Ideal Shoe Co., 400 F. Supp. 141, 168 (E.D. Pa. 1975), aff'd, 568 F.2d 768 (3d Cir. 1978); Segar v. State, 111 Misc. 2d 1034, 445 N.Y.S.2d 894, 897 (1981). Because defendants have failed to proffer sufficient evidence on what portion of the increase in the value of the music assets was attributable to the efforts and expenditures of the defendants, we believe the jury was correctly instructed not to consider the increase in value of the diverted corporations.
4. Instruction Allowing Estate to Claim Royalties Owing to "Diverted Corporations" as Damages:
Defendants maintain that the Court erred in permitting the Estate to claim as damages royalties that were owed to the diverted corporations. We disagree. In this argument, defendants urge a formalistic distinction between the Estate, as the owner of the corporations, and the corporations themselves, arguing that only the latter may sue for the diversion of royalty income. In cases where an estate owns the corporation, however, courts, including the Second Circuit Court of Appeals, have disregarded the separate status of the corporation from its owner for the benefit of the estate. See Musico v. Champion Credit Corp., 764 F.2d 102, 108-110 (2d Cir. 1985). We believe that in this case disregarding the distinction between the corporations and their owner, the Estate, is necessary to prevent fraud and achieve equity. Id. at 108. Accordingly, we find that the Court did not err in permitting the Estate to claim as damages royalties that were owed to the diverted corporations.
G. No Evidence of Actual Loss
Defendants claim that they are entitled to judgment as a matter of law because damages are an essential aspect of all plaintiff's purported causes of action and because plaintiff failed to present any evidence that the Estate suffered an actual loss in the case. We disagree. The Court believes that the plaintiff presented substantial evidence of actual loss, in particular with respect to the assets that were diverted from the Estate by the defendants.
H. The Award of Punitive Damages to Plaintiff is Erroneous
Defendant Mr. Steinberg argues that the award of $ 1,000,000 in punitive damages is erroneous to the extent it is based on RICO claims since RICO's treble damages provision is itself punitive in nature. Although it appears to be an open question in the Second Circuit as to whether RICO's treble damages provision is in fact punitive in nature, this Court has held that RICO's treble damages provision precludes recovery of punitive damages. See Galerie Furstenberg v. Coffaro, 697 F. Supp. 1282 (S.D.N.Y. 1988) ("Since . . . [plaintiff] sues here under the federal RICO laws, whose plain language do not allow for punitive damages, and has not shown that Congress intended such damages to be available under RICO, [the claim for punitive damages is dismissed]" Id. at 1289).
In this case, plaintiff received $ 800,000 on its RICO claims, which was trebled by the Court to $ 2,400,000. Given this substantial increase, we do not believe that a punitive damage award would be appropriate if it is based on the RICO violations. It is generally sound practice not to ask a jury to consider awarding separate punitive damage awards in cases involving multiple claims, since such a practice can artificially inflate the aggregate amount awarded. See King v. Macri, 993 F.2d 294 (2d Cir. 1993). Accordingly, it is impossible to discern on which claims the jury based its award of punitive damages. See Special Verdict Sheet, questions 61-62. Under the circumstances, the Court believes that a reduction in the punitive damages award is in the interests of reasonableness and fairness to the litigants. Specifically, we find that an award of $ 250,000 is sufficient to deter similar conduct by the defendant in the future and to serve as a warning to others not to engage in such wrongful non-RICO acts. In addition, we find that such a figure bears a reasonable relationship to the harm done and the flagrancy of the conduct causing it. Accordingly, we order that the judgment be revised to reflect a punitive damage award of $ 250,000 against defendant Mr. Steinberg, as opposed to the previous figure of $ 1,000,000. See Aldrich v. Thomson McKinnon Securities, Inc., 756 F.2d 243 (2d Cir. 1985) ("It is the duty of a court . . . 'to keep a verdict for punitive damages within reasonable bounds'. . ." Id. at 248-49 (citations omitted)).
I. The Jury's Verdict Was Tainted by Unfair Prejudice
Defendant Mr. Steinberg maintains that he was unfairly prejudiced by the Court's requiring him to invoke the Fifth Amendment in the jury's presence. We disagree. The Supreme Court has stated that the Fifth Amendment does protect a witness against the "imposition of any sanction which makes assertion of the Fifth Amendment privilege 'costly.' Spevack v. Klein, 385 U.S. 511, 515, 17 L. Ed. 2d 574, 87 S. Ct. 625 (1967) (citations omitted). However, we do not believe that Mr. Steinberg's invocation of the Fifth Amendment was "costly" in a constitutional sense. We have reached this conclusion in light of the facts that the jury was properly instructed on the issue of Mr. Steinberg's invocation of the Fifth Amendment (See Jury Charge, Instruction No. 25, at 17), and that the plaintiff presented substantial evidence against Mr. Steinberg apart from any proper adverse inferences consequent to his invocation of the Fifth Amendment. See Baxter v. Palmigiano, 425 U.S. 308, 318, 47 L. Ed. 2d 810, 96 S. Ct. 1551 (1976).
In addition, the Court finds that Mr. Steinberg's testimony was admissible under Rule 403 of the Federal Rules of Evidence in that its probative value substantially outweighed the risk of unfair prejudice. The Court believes that Mr. Steinberg's invocation of the Fifth Amendment was highly probative on the issue of liability (See Brink's, Inc. v. City of New York, 539 F. Supp. 1139 (S.D.N.Y. 1982) (invocation of Fifth Amendment has "significant probative value" on issue of liability), aff'd, 717 F.2d 700 (2d Cir. 1983)), and that any prejudice Mr. Steinberg suffered as a result of the invocation was not "unfair" (See Id. at 710).
J. Motion for an Order Staying the Proceedings
As the Court has hereby disposed of all the issues raised in the defendants' motions, Defendants' motion to stay proceedings pending the disposition of the motion for judgment as a matter of law is moot.
K. Plaintiff's Motion to Register Judgment Outside of New York
Plaintiff has requested that this Court order that the Judgment in this case be registered in the district of Pennsylvania, on the ground that "[since] Steinberg is a Pennsylvania resident, presumably most if not all of his assets lie outside of this district." Plaintiff's Memorandum, at 54. Plaintiff correctly observes that registration of a judgment in another district may be allowed for "good cause" (28 U.S.C. § 1963 (West Supp. 1992)), and that good cause may be shown where the defendant has substantial property in another district and insufficient property in the rendering district to satisfy the judgment. However, the plaintiff has not provided a case, nor have we found one, that stands for the proposition that an automatic presumption of "good cause" is established by the fact that a defendant has a different residence than that of the rendering district. Accordingly, at this time, we deny plaintiff's request for an order to register this Judgment in Pennsylvania, but will allow plaintiff to refile this motion upon a more convincing showing of good cause.
L. Plaintiff's Application for Attorney's Fees and Disbursements
In the Judgment entered by this Court on January 4, 1993, the Estate was awarded reasonable attorneys' fees against defendants Mr. Zolt and Mr. Steinberg pursuant to 18 U.S.C. § 1964(c). In accordance with the Judgment, the plaintiff has submitted an accounting with respect to attorneys' fees and disbursements, requesting $ 3,300,000 in legal fees and $ 264,033.48 in disbursements, for a total of $ 3,564,033.48. See "Plaintiff's Revised Accounting with Respect to Attorneys' Fees and Expenses, Submitted Pursuant to the Judgment Entered Herein, and Revised Affidavit in Support Thereof" ("Plaintiff's Accounting"), Feb. 5, 1993.
The Court has carefully reviewed the Plaintiff's Accounting and the defendants' opposition affidavits. See Jeremy Mishkin's "Affidavit in Opposition to Plaintiff's Revised Accounting with Respect to Attorneys' Fees and Expenses" ("Affidavit in Opposition"), Feb. 18, 1993; Ray Beckerman's "Affidavit Concerning Plaintiff's 'Accounting' of Attorneys' Fees," Feb. 3, 1993. We are somewhat troubled by the high level of expenses incurred by the plaintiff, in particular with respect to certain aspects of the Plaintiff's Accounting. The Court does not challenge the veracity of the figures, but does question the reasonableness of certain expenses (e.g., billing $ 24,108.75 in legal fees in a single day (See Plaintiff's Accounting, at 491, entries for October 29, 1992); 23 hours charged by a single attorney on a single day (See Plaintiff's Accounting, at 463, entry for S.D. Rothman on September 24, 1992)).
Under the circumstances, the Court will reduce the plaintiff's requested total by fifteen percent. Accordingly, the Court awards the plaintiff attorneys' fees and disbursements in the sum of $ 3,029,428.46.
KENNETH CONBOY, U.S.D.J.
Dated: New York, New York
June 16, 1993