Opinion ID: 786706
Heading Depth: 3
Heading Rank: 2

Heading: Probable Cause to Arrest Rothstein

Text: 89 The essence of malicious prosecution is the perversion of proper legal procedures. Broughton v. State, 37 N.Y.2d 451, 457, 373 N.Y.S.2d 87, 335 N.E.2d 310 (1975). The wrong does not occur unless, among other things, the defendant commences or continues a criminal proceeding against the plaintiff. Id. ([I]t has been held that some sort of prior judicial proceeding is the sine qua non of a cause of action in malicious prosecution.). Since the cause of action vindicates the right to freedom from unjustifiable litigation, the plaintiff must plead and prove that the prosecution was unjustified, that is, that it was commenced (or continued) in the absence of probable cause. Id. 90 In this case, the jury was not told that it should determine whether there was an absence of probable cause in February 1996, when the prosecution of Rothstein was commenced. Rather, it was instructed to focus on March 18, 1994, when Carriere was interviewed by the government. Specifically, the jury was told as follows: 91 The test of probable cause is to be applied as of the time when the action complained of was taken. Thus, whether Mr. Carriere had probable cause depends on the facts and circumstances known, or reasonably believed to be true, by Mr. Carriere at the time he provided the information to law enforcement agents. 92 The court further instructed the jury that if it found that Carriere falsely implicated Rothstein as a principal of Bizarre, then probable cause did not exist: 93 If Mr. Carriere knew the information he was providing to law enforcement about Mr. Rothstein was false, that is, that it was untrue, then he did not have probable cause to believe Mr. Rothstein was guilty of a crime. 94 Thus, the jury was told that if it found that Carriere gave false statements to the FBI, it should further find that there was no probable cause to arrest Rothstein. These instructions were erroneous. The existence or nonexistence of probable cause in a malicious prosecution suit is not determined as of the time the defendant gave information to the government. 8 Rather, it is determined, at the earliest, as of the time prosecution is commenced. See N.Y. Pattern Jury Instructions — Civil PJI 3:50 (Dec.2003) (In order to recover, the plaintiff must establish that, at the time the prosecution was initiated,  there was no probable cause) (emphasis supplied). 95 In this case, the existence of probable cause to believe Rothstein committed the obscenity charges in the indictment could not have been clearer. Probable cause to arrest exists where the facts and circumstances are sufficient to warrant a person of reasonable caution in the belief that (1) an offense has been or is being committed (2) by the person to be arrested. United States v. Fisher, 702 F.2d 372, 375 (2d Cir.1983). The offenses for which Rothstein was held suspect were obscenity charges arising out of Bizarre's distribution of videos. The central factual issue was whether Rothstein was an undisclosed principal of Bizarre, i.e., whether Gordon was his front. On that question, there was the following evidence. 96 In the late 1980s, Rothstein had started Gordon, a childhood friend, in the pornography business after Gordon left his unsuccessful career as a furniture salesman. Gordon knew nothing about the pornography business. Rothstein suggested that Gordon consider purchasing Bizarre, which was then a California company with which Rothstein did business. Rothstein introduced Gordon to Bizarre's previous owner and accompanied Gordon to California when Gordon bought the business. 97 After Bizarre was acquired, Rothstein moved all of his pornography businesses into a single 40,000 foot location at 20-40 Jay Street in Brooklyn, New York, and Bizarre joined them in that space. With the addition of Bizarre, there were four companies in the pornography distribution business on the same floor of that building. They were divided by medium: Star distributed magazines; Brett (d/b/a Media Distributors) distributed newspapers; Novelties by Nasswalk distributed novelties; and Bizarre distributed videos. Rothstein admittedly had an interest in all of the companies except Bizarre, which happened to be the subject of Malpas's investigation because its obscene videos had been shipped by Carriere to Florida. A fifth company on the premises, Pro-Vid, was also owned by Rothstein, and it performed consulting services in the pornography industry. 98 Rothstein admitted that he helped his inexperienced friend Gordon run Bizarre. Bizarre shared office space and warehouse space with Rothstein's other companies, and it shared shipping invoices with Star. Elisa Salvio, Bizarre's office manager, would simply cross off Star's name on the preprinted forms and write in Bizarre. Star paid the invoices, and Bizarre would reimburse Star. Salvio testified that this close relationship between Star and Bizarre caused people who dealt with them to confuse the two companies. As Salvio put it: We were separate businesses, but we were like all together. 99 Bizarre not only fit neatly into Rothstein's constellation of pornography businesses, and it not only shared space and invoices with Rothstein's companies, it shared employees as well. When Salvio left Bizarre, she became the office manager for Novelties by Nasswalk. Rothstein acknowledged at trial that, among the various other ways he assisted Gordon in running Bizarre, he helped him procure employees. 100 Michael Warner, a printer who did work for Rothstein and Carriere, testified that because of periodic raids, pornographers used other people as fronts for their businesses. Indeed, Warner testified that Rothstein was perceived as owning many pornography businesses in addition to the ones he owns on paper. Finally, Rothstein drew $3,000 per month out of Bizarre, purportedly as a consulting fee. He testified that he received this fee for about three years. The money was paid to Pro-Vid. 101 Based on the foregoing facts — none of which came from Carriere — the relationship between Rothstein and Bizarre would warrant a reasonable person in the belief that Rothstein was a hidden principal in Bizarre. Had these facts been presented to the grand jury, it would no doubt have reached that conclusion. At the trial below, no rational juror, properly instructed, could have concluded otherwise.