13 repetitive statement made in the motion is 14 that your client is unwilling to waive the 15 technical issue. 16 MR. LINK: We don't think it's 17 technical. I think that's the difference. 18 MS. ROCKENBACH: May I just jump in? 19 THE COURT: It is my respectful view, 20 hyper technical under these set of facts. 21 The hyper technicality arises because of 22 what I have already explained in detail. 23 And that is, that this is really not a 24 counterclaim, and hasn't been a counterclaim 25 since Mr. Epstein made his decision to drop PALM BEACH REPORTING SERVICE, INC. EFTA00801324 51 1 Edwards from the case, which only provided 2 the genesis for what was at the time a 3 counterclaim technically. Perhaps even that 4 might be able to be argued because of the 5 fact that it came after the dropping of 6 Edwards as a party to the claim. But 7 certainly, without equivocation, after the 8 second and third and whatever else 9 iterations of the complaint as amended as of 10 September of 2011, there was no semblance of 11 a counterclaim because he was no longer a 12 party defendant in the claim made by Epstein 13 against Rothstein only. And that's where 14 I'm talking about hyper technicality, that 15 despite the eagerness on the part of Epstein 16 to try the case, as enunciated by Mr. Link 17 repeatedly -- 18 MR. LINK: Mr. Link's excitement. 19 THE COURT: Well, I presume always that 20 counsel is speaking by and for his or her 21 client. 22 MR. LINK: I am, Your Honor, but I am 23 personally excited. 24 THE COURT: Good. But again, it is 25 without the willingness to waive the hyper PALM BEACH REPORTING SERVICE, INC. EFTA00801325 52 1 technicality. 2 Ms. Rockenbach. 3 MS. ROCKENBACH: Your Honor, I just 4 wanted to add an appellate point. It sounds 5 like you and I are both mutual fans of Judge 6 Melanie May's clarity. She authored both of 7 the Fourth DCA's decisions that you are 8 guided by, the genuine parts decision as 9 well as the Labor Ready decision. And it -- 10 submitted to the court, is not a hyper 11 technicality in that the rule says shall, 12 it's mandatory rule, and that is what Judge 13 May was noting and approving and recognizing 14 in the progeny of cases that existed before 15 those two decisions. I am referencing the 16 Bennett case. 17 What this Court has recognized is that 18 Edwards could have but did not move to sever 19 this case back in 2011 when Edwards was 20 dismissed. 21 THE COURT: Was there a need to do 22 that? 23 MS. ROCKENBACH: Yes. Absolutely. I 24 was thinking about this. In other 25 instances, I have had counsel come up and PALM BEACH REPORTING SERVICE, INC. EFTA00801326 53 1 tried to swap party names and drop, and 2 switch, and -- you can't just do that. You 3 have to actually -- I think there's an 4 administrative order on it. I think you 5 have to go to the court do it. 6 But in this instance, you absolutely 7 Mr. Edwards had the onus to come before this 8 Court and say a few things. He could have 9 made his case separate. He didn't, he chose 10 not to. He waited at least seven years or 11 six and a half years, by my count, to come 12 on Friday after 5:00 III. to file a motion 13 to sever the trial and use the at issue as 14 an excuse to sever. 15 He didn't move to sever previously. It 16 was not at an issue when he filed his motion 17 on May 24th, 2017. And there is no case 18 that Mr. Edwards -- no case that I could 19 find -- and I looked -- and there's no case 20 that Mr. Edwards has presented to this Court 21 that says, you can cure the mandatory rule 22 or defect of 1.440 by severing a 23 counterclaim or a cause claim. 24 The last point I would like to make is 25 Mr. Scarola said the rule 1.440 says a PALM BEACH REPORTING SERVICE, INC. EFTA00801327 54 1 party. It says, "any party." And that's 2 significant. The reason why it says any 3 party is that rule talks about crossclaims. 4 It talks about counterclaims. It talks 5 about any party. 6 So any party could have moved to set it 7 for trial. And when Mr. Edwards moved, he 8 didn't move as just Mr. Edwards trying to 9 set his counterclaim for trial. He 10 moved the -- the language is in my motion, 11 and I am sure it's in the Court's extensive 12 docket -- he move to set this case, quote, 13 unquote, and quote, above-style cause of 14 action, quote, unquote. 15 So he clearly could have moved to sever 16 at that time. He did not. He waived the 17 right to timely sever the action. And we 18 ask that the Court grant the default against 19 Rothstein today, unless there is argument to 20 be made, and -- 21 THE COURT: How does this change, 22 though, your trial preparation if I sever 23 the case today as opposed to I severed it -- 24 Judge Crow, my predecessor, severed it back 25 in 2011 when it no longer was a PALM BEACH REPORTING SERVICE, INC. EFTA00801328 55 1 counterclaim, it was a separate action 2 sharing only the same case number? 3 MS. ROCKENBACH: It changes the ability 4 for Edwards to file a ripe 1.440 notice. 5 Because it was not severed, he noticed the 6 entire action for trial when the action 7 wasn't at issue. So severing doesn't cure 8 it. 9 THE COURT: Well, I am asking you, tell 10 me how, for the record, how it affects your 11 trial preparation or your presentation at 12 trial? I think you need to get that on the 13 record. 14 MR. LINK: Yes, Your Honor. It doesn't 15 change our trial preparation. It changes 16 how we try the case. There is a significant 17 difference in me being the Plaintiff in the 18 case and going first and my burden of proof 19 than what Mr. Scarola wants to be is the 20 plaintiff. 21 And he had a choice. He could have 22 filed a separate action, and he would have 23 been the plaintiff. 24 He chose -- he chose the vehicle. He 25 doesn't like his vehicle today. He decided PALM BEACH REPORTING SERVICE, INC. EFTA00801329 56 1 on Friday he didn't like it. But he chose 2 the vehicle of a counterclaim. That means I 3 go first, he goes second. He hates that 4 idea. 5 So it changes and it's prejudicial if 6 these cases are severed, because they are so 7 intertwined, Your Honor. I can't even think 8 of a case that's not more intertwined. 9 THE COURT: You have the right to go 10 first if the Rothstein case is before this 11 court. 12 MR. LINK: In that case. But I have 13 the right to go first in this case because 14 he has the counterclaim. 15 THE COURT: I don't agree with you 16 there. How do you have that right? 17 MR. LINK: Because I am the plaintiff 18 in the case, I go first. 19 THE COURT: You are the plaintiff in 20 the case against Edwards. 21 MR. LINK: No. But the first issue we 22 described in the pretrial stip that's going 23 to get tried is my issue against Rothstein, 24 that means I go first. 25 THE COURT: I agree with you there. PALM BEACH REPORTING SERVICE, INC. EFTA00801330 57 1 MR. LINK: I don't go first in the 2 trial. 3 THE COURT: That's precisely the 4 question I asked and it was not answered 5 correctly. 6 MR. LINK: Sorry. 7 THE COURT: That's okay. 8 I just want to make sure that we are 9 clear that if consideration is given to 10 trying both of these cases that Epstein 11 would be able to prove his damages claim 12 against Rothstein. 13 MR. LINK: Yes. 14 THE COURT: But as it relates to issues 15 on the counterclaim -- we are calling it the 16 counterclaim -- the claim brought by Edwards 17 against Epstein clearly, in that particular 18 action, Mr. Scarola would be bringing his 19 witnesses first. 20 MR. LINK: Absolutely, Judge. I think 21 I spoke poorly. I appreciate you correcting 22 that. 23 But the way the pretrial is setup and 24 the way the case is structured, the first 25 case the jury will hear will be my case PALM BEACH REPORTING SERVICE, INC. EFTA00801331 58 1 against Mr. Rothstein. Then Mr. Scarola 2 will present his case, and we will defend 3 that. 4 So one of the things that's in my mind 5 that I can't let go of, is how do we 6 sanitize Rothstein from this case -- that's 7 what Mr. Scarola wants to do -- when his 8 whole claim against is we wrongly filed a 9 pleading that connected Mr. Edwards to 10 Rothstein. That's what Mr. Edwards has said 11 has kept him in anxiety every single day 12 since December 2009, the connection to 13 Rothstein. 14 So, they have the burden of proof to 15 show that we didn't have probable cause to 16 make that allegation. 17 I promise you, Your Honor, when we get 18 through the evidence, you will see there was 19 plenty of reason to make that allegation. 20 So I don't know how you sanitize 21 Rothstein from this case. So if he's going 22 to be in case, isn't it more efficient to do 23 it once? That's what the pretrial says. 24 Mr. Scarola and I contracted to that. 25 The issue that really is the PALM BEACH REPORTING SERVICE, INC. EFTA00801332 59 1 struggle -- and I get it -- the struggle is, 2 yes, these two cases are intertwined. Is 3 there some machination I can do that would 4 put this case at issue? And the answer is 5 you can't. There's nothing you can do to 6 cure the May defect, Your Honor. That's the 7 problem. I know that's what you would like 8 to do. I get it. 9 THE COURT: Let's take a five-minute 10 break. We will be back momentarily. We 11 will be in recess. Thank you. 12 (A recess was had 11:15 III. - 11:24 III.) 13 THE COURT: Mr. Link, did you finish 14 your argument on the issue? 15 MR. LINK: I am confident I did, but, 16 you know, it's hard for me to turn down an 17 opportunity to say more. But, no, Your 18 Honor, I think we said it all. 19 THE COURT: Thank you very much. 20 Mr. Scarola, the one thing, again -- 21 well, not the one thing -- multiple things 22 that went through the Court's mind when I 23 was dealing with this was the question I 24 posed to Mr. Link, and that is, that the 25 pretrial contemplation of the case -- of the PALM BEACH REPORTING SERVICE, INC. EFTA00801333 60 1 action being tried together. And the 2 anticipated response to my question that 3 trial strategy -- albeit now that we have 4 ironed out the way in which the order of 5 proof will proceed -- could be materially 6 effected, and thus prejudicial to 7 Mr. Epstein's position if the cases are not 8 tried together as noticed. 9 Your thoughts. 10 MR. SCAROLA: Yes, sir. I don't 11 understand what unfair prejudice possibly 12 arises to Mr. Epstein when the jury is 13 instructed that they must consider these 14 cases separately. 15 The only prejudice would arise if 16 Mr. Epstein is permitted to do what it is 17 now obvious Mr. Epstein plans to do, and 18 that is to use his case against 19 Mr. Rothstein to improperly influence the 20 jury with regard to Mr. Edwards' claims 21 against Mr. Epstein. 22 The Court recognizes the fact that 23 there is tremendous danger of confusion and 24 prejudice if these two cases are tried 25 together, following the plan that it has now PALM BEACH REPORTING SERVICE, INC. EFTA00801334 61 1 become evident Mr. Epstein plans to follow. 2 What unfair prejudice arises if these 3 two cases are tried separately? The answer 4 to that question is, there can be none. And 5 one of the reasons why there will be none 6 is, the separate case against Mr. Rothstein, 7 I predict, will never be tried. 8 If it is ever tried, it's a one-day 9 trial. It's a jury selection without any 10 opposition; there's a presentation of a case 11 without any opposition; there's a closing 12 argument without any opposition. The case 13 is over in a day. And what they get, if 14 they get anything, is an uncollectible 15 judgment. 16 THE COURT: What about the pretrial 17 stipulation? Judge Ciklin speaks, again, at 18 length, about the sanctity of the pretrial 19 stipulation. 20 MR. SCAROLA: Yes, sir. 21 THE COURT: He calls it the attempt is 22 to, quote, avail ourselves of the 23 opportunity to once again stress the 24 tremendous efficacy of The Pretrial 25 Stipulation. He puts each of the words, PALM BEACH REPORTING SERVICE, INC. EFTA00801335 62 1 "The Pretrial Stipulation" in capital 2 letters -- strike that. In capitals to 3 start each of those words, and drops a 4 footnote stating, quote, out of respect for 5 and to dignity the use of The Pretrial 6 Stipulation we have intentionally 7 capitalized the name of this important trial 8 efficiency tool, end quote. 9 MR. SCAROLA: And Your Honor, has noted 10 the operative language. Your Honor has 11 noted the reservation that is preserved in 12 that pretrial stipulation about concern for 13 prejudice. 14 So there's nothing in that pretrial 15 stipulation that supports the position that 16 is being argued on behalf of Mr. Epstein, 17 and that is, that we have somehow agreed 18 that we are going to delay our right to 19 trial by jury while we wait -- perhaps 20 forever -- for the claim against 21 Mr. Rothstein to be placed at issue. 22 They can't get a default today. 23 There's been no notice. I don't know 24 whether they're ever going to get a default. 25 We become hostage to their decision PALM BEACH REPORTING SERVICE, INC. EFTA00801336 63 1 about whether they are going to proceed 2 against Mr. Rothstein if Your Honor accepts 3 the argument that they are making. 4 Now, I have had substantial experience 5 before this Court. And your Honor is not a 6 Judge who has ever been deterred from doing 7 what you consider to be the right thing to 8 do because there's the threat of an appeal. 9 They want to petition for writ of 10 mandamus, bring it on. And if the appellate 11 court believes that the arguments that are 12 being made today have merit, we will know 13 before we finish our preliminary screening 14 of the jury on Tuesday. 15 The Court will act immediately, knowing 16 that this case is going to proceed to trial. 17 And whatever concerns Your Honor has -- and 18 there should be none -- whatever concerns 19 Your Honor has will get resolved very 20 quickly under those circumstances. 21 If there has ever been an argument for 22 waiver -- if there has ever been a clear 23 demonstration of no prejudice, this record 24 establishes that. 25 Judge May's words, "Depending upon the PALM BEACH REPORTING SERVICE, INC. EFTA00801337 64 1 circumstances, the mandatory provisions of 2 rule 1.1440 may be waived." 3 They have been waived. They agreed 4 that this case was going to be tried without 5 any further delay starting next week. They 6 told Your Honor they would be ready for 7 trial. They told Your Honor they are not 8 asking for a continuance. They told Your 9 Honor they are ready and anxious to try this 10 case. 11 There has been a waiver of any 12 technical objection that might exist, but 13 there's no technical objection. There is no 14 technical objection. 15 This is a separate claim. It has 16 proceeded as a separate claim. It was 17 noticed for trial as a separate claim. 18 There is nothing in the pretrial stipulation 19 that suggests otherwise. 20 We have not stipulated with regard to 21 anything having to do with the Rothstein 22 case, because we don't represent 23 Mr. Rothstein. His signature and no 24 signature of counsel of his appears on that 25 pretrial stipulation. PALM BEACH REPORTING SERVICE, INC. EFTA00801338 65 1 This pretrial stipulation relates to 2 the trial of what is a separate cause of 3 action by Bradley Edwards against Scott -- 4 excuse me -- against Mr. Epstein. 5 Judge May, again, "Here the complaint 6 was filed in 2002. The parties had adequate 7 time to prepare for the hearing, and the 8 trial court had provided the parties with 9 the requisite 30-day notice. There was no 10 ambush or violation of the procedural 11 safeguards that Rule 1.440 was designed to 12 protect. That's this case. 13 There is nothing but, at very best, a 14 hyper-technical argument that is being 15 raised. They are refusing to waive it, 16 because they don't want this case to ever be 17 tried. 18 And if Your Honor is concerned about 19 the mountain -- the avalanche of paper with 20 which this court has been assailed, I can 21 assure you that it isn't going to stop if we 22 don't start on Tuesday. It's going to get 23 worse. 24 The defense, in violation of this 25 Court's order, last week listed 724 new PALM BEACH REPORTING SERVICE, INC. EFTA00801339 66 1 exhibits that they want to use. And they 2 are going to use this hyper technicality to 3 say the pretrial order was invalid because 4 the case was not at issue; a new pretrial 5 order needs to be issued; discovery is not 6 yet closed; we have an opportunity to 7 proceed to take additional discovery; and we 8 can amend our exhibit list, and we can 9 include 724 new exhibits, and more which 10 they say they are still finding. 11 The only way to put an end to this is 12 to proceed to trial as Your Honor informed 13 everyone we would, in no uncertain terms, 14 the last time this case was reluctantly 15 continued by this Court. 16 So again, my client has been waiting 17 for nine years to clear his name from the 18 defamatory allegations that were made 19 against him in a maliciously filed lawsuit. 20 He was accused of heinous crimes, of 21 being associated with one of the most 22 massive Ponzi schemes in history. And the 23 only way he can effectively exonerate 24 himself is by getting his day in court, and 25 he deserves to have that now. PALM BEACH REPORTING SERVICE, INC. EFTA00801340 67 1 So the solution is very simple. 2 Whether it's a claim or a counterclaim, you 3 have the discretion to sever it. It gets 4 severed. The case is at issue. It goes to 5 trial. 6 We are ready to proceed, and we ask you 7 for the right to be able -- enforcement of 8 the right to be able to proceed. Thank you, 9 sir. 10 THE COURT: Thank you, Mr. Scarola. 11 Thank you, Mr. Link and Ms. Rockenbach, as 12 well. 13 MS. ROCKENBACH: Your Honor, may I hand 14 the Court one case? I apologize. It's 15 cited in my motion. May I approach? 16 THE COURT: Sure. 17 MS. ROCKENBACH: It is the Bennett 18 case. Because -- 19 THE COURT: I have it. Bennett versus 20 Continental Chemicals? 21 MS. ROCKENBACH: Right. 22 And just to respond to Mr. Scarola with 23 regards to -- 24 MR. SCAROLA: I'm sorry, Your Honor, 25 can we put an end to this, because there's a PALM BEACH REPORTING SERVICE, INC. EFTA00801341 68 1 lot that we need to do? 2 THE COURT: I thought that she just 3 wanted to mention the case. 4 MS. ROCKENBACH: I do. 5 THE COURT: I have it here and I have 6 it highlighted. I have reviewed the 7 highlighted provisions of the case. 8 MS. ROCKENBACH: Thank you. It is 9 about the fact that you can't cure the 10 defect. 11 MR. SCAROLA: I'm sorry. I'm objecting 12 to further argument, Your Honor, and ask 13 that we please move on. 14 THE COURT: I will give you a minute to 15 finish up. 16 MS. ROCKENBACH: Thank you, Your Honor. 17 In Bennett, the party, just like 18 Mr. Edwards is doing here, suggested to the 19 court to sever in order to fix the rule 20 1.440 deficiency, and the appellate court 21 said no you can't do that, and "The 22 procedure for setting actions for trial is 23 simple, but many attorneys are careless 24 about it. They serve a notice for trial 25 prematurely. This requires a motion to PALM BEACH REPORTING SERVICE, INC. EFTA00801342 69 1 strike. And there's not excuse for failing 2 to follow the rule." And it goes on about 3 how the rule is not directory, it's 4 mandatory. 5 So this Bennett case speaks to exactly 6 what is evolving here in terms of the 7 severance issue. It doesn't correct the 8 defect. Thank you. 9 THE COURT: Thank you. 10 MR. SCAROLA: Does Your Honor want a 11 response? 12 THE COURT: No. 13 MR. SCAROLA: Thank you, sir. 14 MS. ROCKENBACH: And, Your Honor, we do 15 have a motion for default that we filed 16 simultaneously. And I have a proposed order 17 for the Court. 18 THE COURT: Thanks. 19 I don't know if you've looked at the 20 O'Brien versus Florida Birth-Related 21 Neurological Injury Compensation 22 Association, a case which is from the Fourth 23 District, which indicates that it negatively 24 treated the holding -- at least one of the 25 holdings in Bennett versus Continental. And PALM BEACH REPORTING SERVICE, INC. EFTA00801343 70 1 it is a Fourth District Court of Appeal 2 case, similar to the reliance by Epstein, 3 principally, on the Gawker versus Bollea 4 case. Bollea, if I recall correctly, is 5 Hulk Hogan from wrestling. 6 MS. ROCKENBACH: Correct. 7 THE COURT: But again, this Labor Ready 8 case, authored by Judge May that we have 9 been speaking about, declined to extend the 10 Gawker case to its handling of the Labor 11 Ready case from the Fourth. 12 I haven't seen the O'Brien case. I 13 will give it a real quick look, so that I 14 can be as comprehensive as possible. 15 MS. ROCKENBACH: Is that at 942 So.2d 16 1030? 17 THE COURT: It doesn't give me a 18 citation in this. It just says Fourth 19 District Court of Appeal. March 18th, 1998 20 is the date of decision. It doesn't give me 21 a cite to report. 22 But I can look it up real quickly. 710 23 So.2d 51. 24 MS. ROCKENBACH: I am reading that case 25 right now, Your Honor. PALM BEACH REPORTING SERVICE, INC. EFTA00801344 71 1 THE COURT: By the first blush it 2 doesn't look like it has anything to do 3 with -- 4 MR. LINK: We don't see a reference, 5 Your Honor. 6 THE COURT: It talks about fundamental 7 error, is really what it goes to. 8 It cites to the case and its citation 9 is, quote, We have not been as willing as 10 some of our sister courts to find 11 fundamental error where an objection had 12 been raised by the trial court -- strike 13 that -- had been raised in the trial court. 14 The error could have been corrected and a 15 new trial would have been unnecessary. 16 One of the string of cites cites that 17 Bennett case. There is no specific 18 application of that case to this one here. 19 My ruling is as follows: The Court has 20 in preparation for this hearing carefully 21 weighed the respective positions taken by 22 the parties. And I appreciate the 23 well-written briefs and the well-articulated 24 positions taken as it relates to this issue. 25 The controlling case here in the Fourth PALM BEACH REPORTING SERVICE, INC. EFTA00801345 72 1 District, as far as the Court is concerned, 2 is the Labor Ready Southeast, Inc. versus 3 Australian Warehouses Condominium 4 Association case. But not so much for the 5 Court's position that it's taking as it 6 relates to waiver, which the Court will use 7 as a secondary proposition in its ruling 8 today, but more so the spirit and intent of 9 the case and the message that Judge May and 10 her colleagues, in my respectful view, sent 11 to the trial courts and the litigators, 12 particularly here in the Fourth District 13 Court of Appeal jurisdictional area. 14 The primary ruling and what the Court 15 is going to determine here is that it will 16 sever the claims and will try and proceed 17 with the Edwards versus Epstein matter 18 commencing as scheduled on Tuesday, 19 March 13, 2018. 20 Today being, for the record, and for 21 ease of review, March 8th, 2018. Reference 22 being made to Friday, March 2, 2018. So, 23 again, for ease of review. 24 Because, frankly, when I'm reading 25 appellate briefs sometimes from the county PALM BEACH REPORTING SERVICE, INC. EFTA00801346 73 1 court, it makes it so much easier when the 2 trial judge sets forth the dates as opposed 3 to having to go back and try to reconstruct 4 the timeline when the court is making its 5 ruling. 6 The severance is based on the fact that 7 there is no legal relationship between the 8 Edwards case against Epstein and the damages 9 claim by Epstein against Rothstein solely on 10 a singular-count-amended complaint -- again, 11 forgive the lack of specificity as to the 12 iteration of the amended complaint -- but 13 again, as late as September of 2011 -- six 14 and a half years ago -- and the fact that 15 the Epstein team failed in its capacity, as 16 reasonable trial lawyers, to have secured 17 the default, if it sought same, so as to, in 18 good faith, maintain its claim against 19 Rothstein. 20 I have no recollection whatsoever of 21 anything coming up during the approximate 22 four years that I have presided over this 23 case in division AG of anything whatsoever 24 having to do with Mr. Epstein's prosecution 25 of that one-count complaint against PALM BEACH REPORTING SERVICE, INC. EFTA00801347 74 1 Rothstein from that September 2011 amended 2 complaint. 3 Meaning the entire focus of this Court 4 in the multiple hearings that have been 5 held, in the deluge of paper that -- in part 6 the Court brings on itself because of its 7 preference to have the hard copies, as 8 opposed to utilizing modern technology and 9 solely the computers. It's much easier for 10 me, frankly, and my eyes, physically, to 11 have the paper. It's not because of 12 necessarily wanting it. It's more so 13 because of it's easier on my eyes and causes 14 much less strain on my eyes than having to 15 rely on just the computer copy. I wanted 16 you to know that as well. 17 So severance in this case, whether it 18 was done in September of 2011 or even before 19 that, when the -- what is called the 20 counterclaim, but in this Court's view is 21 not. It may have been because at the time 22 back in December of 2009 -- if I'm not 23 mistaken is when the Edwards claim was 24 brought in against Epstein. That's the 25 approximate time. PALM BEACH REPORTING SERVICE, INC. EFTA00801348 75 1 So now we're dealing with approximately 2 seven years ago -- seven plus years ago from 3 the time that the action was brought by 4 Mr. Edwards against Epstein. 5 Technically, because there may not have 6 been an order signed by the Court, whatever 7 closing documents that are usually and 8 customarily dealt with in closing out a 9 file, may not have been in the court file at 10 that time, perhaps, technically, it 11 constituted a counterclaim. But undeniably, 12 the trappings, the name, the legal effect 13 was not a counterclaim at all, and certainly 14 bore no semblance to a counterclaim once 15 Rothstein dropped Edwards -- once Epstein 16 dropped Edwards -- I apologize -- and 17 proceeded solely against Rothstein. 18 And whether severance took place or a 19 separate claim would have been brought in 20 December of 2009 -- albeit because of the 21 potentiality of the pleadings not being 22 closed, so to speak, as to Edwards at that 23 particular time, so it may have been called 24 a counterclaim. But certainly, and without 25 equivocation, once that case shifted -- now PALM BEACH REPORTING SERVICE, INC. EFTA00801349 76 1 Mr. Epstein didn't have to shift it. But it 2 was by his own doing. He shifted it, 3 because he no longer had Edwards as a 4 defendant in the case. He took that 5 operative step. 6 So it was in name only that this 7 continued having the moniker of a 8 counterclaim, but it wasn't one. It had the 9 genesis in Epstein versus Rothstein, Edwards 10 and III. case so as to permit Edwards to 11 bring the claim against Rothstein. But 12 undoubtedly, it no longer was a counterclaim 13 for at least the past seven or eight years. 14 And in name only, I am not going to 15 remove this case from the docket on what is 16 unquestionably here a hyper technicality. 17 If I'm directed by the Fourth District 18 Court of Appeal to do so, I will, as always, 19 assiduously follow their order. But I do 20 not believe here -- because the focus of the 21 last eight years has been Edwards' claim 22 against Epstein. And in reality, in name 23 only, since the dropping of Edwards from 24 Epstein's case, his own voluntarily 25 dismissal of Edwards, creating a separate PALM BEACH REPORTING SERVICE, INC. EFTA00801350 77 1 claim, albeit having its genesis, as all 2 malicious prosecution claims do, in that 3 prior action, there is nothing that has been 4 argued to today to suggest that a separate 5 action has been, could have been, and, in 6 fact, is at issue here. And that has been 7 the focus, and the only focus that I am 8 aware of, juxtaposing the Epstein versus 9 Rothstein case here; that being the only 10 focus has been for the last seven or eight 11 years; and clearly the fours years that I 12 have been presiding over this case, solely 13 the Edwards versus Epstein malicious 14 prosecution claim. 15 And again, I am not going to be bound, 16 and I don't think any trial court should be 17 bound by the choice of words that may have 18 been used to name a given pleading. 19 It's a separate claim, and it has been. 20 And clearly and without equivocation has 21 been since, somewhat ironically, what has 22 been brought this matter before the Court is 23 the September 2011 claim that was solely 24 brought by Rothstein -- I mean, by Epstein 25 against Rothstein. PALM BEACH REPORTING SERVICE, INC. EFTA00801351 78 1 It essentially highlights the precise 2 position that is being taken by this Court 3 legally, factually and practically. And 4 that's the best that I can do. 5 MS. ROCKENBACH: Thank you, Your Honor. 6 I have proposed orders that just simply 7 grant Mr. Edwards' motion to sever and 8 denying Epstein's motion to remove. 9 And I also have a default for Your 10 Honor, along with the motion for default, if 11 you would like to entertain that as well. 12 THE COURT: Any objection? 13 MR. SCAROLA: We don't represent 14 Mr. Rothstein, Your Honor. But I don't know 15 how that default can be entered without 16 notice to Mr. Rothstein. 17 He has a counsel, who has appeared in 18 this case. That is, in that case. I don't 19 know whether -- I'm not arguing. I'm 20 expressing a concern. 21 THE COURT: Excuse me. And I apologize 22 for interrupting. 23 What I was going to say is this. If he 24 has had representation in the case, then he 25 would have to be noticed in order for the PALM BEACH REPORTING SERVICE, INC. EFTA00801352 79 1 Court to enter a default. 2 MS. ROCKENBACH: Understood. 3 THE COURT: And since this is, again, a 4 later iteration of a complaint to which my 5 understanding was -- he did respond in some 6 fashion originally through counsel or not? 7 Or was he defaulted from -- 8 MS. ROCKENBACH: Earlier on. I'm told 9 by co-counsel early on. 10 We served it on Mr. Nurik, 11 Mr. Rothstein's counsel. The question I am 12 asking is whether it was noticed for hearing 13 today. It went out yesterday. 14 THE COURT: That wouldn't have been an 15 appropriate notice. So it would have to be 16 re-noticed to Mr. Nurik, and we will proceed 17 accordingly once what appropriate notice has 18 been provided. 19 MS. ROCKENBACH: Correct. 20 THE COURT: I just want to make clear, 21 as well, that I have taken into account, by 22 virtue of the ruling that I have made, the 23 contention that somehow trial strategy -- 24 and that was at the behest of the court. I 25 don't believe it was argued in the motion. PALM BEACH REPORTING SERVICE, INC. EFTA00801353 80 1 But again, in my efforts to try to be 2 as fair as I possibly can to both sides, I 3 raised it to hear from Epstein's counsel 4 what, if any, prejudice would be done by 5 virtue of the severance. 6 And again, respectfully, again, in my 7 view, I believe that the response that was 8 provided is, in fact, supportive of the 9 Court's position here. And, that is, the 10 added reason for the Court's severance is 11 the fear of the Court, again, by virtue of 12 its going through thousands of pages of 13 documents by now, hearing scores of motions 14 and being exposed to more, reviewing 15 deposition transcripts, having the anecdotal 16 knowledge that the Court has of 17 Mr. Rothstein's criminal activity, and the 18 fact that it is and was, and potentially 19 continues to be, because of the media 20 attention that remains -- just an example, 21 being a CNBC special that continually runs 22 on American Greed, I believe is the name of 23 the show -- that this biggest Ponzi scheme 24 in the history of state of Florida remains 25 very fresh in the minds of many. PALM BEACH REPORTING SERVICE, INC. EFTA00801354 81 1 And hence, a second reason, a third 2 reason for severance is the absolute danger 3 of confusion relative to a jury's 4 consideration of Edwards' cases versus 5 Epstein's case against Rothstein solely. 6 While facts overlap, the Court can 7 consider and would consider the confusion 8 issues as well as the prejudice, undeniably, 9 that would be done here if both of these 10 cases were tried together. 11 Clearly, as I indicated at the 12 inception of this hearing, I am not pleased 13 by the events that occurred here. No court 14 should be. The blame is several fold, 15 including the individual who is sitting 16 here, who ultimately is responsible for the 17 execution of that trial order. So I have, 18 to a degree, blame myself for the execution 19 of that order. And ultimately I bear the 20 responsibility of that, and I recognize 21 that. 22 But at the same time, as I have 23 mentioned on numerous occasions before 24 groups of lawyers, who have been kind enough 25 to ask me to speak on these types of issues, PALM BEACH REPORTING SERVICE, INC. EFTA00801355 82 1 just generally in terms of how we do things 2 here, tips from the bench and the like, we 3 so rely on the bar and exceptional lawyers 4 that we have here in terms of our daily 5 business. 6 That doesn't exonerate the Court in 7 executing the trial order. But it sheds 8 some light on the busyness of the Court, and 9 the fact that we are, at the present time, 10 as you know, responsible in each of the 11 civil divisions of anywhere between 1,100 to 12 1,200 cases to 1,5' to 1,600 cases in some 13 divisions. The lower number is done by 14 design because one of our judges has agreed 15 to handle the bulk of the tobacco litigation 16 cases, so that Judge has a reduced caseload, 17 deservedly so. 18 But it does highlight our expected 19 reliance on counsel so that these things 20 don't occur in the future. And it's a good 21 reminder to all concern about how these 22 things can crop up. 23 But here hyper technicality should not 24 stand in the way of a pending matter of over 25 3,000 days and nearly nine years. PALM BEACH REPORTING SERVICE, INC. EFTA00801356 83 1 And again, I do not want this order to 2 reflect a suggestion that the Court is 3 willing to deviate from the dictates of 4 1.1440 -- strike that. 1.440. But instead, 5 as I indicated before, the primary impetus 6 here is one of severance for the reasons 7 that I have tried to state as clearly and 8 concisely as I can, balancing the rights, 9 strategies and obligations of each party's 10 concern, balancing what I perceive to be in 11 the best interest of justice to all 12 concerned, balancing the rights of 13 Mr. Epstein to proceed against Rothstein, 14 but at the same time recognizing the 15 separate nature of Edwards' claims against 16 Epstein; and the fact -- 17 Again, while facts may overlap, it does 18 not extinguish the proposition that the 19 Court has indicated, and, that is, whether 20 severance be done now, six months ago, seven 21 years ago, or eight and a half years ago, 22 from December of 2009, it would have been 23 the appropriate and right thing to do under 24 these particular factual circumstances. 25 All right, we have bumped up now PALM BEACH REPORTING SERVICE, INC. EFTA00801357 84 1 against the lunch hour. 2 What do you want to handle next? 3 MR. SCAROLA: The evidentiary issues 4 that have cropped up in past week or so. 5 MR. LINK: Would Your Honor mind 6 entering the orders first once we have 7 agreed to the language? 8 THE COURT: That's fine. 9 Off the record. 10 (A discussion was held off the record.) 11 MS. ROCKENBACH: May I approach, Your 12 Honor? 13 THE COURT: Again, commendation to our 14 court reporter, who is exceptional and 15 always such a pleasure to work with. We 16 appreciate her work. 17 There is a case that -- from the Fourth 18 District Court of Appeal that criticizes one 19 of my now former colleagues in terms of the 20 order saying, "for the reasons stated on the 21 record." 22 So in an abundance of caution, I think 23 it would be best suited for that portion of 24 transcript to be transcribed. You can do it 25 rush if you need to. PALM BEACH REPORTING SERVICE, INC. EFTA00801358 85 1 I am sure Ms. Sonja would be happy to 2 oblige to the best of her ability. And, 3 really, only that portion of it so that 4 my decision would need to be rushed, I 5 think. 6 MR. SCAROLA: Attached, for the reasons 7 stated on the record. Attached. 8 THE COURT: If both sides feel that 9 that's sufficient. 10 Ms. Rockenbach, is an appellate 11 specialist. I defer to her specialty. 12 Mr. Scarola, I know you have also been 13 involved in numerous appeals, whether 14 directly or indirectly, but your name 15 appears on many appellate decisions. 16 Again, I concede to your expertise only 17 to bring up the fact that one of our most 18 respected and one of our former circuit 19 court judges was criticized for the order in 20 the manner in which it's being presented to 21 me. 22 MS. ROCRENBACH: You're correct. I am 23 aware of that decision, unfortunately. And 24 I would ask the Court for a break so that 25 our court reporter could type up the -- not PALM BEACH REPORTING SERVICE, INC. EFTA00801359 86 1 just the ruling, but we need the entire 2 hearing transcript in order to have a 3 complete record. 4 So we would ask for a change in court 5 reporters, as reluctant as I am to do that. 6 I know it's my duty to my client and to the 7 Court. 8 THE COURT: I respect that. And again, 9 you will have to deal with Sonja directly. 10 For the record, again, I apologize for 11 not using her last name. We have known each 12 other for many years. And I know she takes 13 no personal qualms at it, because we have 14 spoken about that before. But at the same 15 time, any review by the court, I would ask 16 that they excuse my lack of formality here. 17 MR. SCAROLA: We have no problem with 18 breaking for lunch at this point so that we 19 can arrange a change of court reporters. 20 The only appeals I remember, Your 21 Honor, are the ones I lost. 22 THE COURT: Again, thank you for your 23 concerns and your patience as well. 24 I also recognize and thank Ms. Musgrave 25 for being here. PALM BEACH REPORTING SERVICE, INC. EFTA00801360 87 1 We will return back at 1:30, so as to 2 give you all some logistic assistance to try 3 to arrange, as you need to, for the court 4 reporter and transcript purposes. 5 Keep in mind that we will go to 4:30 6 today. And also, that I am not available 7 tomorrow. I have several panel commitments 8 for the bench bar tomorrow. And so that 9 would preclude any further consideration. I 10 do have a full day of hearings on Monday as 11 well. 12 MS. ROCKENBACH: Your Honor, before we 13 break, anticipating a potential adverse 14 ruling, I have a motion to stay the matter, 15 which is then immediately reviewable as 16 well. 17 The motion to stay that I have I did 18 not anticipate this court severing the 19 cases. It was only the adverse ruling of 20 the removal of the case from the trial 21 docket. So I would like to revise that 22 motion. But I would make an ore tenus 23 motion to stay this action in order for 24 Mr. Epstein to file the petition for writ of 25 mandamus as to the order denying the motion PALM BEACH REPORTING SERVICE, INC. EFTA00801361 88 1 to remove the case from the trial docket and 2 a petition for writ or certiorari as to the 3 order granting Mr. Edwards' motion to sever. 4 THE COURT: Mr. Scarola. 5 MR. SCAROLA: We would clearly object 6 to a stay, Your Honor. It would effectively 7 be granting the same relief that the defense 8 has been unsuccessful in obtaining. 9 We are confident that Your Honor's 10 order will withstand appellate review. And 11 a petition for writ of mandamus is an 12 expedited proceeding. I am sure we will 13 hear from the appellate court if they have 14 any reason whatsoever to question the 15 proprietary or the order that Your Honor has 16 entered. 17 THE COURT: The motion to stay from 18 this Court is denied. 19 MR. SCAROLA: Your Honor, I expect what 20 we will deal with after lunch are issues 21 that relate to the most recently disclosed 22 documents, including, in particular, emails. 23 THE WITNESS: That's what I anticipate. 24 MR. SCAROLA: And I have a timeline, 25 which I provided to opposing counsel. I am PALM BEACH REPORTING SERVICE, INC. EFTA00801362 89 1 going to hand that to Your Honor in case you 2 want to chew on that over lunch. 3 MS. ROCKENBACH: Your Honor, if I may 4 approach. 5 THE COURT: Sure. 6 MS. ROCKENBACH: I have one submission 7 to the Court. It was hand-delivered 8 yesterday before we received your judicial 9 assistant's email about no future 10 submissions. But it relates to this issue. 11 THE COURT: I can't promise you that I 12 will have time to read it. 13 MS. ROCKENBACH: Understood. 14 THE COURT: I will do the best I can. 15 MS. ROCKENBACH: Thank you very much. 16 THE COURT: Thank you all again for 17 your excellent presentations and arguments. 18 We will be in recess until 1:30. 19 - - - 20 (The above proceedings were 21 concluded at 12:08 III.) 22 23 24 25 PALM BEACH REPORTING SERVICE, INC. EFTA00801363 90 1 COURT CERTIFICATE 2 3 4 STATE OF FLORIDA ) : SS 5 COUNTY OF PALM BEACH ) 6 7 I, SONJA D. HALL, certify that I was 8 authorized to and did stenographically report the 9 foregoing proceedings and that the transcript is a 10 true record of my stenographic notes. 11 12 13 Dated this 8th day of March 2018. 14 15 16 SONJA D. HALL 17 18 19 20 21 22 23 24 25 PALM BEACH REPORTING SERVICE, INC. EFTA00801364