NXIVM Civil Lawsuit Begins but Only Bronfman Lawyers Show Up for Defendants

Maybe it is just and fitting. You only defend when you have something to lose.

A status conference was held for the civil lawsuit of Sarah Edmondson Et Al., v. Keith Raniere Et Alon October 15, in the United States District Court, Eastern District of New York.

Judge Eric R. Komitee presided.

Only Clare and Sara Bronfman’s lawyers showed up for the defense.

For the 83 plaintiffs, attorneys Neil Glazer, William Hoese, Zara Dean, and Elias Cohen of Kohn, Swift & Graf, P.C. of Philadelphia and Elisa Mueller of Zuckerman Spaeder of New York, NY, appeared and were ready to battle.

Their clients are Edmondson, Toni Natalie, Jessica Joan, India Oxenberg,  Bonnie Piesse, Tabitha Chapman, Ashley Mclean, Ana Ceclia, Mark Vicente, Anthony Ames, and the single-namers – Daniela, Camila, Souki, Nicole, and some 50 Jane Does and 15 John Does, more or less.

 

The Doe family [may their tribe decrease] are those who want to collect money but don’t want to be known publicly.

It makes sense that Clare and Sara Bronfman sent lawyers for their defense. They are the two birds whom this case is all about.

Getting Bronfmans to pay – it may be just and fitting  – for they funded the entire escapade known as NXIVM. They alone kept it alive for years to let a man named Keith Raniere run rampant over the lives of many.

They are the ones who count. Between them, they have at least $500 million.

There are other defendants, for instance, the above named Raniere. It is not known if he will ever get Pam Cafrtiz’s $8 million estate or not but if he does, it adds to the bucket that the plaintiffs can be paid from if they are successful in the lawsuit.

And this is about money.

There is also a collection of broke NXIVM defendants: They include criminal defendants, Nancy Salzman, Lauren Salzman, Allison Mack and Kathy Russell.

Though the civil suit was filed in 2019, it had to wait until the last defendant was sentenced, which occurred earlier this month with the sentencing of Kathy Russell.

In addition, there are defendants Karen Unterreiner, Dr. Brandon Porter, Dr. Danielle Roberts; and Nicki Clyne, none of whom are known to have any money.

Both doctors lost their medical licenses thanks to the wonder known as Executive Success.

Prior to a mutually agreed upon dismissal, there were four more defendants — four of five Mexican DOS masters: Loretta Garza, Monica Duran, Rosa Laura Junco, and Daniela Padilla.

The plaintiffs agreed to dismiss the case against the Mexicans, possibly because they are Mexicans and beyond the reach of the US government in civil matters.

The lawsuit is also against NXIVM Corp, Executive Success Programs, Inc. and First Principles. It is not known if any of these have assets or whether the US government, as part of its forfeiture action, owns these.

The lawsuit also names the Ethical Science Foundation, an entity formed by Clare and Sara Bronfman of indeterminate assets.

At the October 15th status conference, only Clare and Sara Bronfman had attorneys present:

Ronald Sullivan, Craig Martin, and Sara Tonnies Horton of Willkie Farr & Gallagher, LLP of Chicago appeared for Clare.

James Wareham and Israel David of Fried, Frank, Harris, Shriver & Jacobson, LLP of Washington, DC appeared for Sara.

 

The proceedings commenced at 9:41 a.m.

The case had been stayed for several years and this status conference was to determine whether the stay should be lifted and for the judge to hear a little from both sides about what the case is about.

The parties agreed the stay should be lifted. Let’s start making money.

The judge raised a question – whether the lawsuit is two lawsuits instead of one.

He said, “One [is] dealing with the very serious… allegations concerning sexual assault that were primarily the subject of the criminal case before Judge Garaufis. And then secondarily… allegations relating to multi-level marketing and questions of consumer fraud…”

The lead attorney for the plaintiffs, Glazer, stepped in to clarify:

Glazer said, “Your Honor’s general description of the case is correct, but there’s a middle part which overlaps, and that has to do with the way that the methods that the leadership of NXIVM used and applied on all the members of the community through the curriculum, which we allege was quite disruptive, and the EM [Exploration of Meaning therapy] method, which we allege in the complaint, constituted an unlawful form of mental health counseling or therapy. And everyone was subjected to that.

“And for that reason, we believe that it would be difficult and probably not efficient to break this into two separate cases because there are those overlapping issues that we believe would have to be tried in each one.  And if we did it separately there would be duplicative efforts, we think an unnecessary expenditure of resources, and potentially the risk of conflicting decisions on the law if these cases are before two different judges.”

The judge said, “I take it… that… your position [is] that it would not make sense to litigate issues of commonality before discovery has concluded, is that fair to say?

GLAZER: Yes, that’s correct.

COURT: Okay. Can I hear from the defendants?….

SULLIVAN: … I haven’t spoken to the client, Ms. [Clare] Bronfman, about the specific question, so we would definitely want to reserve making representations at this point…  I will say generally that separation seems to me to make sense…  with respect to my client…  Some significant percentage of the complaint has absolutely nothing to do with her, so I think it’s going to be logistically, extraordinarily difficult to carve out what applies to whom. That’s one. And two, we are still unclear about what the case is actually about given the way the complaint is written.

Another Clare Bronfman attorney, Martin spoke next;

MARTIN…  [W]ith respect to the complaint our intent was to move under Rule 8, Rule 9 and Rule 12…  and we don’t want to get into… the argument… now — but the complaint is very lengthy, is not a short and simple and plain statement that gives … either [of the two] Ms. Bronfmans notice of what the allegations are against them.

We also think that [the complaint is] going to fail under Rule 12 and Rule 9(b), so in terms of our intent was to move toward a motion to dismiss…..

Next up was Sara Bronfman’s attorney.

WAREHAM:…  this isn’t one or two cases or three cases, it’s 83 cases. This is not plead as a class action. These individual people, many of which are unidentified, have claims of kind of an unknown origin against my client….  I think this complaint is so infirm on its face that… we’d like to move to  dismiss….

***

MARTIN  [for Clare Bronfman]… Rule 8 provides essentially that we should have a plain and simple statement that puts us on notice of the claims against Ms. Bronfman in a clear and simple way. We will explain that this complaint does not do that. Rule 9(b) provides that fraud should be pleaded with particularity. Certain elements of the complaint need to be pled with particularity, who, what, why, et cetera, and how, and this complaint again does not do that.  And then finally with regard to Rule 12(b)(6) the allegations under the trafficking statute and also under RICO, which we do not think will… state a claim.  The fundamental issue with the complaint….  is [its] a very difficult document to read…  it doesn’t put us on notice with regard to Clare Bronfman and what it is specifically that she did that violates one of these statutes…

The judge asked the defendants to submit a letter to consolidate their arguments.

WAREHAM: …. I don’t think a joint letter is appropriate. For example, Sara Bronfman not only was not a target or a defendant in the criminal case, she had no role whatsoever in the criminal case.

COURT: Yeah.

WAREHAM… And, you know, she’s been accused of very salacious things by all plaintiffs. All 83 claim that she’s responsible for sex trafficking against all 83. And so we’re really not in a motional position to wait and dodge. We want to get it on here and get it over with because she’s got a reputation to preserve and she’s being dragged through the mud for no apparent reason….

COURT: Okay. Well —

WAREHAM: …  the normal defense posture of dodge and weave and bob, that’s not where we are, Your Honor.

COURT: Okay. But on the more discrete question of should the defendants submit one letter or multiple letters, I guess I leave that to you then to figure out, but try to avoid overlap such that to the extent there are issues that are common to you all, I’d like to read about them once instead of multiple times. And I’d like these letters to be short, as short as possible. I don’t know that it’s appropriate to set a page limit here, but I’m envisioning, you know, letters certainly less than ten pages and maybe substantially less than that.

***

The defendants’ letters are due October 29th. Plaintiffs’ response by November 12th.  A follow-up status conference is scheduled for November 30th at 2 p.m.

Before the proceedings ended, however, Glazer made some shocking statements to the court about Suneel Chakravorty.

Stay tuned for Part #2.