EFTA00285631.pdf

I877DOEC UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK x 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Plaintiff, v. 17 Civ. 616 (JGK) JEFFERY EPSTEIN, GHISLAINE MAXWELL, and Defendants. Before: x New York, N.Y. August 7, 2018 2:30 p.m. HON. JOHN G. KOELTL District Judge APPEARANCES BOIES SCHILLER & FLEXNER LLP Attorneys for Plaintiff BY: SIGRID MCCAWLEY S.J. QUINNEY COLLEGE OF LAW AT THE UNIVERSITY OF UTAH Attorneys for Plaintiff BY: PAUL CASSELL STEPTOE & JOHNSON LLP Attorneys for Defendants Jeffery Epstein, and BY: MICHAEL MILLER JUSTIN CHU DARREN K. INDYKE LLC Attorney for Defendant Jeffery Epstein BY: DARREN K. INDYKE SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285631 I877DOEC APPEARANCES (Continued) HADDON MORGAN & FOREMAN P.C. Attorneys for Defendant Ghislaine Maxwell BY: LAURA MENNINGER 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ALSO PRESENT: ALEXANDER LORENZO SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285632 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Case called) (In open court) MS. MCCAWLEY: Sigrid McCawley for plaintiff, along with my co-counsel Paul Cassell. MR. MILLER: Good afternoon, your Honor. Michael Miller and Justin Chu from the law firm of Steptoe & Johnson, and Darren Indyke, who is counsel to Mr. Epstein. We represent Jeffery Epstein and , and yesterday filed a substitution of counsel with respect to , whose previously existing counsel is also here today, and if the Court is comfortable with the substitution of counsel, we will argue for all three defendants. THE COURT: I signed it already. MR. MILLER: Fine. Thank you, your Honor. THE COURT: And it should be on the docket, I think. MS. MENNINGER: Good afternoon, your Honor. Laura Menninger, on behalf of Ghislaine Maxwell, from Haddon Morgan & Foreman. MR. LORENZO: Good afternoon, your Honor. Alex Lorenzo from Alston & Bird. As Mr. Miller indicated, we are now predecessor counsel. I saw the order pop on the docket. wanted to come down in case that there was some issue, but I would request permission to be excused. THE COURT: Yes, you can be excused. Thank you. I did sign the substitution, as you saw. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285633 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 All right. OK. I know people personally and professionally at Boies Schiller. I knew Mr. Haddon when I was in private practice. I may know people at Steptoe, but I'm not sure. Nothing about any of that affects anything that I do in the case. I also had dealings with Mr. Boise when I was in private practice. Again, nothing about that affects anything that I do in the case. These are motions to dismiss. I'm familiar with the papers, and I'm prepared to listen to argument. MR. MILLER: Your Honor, can I address you from the podium there? THE COURT: Sure. MR. MILLER: Michael Miller from Steptoe & Johnson, and as I indicated we are here on behalf of and Jeffery Epstein, and Your Honor, we respectfully submit that the amended complaint before you is legally deficient and should be dismissed for several reasons, the first of which is that it was not filed timely. Our belief is that the statute of limitations has lapsed. The amended complaint also fails, your Honor, to properly allege fraud, coercion or force, which are three alternative ways of proving a violation of Section 1591. More broadly, your Honor, it's our view that section 1591 does not SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285634 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 apply to the conduct alleged in this case. And, lastly, at least in terms of points that we will be making, is that we believe that there have been insufficient allegations of personal jurisdiction. In an effort to do this efficiently, your Honor, Ms. Menninger and I have divided up these topics, and if it's all right with the Court, I will be addressing the statute of limitations issue, the allegations of fraud, the scope of Section 1591, and the lack of personal jurisdiction; and Ms. Menninger will be addressing the allegations of coercion and force, the lack of a causal link between those allegations and sexual activity, and the specific allegations with respect to her client. Your Honor, starting with statute of limitations, Section 1591 was enacted in 2000 with a four year statute of limitations. That was the statute of limitations in effect when the events at issue in this case occurred, and those events as alleged were in 2006 and 2007. Clearly, if the four year statute of limitations applies, the lawsuit was not started in a timely fashion. In late 2008, effective early 2009, Section 1591 was amended to permit a ten year statute of limitations. And I think the preliminary, the threshold issue before the Court today, is whether the four year statute of limitations or the ten year statute of limitations should apply to this case. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285635 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: When the statute was amended to increase the statute of limitations to ten years, the claims were still alive under the four year statute of limitations had the case been brought at that time. MR. MILLER: That is correct, your Honor. And I am aware that there are two cases here -- I believe they are district court cases -- where that analysis has been applied to conclude that the ten year statute of limitations applies. We cited a case out of the District of Minnesota, the Abarca case, that takes a different view, and the thinking in the Abarca case -- which we think is the correct thinking -- THE COURT: So far the thinking in this District is against you. MR. MILLER: I appreciate that, but I think that the analysis in Abarca, which basically is that Congress had the ability to articulate that it wished to apply it retroactively, wished to apply it to any action that was not time barred at the time of amendment and didn't do so. THE COURT: But the issue then becomes a definition of retroactivity. The rules against retroactivity are there to prevent -- unless the legislature otherwise provides -- that t cause of action is not revived or that rights are not otherwise cut off. Here there is nothing that was being revived and there was nothing that was being cut off. Congress simply made a determination that the statute of limitations would be SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285636 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 lengthened. So there was no need for Congress to say we're reviving a cause of action that is otherwise barred, which would be the core of a problem of retroactivity. So you have to ask in the first instance if there is a claim of retroactivity, did Congress specifically authorize the retroactive application. In this case there was no retroactive application to be applied; Congress simply lengthened the statute of limitations, and that included all causes of action that were alive at that time. That logic seems to be right. MR. MILLER: Well, if I can, your Honor, I certainly understand, accept and agree with the proposition as you've articulated it as far as it goes, but I think that the case law with respect to retroactive application isn't limited to vested rights like the statute of limitations has already expired and the new statute of limitations would restore an action that has already ceased to be subject to prosecution under the statute of limitations. It's not limited to reviving an affirmative defense that has already run its course. I respectfully submit that there is a significant impact on defendants. At the time that the alleged activity occurred here, there was a four year statute of limitations. By expanding it to ten years, at the time that they engaged in that conduct -- if they were even aware of the statute -- they would have been operating under the assumption that there was a four year statute of limitations. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285637 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Yes, it would have been -- it is a difficult argument that a defendant can rely upon the statute of limitations which has not yet expired so that the defendant can say, you know, you can't sue me; you have a few more years to sue me, but after that you can't sue me because of this statute of limitations. Much more powerful argument would be a defendant who says I rely on the fact that if I did something more years ago than the statute of limitations, I am now safe. A defendant who is still subject to being sued cannot say to himself or herself I am now safe. MR. MILLER: That's undeniable, that is true, but in the same breath you could say that by 2011 or thereabouts certain rights that would have existed under the four year statute of limitations would have matured at that point, and from that date forward, from whatever that four date year was forward, there were certain rights that would have existed but for the amendment of the statute of limitations, and that is something of value that is essentially taken away by a retroactive application of the ten year statute of limitations to conduct that predated the date of the amendment. I sense that I'm sledding uphill, and so perhaps I should push my sled in a different direction, but I do believe that the two district court cases here were incorrectly decided on that theory and that the ten year statute of limitations should not apply. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285638 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 But even if it does apply, your Honor, according to the amended complaint, in January of 2007 -- and I guess just by way of a footnote, the original complaint was filed in this case on January 26th of 2017 -- so in January of 2007, according to the amended complaint in paragraphs 55 to 57, the plaintiff went to to visit with her family. That's where her father and stepmother and other family members live. Under the Oluch case which we cited from the Southern District, a 2015 case, frankly under the Abarca case from the District of Minnesota that we also cited, the cause of action, if any, that the plaintiff had with respect to the defendants under Section 1591 accrued as of that point in time. Under Oluch the Southern District held that the claim accrued when the plaintiff first left the defendant's home. In the Abarca case -- which I grant is the District of Minnesota -- they put it slightly different, when the plaintiff traveled home to Mexico and had "physical freedom" the cause of action accrued. Under the complaint, the amended complaint as drafted, the plaintiff left New York City, left where Mr. Epstein and the defendants were allegedly located, and went home and had the kind of physical freedom that the Abarca case speaks to. Now, the complaint is in all candor vague about when in January of 2007 that trip occurred, and the lack of detail is odd because, as you may recall from earlier stages of this SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285639 1C I877DOEC case, after the original complaint was filed, we worked out a process with the Court's consent whereby we provided a 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 deficiency letter to the plaintiff, to many, many issues that we had with the and one of those issues was statute of counsel, outlining the complaint at that time, limitations, and one of the points we made is that, to the best of our knowledge, she left, she was already gone and left New York City before January 26 of 2007, more than ten years before the complaint in this action was actually filed. There is additional evidence that was addressed in the papers, and from a procedural perspective let me pause for a moment. I would like to be able to speak to the evidence that was gathered in the case, which is the subject of a protective order. It's all before you, but I just don't know if you have any reservations about me speaking about it openly in court about it today. THE COURT: I don't. Do any of the parties? I should add that it is not clear to me -- in fact 1 should put it differently. I think the various items that you rely on from the deposition in the other case are not properly considered by me on this motion, which is a motion to dismiss on several grounds. The parties go to great lengths to describe the plaintiff in the most uncomplimentary terms based on the deposition in the other case. Those allegations are plainly SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285640 11 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not in the complaint in this action. The deposition was taken after the complaint in this action. There is no reasonable legal basis that I see for incorporating the allegations or the statements in the deposition in the other case in support of the motions in this case. The deposition in the other case was taken after the complaint in this case, was not incorporated into the complaint in this case, was plainly not relied upon by the plaintiff in drafting the complaint in this case, and appears to me to be admitted or offered by the defendants solely for purposes of influencing me against the plaintiff in this case, contrary to the facts that are pleaded in this case, and that includes the comments about the statute of limitations. MR. MILLER: If I might, just briefly, your Honor. THE COURT: Yes, sure. MR. MILLER: Just two quick points. One is chronologically the original complaint was filed in January of 2017. It's my understanding, my recollection, that the depositions at issue occurred after that but before the first amended complaint was drafted and filed, so from a timing perspective, if that matters in your analysis -- THE COURT: Thank you. It doesn't. It doesn't. Hold on. I appreciate your correcting the chronology, but the deposition was plainly not relied upon by the plaintiff in drafting this complaint, and the plaintiff doesn't rely upon SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285641 12 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 any of the allegations in that deposition for purposes of the allegations in this complaint. MR. MILLER: Well, I think we carefully articulated in our motion papers that the reason we cited to the evidence was to establish that if the Court agreed that the first amended complaint as drafted was legally insufficient, that a dismissal should be with prejudice, because based on the evidence there is no available theory under which the case -- the complaint could be repled properly. THE COURT: That really is not the way in which the deposition was used. It was not used for purposes of saying don't let the plaintiff amend because look at what was said in the deposition. It was used, for example, to say on the statute of limitations that while the complaint alleges activities that continued into February of 2007, you can't believe those allegations because at that time the plaintiff was in fact a willing and knowledgeable person who was doing other things, other things which are not alleged in the complaint. And they were used for purposes of saying you really can't credit the allegations in the complaint of force or fraud, coercion, because look at all of the other things that the plaintiff was doing. MR. MILLER: Your Honor, I must say, I take ownership of the drafting of that motion. It was our intention, if inartfully framed, to really speak to the ability of the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285642 13 I877D0EC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 plaintiff to replead a legally sufficient complaint. And I would be happy to sit down with you and go over the motion papers as drafted, but -- THE COURT: Well, trust me we will not sit down and go over the motion papers. Trust me also that I carefully read all of the motion papers, and I was more than surprised that lawyers of the distinction of the lawyers in this case on the defense side would do what you did. Now, you may say, oh, Judge, even though our papers were larded with an explicit discussion of each of the plaintiff's relations with other people, right down to the most recent allegations of the plaintiff's alleged other occupation, all of that, we're not relying on that for our motion to dismiss; we're relying on that for our argument that once having dismissed this complaint you shouldn't let the plaintiff replead. You can say that, but I don't think that any reasonable person reading these briefs would come away with that as a conclusion. And also one wonders how that would even make any sense. If I were to grant the motion to dismiss because there are insufficient allegations in the complaint, _ should then rely upon the deposition to say that the plaintiff could not replead because I now can read the deposition and rely upon the statements in the deposition, and conclude that any new complaint would not survive a new motion to dismiss, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285643 14 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 when the new complaint would plainly not rely upon the specific allegations that the defendants are relying on in the deposition? That would be a difficult argument. Moreover, it is contrary to what you said in the briefs. In the briefs you attempted to come up with other reasons for putting all of this in, reasons like the plaintiff started it; we were able to rely upon the deposition because the plaintiff relied on the deposition. Well, that's not quite right, is it? You made the motions to dismiss, and then the plaintiff responded to the motions to dismiss. And the plaintiff said, you know, the deposition doesn't really say what you're saying it says. But it was in the motions to dismiss, so -- but go ahead. MR. MILLER: Your Honor, I will just say I apologize for any unintended confusion on our part about how we intended to use the evidence from the matter, and -- THE COURT: I should add, the amount of the briefs that are devoted to the allegations from the deposition, I haven't counted up words or pages, but there is an awful lot of these briefs that rely upon what was said at the deposition, and under the law that's just not right. Just as a matter of law it's not correct, which is what brought me to my comment of surprise at the defense counsel doing that. MR. MILLER: Thank you, your Honor. Understood. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285644 I877D0EC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 will proceed without any further reference to that body of information. In addition to the fact that the complaint itself, the amended complaint itself, acknowledges that the plaintiff left New York in January of 2007, the complaint also states that at the time that the plaintiff left in January of 2007 and went to , that when she went to she was asked to look for somebody to work as a personal assistant to Mr. Epstein, and she decided not to do that, having concluded that the individual, rather than being treated as an assistant, might be treated in another, you know, less reputable way. And I believe it is fair to conclude from that language in the amended complaint that by the time the plaintiff left New York to go to in January of 2007, she had already come to a place where in her mind she didn't believe she could trust the defendants or the representations that they were making to her about what they were actually seeking to accomplish with THE COURT: What do I do, for example, with the allegation in the amended complaint in paragraph 61? "In February of 2007, in reliance on promises made by the defendants, plaintiff returned to New York City, in the Southern District of New York, and was promptly ordered by the defendant Maxwell to have sex with defendant Epstein. Defendants Maxwell, and Epstein each fraudulently promised plaintiff again that her sexual compliance would be SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285645 16 I877DOEC rewarded with admission to the Fashion Institute of Technology or a comparable college, a promise which they knew to be false." 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. MILLER: I think in short strokes you have an individual who claims that before she left, or at the time she left New York, she no longer believed the representations made by the defendants to her. That is difficult to reconcile with the notion that she left her family in to come back to New York based on additional promises and representations made by the defendants. So, we have a fundamental conflict within the four corners of the complaint as drafted. THE COURT: It wouldn't be the first time for a fraud case in which an alleged victim of a fraud came to believe that the victim was defrauded, and the perpetrator goes to the victim and convinces the victim to invest yet again. Those cases are in fact not uncommon. So, you say there are conflicting allegations in the complaint. That means that they're not really susceptible to a motion to dismiss. They may be susceptible to a motion for summary judgment. But the only way to grant the motion on statute of limitations grounds is to say that paragraph 61 is simply false, it's a false allegation, you can't take it, Judge. And in order to support that, of course, in your SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285646 17 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 papers you describe what you say the plaintiff was doing after she returned to New York. But you say, well, we're not relying on that for the motion to dismiss; we're relying on it solely that she can't file an amended complaint. MR. MILLER: That is correct. THE COURT: But then I'm left with the unrebutted paragraph 61. MR. MILLER: The way we read that paragraph is that the allegations were broad, they were conclusory, they don't satisfy Rule 9(b) particularization, and there is no way to read those additional allegations in light of the other allegations in the amended complaint to demonstrate that the plaintiff reasonably relied on whatever new representations were made to her. So, given the unique definition of Section 1591, it is our view that those allegations about the conduct that occurred between February and May of 2007 don't establish a violation of Section 1591. Whatever conduct occurred before January of 2007 -- and obviously on the merits, you know, we have a different view of the underlying allegations, but whatever happened before January of 2007, that cause of action accrued at the time the plaintiff left New York and went to under the cases that we discussed earlier. So, our view is that the ten year statute of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285647 18 I877DOEC limitations ran on the activity that occurred before January of 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2007 and that the new allegations that were raised don't satisfy the elements of Section 1591. Your Honor, Section 1591 requires that the defendants know and, indeed, in some manner of conduct, know that an individual is going to be subject to amongst other things force, coercion or fraud. We respectfully submit that the amended complaint as drafted does not satisfy Rule 9(b) pleading standards. The amended complaint fails to allege with particularity when any representations -- specifically when any representations were made to plaintiff about getting her into -- which seems to have been the principal factual allegation in the amended complaint -- or any other particular school, particularly whether any of those representations were made before or after the alleged sexual relationship began. In addition, the amended complaint fails to allege with particularity what any particular defendant said to her about her prospects of getting into MM. or any other particular school. There is a heavy reliance throughout the amended complaint on group pleading, which is not embraced in this Circuit, when you're talking about oral statements and representations. And the allegations with respect to defendants conclusory. and are particularly threadbare and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285648 19 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 The amended complaint also fails to allege with particularity whether anyone promised that the plaintiff would get into §§§ or any other similar school in any particular semester. The amended complaint fails to allege facts demonstrating that at the time whatever statements were made about MI., that they were false when made. The law is clear in this jurisdiction that the question is were the statements false at the time they were made. And the fact that there has been inaction in connection with the promises isn't sufficient to show that the statements were false when made. The amended complaint contains allegations, your Honor, that strongly suggest to the contrary. The allegations in the complaint are that Mr. Epstein promised to take care of this individual and that he in fact gave her access to an apartment, a car, telephone, and that with respect to the school, that the complaint acknowledges that Epstein reminded the plaintiff about completing her application and reviewing it for her. None of those facts contained in the amended complaint are consistent with the notion that at the time whatever statements were made those statements were false. THE COURT: One of the arguments made in the papers is that it was incredible for the plaintiff to believe that defendant Epstein could impact, derail her application to I'M and derail her career, that is simply incredible, or SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285649 20 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the papers say. MR. MILLER: Well, we do make the argument that the plaintiff's reliance on those representations was not reasonable. THE COURT: Not reasonable because it was incredible to believe that a person of the alleged wealth and prestige of defendant Epstein could in fact derail the plaintiff's education and career. That's the argument. MR. MILLER: I think the allegations in the amended complaint, your Honor, are that the threat was you'll never go to college anywhere, you'll never get a career going anywhere, and I think that is a pretty broad statement for somebody to reasonably rely upon, regardless of the wealth and power of the individual who is making the statement. THE COURT: So, it is incredible as a matter of law that a person of alleged wealth and prestige sufficient to own an island could in fact blackball someone from education and a career presumably in New York? I am expected to rule as a matter of law that that's incredible as a matter of law, that that is not reasonable reliance, it just couldn't happen, and no reasonable person could believe that it could happen. Right? I mean your argument is asking me to rule as a matter of law that such a conclusion is incredible as a matter of law, and that, therefore, there is no reasonable reliance. MR. MILLER: Yes. The argument is specifically that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285650 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 relying on the affirmative promises, relying on the alleged very broad allegations of threat, was not reasonable under the circumstances. THE COURT: What comparable case do you think stands for that proposition? MR. MILLER: Well, I think the threat is just so broad as to be as a practical matter -- regardless of the wealth or prestige of the individual -- an impossible threat to carry through on. The notion that an individual could prevent another individual from going to school anywhere, from pursuing a career anywhere, it stretches the boundaries of what is reasonable reliance. That's the point we were making. THE COURT: And my question is what case do you rely on for that proposition with any similar set of circumstances: An alleged -- for purposes of the complaint -- young person versus a person of wealth and prestige, that the kind of promises and alleged threats that were being made were unreasonable as a matter of law? I mean I understand the reasonable reliance cases in terms of investors and in terms of what should and shouldn't be done in terms of reasonably pursuing an investigation of a company. But is there any comparable case that has said that in a situation such as this, such as alleged in the amended complaint, it should be dismissed as a matter of law on a motion to dismiss? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285651 22 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. MILLER: Your Honor, most of the cases that we looked at did deal with reasonable reliance in the context of investment scenarios with relatively sophisticated parties on both sides. I can't say that we found a case that is specifically on point, so we're really arguing more from the facts than a specific case. THE COURT: OK. MR. MILLER: Your Honor, the last point that I'd like to address is the issue of lack of personal jurisdiction. I think it's fair to say, based on some of the dialog we've had so far, that it's your view that there are sufficient allegations of conduct in the February to May 2007 time period. But, you know, as we have noted in the papers, virtually all of the conduct that's at issue in this case predated January of 2007, predated the plaintiff's departure from New York to go to The only allegations in the complaint as to the defendants and their current ties to New York relate to Mr. Epstein and a particular piece of real estate. We respectfully submit that the absence of concrete evidence of violations of Section 1591 in 2007 -- as opposed to before the defendant left -- should lead to the conclusion that there is no personal jurisdiction over the defendants. THE COURT: OK, thank you. MR. MILLER: Thank you. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285652 23 I877DOEC THE COURT: Ms. Menninger. MS. MENNINGER: Thank you, your Honor. On behalf of 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 defendant Ghislaine Maxwell, I would ask the Court to dismiss the first amended complaint filed on June 5, 2017. In some ways I want to start in the same place that Mr. Miller did, and that is with the statute itself and its passage. Your Honor, in 2007 -- 2006 and 2007 -- when the allegations in the complaint purportedly took place, there was no civil cause of action at all under this chapter other than a violation of 1591. The same amendment which added these ten year statute of limitations also broadened who could be sued and for what. The statute that existed in 2006 and 2007 read, "An individual who is a victim of violation of Section 1589, 1590 or 1591 of this chapter, may bring a civil action against the perpetrator in an appropriate district of the U.S. and may recover damages and reasonable attorney fees." The persons who could be sued under that chapter were perpetrators of the crimes specified in 1589, 1590 and 1591, and the person who could sue was an individual who was a victim under those three statutes. Notably absent is any reference to lawsuits, civil causes of sections of that chapter. 1594, as well as 1593(a), action brought pursuant to other Those would include 1592, 1593 and which was added in December of 2008 and did not previously exist. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285653 L^ I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Paragraphs -- you look like you had a question. THE COURT: The same arguments that I was raising with your colleague would apply to all of these arguments also. At the time that the statute was amended to include the ten year statute of limitations, there was no bar, if you will, to a claim against all of the defendants. MS. MENNINGER: Your Honor, I respectfully would contend that there is a fundamental difference between a statute of limitations that is extended as to conduct that has already occurred versus creating a new cause of action or a new civil remedy. The support for that, your Honor, is the U.S. Supreme Court in Landgraf v. USI Film Products, which I cited in my papers for a different proposition, but it's found at 511 U.S. 244. In that case, your Honor, the U.S. Supreme Court was considering a very similar situation with respect to a sexual harassment claim under Title VII. In that case, Title VII, prior to the defendant at issue's conduct, only provided for back pay or equitable remedies, and then in 1991 Congress added a compensatory damage provision. The U.S. Supreme Court spent a great deal of time in Landgraf, explaining that adding a cause of action for damages -- as was done in this statute -- did not retroactively apply unless there was an express finding by Congress to do so. And they distinguished things like extending statutes of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285654 25 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 limitations and, rather, relied on the fact that a new action for damages was being created. And that is what happened in this case with respect to this statute as well, your Honor. THE COURT: OK. MS. MENNINGER: Paragraphs 69 through 77 of the first amended complaint purport to state causes of action under each of those other chapters -- excuse me -- sections of the same chapter, your Honor, and I would ask at the outset that those particular requests be stricken from the first amended complaint. THE COURT: But there would still be the action under 1591. MS. MENNINGER: Yes, your Honor. I'm starting from the ones that are really easy, in my opinion, and then moving to 1591, which would be the other one. But it does, your Honor, significantly affect some of the allegations within the first amended complaint. For example, 1592 is the provision that criminalized the taking of the passport, for example. THE COURT: Right. But, in a way, each of the other provisions is subsidiary to 1591. The plaintiff doesn't break out the four separate subsidiary statutes, 1591 and the other three; the plaintiff has only one cause of action for a violation of 1595. MS. MENNINGER: She requests specific damages under some of those statutes, your Honor, for example, forfeiture and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285655 2 I877D0EC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 restitution. She relies on a conspiracy theory that is articulated in one of those statutes. She relies on the attempt provision that's included in one of those statutes and, as I mentioned, the passport. THE COURT: But she one claim, one cause of action for a violation of 1595. What the argument that you have been making so far comes down to is I should give the complaint a haircut by striking some of the allegations in the complaint, even though the case goes forward, and even though allegations like holding the passport could be used in support of a violation of 1591. MS. MENNINGER: Your Honor, I was not about to just sit down after that particular argument; I was going to move on to the next one. THE COURT: OK. MS. MENNINGER: So, I guess it would be the first chop in the haircut that I propose that this Court make a complete shaving of the head by the time that we're done. But, in any event, I think those particular statutes clearly do not grant a cause of action to the plaintiff for conduct that occurred prior to Congress authorizing the civil action. With respect to 1591, your Honor, moving there, the statute as it read at the time permitted a cause of action against the perpetrator, not against someone who was alleged to have been a person who benefited from a venture, which is SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285656 27 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 something else that is seen replete through the first amended complaint. And it requires, your Honor, the statute 1591 as it existed in 2016, that an individual either recruit, entice, harbor, transport, provide, or obtain by any means a person or benefit financially. Those are what I would -- drawing upon criminal law -- call the actus reus of this particular offense that has been granted a civil cause of action. Your Honor asked earlier with respect to the statute of limitations question why does paragraph 61 of the first amended complaint -- which talks about reliance on promises that occurred after January of 2007 -- how can we just read those out of the first amended complaint. Your Honor, I believe that the way 1591 is read, the act is accomplished -- the offense accrues when the recruiting, enticing, harboring, etc. occurs. This is not a general fraud statute. Although fraud rears its head in the mens rea element, fundamentally the act that is sought to be covered here occurs at the time of the recruitment, the enticement, the harboring, etc., or at the time of benefiting financially. Those are the two provisions of 1591. So, your Honor, the allegations contained in paragraph 61 of the first amended complaint are not allegations of a recruitment, or an enticement, or a harboring; they are allegations that go to the mens rea. Therefore, I would submit SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285657 28 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to your Honor that the act has accrued once the recruitment or the enticement happened, not because further acts of purported fraud occurred later. Your Honor, moving on to the sections not already covered by Mr. Miller, I would point your Honor to the requirement that one of those two acts has to occur knowing that fraud, force or coercion will be used to cause that person to engage in a commercial sex act. With respect to knowing that force will be used, there is no allegation of force in the first amended complaint. With respect to fraud, Mr. Miller has already addressed the absence of particular allegations with respect to fraud: The dates, times and circumstances that any particular statement was made. And, your Honor, I will move to the last of those three permitted means of stating a claim, and that is with respect to coercion. In their response, plaintiff has pointed to two particular paragraphs that they claim adequately state a claim for coercion -- although they plead it in the alternative, noting as the statute does, that there are three ways that could accomplish the final goal. And they point to paragraph 48, which just says simply that there were threats of serious harm, without stating what any such threats were; and they point to paragraph 49, which is that she was physically returned to the main island on house by a search party at some SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285658 29 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 point in time. And, again, without any dates, it's difficult for the Court or the parties to understand any particular sequence of events, but it is up to the plaintiff to allege sufficient facts that would state a claim, if they were there. And, your Honor, there are no facts that show -- I think it's important to look at the statute again, which defines what coercion means in this context, and coercion means under 1591 in existence at the time, threats of serious harm to, or physical restraint against any person, is the primary definition. There are not facts other than bald allegations with respect to that definition of coercion. In their response papers they point to a threat that she would no longer be given the same financial benefits that she had been receiving in the past, but that is clearly not what coercion is defined to include in the statute itself under 1591. Finally, your Honor, with respect to what we will call the causal connection, 1591 states that the person must have known that fraud, force or coercion would occur, would be used to cause the commission of the commercial sex act. Again, your Honor, other than using these several months at a time pleading windows, the complaints have not specified the time when any such thing occurred. And I think that was a conscious choice, because they, I believe -- and we will not talk about other things outside of the four corners of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285659 I877DOEC the complaint -- it was a choice they made not to include 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 specific dates. Without those dates, your Honor, there is nothing more than a bald assertion that the knowing, the force, fraud, or coercion would cause a commercial sex act. THE COURT: In your papers -- I say it for the first time, unlike other defendants -- you also rely on the fact that the plaintiff was engaged, you say, in another occupation which is inconsistent with the allegations in the complaint. And I could not understand how that allegation could be made in your papers. It's certainly not in the complaint. And I couldn't understand the reason for putting that in or what the effort was in terms of having me rely on that for a decision. MS. MENNINGER: Your Honor, I heard you very loud and clear when you were speaking with Mr. Miller, and I too had intended to use evidence from the other deposition in support of an argument that any further amendment of this complaint would be futile, but I'm trying to carefully not mention any of those items during my oral argument. THE COURT: OK. If you believe that that's the true reason why that was included in your papers, so be it. Go ahead. MS. MENNINGER: As with the argument regarding fraud -- and I think there are a number of cases -- THE COURT: Oh, before we leave that, part of the argument that there was no fraud is there is no -- the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285660 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 plaintiff hasn't pleaded the reasonable basis for concluding that the defendants didn't believe the alleged promises at the time that they were made and, therefore, there is no pleading of fraud, because a promise isn't fraud unless it is knowingly false when made. At the same time the defendants ask me to strike all the allegations in the complaint about what happened previously, which would appear to go to the issue of intent under 404(b). Promises were made in the past, they weren't kept, the defendants knew that when they were making promises in this case they weren't going to be kept, and the defendants urge me to simply strike paragraphs in the early part of the complaint as irrelevant. Why don't those paragraphs go to intent on the subject of fraud? MS. MENNINGER: Your Honor, the intent for purposes of this statute would require knowledge that force, coercion or fraud would be used to induce a commercial setback. Those earlier allegations do not allege force; they do not allege except in very bare terms coercion; they do not allege, except in very bare terms anything with respect to the fraud. So, for the same reasons that in this District fraud requires particularity, those are very broad, unspecified allegations, divorced from dates, times, places, people's statements, and so it appears for perhaps some of the same SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285661 32 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 reasons that your Honor questioned why some of these other things were in our papers, that that is in fact the same reason that these other allegations were contained in the first amended complaint, more to make it read as a press release than it was to actually try to make a cause of action. THE COURT: There are differences, right, between allegations in a complaint and a legal basis for a motion to dismiss. So, OK. MS. MENNINGER: Your Honor, I would really urge your Honor to look through the complaint with a careful eye towards any places in which an actual time, place, event were specified. We asked for that in our motion to dismiss; we said that there was nothing more than a bald assertion that there was a causal connection; and we were told here is where it says in the amended complaint where it says there is a causal link, but without any reason to show the causal link. There are ways that your Honor could imagine that a complaint could contain allegations. They could say this happened first and then this happened next, but that's not how any of this read. And the same way that your Honor earlier pointed out how am I supposed to just say because he's wealthy he could not have controlled all of higher institutions of learning and all contracts in this world, if there were allegations like he sat on the board of or he had a special connection SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285662 33 I877D0EC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with all of these higher institutions of learning -- like an investor who is defrauded where there have been promises made that an individual has the ability to get a particular return -- there are no facts in here other than the mere mention of wealth and status to suggest under the terms of the amended complaint that this individual, Mr. Epstein, could control all higher institutions of learning or all contracts. But there is even less with respect to my client, your Honor. There are no allegations that she controlled the world of and the world of higher institutions of learning. So, I would ask your Honor to enforce what is the common rule in this District, that allegations of fraud need to be pled with particularity, and no such particularity exists in this amended complaint. THE COURT: OK. Thank you. MS. MCCAWLEY: Is it all right if I'm here, or would you prefer if I am at the podium? THE COURT: It's probably better if you are at the podium. MS. MCCAWLEY: If I could just approach the bench; 1 have come books. THE COURT: All right. It's not so clear why you're offering up a bench book. MS. MCCAWLEY: Sorry, your Honor. I thought it might SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285663 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 be helpful for you to have in front of you some of the key cases we cited, along with a copy of our amended complaint, and then I have just a couple -- just to make it easy for you to follow -- the bullet points that show where the paragraphs are in the motion to dismiss. They've obviously claimed that we have not properly alleged certain things including fraud and coercion, so I've set this forth. THE COURT: Go ahead. MS. MCCAWLEY: So, your Honor, I submit to you that Congress had in mind this exact situation when it enacted 18 U.S.C. 1591, and that was to stop repeat offenders, or repeat traffickers like the defendant in this case, from using fraud and coercion to force females in commercial sex. That's what happened to my client here, and that's what happened to other females, as alleged in our complaint. So what we have alleged in the complaint you've heard a lot from the defendant about various deficiencies. We believe the complaint is fulsome. It includes the allegations that are necessary under the statute. The statute makes clear that with respect to the definition of commercial sex, that it is broad and it means any sex act on account of which anything of value is given or received by any person. We believe we have alleged that in our complaint with respect to Ms. being used and induced into commercial sex with respect to the defendants, and we SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285664 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 believe we have pled that with specificity. I want to talk a little bit about the fact that the defendants have claimed that the tightened pleading standard, we haven't met it. First, I believe we have met it. But setting that aside, in the sea of the over 50 cases that they cite in their briefs, there is not one that addresses a sexual trafficking case where this heightened 9(b) issue is discussed. So, they have RICO cases, they have other securities cases, things of that nature, but nothing in this context. And I submit to you that when Congress enacted this statute, it intended it to be very broad; the language is very broad. It covers not only fraud but also, as we've said, coercion. And while Ms. Menninger was reading to you from the old statute, the statute as it sits today and as it was at the time that our client filed her complaint, defines the term coercion in a much broader manner. It defines it -- and this is in Section 4 of 1591 and (e)(4) -- it says, "The term 'serious harm'" -- so serious harm is one of the pieces of coercion -- "The term 'serious harm' means any harm, whether physical or nonphysical, including psychological, financial, reputational harm that is sufficiently serious under all the surrounding circumstances" -- THE COURT: Should I look at the statute at the time that the events occurred? You're not suggesting that if the defendants did something when the statute was somewhat SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285665 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 different, and the statute was then amended thereafter, I should look at the amended statute to determine whether what the defendants did at the time that they did it was in violation of the statute? MS. MCCAWLEY: Well, your Honor, first I believe we need we meet both, so let me be clear on that. I believe the complaint as pled meets both standards. I was reading to you the coercion as it stands now with respect to serious harm under the statutory language -- which I believe we've met and as we talked about with respect to the statute of limitations, that's the Lama v. Malik case and the Oluch case that they referenced. THE COURT: I mean I understand your argument with respect to the statute of limitations with respect to the length of the statute of limitations and the fact that when the statute was amended the claim was still alive. It's a somewhat different argument to say that at the time the statute was amended the statute made unlawful something that was lawful at the time that the defendants did it. That would seem to run counter to the normal retroactivity practice. MS. MCCAWLEY: Right, your Honor, I understand. So, I can just move on from that. I believe we've met the fraud and coercion under both the old version and the new version, and I believe we sufficiently articulate that in our complaint, so I SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285666 37 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 will move forward with respect to that. I did just want to highlight for you very briefly with respect to the claims of fraud and coercion, that we have pled those. I put them in the binder, but they are a number of paragraphs, 38, 40, 41, 52, 53 and 66; and with respect to coercion, 43, 45, 46, 48, 50 and 57. With respect to the allegation that there was a group pleading or an insufficient pleading with respect to certain of the defendants, we submit to your Honor -- and I put the paragraphs in there -- but we have both allegations particular to the individual defendants, as well as allegations when they pertain to all defendants, we've set that forth in the complaint as well. With respect to reasonable reliance, your Honor touched on this a little bit in the beginning, but we have a number of paragraphs that address that reliance, including 11, 12, 16, 22, 36, 38, 40, and the causal link as well in those and in 49. I will just touch briefly on the jurisdictional argument that was made. We obviously believe we've submitted appropriately that your Honor has jurisdiction in this matter, and if there was any question with respect to jurisdiction we did request in our papers to have a jurisdictional deposition. With respect to the timing on the statute of limitations, you pointed out paragraph 61. We believe that in SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285667 38 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that paragraph we have set forth very sufficiently that while there was an episode where my client, Ms. , was sent by the defendants to for the purposes of recruiting another female and bringing her back to the United States for the purposes of sex, we believe that that allegation is part and parcel of the fraud and coercion that she was susceptible to during that time period, that it carried on, it didn't stop. There is no magical moment in that time period. She was still under that fraud and coercion at that point, and it continued when she got back to the United States, as alleged in the complaint, up until May of 2007, your Honor. So, we believe that the complaint sets forth very sufficient allegations in detail about the harm that she was subjected to and the time period within which that harm occurred. And, your Honor, if you have any other questions, I would be happy to answer them. heard? THE COURT: No, thank you. All right. I will take a ten minute break. Oh, I'm sorry. I should have asked, any response? MR. MILLER: No, your Honor. THE COURT: Ms. Menninger? MS. MENNINGER: Your Honor, may I be very briefly THE COURT: Of course. Of course. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285668 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MS. MENNINGER: With respect to the statute of limitations question, your Honor, you heard plaintiff say that they rely on the allegations contained in paragraph 61 of their first amended complaint. And, your Honor, in that particular paragraph they do not set forth any activity that could be described as recruiting, enticing, harboring, transporting or obtaining by any means a person, nor do they set forth anybody who has gained a financial benefit. Those are the two requirements of 1591 as it existed in 2006. And without any allegations that any of those activities happened, you know, after January of 2007 when the plaintiff left the country, they have not set forth I think -- and I would submit to your Honor -- any allegations that would restart the accrual period that set off the ten year statute of limitations at best, the four year statute of limitations of course having expired four years earlier. Thank you. THE COURT: OK. Thank you all. I will take ten minutes. (Recess) THE COURT: I am prepared to decide the motions. The plaintiff, , brings this action under the Trafficking Victims Protection Reauthorization Act (the "TVPRA"), 18 U.S.C. Section 1595, against the defendants Jeffery Epstein, Ghislaine Maxwell, and . The plaintiff alleges that between SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285669 .1C I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 October 2006 and May 2007, the defendants knowingly, coercively, and fraudulently recruited and enticed the plaintiff to engage in commercial sex acts with Jeffery Epstein in violation of 18 U.S.C. Section 1591, and that the defendant engaged in conduct that violated 18 U.S.C. Sections 1592, 1593A and 1594. Epstein, Maxwell and have filed motions to dismiss the plaintiff's amended complaint pursuant to Rules 12(b)(2), 12(b)(3) and 12(b)(6) of the Federal Rules of Civil Procedure, and they move to strike allegations pursuant to Rule 12(f) of the Federal Rules of Civil Procedure. They argue that the Court should strike the portion of the amended complaint detailing prior proceedings related to Epstein as or immaterial to the allegations set forth in the complaint and that the amended complaint fails to impertinent amended state a claim for relief under 18 U.S.C. Section 1591 because, first, Section 1591 does not apply to the alleged relationship between the plaintiff and Epstein; second, the amended complaint fails to allege fraud or coercion against any of the defendants; third, the amended complaint impermissibly lumps the defendants together in violation of Rule 8 of the Federal Rules of Civil Procedure; and, fourth, the amended complaint fails to demonstrate that the alleged fraudulent or coercive conduct caused the plaintiff to engage in a commercial sex act. Additionally, with respect to the Section 1591 claim, and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285670 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 argue that the plaintiff fails to allege that either or had sufficient knowledge that the plaintiff was engaged in commercial sex caused by fraud or coercion. With respect to the plaintiff's Section 1592 claim, the defendants argue that the claim should be dismissed because it lacks specific factual support. The defendants also argue that the plaintiff does not allege violations of Sections 1593A and 1594. The defendants also argue that the plaintiff's claims are barred by the statute of limitations set forth in 18 U.S.C. Section 1595(c), that the Court lacks personal jurisdiction over the defendants, and that venue is improper in this District. In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in the plaintiff's favor. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). The Court's function on a motion to dismiss is "not to weigh the evidence that might be presented at trial but merely to determine whether the complaint itself is legally sufficient. Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985). The Court should not dismiss the complaint if the plaintiff has stated "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 554, 570 (2007). "A claim has SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285671 42 I877DOEC facial plausibility when the plaintiff pleads factual content 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009). While the Court should construe the factual allegations in the light most favorable to the plaintiff, "the tenet that a court must accept as true all the allegations contained in the complaint is applicable to legal conclusions." Id. When presented with a motion to dismiss pursuant to Rule 12(b)(6), the Court may consider documents that are referenced in the complaint, documents that the plaintiff relied on in bringing suit and that are either in the plaintiff's possession or that the plaintiff knew of when bringing suit, or matters of which judicial notice may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002); Millennium Health LLC v. Emblemhealth, Inc., 240 F.Supp. 3d 276, 279-80 (S.D.N.Y. 2017). The following facts are taken from the plaintiff's amended complaint and are accepted as true for the purposes of this motion to dismiss. Jeffery Espstein is a wealthy individual who, along with and , has previously been investigated by Florida state law enforcement and the United States Attorney's office for the Southern District of Florida for various offenses relating to sex trafficking, including 18 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285672 43 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 U.S.C. Section 1591. Amended Complaint paragraphs 11 to 29. The plaintiff alleges that her association with the defendants began in approximately October 2006, when the plaintiff was approached by , allegedly one of the enterprise's recruiters. informed the plaintiff that she would introduce the plaintiff to Epstein, whom described as a wealthy philanthropist who regularly used his wealth, influence and connections to help financially poor women like the plaintiff achieve their personal and professional goals and aspirations. Amended complaint paragraphs 35 to 36. introduced the plaintiff to Epstein, and Epstein confirmed to the plaintiff that he would use his wealth and influence to have the plaintiff admitted to the .") in New York City. Between October 2006, and May 2007, each defendant confirmed and reiterated this promise to the plaintiff many times. Amended complaint paragraph 38. Ghislaine Maxwell, who allegedly oversaw the entire sexual enterprise with Epstein, told the plaintiff that in order to reap the benefits of Epstein's and Maxwell's connections, the plaintiff would need to provide Epstein with body massages. Amended complaint paragraph 39. Maxwell allegedly instructed the plaintiff on how to massage Epstein. During the plaintiff's first massage of Epstein, Epstein allegedly converted the massage into a sexual act and made it SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285673 44 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 known to the plaintiff that further sex would be required in order for the plaintiff to obtain the assistance he promised her. Epstein allegedly told the plaintiff that if she did not perform the sexual act as demanded, Epstein had the ability to make sure that the plaintiff would not obtain either a formal education or any contracts. Amended complaint paragraph 43. Maxwell allegedly reiterated to the plaintiff that if the plaintiff did not perform the sexual favors desired by Epstein or abide by the instructions given to her by Epstein, , and Maxwell, the defendants had the ability to make sure the plaintiff would not obtain formal education or contracts. Amended complaint paragraph 41. Thereafter, the plaintiff was allegedly instructed dozens of times to provide body massages to Epstein, both at his alleged townhouse in New York City and on his alleged private island in the U.S. Virgin Islands, and on each occasion the plaintiff was required to perform a sexual act with Epstein. Amended complaint paragraph 45. Each defendant participated in arranging these meetings between Epstein and the plaintiff, and each defendant allegedly made representations mainly promises to advance the plaintiff's education and career -- to ensure that the plaintiff would cooperate in fulfilling Epstein's sexual requests. Amended complaint paragraphs 40 and 45. The plaintiff alleges that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285674 4 I877DOEC these representations were knowing and deliberately false, were not acted upon by the defendants, and were made by Epstein, and Maxwell solely for the purpose of 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 maintaining the plaintiff's financial dependence on, and sexual compliance with, Epstein's demands. Amended complaint paragraph 53. The plaintiff was also allegedly provided with living quarters in New York, a car service and a cell phone, so long as she serviced Epstein sexually. Amended complaint paragraph 52. Epstein, Maxwell, and allegedly intimidated, threatened, humiliated and verbally abused the plaintiff in order to coerce the plaintiff into compliance. Amended complaint paragraph 48 and 50. For example, while being transported to Epstein's island in the U.S. Virgin Islands, Epstein, Maxwell, and took possession of the plaintiff's passport in order to coerce her to comply with their demands, including their demands that the plaintiff have sex with Epstein and others. Epstein and Maxwell also forced the plaintiff into losing weight in order to be allowed to return to the United States from the trip to Amended complaint paragraph 54. The plaintiff complied with the defendants' instructions, including Maxwell's sexual demands. In May 2007, after still not being granted admission into ., the plaintiff left the United States and did not return. Amended SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285675 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 complaint paragraph 64 to 66. The defendants argue that the portion of the amendeci complaint related to the prior state and federal investigations of Epstein and others should be stricken from the amended complaint. The defendants argue that these allegations are immaterial because the prior investigations did not involve the plaintiff. The plaintiff argues that the allegations of prior state and federal investigations into Epstein's conduct could be used to show a modus operandi. A court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Federal Rule of Civil Procedure 12(f). "Motions to strike are not to be freely granted, and no deletions will be made unless it is clear that the allegations are without [basis]." Laub v. Genway Corp., 60 F.R.D. 462, 465-66 (S.D.N.Y. 1973) (citations and quotations omitted). Moreover, the movants should show that they will be prejudiced if the attacked allegations are left in the pleadings. Allsate Ins. Co. v. Home Ins. Co., No. 97 Civ. 4332, 1997 WL 639254, at *1 (S.D.N.Y. Oct 15, 1997). As another court in this district noted: "there has arisen since the adoption of Rule 12(f) general judicial agreement, as reflected in the extensive case law on the subject, that motions to strike under Rule 12(f) should be denied unless the challenged allegations have no SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285676 47 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 possible relation or logical connection to the subject matter of the controversy and may cause some form of significant prejudice to one or more of the parties to the action." VNB Realty, Inc. v. Bank of America Corp., No. 11 CV. 6805, 2013 WL 5179197, at *3 (S.D.N.Y. Sept. 16, 2013) (internal quotation marks, brackets and citations omitted); see also I.B. Trading, Inc. v. Tripoint Global Equities, LLC, 280 F. Supp. 3d 524, 546 (S.D.N.Y. 2017). There is no issue in this case with respect to an unknown identity that may have to be proved by a pattern of similar alleged crimes. Cf. Federal Rule of Evidence 404(b); United States v. Carlton, 534 F.3d 97, 101-02 (2d Cir. 2008) (holding that the defendant's three prior convictions for bank robbery were admissible to prove identity for the bank robbery at issue through a common modus operandi). However, the portion of the amended strike is not relevant has no doubt as to who complaint that the defendants move to to an issue of identity. The plaintiff allegedly committed sex acts with her. However, the portion of the amended complaint that the defendants move to strike is not so irrelevant to the case that they should be stricken. Maxwell and deny that the alleged promises of financial assistance to the plaintiff were knowingly false when made. The portion of the amended complaint subject to the motion to strike provides specific facts in support of the plaintiff's allegations that she was SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285677 18 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 recruited an enticed into performing sex acts with Epstein as part of a larger enterprise to provide Epstein with young females for sex, in which each defendant allegedly played a specific role. The defendants contend that the plaintiff was a younger woman who willingly accepted the blandishments of a wealthy older man. The knowledge and intent of the defendants will plainly be an issue. The paragraphs of the amended complaint that the defendants seek to strike may be evidence of the defendants' knowledge and intent in their dealings with the plaintiff. See Federal Rule of Evidence 404(b). Accordingly, the motion to strike is denied. The defendants move to dismiss the amended complaint on the basis that 18 U.S.C. Section 1591 does not cover the alleged conduct. The defendants argue that the plaintiff and Epstein were engaged in a consensual relationship and that the amended complaint does not allege that the plaintiff was the victim of sex trafficking within the meaning of Section 1591. As support for their argument, the defendants rely on the plaintiff's deposition in a proceeding before a different judge. According to the defendants, in this deposition the plaintiff describes her relationship with Epstein as consensual. The defendants argue that this testimony from the plaintiff contradicts the amended complaint. But it is well established that it is improper for the Court to consider SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285678 19 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 matters outside of the pleadings on a motion to dismiss. Millennium Health, 240 F. Supp. 3d at 280. The defendants argue that the Court can consider the plaintiff's testimony because it was relied on by the plaintiff in response to the defendants motions. But the plaintiff referenced her prior deposition only in response to the defendants' improper use of the deposition. The defendants also argue that the plaintiff relied on her prior deposition to draft the amended complaint, but that is plainly not true. The plaintiff's deposition is not referred to, relied on, or incorporated by reference in the amended complaint, and indeed the defendants argue that the specific testimony in the deposition is actually inconsistent with the allegations in the amended complaint. Therefore, the Court will not consider either parties' improper use of materials outside of the amended complaint. The defendants also argue that the amended complaint itself should be read as describing a consensual relationship between two adults, but the amended complaint describes with sufficient detail the manner in which the plaintiff was deceived, threatened, and coerced into following the defendants' instructions to comply with Epstein's sexual requests. Accepting the defendants' description of the relationship between the plaintiff and Epstein would require the Court to accept the defendants' view of the facts rather than the allegations in the amended complaint. That would be SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285679 rC1 I877DOEC improper on a motion to dismiss. The defendants further argue that Section 1591 was 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 intended only to reach victim's trafficked for sex and held against their will, and that the amended complaint does not allege that the plaintiff falls within that definition. The defendants again rely on materials outside the amended complaint to support this proposition. The Court will not consider evidence extrinsic to the amended complaint at this stage of the litigation. Moreover, Section 1591 is not as limited as the defendants suggest. Rather, Section 1591(a) imposes liability on: "whoever knowingly in or affecting interstate or foreign commerce, or within the special maritime and territorial jurisdiction of the United States, recruits, entices, harbors, transports, provides, obtains ... or solicits by any means a person, or benefits financially or by receiving anything of value from participation in a venture ... knowing, or ... in reckless disregard of the fact, that means of force, threats of force, fraud, coercion ... or any combination of such means will be used to cause the person to engage in a commercial sex act." 18 U.S.C. Section 1591. The statute imposes liability for the use of force but does not require that force be used in order for conduct to fall within the statute's reach. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285680 51 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Here, the amended complaint alleges that the plaintiff performed sex acts on Epstein in return for numerous financial inducements and fraudulent misrepresentations made and reiterated by each of the defendants to the plaintiff. The plaintiff was allegedly recruited and enticed by the defendants who knew that she would be fraudulently induced to engage in commercial sex acts with Epstein. A commercial sex act is defined in Section 1591(e)(3) as "any sex act, on account of which anything of value is given to or received by any person The plaintiff was given financial incentives to engage in sex acts with Epstein. She was allegedly fraudulently induced to do so by false promises of help in her education and career, and threatened with retaliation if she did not continue. The promises were allegedly knowingly false when made. She was recruited and solicited to do so. While the defendants seek to limit the statute to sex slavery, the statute is not so limited. Accordingly, the defendants' argument that the amended complaint's allegations do not fall within Section 1591 is without merit. The defendants move to dismiss the amended complaint on the ground that it fails to satisfy the pleading requirements under Iqbal, Twombly, and Rule 8 of the Federal Rules of Civil Procedure. The defendants argue that the amended complaint does not state a plausible claim with SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285681 52 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sufficient specific allegations that the plaintiff was a victim of sex trafficking in violation of Section 1591 or any other related statute entitling the plaintiff to civil relief pursuant to Section 1595. While the plaintiff has partly relied on group pleading in her allegations against the defendant, the amended complaint contains several specific factual allegations sufficient to survive a motion to dismiss against each of the defendants. For example, the amended complaint alleges that in March or April of 2007, Maxwell, , and reiterated to the plaintiff Epstein's alleged promise that in exchange for the plaintiff's continued sexual cooperation with Epstein, Epstein would use his wealth and influence to have the plaintiff admitted into . Amended complaint paragraph 38. The amended complaint alleges that Maxwell and Epstein threatened the plaintiff that if she did not comply with Epstein's sexual requests, they had the ability to make sure she did not obtain a formal education or contracts. Amended complaint paragraph 41. The amended complaint also alleges that Epstein's wealth and connections were similarly used by and both to induce the plaintiff to provide sex to Epstein and as a means of threatening punishment to the plaintiff if she refused to comply with their instructions. Amended complaint paragraph 50. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285682 53 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Accordingly, the defendants' motion to dismiss on the basis that the plaintiff does not state a plausible claim based on specific factual allegations is without merit. The defendants argue that the amended complaint fails to state a claim under Section 1591 because it fails to allege either fraud under Rule 9(b) or coercion as defined by Section 1591. Section 1591 defines coercion as: "(A) Threats of serious harm to or physical restraint against any person; "(B) Any scheme, plan, or pattern intended to cause a person to believe that failure to perform an act would result in serious harm to or physical restraint against any person; or "(C) The abuse or threatened abuse of law or the legal process." 18 U.S.C. Section 1591(e)(2). Section 1591 defines serious harm as: "any harm, whether physical or nonphysical, including psychological, financial, or reputational harm, that is sufficiently serious under all of the surrounding circumstances, to compel a reasonable person of the same background and in the same circumstances to perform or to continue to performing commercial sexual activity in order to avoid incurring that harm." 18 U.S.C. Section 1591(e)(5). Based on the definitions of coercion provided by Sections 1591(e)(2) and 1591(e)(5), the plaintiff has stated a claim for coercion,. As explained above, the plaintiff alleges SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285683 I877DOEC that the threats made to her by Epstein, Maxwell, , and coerced the plaintiff into performing and continuing to perform the sexual acts requested by Epstein. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Maxwell, allegedly made by reasonable person suffering serious and Epstein argue that the threats Maxwell and Epstein would not cause a to believe that they were in danger of harm, and therefore the plaintiff's allegations fail to state a claim for coercion. But whether a reasonable person would perceive the alleged statements as a threat of serious harm is necessarily a factual inquiry which cannot be decided on a motion to dismiss. Moreover, it is certainly not implausible that a young person could believe that a person of apparent enormous wealth would have the power to open educational and career doors for her, or to slam those doors if she did not acquiesce in requests for sexual activity. argues that nowhere in the amended complaint is alleged to have participated in or to have been aware of Maxwell's and Epstein's threats, but the amended complaint alleges that played a role in inducing the plaintiff into performing commercial sex acts for Epstein and that used Epstein's wealth, influence, power and connections as a means of threatening punishment in the event that the plaintiff refused to comply with the instructions to provide sex to Epstein. That conduct meets the definition of coercion and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285684 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 under Section 1591(e)(2). The defendants also argue that the plaintiff has failed to satisfy the heightened pleading standards provided by Rule 9(b) for fraud claims because the amended complaint fails to specify when and where any fraudulent statements were made or explain why these statements were made with scienter. Rule 9(b) provides that "in alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions ever a person's mind may be alleged generally." Federal Rules of Civil Procedure 9(b). To satisfy Rule 9(b), a complaint must "(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993). Although Rule 9(b) allows a plaintiff to allege fraudulent intent generally, a plaintiff must allege facts that give rise to a strong inference of fraudulent intent. Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994). This strong inference can be established either "(a) by alleging facts to show that defendants had both motive and opportunity to commit fraud, or (b) by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness." Id. See also U.S. Bank National Association v. BFPRU 1, LLC, 230 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285685 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 F.Supp. 3rd 253, 262 (S.D.N.Y. 2017). The amended complaint satisfies Rule 9(b). The plaintiff alleges that told the plaintiff in October of 2006 that Epstein would use his wealth and influence to have the plaintiff admitted into . and that when introduced the plaintiff to Epstein, Epstein reiterated this promise to her. Amended complaint paragraphs 34 to 36. The plaintiff also alleges that between October 2006 and May 2007, Maxwell, , and each confirmed and reiterated to the plaintiff many times that Epstein would use his wealth and connections to advance the plaintiff's career. Amended complaint paragraph 38. These allegations sufficiently specify the statements that the plaintiff contends are fraudulent, as well as the identity of the speakers. See Lehman Brothers Commercial Corp. v. Minmetals International Non-Ferrous Metals Trading Co., No. 94 Civ. 8301 (JFK), 1995 WL 608323A2, at *2 (S.D.N.Y. Oct. 16, 1995) (noting that where allegedly fraudulent statements occurred over a period of time, a plaintiff is not required to provide the date and time of every statement). While the plaintiff does not describe the specific locations where each of the alleged misstatements took place, the plaintiff does allege that a substantial portion of her interaction with Epstein occurred at his townhouse in New York and on his private island in the U.S. Virgin Islands and that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285686 57 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 each defendant participated in arranging the plaintiff's transportation to these locations. Amended complaint paragraph 45. Moreover, the plaintiff provides the exact address where the plaintiff was provided living quarters and that she was provided a cell phone so that the defendant could communicate with and maintain control over the plaintiff. Amended complaint paragraph 52. These allegations satisfy the requirement under Rule 9(b) that the plaintiff provide the location at which the fraudulent statements were made. As to scienter, the defendants argue that the fact that they did not ultimately act upon the alleged promises to have the plaintiff admitted into . fails to show that they made the alleged misrepresentations with the intent to defraud. But while "the failure to fulfill a promise to perform future acts is not ground for a fraud action," it can provide a basis for fraud if "there existed an intent not to perform at the time the promise was made." Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir. 1994). Here, the plaintiff alleges that the defendants reiterated and confirmed Epstein's promise solely for the purpose of maintaining the plaintiff's relationship with Epstein. Amended complaint paragraph 53. The plaintiff also alleges that these statements were reiterated by the defendants with the intention of convincing her to rely on the defendants' representations in furtherance of a sex trafficking enterprise. Amended complaint paragraph 53. That is SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285687 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sufficient to allege that when the defendants made the statements at issue, the defendants did not intend to perform their promises to further the plaintiff's education and career. Indeed, the allegations that the defendants seek to strike may provide further evidence of the defendants' knowledge and intent. Accordingly, the defendants' argument that the plaintiff has failed to plead fraud is without merit. and also argue that the plaintiff's allegations against them do not establish that either had knowledge that force, fraud, or coercion would be used to cause the plaintiff to engage in a commercial sex act with Epstein. This argument is without merit. As explained above, the amended complaint provides several specific allegations that, if accepted as true, would establish that both and knew that Epstein's wealth, influence, power and connections were being used fraudulently to induce the plaintiff into complying with Epstein's demands and as a means of coercing the plaintiff. Accordingly, the defendants' argument that the amended complaint fails to state a claim because it does not allege coercion or fraud fails. The defendants argue that the amended complaint fails to plead a causal link under Section 1591 because the amended complaint should be read as describing a consensual sexual relationship between the plaintiff and Epstein. See 18 U.S.C. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285688 I877DOEC Section 1591(a) (requiring that "force, threats of force, 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 fraud, coercion ... or any combination of such means ... be used to cause the person to engage in a commercial sex act")• This argument is without merit. Again, this argument asks the Court to accept the defendants' version of the facts rather than accept the well pleaded allegations in the plaintiff's amended complaint as true, which is impermissible on a motion to dismiss. Accordingly, the defendants' argument that the amended complaint fails to plead a causal link is without merit. Epstein, Maxwell, and move to dismiss the plaintiff's claim that they violated Section 1592. Epstein Maxwell, and argue that plaintiff's Section 1592 claim lacks factual support and argue that there is no factual allegation that the plaintiff's passport was confiscated and held in order to force the plaintiff into commercial sex. Section 1592 imposes liability on "whoever knowingly ... confiscates, or possesses any ... passport of another person in the course of a violation of section 1591." 18 U.S.C. Section 1592(a). As an initial matter, the plaintiff's allegation of a violation of Section 1591 alones provides a sufficient basis to proceed on a claim under Section 1595. See 18 U.S.C. Section 1595(a) (providing a civil remedy to anyone "who is a victim of a violation of" Chapter 77 of Title 18 of the United States Code). Moreover, the plaintiff has pleaded SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285689 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sufficiently a violation of Section 1592. The amended complaint alleges that the plaintiff's passport was confiscated and controlled by Maxwell, and while the plaintiff was on Epstein's private island in order to coerce the plaintiff into providing sex to Epstein. Of course, the defendants tell a completely different story by relying on upon statements in the plaintiff's deposition, but the Court cannot rely upon those statements for purposes of this motion to dismiss. Accordingly, the amended complaint states a cause of action under Section 1592. The defendants also argue that the plaintiff fails to state violations of Sections 1593A and 1594. As noted above, the plaintiff's allegations of violations of Sections 1591 and 1592 are each sufficient on their own to sustain a Section 1595 claim. It is therefore unnecessary to reach the defendants' arguments with respect to Sections 1593A and 1594. The defendants argue that the plaintiff's claim is barred by the statute of limitations in Section 1595(c)(1). At the time when the plaintiff alleges the violation in this case occurred -- in 2006 and 2007 -- Section 1595 contained a four-year statute of limitations. See Trafficking Victims Protection Reauthorization Act of 2003, Public Law No. 108-193, Section 4(a)(4), 117 Statutes 2875, 2878; 28 U.S.C. Section 1658(a); see also Cruz v. Maypa, 773 F.3d 138, 143-44 (4th Cir. 2014). In December 2008, Section 1595 was amended to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285690 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 provide a ten year statute of limitations. See William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008, Public Law No. 110-457, Section 221, 122 Statutes 5044, 5067. The defendants argue that the ten year statute of limitations should not be read to apply to this case under the anti-retroactivity doctrine and that the four-year statute of limitations applies to the plaintiff's claims in this case. See Weingarten v. United States, 865 F.3d 48, 54-55 (2d Cir. 2017) (citing Landgraf v. USI Film Products, 511 U.S. 244, (1994)). Therefore, the defendants conclude that the plaintiff's claims are plainly time-barred. The defendants rely on Abarca v. Little, 54 F. Supp. 3d 1064 (District of Minnesota 2014), in which the district court held that the four-year statute of limitations applied to Section 1595 claims, where the conduct was alleged to have occurred prior to the 2008 amendment. Id. at 1068-69. However, courts within this Circuit have held consistently that the ten-year statute of limitations applies to TVPRA claims that were not time-barred under the four-year statute of limitations when Congress extended the Section 1595 statute of limitations in December 2008, even if those claims accrued before 2008. See Lama v. Malik, 192 F. Supp. 3d 313, 321-323 (E.D.N.Y. 2016); Oluoch, v. Orina, 101 F. Supp. 3d 325, 329-31 (S.D.N.Y. 2015); accord Cruz, 773 F.3d at 143-44. In that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285691 62 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 situation, applying this ten year statute to claims that were alive in December of 2008 has no retroactive effect because it does not impair any rights or revive any stale or expired claims. The defendants have not explained why this Court should reject the conclusions reached by all of the other courts of this Circuit that have addressed this question, which have held uniformly that the ten-year statute of limitations applies to claims that were viable when the ten-year statute of limitations period was enacted. See Lama, 192 F. Supp. 3d at 321-22 (collecting cases). Accordingly, the ten-year statute of limitations applies to the plaintiff's claims in this action. The defendants argue that even if the ten-year period applies, the plaintiff's claims would still be time barred because amended York in they accrued no later than complaint alleges that the February 2007, each of the January 2007. But the plaintiff returned to New defendants promised the plaintiff again that her sexual compliance would be rewarded with admission into . and that each defendant required the plaintiff to provide Epstein with sex acts thereafter. Amended complaint paragraphs 61-63. The defendants argue further that after January 2007 it was rely is a unreasonable for the plaintiff on any alleged promises made by the defendants, but factual question that cannot be decided on a motion to this to dismiss. A statute of limitations defense that involves a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285692 63 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 fact-specific analysis is inappropriate to resolve on a motion to dismiss unless it is clearly meritorious from the face of the complaint. See Bigsby v. Barclays Capital Real Estate, Inc., 298 F. Supp. 3d 708, 725-26 (S.D.N.Y. 2018). That is plainly not the case here. Accordingly the defendants' motions to dismiss based on the argument that the plaintiff's claim is time-barred are not yet ripe for litigation. Accordingly, the defendants' statute of limitations defense is not a basis to dismiss the plaintiff's claims. Finally, the defendants move to dismiss the amended complaint for lack of personal jurisdiction. and Maxwell argue that the amended complaint fails to allege any present connection between the defendants and New York. However, there is plainly specific personal jurisdiction over all of the defendants on the basis that the alleged violations of Section 1595 occurred in New York. See N.Y. C.P.L.R. Section 302(a)(2) (providing personal jurisdiction over any person who "commits a tortious act within the state"). The defendants contend that the alleged tortious conduct in this case ended prior to the period covered by the statute of limitations and that therefore the amended complaint fails to show that the suit-related conduct occurred in New York. This argument depends upon accepting the defendants' arguments on the statute of limitations that the Court has already rejected. In any event, to survive a motion to dismiss SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285693 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 where no evidentiary hearing is held, the plaintiff need only make a prima facie case that the defendants are subject to the Court's personal jurisdiction. See In re Magnetic Audiotape Antitrust Litigation, 334 F.3d 204, 206 (2d Cir. 2003) (per curium) ("Prior to discovery, a plaintiff may defeat a motion to dismiss based on legally sufficient allegations of jurisdiction;") PDX Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997); Rubinbaum LLP v. Related corporate Partners V, L.P., 154 F. Supp. 2d 481, 486 (S.D.N.Y. 2001). The Court must construe the pleadings and supporting affidavits in the light most favorable to the plaintiff. See PDK Labs, 103 F.3d at 1108. The plaintiff eventually will have to establish jurisdiction by a preponderance of the evidence, either at trial or at a pretrial evidentiary hearing. See CutCo Industries, Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986); Marine Midland Bank, N.A. v. Miller, 664 F.2d 889, 904 (2d Cir. 1981). But at this stage, prior to discovery, the Court must "credit a plaintiff's averments of jurisdictional facts as true." In re Magnetic Audiotape, 334 F.3d at 206; see also Landau v. New Horizon, No. 02 Civ. 6802, 2003 WL 22097989, at *3, (S.D.N.Y., Sept. 8, 2003). The plaintiff has done all she needs to do to plead personal jurisdiction at this stage of the litigation. See United States v. Machet, No. 08 Civ. 7936, 2009 WL 3029303, at *8 (S.D.N.Y. Sept. 21, 2009) ("Where, as here, the facts of the case itself are so intertwined with the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285694 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 jurisdictional issue, the Court is well within its discretion to deny the motion to dismiss for lack of personal jurisdiction."). Similarly, the defendants' assertion that venue is improper in this District is without merit. Again, the defendants argue that the alleged conduct occurred outside of the statute of limitations period and therefore cannot establish that a substantial part of the events giving rise to the claim occurred within this District. The defendants' argument is yet another variant of their statute of limitations argument, which has already been rejected as grounds to dismiss the amended complaint. The amended complaint alleges that a substantial amount of the actionable conduct occurred here in the Southern District of New York. Accordingly, the defendants' arguments to dismiss for lack of personal jurisdiction and improper are without merit. The Court has considered all of the arguments raised by the parties. To the extent not specifically addressed, the arguments are either moot or without merit. As explained above, the defendants' motions to dismiss are denied. The clerk is directed to close all pending motions. So ordered. All right. That brings us then to the scheduling order. How much time for discovery? It would seem to me that discovery in the case is fairly straightforward. There are about six potential SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285695 6 6 I877DOEC witnesses. The parties allege that each of the other parties 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 is not telling the truth. Whether those issues can be resolved on summary judgment, I don't know. I don't decide anything until it's briefed on the facts and the law; and there is no such motion before me, except the parties attempted to rely on lots of material outside the complaint. But there are about six witnesses, except perhaps some additional witnesses with respect to the allegations in the complaint that were the subject of the motion to strike. But I would think that you all ought to be able to complete discovery by the end of the year, end of December. OK? MR. MILLER: Your Honor, respectfully, could we request a close of discovery at the end of February of 2019? THE COURT: On what basis? MR. MILLER: Just as I'm starting to discuss the issue of timing with my colleagues here, there is some concern that between document production and scheduling depositions, the end of the year may not be realistic, and we're just trying to set a date that gives us some flexibility there. THE COURT: OK. Yes, plaintiff? MS. MCCAWLEY: On behalf of the plaintiff, we would like to proceed as swiftly as possible, so we would appreciate the December date. THE COURT: I think February is a little long. On the other hand, I think asking the parties to complete discovery at SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285696 67 I877DOEC the end of the holiday season, December the 28th, may not be quite fair to both sides, so I think the end of January is not 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 unreasonable -- that's six months -- but that should be a firm deadline. There is no reason why you can't get the discovery done by then. So, the last Friday in January is actually January 25. So, complete discovery by January 25, 2019. There aren't going to be anymore parties, causes of action, amendments to the complaint; is that right? MS. MCCAWLEY: Not from the plaintiff, no. THE COURT: OK. MR. MILLER: Your Honor, obviously we have not filed an answer yet. THE COURT: Right. MR. MILLER: And we haven't fully evaluated whether there are any counterclaims or the like, so I just want to note that for the record. THE COURT: OK. I think the rules say, what, how much time after a decision on the motion to dismiss to file an answer? 14 days? MR. MILLER: The wiser heads at this table are telling me 20 days. MS. MENNINGER: I think it's 21 just off the top of my head, but I apologize, your Honor, I may be confusing another rule. THE COURT: It doesn't really make a difference, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285697 CH I877DOEC because I can set it. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 For what it's worth, my recollection was correct, '5 i4 days. "Unless the court sets a different time, serving a motion under this rule alters these periods as follows: If the court denies the motion or postpones its disposition until trial, the responsive pleading must be served within 14 days after notice of the court's action." MR. MILLER: Your Honor, can we request -- THE COURT: You can have some more time. So end of August, August 31. So, time for defendants to answer is August 31, 2018. No additional parties or causes of action after September 14, 2018. No additional defenses after September 28, 2018. Except for good cause shown, all discovery is to be completed by January 25, 2019. Dispositive motions, if any, February 15, 2019. Joint pretrial order, March 1, 2019. And the date for the pretrial order gets put over automatically for three weeks if there is a dispositive motion, and the ready trial date gets put over also for four weeks. So, if there is a dispositive motion, the parties should be ready for trial 48 hours notice on and after March 15. This is a jury trial, yes? Jury trial. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285698 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Estimated trial time? Eight days? MS. MCCAWLEY: That would be fine, your Honor. THE COURT: Do the parties want to talk to the magistrate judge about the possibility of settlement? MS. MCCAWLEY: We have no objection to that, your Honor. MR. MILLER: We haven't discussed that with the clients yet. As a general proposition, we are always open to that, but I would like to discuss it with the clients if I could. THE COURT: Well, it seems to me if there is willingness on one side to talk, I should at least send it to the magistrate judge, even if one side says that there will never be a settlement in this case. So long as there is some flexibility on one side, that at least is a step forward. Which leads then to the next question: Would the parties agree to try this case before the magistrate judge? I don't know if another magistrate judge has been appointed. It was originally Magistrate Judge Francis, who has now left the bench, but the docket sheet will reflect a new magistrate judge when I assign it to the magistrate judge for purposes of settlement, so you can follow that. I imagine that without even knowing who the magistrate judge is, you're not going to tell me that you're prepared to agree to try the case before the magistrate judge, but maybe SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285699 I877DOEC 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I'm wrong. MS. MCCAWLEY: I would appreciate knowing the magistrate before we make that decision and talk to our client. THE COURT: OK. So, I'm going to refer it to the magistrate judge for purposes of settlement. Follow the docket sheet, and you will see who the magistrate judge is. And you can let me know by September 14 -- just write me a letter -- whether the parties consent to trial before the magistrate judge. And you can just write me a joint letter. You don't have to tell me who wants to go to the magistrate judge and who doesn't; all I need to know is whether all agree to go to the magistrate judge. Which leads me then to one other request. I really urge all of you to be cooperative and civil with each other. Whatever the relations are between your clients should not infect the way you deal with each other, or the papers that you file before me, because that's really not helpful. So, OK, I'll enter the civil scheduling order. I will do an order disposing of the motions, and the full rationale for the motions is in the transcript. All right. Anything further? MS. MCCAWLEY: Thank you, your Honor. MR. MILLER: No. Thank you, your Honor. THE COURT: Good afternoon, all. (Adjourned) SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 EFTA00285700