SANTA MONICA, CALIFORNIA; WEDNESDAY, FEBRUARY 5, 1997
THE COURT: This is defendant's motion in limine to preclude any evidence of allegations of future earning capacity and purported value of name and likeness.
MR. BAKER: Your Honor, before we start that, I want to move to dismiss the punitive damages claims on violation of the gag order by Mr. Petrocelli, Mr. Kelly and Lou Brown on all television --is on national television. Mr. Petrocelli said as follows: "We want to make clear to everyone that we're grateful for this jury's verdict and we feel there is a vindication for Ron's death and Nicole's death." And Mr. Kelly was asked a question: "Do you wish there had been an African-American juror on the panel?" And Kelly answered "You know what, we weren't looking at the jury as any sort of color or tinted glasses whatsoever. We were looking at a jury of men and women that reflect all stratas (sic) of society and we're glad they looked at it closely and came up with a verdict. Color played no part in this verdict." Both of these are, in our view, violative of the gag order and they're now, after being solicitous of the jury, want to go back before those people, the same people that they congratulated and ask them now to order punitive damage claim. And on that basis, I -- we move to dismiss the punitive damages claim.
THE COURT: Okay. Do you want to respond?
MR. PETROCELLI: Yeah, Your Honor. I'll respond first. Mr. Baker's right that I made that comment. I made it quite clear that we were not going to be giving any interviews and talking to the media at all until this case is over. And we made a very brief statement because there was just an extraordinary amount of demands and pressures. We couldn't even get into our hotel room from the Court house. And those are the extent of the comments we made. And that was it. And there won't be any further discussion until the gag order is lifted. And we were very careful not to say anything at all about the case or the merits of the case or anything.
MR. KELLY: Likewise, Your Honor.
MR. BAKER: I have the transcript if the Court's interested in it.
THE COURT: Okay. Court admonished the jury, I presume the jury is carrying out the Court's admonition. Denied. Okay. I'll hear the motion with regards to future earning. I read the moving papers. And the transcript of Rosler.
MR. BAKER: Then, Your Honor, you're well aware that he indicated that he believes that this is speculation. And it is clear speculation on what Mr. Simpson will earn in the future; and his earnings in the future, I would respectfully submit, are not part of his present net worth. In other words, his image and likeness is not part of his present net worth. What the plaintiffs have attempted to do is to create an asset by attempting to turn speculated income stream into a balance sheet item. And I don't -- there's no precedent for that. That isn't his net worth. That's nothing that he can pay and punitive damage award now after one is rendered. As the Court or Supreme Court said in Neal versus Farmers, the purpose of punitive damages is not served by financially destroying the defendant and an award is excessive if it is disproportionate to defendant's ability to pay. Defendant doesn't have any ability to pay based upon a future earning award. He has to have the ability to pay now on Egan versus Mutual of Omaha Cal.Ap. 3d at 804, 824. You've got to have the ability to pay and any award that is rendered that he doesn't have the ability to pay is, by definition excessive, as we put forth in our papers. You can't get a loan on what they're talking about. If you listed that as an asset on your balance sheet and took it to the bank to -- To try to get a loan, they'd laugh at you. This is creative accounting at its best or worse, depending on your point of view. But it is attempting to say that Mr. Simpson has good will when all I read in the L.A. Times today is there is a lot of ill will and they're trying to say this good will will create 2 to 3 million dollars of income a year over 25 years and that that then reduced to -- with their accounting hocus pocus to some sort of present cash value is 24 and a half million dollars. It should be included on his balance sheet and his net worth and that would be, I would suggest, attempting to destroy the defendant, which is not the issue of punitive damages. And in Adams versus Maricoma, suggests -- which is our Supreme Court, talking about punitive damages, suggests that public policy precludes awards based on mere speculation. And we don't know if Mr. Simpson will ever have a personal appearance contract again. We don't know if he'll ever have an endorsement contract again. And all of that is what they're trying to base this line item in a balance sheet upon. And we believe it is fallacious and it's not in accordance with any generally accepted accounting principles for net worth statement.
MR. GELBLUM: Your Honor, the defense really shouldn't be speaking about creative accounting when the net worth statements that we received from them plummeted from their internally prepared documents of $8 million, when they were first prepared -- first ordered to produce one to us; 45 days later it was $7500 net worth. They're the ones getting creative in accounting. In terms of the value of name and likeness, it's exactly the same as the good will of a company. That's absolutely standard and included on virtually every balance sheet of every country in the world. It is something that you can take to the bank. It is something, the risks of the future earnings, the discount rates are applied to them. All that is figured in. All this goes to the weight of the evidence. It's a standard component of net worth. In marriage dissolution cases celebrity good will is generally accepted as an element that gets divided up between the parties. We have cases for you. There are none in California that I could find but in New Jersey and New York there's two: Piscopo versus Piscopo at 231 New Jersey Superior Court 576 affirmed at 557A 21030, Gulb G-U-L-B versus Gulb 139 Misc.2d 440, and other cases cited there. The Elkis (phonetic) case, very standard, divide up celebrity good will in divorces. It's no different than putting a component of good will in a company balance sheet, reduced to present value and taking into account all the risks, all the things Mr. Baker is talking about. He doesn't like the number. That all goes to weight. It's not speculation. Mr. Rosler, that is what he does for a living, not testify as an expert but markets celebrities' name and likeness. That's what he does. He markets them. He protects them. They have all the opportunities they want to cross-examine them, challenge the weight of his testimony. He bases it not on speculation but on his 15 years of experience in the field, on his being head of the company, the largest company in the country that does this kind of work on published prices of Mr. Simpson's autograph, the value of Mr. Simpson's autograph, which by the way, is higher than about three living athletes in the world, even today. He has a great deal of value. It's something that the jury can consider and take into account whether they like Mr. Rosler's testimony or not. But certainly admissible testimony.
MR. BAKER: Well, I respectfully disagree. To assert that Mr. Simpson is ever going to have another contract is highly speculative at this point in time. And to assert that he's going to have it for 25 years and then say it goes to the weight of the risk when --what their purported expert wouldn't even take Mr. Simpson on as a client. It's sophistry and it is pure speculation that he's ever going to have any -- any endorsement contract or any movie roles or any book deals or anything. That is total speculation. In the past six months he has earned less than $100,000. Considerably less. And to say that he earned 2 to 3 million a year after this verdict is -- Is purely speculation.
THE COURT: Well, the case you cite, Adams versus Murakami of course, is a case in which the plaintiff offered nothing by way of indicating the financial worth of the defendant. And the discussion in that case does discuss the various factors that a jury may consider in ascertaining whether or not punitive damages ought to be imposed. But the Court in the Adams case said that the major defect in that case, there is no evidence whatsoever on which the appellate court can base a -- an evaluation of a jury's verdict with regards to that amount. Now, in this case, there seems to be evidence that is proposed by the plaintiffs to establish the value of the worth of the defendant and in that regard seeks to characterize the earning capacity of the defendant's personality, which I believe the witness referred to himself as. And in terms of good will or blue sky. And that is an economic concept that is an accepted concept in the law. The weight may or may not be sufficient to establish any particular level of worth. That depends on what the jury believes to be credible with regards to Mr. Rosler's testimony. The Court makes no decision as to the relative worth of the personality of Mr. Simpson. And that will be for the jury to decide. Court feels that it is an aspect that the appellate court certainly will have the opportunity to determine whether or not blue sky or good will or salability of a personality is credible and net worth and this will be one opportunity for the appellate courts to make a ruling on -- in that regard. I will deny the motion. With regards to defendant's motion to quash production of documents served on Taft -- looking at the subpoena that is attached thereto, which is supported by a declaration of Mr. Gelblum, the defendant moves to quash on the basis of a stipulation and an order of Judge Haber in connection with the stipulation. What has been produced to plaintiffs so far in regards to --
MR. GELBLUM: Attorney fees.
THE COURT: That --
MR. GELBLUM: It's -- I don't think I have it with me -- I do. It's a one page summary that lists items, it has criminal defense attorney fees, criminal defense investigator, criminal defense experts, civil attorneys' fees. Maybe one or two other items. That's all there is and all we're asking for is support for that. I've told the defense that.
THE COURT: What do you mean support?
MR. GELBLUM: Bills. The bills that show -- with all descriptions of services redacted. I just want confirmation as we do with every other category, we had some back up support if there was a line item on the balance sheet that said deed of trust, we got the deed of trust and the promissory note. We want the bills of the law firms and the experts, whoever they may be, that reflect these numbers. That's all I'm asking for on the attorney fees, and there's an additional item which I believe there's another attorney here to talk about, which is the amount of insurance payment if any --
THE COURT: Well, let's do the attorney fees at this time.
MR. GELBLUM: This relates --
THE COURT: Okay. What is the defendant's specific documentation that you are objecting to.
MR. P. BAKER: Well, Your Honor, we are objecting to bills that were sent from various attorneys including the criminal defense attorneys, including the civil defense attorneys, on the grounds that the attorney client and work product and an issue was raised in front of Haber in February of --
THE COURT: No, it's Judge Haber.
MR. P. BAKER: Judge Haber. I apologize. February of 1996 stipulation was entered as a result. That's what they asked for, a summary of attorney fees. That was turned over in February of 1996. It was held to be sufficient by them. We were in your chambers on January 29 and I quoted Mr. Gelblum's response saying all they want is a summary. That's what we provided to them and now they served a subpoena on February 4 with only two days.
THE COURT: Excuse me. This is like deja vu. What is it you are attempting to establish? That they are fake amounts?
MR. GELBLUM: I want to verify, like we did with every other line item, that's all. It's nothing unusual. They have a very, very large number.
THE COURT: What if it's redacted, what is the --
MR. GELBLUM: Just the dollar amount. I don't need the description of services. I don't care about that. I want to verify that these amounts were in fact billed, that he incurred these fees. That's all I'm asking.
MR. BAKER: They're essentially calling us liars. That's what they're doing by not accepting a summary.
THE COURT: Well, you want the attorneys' names too?
MR. GELBLUM: Don't need that. Don't need to know who entered it, just the name of the firm.
THE COURT: Just show them the bill with the date and the amount.
MR. P. BAKER: The most recent bill?
THE COURT: Excuse me?
MR. P. BAKER: The most recent bill?
MR. GELBLUM: Whatever adds up to the number. If it's accumulative that shows this amount.
THE COURT: I think they want a piece of paper that shows a date and a bill.
MR. P. BAKER: Okay. The only problem is, Judge, is that I certainly will try to comply with the court order. I got this yesterday afternoon it's going to --
THE COURT: The only other way I could see of handling this, if it's so objectionable that you don't want to show them a bill and the amount, I guess I can refer to a referee to view it in camera to verify that they verified. Why should we go to that expense? That's so dumb.
MR. BAKER: It's so dumb to challenge that we would misrepresent what our attorney fees are. That's so dumb. So let's have a referee.
MR. P. BAKER: Everything gets leaked in this case.
THE COURT: It certainly does.
MR. P. BAKER: Time Magazine telling us about our finances.
MR. PETROCELLI: Like juror number 6.
MR. P. BAKER: Like your statement yesterday.
THE COURT: Just a minute, please.
MR. P. BAKER: Time Magazine has everything that was turned over to them. Who leaked it?
THE COURT: All right. Here's what I'm going to order you to do. You can take it or leave it. You make a copy of the bill, you can blank out the name, blank out everything but the date and the amount and give it to them.
MR. BAKER: We'll leave it.
THE COURT: Excuse me?
MR. BAKER: You said we can take it or leave it, we will leave it.
THE COURT: All right. Then turn it over to me.
MR. P. BAKER: Okay.
THE COURT: Okay.
MR. P. BAKER: Next is a document that was a subject to a confidentiality agreement. And the way we tried to -- there were a number of parties involved and subject to a confidentiality agreement, what I did was prepare -- had a synopsis prepared with an attorney name and made the document available to Mr. Gelblum so he can review it, just to verify whether or not his summary was accurate or not. He has seen that. I don't know why we should turn over the document again because he's seen it and there's other parties involved and there was confidentiality arrangement involved and we were trying to protect not our client's interests of --
THE COURT: Which document was that?
MR. P. BAKER: That's --
MR. GELBLUM: That's the cornerstone --
THE COURT: What do you need from that?
MR. GELBLUM: I already told the other parties involved, including somebody from Mr. Baker's office, I just want to have the document in case there's some challenge to it, in case there's some argument raised that I don't anticipate raised in court when we talk about the numbers involved in the dollar amounts and the summary.
MR. P. BAKER: We will stipulate to the summary that Skip Taft provided you.
MR. GELBLUM: Would -- this would be sent to -- can you have the document in court?
MR. P. BAKER: Yes.
MR. GELBLUM: In case we need to look at it?
MR. P. BAKER: Yes.
MR. GELBLUM: That's fine.
THE COURT: Okay. What other documents?
MR. P. BAKER: Next document is a policy that was --
MR. BAKER: What?
MR. P. BAKER: This is the -- we'd actually prefer to discuss this in --
MR. BAKER: No, that's all right. Laurie, you can talk about it.
MS. ZELON: My name is Laurie Zelon from Morrison & Foerster. I'm proceeding on insurance. CNA has been subpoenaed to serve the person most knowledgeable to testify concerning claims on the policies. We are prepared, of course, to have someone here, although none of our California employees are knowledgeable beyond the fact that a claim was made and denied. It's my understanding from Mr. Gelblum that the subject of the testimony that is actually being requested would involve a matter as to which my client is under an obligation of confidentiality.
MR. GELBLUM: All we need is -- Is the number and we can -- there are different ways we can reflect it on the sheets that would be put in evidence. And I'm willing to do it in a way that won't violate any kind of confidentiality. We just need to know the number. We need to know what the number is.
THE COURT: What's the relevance about the number?
MR. GELBLUM: The number is a number that was applied to the attorney fees in the case. We think that goes to reduce the number that has been put on the balance sheet as a liability for attorney fees. And at deposition Mr. Baker refused to give us the information about the payment by the insurance companies. So we've subpoenaed CNA for the information. And that's it. And we can reflect it either just as to decrease the liability that they've listed or --
THE COURT: Okay. What's another basis for overcoming the confidentiality?
MR. GELBLUM: The subpoena, I mean I assume --
THE COURT: What's another basis for overcoming the confidentiality?
MR. GELBLUM: It's a confidentiality agreement among the parties, I think.
THE COURT: Is that what it is?
MS. ZELON: Yes, Your Honor.
THE COURT: The defendant's financial status being an issue, that's not an attorney client confidentiality, is it?
MR. BAKER: No, it's not.
THE COURT: It's not a legal privilege confidentiality, is it? If it is, tell me which privilege it is.
MR. BAKER: No, it's not. It's not. It's a confidentiality.
THE COURT: You're ordered to disclose the amount only to --
MR. BAKER: And again what is the possible relevance of that?
THE COURT: He just said it.
MR. BAKER: He -- So the assertion is --
THE COURT: The assertion, apparently, is that the defendant is claiming expenditures for legal fees and that plaintiff's contending that he didn't pay all of those legal fees, somebody else did. Is that the contention?
MR. GELBLUM: Yes.
THE COURT: All right.
MR. BAKER: The contention, the amount of legal fees on the balance sheet is again a lie.
THE COURT: If you want to characterize it as that, I suppose that's the way they want to characterize it. I don't know whether it is or not. They are disputing it. It's a dispute. It's a dispute. However you want to characterize it, that's your privilege.
MS. ZELON: Your Honor, there is no one more knowledgeable that my client's company as to the use the funds were put.
THE COURT: We want to know the amount that went out or they do, on behalf of the client, that's all.
MS. ZELON: So am I to understand that my client is being ordered to appear and testify concerning this matter?
MR. P. BAKER: I can provide them an amount, they don't need a representative.
THE COURT: Okay, thank you.
MR. GELBLUM: Can we get it by 3:30 this afternoon so we can work it into our papers?
THE COURT: Yes.
MR. GELBLUM: So the subpoena is released?
THE COURT: You're excused.
MS. ZELON: Thank you, Your Honor.
THE COURT: Excuse me?
MR. P. BAKER: C is -- I've just told Mr. --
THE COURT: Is it 3C?
MR. P. BAKER: On page 2, yes.
THE COURT: Page 2. There are none.
MR. GELBLUM: Just said there are none.
MR. P. BAKER: There are none.
THE COURT: D.
MR. P. BAKER: D through H deals with the issue we just discussed.
THE COURT: Okay.
MR. GELBLUM: There's no sources other than CNA?
MR. P. BAKER: No. I believe we complied with -- it's over broad and we believe, in light of the most recent rulings, this is everything.
MR. GELBLUM: I just didn't know. There seemed to be some of the forms, some redactions that I didn't know if they were -- I just couldn't tell. If you've given me everything, the income from June 12.
MR. P. BAKER: They have everything J through 11. I have no idea, that's Mr. Kelly's client. We have no information regarding that.
MR. KELLY: Judge, if I may?
MR. GELBLUM: Yeah.
MR. KELLY: Judge, I think there's reference made here to a possible guardianship trust that could have been set up for the children, which would be controlled in addition to the person, the children or property of the children which would be separate and distinct from the estate of Nicole Brown Simpson. And if there has been some sort of separate guardian trust set up for the children, their assets may have been transferred into or something that would be relevant and I have no access to any of that. I do not represent the children's interest separate and distinct other than the beneficiaries as stated in this case, I have no access to that and no knowledge. I would think it would be a proper request.
MR. P. BAKER: I'm not aware of some trust. I'll confirm that and inform Mr. Gelblum.
THE COURT: Okay.
MR. GELBLUM: There's a couple items on the balance sheet showing liens from that society.
MR. P. BAKER: Okay. That's it.
THE COURT: With regard to the attorney bills you're ordered to give them to the clerk. Mr. Gelblum, you give your -- the redacted -- not redacted but the -- The --
MR. GELBLUM: The summary sheet.
THE COURT: The summary sheet -- and we'll see if I can find somebody to do this, the Court will make an effort to make a reference with regards to ascertaining whether or not there are any discrepancy.
MR. GELBLUM: Thank you Your Honor.
MR. KELLY: Thank you Your Honor.
(At 2:45 pm the following proceedings were held in open court outside the presence of the jury.)
THE COURT: I looked over the blue back and the exhibits a little more, Counsel, looked at some text material and I'm curious Mr. Gelblum, did you cite me cases to support the discovery of attorney bills?
MR. GELBLUM: We didn't file any papers, Your Honor, because we didn't --
THE COURT: At the outset, you had indicated that all you wanted was a summary.
MR. GELBLUM: I understand.
THE COURT: Now you're asking for more.
MR. GELBLUM: Yes, not bills. I can probably get you some authority within the hour if you need it 'cause I know there is authority. I've cited it in other cases.
THE COURT: Hum?
MR. GELBLUM: I know that the description of the bills -- without the descriptions, I've cited them in other cases. I can sure cite them within the hour.
THE COURT: Okay. Give me a case.
MR. GELBLUM: Will do. And I'll call defense too.
MR. P. BAKER: Should we wait?
THE COURT: Because if there is authority, if he's entitled to it, I'm going to order that you provide a copy of the bill with a date and the amount. You can redact everything else.
MR. P. BAKER: Okay.
THE COURT: That's all he seems to want of the cases. I read that. Says, even fee arrangements are not privileged according to Epstein's latest works.
MR. GELBLUM: Right.
THE COURT: I'm not so sure that they are privileged. He's willing to redact it. I don't see where the harm is.
MR. P. BAKER: Well --
THE COURT: Other than the fact that I can understand your feelings in that regard by the imputation of whatever it is he's trying to.
MR. P. BAKER: That's part of it, part of it is the issue is raised in front of Judge Haber and the synopsis --
THE COURT: I understand he got an inch, now he wants a foot.
MR. GELBLUM: We'll call you with a cite. Do we want to talk about a referee?
THE COURT: I'm not going to order a referee. If I'm my going to order a referee, if you're entitled to it, I will simply order a totally redacted --
MR. GELBLUM: Produced directly to us.
THE COURT: -- Bill, that's all. If you're not, then I won't order it.
THE BAILIFF: Audio feed off.
(At 2:49 P.M. an adjournment was taken until Thursday, February 6, 1997 at 8:30 A.M.)