Opinion ID: 786706
Heading Depth: 3
Heading Rank: 3

Heading: The Dismissal in this Case

Text: 62 The undisputed facts of this case preclude Rothstein from carrying his burden of proof that he obtained a favorable termination of his criminal case. As set forth below, Rothstein fought hard and successfully to suppress the testimony of Malpas (the prosecutor) and Pellegrino (the FBI Agent) about why the government moved to dismiss the charges against him. Notwithstanding those efforts, the record shows that Rothstein and Sarnblad compromised the criminal case in a way that precludes Rothstein's malicious prosecution claim against Carriere. 63 The individual defendants in Rothstein's indictment were Rothstein, Sarnblad and Gordon. The indictment charged, among other things, that Gordon shipped obscene videos from Bizarre's offices in New York to Multi-Media in Indiana, which then shipped the videos to the Northern District of Florida. In November 1996, Rothstein and Sarnblad reached an agreement with the government to dismiss the claims against them in exchange for an affidavit by Sarnblad that implicated Gordon in the charged crimes. In the affidavit, Sarnblad admitted his involvement in Multi-Media's purchases of videos from Bizarre, and further stated that he supplied cash to a Multi-Media employee for delivery to Gordon as partial payment for the videos. In exchange for what Rothstein concedes was a useful piece of evidence to the government (Appellee's Br. at 45), Malpas agreed to dismiss the charges against Rothstein and Sarnblad. Having bought his peace with the government, Rothstein may not assert that the criminal case terminated in his favor. 64 Rothstein's arguments on this issue are easily dismissed. First, he contends that only Sarnblad bargained with the government for a dismissal. This is false. Sarnblad's affidavit implicating himself and Gordon was sent to Malpas by Katzberg, Rothstein's attorney in this case, who was paid by Rothstein to represent Sarnblad in the criminal case. Katzberg's letter stated as follows: Enclosed, pursuant to our agreement to dismiss with prejudice the above-captioned indictment against defendants Sarnblad and Rothstein, is a photocopy ... of [Sarnblad's] affidavit.... As I understand it, the United States will now move to dismiss against Sarnblad and Rothstein ( with, of course, the consent of the defendants )..... (Emphasis added). Three days earlier, when forwarding the draft affidavit for Malpas's approval, Katzberg also referred to  our agreement that the government will dismiss the ... indictment against defendants Donald Sarnblad and Theodore Rothstein. ... . (Emphasis added). In light of those statements, the argument on this appeal that Rothstein did not bargain for the dismissal of the charges against him rings especially hollow. 5 65 Second, Rothstein claims that Sarnblad's affidavit exonerated Rothstein. That claim is also false. Sarnblad's one-paragraph affidavit makes no mention of Rothstein, and is entirely consistent with the government's theory that Rothstein had a hidden interest in Bizarre. In any event, the argument misses the point. The dismissal of Rothstein's case precludes his malicious prosecution claim not because it is inconsistent with his innocence, but because it was the result of a consensual agreement to end the case against him. 66 Third, Rothstein contends that he made no concession of guilt in return for the dismissal of the indictment. The district court erroneously concluded that such a concession was necessary before a compromise of a criminal case can extinguish a malicious prosecution claim. As discussed above, New York law provides otherwise. By agreeing to provide useful evidence against Gordon in exchange for the dismissal of the charges against themselves, Rothstein and Sarnblad consented to a termination of the case that left open the question of their own guilt or innocence. The fact that the evidence was provided in an affidavit signed by Sarnblad, rather than by Rothstein, is of no moment. The indisputable fact is that the prosecutor dismissed the cases against both Rothstein and Sarnblad pursuant to a compromise with both. As a matter of law, that is all that was needed to defeat Rothstein's malicious prosecution claim, as [a] termination is not favorable to the accused ... if the charge is withdrawn or the prosecution abandoned pursuant to a compromise with the accused. Smith-Hunter, 95 N.Y.2d at 196-97, 712 N.Y.S.2d 438, 734 N.E.2d 750. 67 Finally, ignoring the documentary evidence that the case was dismissed based on the agreement described above, Rothstein argues that the indictment was dismissed as against him because Malpas and Pellegrino learned that Carriere had lied to them. (Appellee's Br. at 12; see also id. at 13 (Malpas [o]bviously determin[ed] that Carriere's claims were bogus).) There is no support for that claim anywhere in the record. Indeed, the record reveals that Rothstein vigorously and successfully sought to suppress any testimony on the subject by Malpas, the prosecutor who dismissed the case. As for Pellegrino, he testified that he believed Carriere at all times, and never had reason to believe he had lied. The jury never heard that testimony, however, because Rothstein moved in limine to preclude it and the district court granted the motion. 68 Malpas testified at trial by deposition. The portions of his deposition that were not read to the jury demonstrate that Katzberg's strategy on Rothstein's behalf was to preclude any testimony by Malpas about whether Malpas believed Carriere and why the government dismissed the charges: 69 Q: Have you had anything come to your attention through Mr. Carriere or otherwise that indicated that Mr. Carriere was lying when he told you that [Rothstein had an interest in Bizarre]? 70 Katzberg: Objection.... 71 . . . 72 Q: Based upon your corroboration [of Carriere] did you find what he told you by and large was true? 73 Katzberg: Objection.... 74 . . . 75 Q: As a result of your looking into the matter, were the matters that Mr. Carriere described to you corroborated by your investigation? 76 Katzberg: Objection ... We don't know what matters we are talking about.... And we don't know what you mean by corroboration. Are you talking about documents or another witness? 6 77 . . . 78 Q: Insofar as your investigation, has there been [sic] anything come to your attention since that time that indicates or sets out that Mr. Carriere is not telling the truth? 79 Katzberg: Objection.... 80 Having steadfastly prevented any testimony by Malpas on the question whether he believed Carriere was telling the truth, Rothstein's claim on appeal that Malpas believed Carriere had lied is somewhat disingenuous. 7 81 The record does reveal that Pellegrino believed Carriere had been truthful. He so testified at his deposition. That testimony was not read to the jury at trial, however, because Katzberg successfully moved in limine to preclude it. In arguing that such testimony should be precluded, Katzberg complained that, interesting[ly] enough, Malpas declined to answer that question..... Katzberg did not disclose to the district court that he had successfully objected to the question when it was posed to Malpas. In any event, the district court granted the motion, precluding Pellegrino's testimony. Thus, the jury was not informed that Pellegrino believed Carriere had been truthful. Nor was it informed that Malpas had been prevented, by both Rothstein's counsel and the government, from testifying about whether he believed Carriere and why the indictment was dismissed. Nevertheless, in summation, Katzberg argued that the government dismissed its case against Rothstein when they realized that Carriere had lied, and that Pellegrino and Malpas both realized that they basically indicted two innocent men based upon the lies that Mr. Carriere told them..... That argument, which has been raised again on this appeal, is baseless. 82 In sum, Rothstein's agreement with the government that it would dismiss the criminal case against him in exchange for an affidavit from Sarnblad precludes Rothstein from establishing the favorable termination required by New York law.