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Mon Mar 26, 2018, 05:51 PM

 

A quick read of the Amended Stormy Daniels Complaint

Since the news media is generally horrible about conveying what is actually happening in litigation, here's the show so far:

1. Trump/Cohen obtained an arbitration award for violating the NDA.

2. Daniels filed an action in CA state court seeking recission of the contract.

3. Trump/Cohen removed the case to federal court.

4. Today: Daniels filed an Amended Complaint in the case. It includes re-tooled allegations concerning the contract, and adds a defamation claim on the basis of Cohen's statement in February to the effect of acknowledging the 130k payment and suggesting that "Just because something isnít true doesnít mean that it canít cause you harm or damage. I will always protect Mr. Trump."

Here's the amended complaint:

https://www.courtlistener.com/recap/gov.uscourts.cacd.704250/gov.uscourts.cacd.704250.14.0.pdf

Generally, in court proceedings, you have the opportunity to (a) include all of the claims you have, and (b) amend your claims at certain early stages of litigation. This is not a "new" suit. It is the same suit with new claims.

What's interesting is that Avenatti finally included the strongest argument for invalidity - that it was void on policy grounds as an illegal campaign contribution. He had not included that in the original complaint, so it's good to see that he's gotten some help. The only downside to that argument is that it essentially admits that Daniels was actively conspiring to keep an illegal campaign contribution secret. However, the current FEC is unlikely to act anytime soon on the complaints that have been lodged with the FEC on the subject, so Daniels admitting complicity in the scheme is probably not going to amount to anything as far as the FEC is concerned.

To put that another way, let's say that you are involved in scheme to sell cocaine over several shipments. You sign a contract and an NDA. You get paid up front by the buyer, and then decide to stop the contracted shipments. The buyer threatens you with a contract action over the contract, and so you proceed with a declaratory judgment action on the grounds that "We didn't have a contract, because I was selling cocaine!" Well, yeah, that will probably get you out of the contract.

The original Complaint had described unspecified threats or coercion alleged to have resulted in the January 2018 signed denial by Daniels. Those are all now gone from the Amended Complaint, as it is now clear, based on the 60 minutes interview, that the January 2018 "threats" were threats to enforce the contract.

Of course, the other reason for taking out the January 2018 Daniels statement is that it undercuts the defamation claim against Cohen. First off, the defamation claim essentially boils down to it being damaging to Daniels reputation if anyone denies she had sex with Trump. Secondly, Cohen's February statement of "Just because something isnít true doesnít mean that it canít cause you harm or damage" is (a) not a direct statement that Daniels is lying, since it is to some extent phrased hypothetically, but (b) more importantly, if it is taken as an inferential statement to the effect that "Daniels is lying", it is hard to square that with the facts on the ground at that time - i.e. she had signed a written statement that there had been no affair.

In other words, at best, the defamation claim is "Cohen damaged Daniels reputation by agreeing with her signed statement, which she now disavows." And, remember, this Amended Complaint no longer alleges that statement to have been the product of any duress or threats. There is no claim in Daniels' Amended Complaint which alleges any threats of any kind at any time.

So taking these claims together, the Amended Complaint says:

1. The contract should be void since it amounted to a conspiracy among Daniels Trump and Cohen to keep a crime secret, and

2. It is damaging to Daniels' reputation for people to (a) agree with her signed statement at the time, and (b) claim that she didn't voluntarily have sex with Donald Trump.

Oh, yeah, there was something in the news about some payments being funneled from the UAE to Trump. Probably some really boring news that doesn't involve sex in any way, and involves countries that are hard to find on a map.


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Arrow 42 replies Author Time Post
Reply A quick read of the Amended Stormy Daniels Complaint (Original post)
jberryhill Mar 2018 OP
hlthe2b Mar 2018 #1
gratuitous Mar 2018 #2
jberryhill Mar 2018 #3
EffieBlack Mar 2018 #10
jberryhill Mar 2018 #18
EffieBlack Mar 2018 #21
jberryhill Mar 2018 #23
EffieBlack Mar 2018 #25
jberryhill Mar 2018 #26
EffieBlack Mar 2018 #30
jberryhill Mar 2018 #32
EffieBlack Mar 2018 #34
Ms. Toad Mar 2018 #4
DemocratSinceBirth Mar 2018 #5
Ms. Toad Mar 2018 #7
DemocratSinceBirth Mar 2018 #9
Ms. Toad Mar 2018 #16
EffieBlack Mar 2018 #11
DemocratSinceBirth Mar 2018 #12
jberryhill Mar 2018 #15
Ms. Toad Mar 2018 #17
jberryhill Mar 2018 #24
Ms. Toad Mar 2018 #27
elleng Mar 2018 #31
EffieBlack Mar 2018 #6
jberryhill Mar 2018 #13
EffieBlack Mar 2018 #20
jberryhill Mar 2018 #22
unblock Mar 2018 #8
jberryhill Mar 2018 #14
unblock Mar 2018 #19
jberryhill Mar 2018 #29
EffieBlack Mar 2018 #37
Lee-Lee Mar 2018 #39
EffieBlack Mar 2018 #41
elleng Mar 2018 #28
Jarqui Mar 2018 #33
EffieBlack Mar 2018 #35
Jarqui Mar 2018 #36
DemocratSinceBirth Mar 2018 #38
Lee-Lee Mar 2018 #40
EffieBlack Mar 2018 #42

Response to jberryhill (Original post)

Mon Mar 26, 2018, 06:01 PM

1. Perhaps you may want to rephrase #1

Trump/Cohen obtained an arbitration award for violating the NDA

Though I believe Cohen himself violated the NDA as he spoke up first about it, I am certain that is not why he (plus Trump) were recipients of "arbitration award"... You might also indicate that that "award" was in reference to a restraining order re: the NDA.

And while you may want to keep it simple, the fact that they got that "arbitration restraining order" without even notifying Daniels or her attorney, seems relevant.

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Response to jberryhill (Original post)

Mon Mar 26, 2018, 06:12 PM

2. I wonder if the new argument was available in state court?

I haven't read the new complaint to compare it to the original filing, so I'll take your word for it that a new specification has been added: The NDA is invalid on policy grounds as the payout was an illegal campaign contribution. Could it be that this allegation wasn't available in a state court proceeding, but is available in a federal proceeding? If so, it could be that Trump's legal team has once again shot itself in the foot.

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Response to gratuitous (Reply #2)

Mon Mar 26, 2018, 06:30 PM

3. No, illegal is illegal

 

If the purpose is illegal, then as a contract claim per se, the court doesn't matter.

The other hazard for Daniels in going into the whether the NDA was an agreement to remain silent about the agreement and payment itself, is that it does get a step closer to a plausible claim that by agreeing to get paid not to speak about the agreement, she was engaged in blackmail.

I had touched on the difference between the federal statute defining "blackmail" and the colloquial meaning of the word in a prior post.

In essence, most people think about "blackmail" as getting paid to be quiet about something "bad" about someone - i.e. broadly some sort of embarrassing information. The actual federal statute is:

https://www.law.cornell.edu/uscode/text/18/873

18 U.S. Code ß 873 - Blackmail

Whoever, under a threat of informing, or as a consideration for not informing, against any violation of any law of the United States, demands or receives any money or other valuable thing, shall be fined under this title or imprisoned not more than one year, or both.


Now, I haven't kept abreast of every one of Avenatti's numerous television appearances. One aspect of the circumstances in general which is unclear to me is how the ball got rolling on the NDA in the first place.

Daniels attorney at that time - Davidson - is in the business of extracting money from people for locking down sex tapes etc.. That's what he does for a living. Also, Daniels has never alleged, in the original complaint or in this one, that the NDA itself was the product of any sort of coercion or threat. In the interview, she says:

When a gossip website reported a few months later that she'd had an affair with Mr. Trump, Stormy Daniels publically denied it. Five years later, Donald Trump won the Republican nomination for president.

Stormy Daniels: Suddenly people are reaching out to me again, offering me money. Large amounts of money. Was I tempted? Yes-- I struggle with it. And then I get the call. "I think I have the best deal for you."

Anderson Cooper: From your lawyer?

Stormy Daniels: Yeah.

The deal was an offer not to tell her story. It came from Mr. Trump's attorney Michael Cohen. In return for signing this non-disclosure agreement, Cohen would pay her $130,000 dollars through a Delaware-based limited liability corporation he had established in mid-October 2016 called essential consultants. Daniels says the agreement was appealing because it meant she would receive some money but also not have to worry about the effect the revelation of the affair would have on her child who was now old enough to watch the news. She signed the agreement eleven days before the election.


So, what sorts of deals was Davidson pursuing on her behalf, such that he would ring her up and say "I got one."

Now, sure, at the time, Daniels may not have understood the deal itself to constitute an illegal campaign contribution, but among her contentions in the Amended Complaint, she is now claiming the contract to be void as an illegal agreement not to disclose a violation of federal law - i.e. that the contract is void because she was committing blackmail under the definition above.

It's sort of like fighting a parking ticket by arguing, "My car couldn't have been parked in that space, because I was using it at the time as the getaway driver for a bank robbery." I mean, yeah, that will certainly be effective against the parking ticket, but probably not an argument I would advance on behalf of my client.

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Response to jberryhill (Reply #3)

Mon Mar 26, 2018, 06:47 PM

10. Under this argument, every NDA is problematic because it is a form of blackmail

People sign NDAs all the time - agreeing to accept money for not talking about private matters is not necessarily proof of blackmail. And, since, as I noted in another post, it is highly unlikely that Daniels was aware that Trump's action violated campaign finance laws AND no violation would have taken place until after he actually had paid her the agreed-upon amount to be quiet about their encounter, arguing that she was engaging in blackmail is a non-starter.

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Response to EffieBlack (Reply #10)

Mon Mar 26, 2018, 07:30 PM

18. I write NDA's all of the time

 

...typically in an industrial context, since my main business is intellectual property, including trade secrets.

The difference, under the federal blackmail statute, is whether the NDA relates to an agreement to conceal a federal crime.

I'm not sure you are reading my posts before replying, because I was very careful to point out that agreeing to keep secrets is legal, and that people colloquially call that blackmail.

Daniels is alleging the contract was void ab initio - i.e. that the contract itself inherently - is an agreement to conceal a federal crime. Not the aspect of taking the money not to talk about the sex, but the aspect of taking the money not to talk about the agreement to take the money. There are two things which the contract seeks to keep quiet - the sex AND the agreement itself. As you know, an NDA can specify certain subject matter, and it can optionally include a confidentiality obligation as to the agreement itself.

Whether to keep an NDA itself confidential depends on context. In the trade secret context, you generally want people to say "I can't talk about that because it is the subject of an NDA". The reason you want that is because if someone poaches that engineer, then you want to be able to go after the poacher on tortious interference. To do that, they had to know of the contract. So, no, not all NDA's are per se confidential as to the existence of the NDA itself.

It is that second aspect of the agreement which Daniels is arguing was inherently illegal. I'm not making that argument. She is making that argument.

Again, if you are saying that the contract was used by Trump/Cohen as a vehicle for some sort of illegality, you are not agreeing with Daniels that it was void ab initio as an illegal agreement, and you are arguing against her position.

Daniels argument is that the agreement was inherently unlawful.

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Response to jberryhill (Reply #18)

Mon Mar 26, 2018, 08:03 PM

21. There was no federal crime UNTIL the money was paid

And it was only a crime IF it was paid for the purpose of benefitting Trump's campaign AND it wasn't reported to the FEC. Daniels had no way of knowing what Trump's purpose was - he'd been trying to shut her up since long before he ran - and she didn't know where the money was actually coming from or whether Trump and Cohen would follow the reporting requirements. Moreover, the contract says nothing about being silent about the payments in and of themselves, so it's a stretch to say she agreed to cover up a federal crime of which she wasn't aware and which had not yet fully occurred at the time she signed the agreement.

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Response to EffieBlack (Reply #21)

Mon Mar 26, 2018, 08:23 PM

23. Then you should go argue with Avenatti

 


You have just successfully argued against Daniels claim in the suit.

If you are saying the contract was not inherently illegal, then it is not voidable for illegality.

Compare what you have written with Daniels actual allegation:

45. First, the Hush Agreement was entered with the illegal aim, design, and purpose of circumventing federal campaign finance law under the Federal Election Campaign Act (FECA), 52 U.S.C. ßß 30101, et seq., and Federal Election Commission (FEC) regulations.

So are you are saying is that Avenatti is full of crap there?

I'm certain you must know what "ab initio" means, and you must know why it is specifically stated throughout the complaint.

Avenatti's complaint, which I would suggest giving a thoughtful read, is at odds with what you are arguing here.

Moreover, the contract says nothing about being silent about the payments in and of themselves


Well that's just plain not true. The contract defines confidential material, and FURTHER states that the existence of the agreement is itself confidential. That inherently means being silent about the payment.

If you are going by the terms of the contract, no, she was not allowed to say she'd been paid $130k to keep quiet. That's basic to the design of the agreement.

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Response to jberryhill (Reply #23)

Mon Mar 26, 2018, 08:47 PM

25. Perhaps YOU should go argue with him

since you seem so certain that you know his case better than he does and feel qualified to criticize and second-guess him at every turn ...

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Response to EffieBlack (Reply #25)

Mon Mar 26, 2018, 08:55 PM

26. I'm qualified to second guess or criticize whom I please

 

I have a keyboard and an internet connection. That qualifies me to criticize anyone on an internet forum.

However, your argument has nothing to do with what he's alleged insofar as the contract being void ab initio for illegality.

Your argument is actually a counter to his argument. If you are saying there was illegality committed in the performance of the contract by Trump/Cohen, that is not a ground for Daniels to void the contract for illegality of its object. You are saying that the contract was not inherently unlawful. Well, that throws Avenatti and Daniels directly undadabus insofar as they have alleged it is inherently illegal in order to persuade a court to void it.

All I said, is that it is an interesting limb to go out on, but at least I took the time to understand what he is alleging.

Daniels is alleging the contract was void AB INITIO. Daniels is not alleging that the contract should be void because of some illegality by Trump/Cohen in the course of performance. That is not a grounds for voiding a contract on the grounds of illegality.

But, I would really appreciate your insight and comments on allegations Paragraph 53 and 54 of the Complaint. If I did not respect your opinion, I would not waste the time arguing.

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Response to jberryhill (Reply #26)

Mon Mar 26, 2018, 09:18 PM

30. of course you are. And others are free to think you're wrong

I'm not claiming the contract became void because of anything that occurred in the course of performance. Trump completed the online elemental portion of his performance under the contract when the payment was made. Whether or not he reported the payment to the FEC as a campaign contribution has no bearing on his performance under the contract. But it does determine whether the payment he made violates federal law. The combination of the prior intent, the payment and their subsequent actions - or lack of action - is what made the payment a crime. If they had reported the payment as a contribution, the payment would not have been an illegal campaign contribution.

This is an instance where the crime has separate elements, which by their nature, don't occur simultaneously, but still add up to constitute a crime. The fact that one of the elements of the crime occurred after the contract was signed and payment rendered does not mean that the payment couldn't be a campaign finance violation. It simply means that the final act that perfected the crime - failure to report the payment made on behalf of the campaign - relates back to the payment itself, the gravaman of the crime.

That is completely consistent with the claim.

FYI - this principal also applied to my contractor breach of contract - had my client obtain his contractor license at any point during the renovation, it would have related back to the date of the contract signing and the contract would have been valid. But he didn't, so the contract was later determined to be void and unenforceable.

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Response to EffieBlack (Reply #30)

Mon Mar 26, 2018, 09:35 PM

32. So let me ask you this

 


Letís take your contractor case. The point there was that the contract was void AB initio because it would have been illegal - under any circumstances - to be undertaken by someone who was not a licensed contractor.

Letís say your client was a licensed contractor, did the work, but was pocketing the FICA deductions from his crewís paychecks. He also had a headlight out on his truck, and ran three stop signs on the way to the job site.

Yes, several crimes were committed, but that doesnít render the contract to do the work voidable ab initio. Whether he was violating wage or vehicle laws in the course of performance has nothing to do with the contract to do the work.

And, yes, anyone is free to diasagree. You disagree vehemently with what Avenatti has alleged in this complaint.

So, what do you make of paragraphs 53 and 54?

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Response to jberryhill (Reply #32)

Mon Mar 26, 2018, 10:27 PM

34. Oh please - your hypos are getting more ridiculous

You surely know that just because a party to a contract does stupid, even illegal acts while performing the contract does not invalidate the contract - for example, the way Donald Trump colluding with Russia in furtherance of the same campaign he hoped to advance by shutting Daniels up doesn't invalidate the contract.

The difference between your hypo and this case is that your imaginary contractor's behavior, while occurring in the course of his performance of the contract, is not elemental or even directly related to the contract. On the other hand, the very point of the NDA - to protect his campaign - was a fundamental element of the crime and the consideration therefor - an unreported campaign contribution - was another critical element of the same crime. The criminal behavior was not incidental to the contract - it pretty much WAS the contract.

While they aren't the strongest claims, I don't have any problem with the inclusion of 53 and 54 - but I have no interest in arguing with you about it so let's just say whatever you think of it is fine and leave it there.

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Response to jberryhill (Original post)

Mon Mar 26, 2018, 06:34 PM

4. Umhmmm....

I see you share my opinion about Mr. Aveneti's legal prowess.

What's interesting is that Avenatti finally included the strongest argument for invalidity - that it was void on policy grounds as an illegal campaign contribution. He had not included that in the original complaint, so it's good to see that he's gotten some help.


He seems to be pretty good at the PR game, but his initial complaint has proven to be very fertile ground for hypos for my students preparing for the July bar exam. As of the first complaint, the half of the room that I assigned as Trump's attorney was having a field day.

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Response to Ms. Toad (Reply #4)

Mon Mar 26, 2018, 06:36 PM

5. Trump is getting roasted in the court of public opinion.

It's not as if his liberty or Stormy's liberty is at stake.


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Response to DemocratSinceBirth (Reply #5)

Mon Mar 26, 2018, 06:44 PM

7. Not really my point

I was obliquely referring to the numerous fawning posts/threads about her attorney's legal abilities. Having read both the complaint, and the amended complaint, I'm not impressed with his legal abilities.

His PR savvy is another matter - unrelated to his legal abilities.

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Response to Ms. Toad (Reply #7)

Mon Mar 26, 2018, 06:46 PM

9. He's won some humongous judgments, mid nine figure ones.

It seems Stormy is playing with house money.

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Response to DemocratSinceBirth (Reply #9)

Mon Mar 26, 2018, 07:23 PM

16. That may well be.

I know quite a few attorneys who do very well leveraging PR skills into significant wins despite a somewhat loose connection with the details of the substantive law.

(I know nothing more about him than the complaint, so I am basing my assessment on the original, and now amended, complaint. The former contained a fair amount of legal nonsense.)

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Response to Ms. Toad (Reply #7)

Mon Mar 26, 2018, 06:51 PM

11. I'm impressed with him

Not only does he have a record and reputation as a very good lawyer, he has skillfully used his PR skills to extract additional information from Trump and elsewhere in order to strengthen his case.

For example, when he first filed the suit, the campaign finance issue was floating around in the ether, but wasn't really pinned down. It wouldn't have been a good idea, in my estimation, to include that as a claim. But in the wake of the suit, Cohen, Trump and others revealed additional information that bolstered that argument and now it is a much more plausible and valid claim. So, I don't look at his amendment as an instance of him " fixing" an error or shortcoming. I think he's handling this very deftly.

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Response to EffieBlack (Reply #11)

Mon Mar 26, 2018, 06:55 PM

12. He seems like a "killer"

After law school, Avenatti worked at OíMelveny & Myers in Los Angeles, California, alongside Daniel M. Petrocelli, who previously represented the Ron Goldman family in its case against O.J. Simpson.[18] He assisted Petrocelli on multiple legal matters, including the representation of singer Christina Aguilera[19] and litigation surrounding the movie K-19: The Widowmaker,[20] and worked extensively for Don Henley and Glenn Frey of the musical group The Eagles, including in a suit brought by former bandmate Don Felder against the group and Irving Azoff.[21][7]

Avenatti later joined Greene Broillet & Wheeler, a Los Angeles boutique litigation firm. While there, he handled a number of high-profile cases, including a $10 million defamation case against Paris Hilton,[22] a successful idea-theft lawsuit relating to the show The Apprentice and against producers Mark Burnett and Donald Trump,[23] and a $40 million embezzlement lawsuit involving KPMG.[7][24]

In 2007, Avenatti formed the law firm Eagan Avenatti, LLP (formerly known as Eagan OíMalley & Avenatti, LLP) with offices in Newport Beach, California, Los Angeles and San Francisco, California. He has since appeared on 60 Minutes twice in connection with cases he has handled.[1][25] Avenatti has also served as lead counsel on a number of historically-large cases, including an April 2017 $454 million verdict after a jury trial in Federal Court in Los Angeles in a fraud case against Kimberly-Clark and Halyard Health,[26] a $80.5 Million class-action settlement against Service Corporation International,[27] a $41 million jury verdict against KPMG, [28] and a $39 Million malicious prosecution settlement. [29] In 2015, Avenatti prevailed against the National Football League following a two-week jury trial in Federal District Court in Dallas, Texas after cross-examining Jerry Jones at trial.[30][31]
https://en.wikipedia.org/wiki/Michael_Avenatti


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Response to EffieBlack (Reply #11)

Mon Mar 26, 2018, 07:22 PM

15. "when he first filed the suit, the campaign finance issue was floating around in the ether"

 

That's not even close to being factually correct.

Common Cause filed the FEC and DOJ complaints in the Daniels-payment-as-campaign-contribution matter in JANUARY:

https://www.politico.com/story/2018/01/22/stormy-daniels-trump-payment-illegal-donation-357250



A watchdog group filed a pair of complaints on Monday alleging that a $130,000 payment reportedly made to a pornographic film actress who claims to have had an affair with Donald Trump violated campaign finance laws.

In submissions to the Justice Department and the Federal Election Commission, Common Cause said the alleged payment to Stephanie Clifford ó who uses the stage name Stormy Daniels ó amounted to an in-kind donation to Trump's presidential campaign that should have been publicly disclosed in its official reports.



Likewise, they followed up on the McDougal one in FEBRUARY:

http://www.commoncause.org/press/press-releases/common-cause-v-trump-fec.pdf

http://www.commoncause.org/press/press-releases/doj-fec-complaints-filed-against-trump-his-campaign-and-american-media-inc-for-illegal-unreported-150K-coordinated-expenditure-to-former-playboy-playmate.html

These proceedings were initiated when news of the payments came out, and were indeed "pinned down". All four of these proceedings pre-date the Daniels civil complaint.

What's sad is that while an organization such as Common Cause pursues these things in the public interest, they don't seem to attract the same sort of interest or support from people who are happy to donate to a civil suit over a contract.

But it is a real kick of mud in the face to Common Cause to suggest that these weren't "pinned down" when they've been the subject of an FEC proceeding for quite some time now.



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Response to EffieBlack (Reply #11)

Mon Mar 26, 2018, 07:27 PM

17. I agree as to the PR aspects.

And there are a lot of trial lawyers, especially, who fly by the seat of their pants and do a very effective job.

Being unimpressed relates to the legal nonsense both in the complaint, and in public appearances. For example, asserting that an agreement is void merely because it lacks a signature is legal nonsense. Typically, the lack of a signature makes an agreement unenforceable (to the extent it is required to be in writing), not void. Not to mention that if the statute of frauds in an issue, it is Daniel's signature that would matter since she is seeking to avoid enforcement against her.

On a quick glance, the amended complaint seems more tightly drafted.


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Response to Ms. Toad (Reply #17)

Mon Mar 26, 2018, 08:25 PM

24. Take a look at paragraph 54

 


Paragraph 54 of the Complaint is, hands down, one of the dumbest allegations I've ever seen in a civil complaint.

It makes a conditional allegation on a factual proposition which, I kid you not, is alleged to be "unlikely".

Can you imagine?

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Response to jberryhill (Reply #24)

Mon Mar 26, 2018, 09:01 PM

27. Makes my brain hurt.

Whatever happened to "on information and belief"? Guess it doesn't work so well if you don't have information and don't actually believe what your'e saying.

. . . Back to grading student papers. Some of them, at least, make my brain hurt less.

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Response to Ms. Toad (Reply #27)

Mon Mar 26, 2018, 09:23 PM

31. Thanks, having fun learning from you 2,

who have been reading this stuff; I haven't been doing so. Good to be almost 'back in the saliva.' Damn, can't find name of Secy of Something who said it, in some repug administration.

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Response to jberryhill (Original post)

Mon Mar 26, 2018, 06:38 PM

6. Interesting analysis - but I think the campaign finance argument is stronger than you do

It's not uncommon for contracts to be voided as contrary to public policy because they require an illegal act to complete. The fact that the consideration is illegal or improper does not mean the must contract stand or can't be attacked - the illegality is the very reason for the contract to be voided.

The cocaine deal hypo is not on point for a couple of reasons. First, unlike a drug deal, being paid to keep an affair secret is not inherently illegal. In this case, the mutual agreement to pay for silence and to accept payment for silence is not in itself illegal and, without more, would not necessarily be a campaign finance violation. It's the motive on the Trump team's part that makes it a campaign finance violation and raises questions about it legality. But, unlike the parties in a cocaine deal, Daniels had no way of knowing that this was an illegal campaign finance violation, both because she did not and could not be expected to know the law (although her lawyer may be expected to), but more importantly, she was not privy to all of the facts that Trump knew, including the specific reasons he wanted her to stay quiet, where the money was coming from and whether the payment had been reported to the FEC.

When I first started practicing law, I represented a contractor whose customer had refused to pay him for a renovation job and we sued for breach of contract. However, it turned out that my client had not obtained his contractor's license prior to completing the work. As a result, the court ruled, as a matter of law, that the contract was void because state law required that only licensed contractors could do the work called for in the contract, and, therefore, the contractor could not bring an action for breach of contract.

Fortunately, we were able to recover under an alternative cause of action - unjust enrichment - since the customer received full benefit of my client's services.

I think that's a closer comparison to this case. If it turns out that it was illegal for Trump to pay Stormy for her silence under these particular circumstances (to benefit his campaign and without filing the required FEC disclosures), she has a strong argument that the contract is void and, therefore, she is not required to perform her end of the deal, (i.e., to be quiet). And if she's willing to return the $130,000, she has not been unjustly enriched and both parties will return to the status quo.

That's how I see it...

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Response to EffieBlack (Reply #6)

Mon Mar 26, 2018, 07:11 PM

13. I said it was the strongest of the bunch

 


But public policy arguments also tend to be the least favored.

she was not privy to all of the facts that Trump knew, including the specific reasons he wanted her to stay quiet


IMHO it is a stretch to suggest she would not have known, in October 2016, why Trump would have wanted to bury her story. From the interview, she claims to have gotten a call from Davidson, that suggests he was shopping it around, as is his stock in trade, claiming that he had found the best deal for her. At the time, it would have been quite obvious to her that the motivation on the Cohen/Trump end of the deal was that disclosure would damage the campaign.


Daniels had no way of knowing that this was an illegal campaign finance violation


Did your client's customer know that your client didn't have a contractor's license at the time of the contract, or did the customer find that out later?

So backing up a bit:

Daniels had no way of knowing that this was an illegal campaign finance violation, both because she did not and could not be expected to know the law (although her lawyer may be expected to), but more importantly, she was not privy to all of the facts that Trump knew, including the specific reasons he wanted her to stay quiet, where the money was coming from and whether the payment had been reported to the FEC.


The Amended Complaint says that the agreement was void ab initio as an illegal campaign contribution. If they are claiming that the contract itself - the deal between Daniels and Trump/Cohen - was not inherently unlawful, but that whether there was some external illegality involved in the mechanism by which she was paid, then that's not a ground for voiding the contract per se.

I rob a bank. I then buy your car. You want your car back because you don't want to be the person who sold the car to a bank robber. You can't void the contract because I paid you out of the proceeds of my bank robbery. My financial dealings, how I got the money, whether I paid the correct tax, whether I register or title the car properly, aren't the subject of the contract.

Or... I buy your car. I then go rob a bank. Again, that doesn't void the sale of the car, simply because I was using the contract as a vehicle, and the vehicle, to go and commit some other illegality that is not within the four corners of the contract.

If the contract was void ab initio as a vehicle to disguise an illegal campaign contribution, as alleged, then that has to be inherent in the contract itself.

On the other hand, if one is saying that the manner in which the payment was arranged and sent involved illegal activity on the part of Trump/Cohen, then that's not an inherent defect in the contract itself.

I suppose minds can differ on whether Daniels understood at the time that accepting the money and agreeing to be silent was motivated by an interest in avoiding damage to Trump's presidential campaign. I would find it hard to believe that she would not have understood that. I also don't believe she had to specifically understand campaign finance law, particularly since her current claim is that the contract itself constituted a violation of it from the moment of inception.

Take all of those standard clauses to the effect of "each party will be responsible for all taxes accruing from this transaction". It's not as if anyone goes and checks to see if the other party is up to some sort of tax hanky panky. I represented a client in the sale of an asset to a non-profit organization. The deal looked a little odd to me, since commercially it seemed like a bad deal for the organization. As you know, the commercial terms - i.e. how much are you paying for this thing - are not something that are of any formal concern. What people pay to buy or sell things is none of my business. My guy isn't taking any sort of tax deduction for the deal, since it is a straight up sale of an asset, and he's certainly reporting it as income. Do I think the non-profit might be trying to inflate their operating expenses for some reason that is favorable to them? Yeah. Does it affect the validity of the contract? Nope.

IMHO, the PR campaign by Avenatti and the "litigation by media" stuff, is primarily a strategy to get Trump/Cohen to drop the arbitration award on the proposition that the PR bleeding from the circus sideshow is more damaging than actually keeping the agreement in place. It's hard to see that Cohen statement as defamatory, but they went with it because they had probably hoped that by now (and while there's still time to amend the complaint without leave) the Trump/Cohen camp would have said something more directly actionable. The tactic of goading the Trump/Cohen camp into doing that has not worked, surprisingly, so they went with what they could before a responsive pleading or motion was filed.

On the unconscionability stuff... IMHO that's a tough one when you were represented by counsel which the contract affirms, and which Daniels further affirmed in the 60 Minutes interview. That's why the McDougal complaint is a little more interesting in that regard, in that it suggests some dirty dealing by Davidson (although with thin factual allegations). Daniels and Avenatti don't seem to want to impugn Davidson which is kind of interesting, again given the business that Davidson is in.

Just my two cents. Reasonable minds can differ.

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Response to jberryhill (Reply #13)

Mon Mar 26, 2018, 07:43 PM

20. Your hypos just don't work here

If someone had illegally donated money to Trump and then, in a separate, subsequent transaction, he entered into an NDA with Daniels and used a portion of the illegally obtained funds to pay his consideration, your hypo might make sense (and only might since the consideration could still fail as an ill-gotten gain) but that's not what happened here.

Instead, a third party paid the shaky money directly to Daniels for the express purpose of benefitting Trump's campaign - and Daniels' agreement to remain silent was a critical part of this benefit, without which there'd likely be no violation - making the entire transaction likely a campaign finance violation.

Your hypos might be applicable if someone promised a woman he would buy her a car if she agreed not to tell anyone about their affair, and then had his friend buy the car with drug money and give it to her. If the feds trace the money and confiscate the car under RICO, the man would have no cause of action for breach if the woman decided to talk about their relationship given the failure of consideration for the agreement.

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Response to EffieBlack (Reply #20)

Mon Mar 26, 2018, 08:13 PM

22. That still conflates the object of the contract with the means of performance

 

Daniels claim is that the contract is inherently void on the ground of illegality.

In order to void a contract on the grounds of illegality, the illegality has to flow from the object of the contract itself, and not the means of performance. The purpose of the contract - as defined by the contract - has to inherently be unlawful.

She got the money, and nobody has taken the money away. Where the money came from is not relevant to the object of the contract.

Unlike the Common Cause action - since they apparently don't have the kind of pull to have telegenic spokespersons on every news show - she's not pursuing a campaign finance law violation. She is claiming that the object of the contract - thus rendering it voidable - was illegal. Unlike the Common Cause action, the campaign law violation is merely incident to her affirmative defense to the adverse arbitration decision.

The actual complaint does not advance an argument anything like the one you are making:

45. First, the Hush Agreement was entered with the illegal aim, design, and purpose of circumventing federal campaign finance law under the Federal Election Campaign Act (FECA), 52 U.S.C. ßß 30101, et seq., and Federal Election Commission (FEC) regulations.


She's not alleging that the manner of performance involved "shaky money", whatever that is. She is alleging that the contract had the "illegal aim, design and purpose of circumventing" FECA. She alleges that the campaign finance violation was the POINT of the contract, not an incident to performance of the contract on the Trump/Cohen end of things.

She is alleging that because in order to void a contract on illegality, the contract has to be inherently illegal from the get-go (in case anyone didn't know what ab initio meant).

She is not alleging that the mechanism of payment was illegal, or that the contract was used as a vehicle for some other illegality. She's not alleging those things because those things won't render the contract void for illegality any more than McDonalds selling a hamburger to a crack dealer.

And if you want really pathetic, review your comment above on how an NDA relating to an adulterous affair is legal:

53. Third, the Hush Agreement is also without a lawful object or purpose and thus void ab initio based on illegality because it was entered for the purpose of covering-up adulterous conduct, a crime in New York, Mr. Trumpís home state at the time of the Hush Agreement and at the time of the intimate relationship between Plaintiff and Mr. Trump.

That one, you have to admit, is just sad. She claims to have had sex with him in California. Adultery, yes, is a misdemeanor in New York, but there is no act of adultery alleged to have taken place in New York.

That would be like me skipping out on a Nevada brothel debt by saying "But it's illegal in Delaware, where I live." It's just plain stoopid.

Or, from the most self-defeating allegation I have ever seen department:

54. Fourth, the Hush Agreement is also without a lawful object or purpose and thus void ab initio based on illegality because it was entered into by Defendant EC at the behest of Defendant Cohen, a New York attorney then subject to the New York
Rules of Professional Conduct. If Mr. Cohenís public statements are true (which is unlikely), he violated Rule 1.4 of the New York Rules of Professional Conduct by entering into an agreement on his client Mr. Trumpís behalf without notifying him of the agreement...


Now before just jumping on the keyboard, let that allegation sink in for a moment.

Tell me, honestly, would you ever make an allegation in a civil complaint which is conditional on a proposition that you say, right there in the complaint "which is unlikely".

Well, golly, I'd answer that one with "Defendant admits that the allegations of Paragraph 54 are 'unlikely' as stated" and be one and done with that claim.

Why on earth would you state, in a civil complaint, that the factual basis of your own allegation is "unlikely"? Seriously.

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Response to jberryhill (Original post)

Mon Mar 26, 2018, 06:45 PM

8. Does Daniels have to have been in on the scheme to evade campaign laws?

How was she to know that they would not report it or that there was anything illegal about the payment?

I think as far as she knew it was just meant to remain private from the media or Melania.

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Response to unblock (Reply #8)

Mon Mar 26, 2018, 07:12 PM

14. Okay, fine

 


But then, as discussed in the response above, how does that void the contract?

If I buy your car, and then use that car to rob a bank, the fact that I've then gone off and done something illegal with the car doesn't void my purchase of the car from you.

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Response to jberryhill (Reply #14)

Mon Mar 26, 2018, 07:35 PM

19. That I don't know. If one party designed it to evade laws,

Does that release the other party?

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Response to unblock (Reply #19)

Mon Mar 26, 2018, 09:16 PM

29. No

 


If I rent a pickup truck from Hertz because I need to dispose of a dead body of one of my victims, it is a perfectly fine truck rental agreement.

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Response to jberryhill (Reply #29)

Mon Mar 26, 2018, 11:57 PM

37. Not the same

You really need to work on your hypotheticals - they should bear at least some connection to the issue at hand.

Your hypo's no good because, unlike in this case, you did not contract with Hertz to engage in an illegal act. You contracted with them to rent a vehicle, which is perfectly legal, therefore the contract was not based on an illegal act. In the Daniels case, the performance of the terms of the contract was the illegal act.

The more accurate hypo would be that you went to Hertz and told them you wanted to transport a dead body and they picked out the perfect truck for the task and drew up a special contract that said you were using the truck to move a corpse - but you later found out that it's illegal to transport dead bodies in a rental truck. If Hertz later tried to charge you a late fee because you didn't get the truck back in time after you were arrested and locked up for driving around with a corpse in your rental truck, you'd have a strong claim for not having to pay the late fee since the contract providing for it was unenforceable because it was based on an agreement to do an illegal act.

(Doesn't mean you won't have to pay under an alternative theory, just not breach of contract)

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Response to EffieBlack (Reply #37)

Tue Mar 27, 2018, 09:30 AM

39. Except one thing

 

There is no evidence she knew that the payment would constitute an illegal campaign contribution. On her end it appeared a standard NDA.

So your example of going to tell Hertz the rental was for an illegal use is not really accurate. Not unless they can show that she was told the payment would be illegally funded.

The issue of the illegal campaign contribution doesnít really come into play here because that is an issue between Trumps team and the FEC as to if itís a violation of law. It doesnít involve her role in this.

Perhaps a better analogy is this.

Itís legal to buy a pickup truck just as much as it is legal to buy silence with an NDA.

Letís says Trump wants to drive around in a pickup truck for campiaign appearances to look like the ďcommon manĒ.

Someone goes to a dealership and buys a truck and gives it to him. They even say itís for Trump to the dealer. That doesnít get reported as a donation to the FEC.

That was an illegal contribution by the person buying the truck.

But that wouldnít give the dealership any grounds to say that the contract to sell the truck is now invalid and they get to go take the truck back and refund ten purchase price.

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Response to Lee-Lee (Reply #39)

Tue Mar 27, 2018, 11:24 AM

41. Whether or not she knew the payment was an illegal campaign contribution is irrelevant

And, although your hypo is more on point than the one I was responding to, itís still distinguishable from this case.

Specifically, the illegal contribution in your hypo was not the purchase of the truck by the supporter who bought the truck outright from the dealer and then took ownership. The illegal contribution was the the donation of his property to the candidate. The contract he used to obtain that property is irrelevant. This would apply to any property he owned and gave to the candidate - cash, jewelry, real estate, furniture, etc. Once he bought it, itís his with which to do what he chooses and his actions have no impact on how he obtained it. The fact that, once he owned the property, he illegally donated it to a candidate does not void the contract by which he originally acquired that property.

On the other hand, in this instance, the transaction itself is what triggers the campaign finance violation. Danielsí silence is the campaign benefit being purchased under the contract and the campaign benefit is very specific to Daniels and only Daniels. It is buying HER silence and without her involvement, the illegal purpose could not be fulfilled. This is not an instance of Cohen buying a product from Daniels and then later giving it to Trump who subsequently used it for an illegal campaign purpose. The deal itself is the illegal campaign purpose. And since courts are loathe to enforce contracts to perform illegal acts, it is very reasonable to argue the unenforceabilty of a contract entered into for the purpose of influencing a presidential campaign if the consideration is deemed an illegal campaign contribution.

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Response to jberryhill (Original post)

Mon Mar 26, 2018, 09:07 PM

28. Thanks for taking this up.

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Response to jberryhill (Original post)

Mon Mar 26, 2018, 10:03 PM

33. I think there is more to the amended complaint than the summary in the top post

Some of the original concerns remain, etc

I really appreciate the discussion in this thread - good stuff.

Stormy's lawyer is asking for a jury trial. It won't rival OJ's trial but it will be a media circus. Trump and Cohen may have been sucked in too far already but they should be looking for an exit. They're being played like a violin in the media by Stormy's lawyer.

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Response to Jarqui (Reply #33)

Mon Mar 26, 2018, 10:40 PM

35. And his media strategy is pushing them further into a legal box

He just noted in an interview that one of the traps the Trump team fell into was moving the case to federal court - apparently assuming Daniel's folks wanted to keep it in state court - but now he must submit to discovery.

He's not doing PR for PR's sake. He's goading Trump's lawyers into undermining their own case.

Not surprising. Cohen's not a litigator. He's a henchman/consiglieri. He's used to dealing with small-time collections attorneys trying to get Trump to pay his bills and don't have the experience and resources to fight his bullying, threats and deep pockets. He's not accustomed to being on the wrong side of skilled, take-no-prisoners litigators who are more experienced and better lawyers than he is, aren't the least bit intimidated by him, and whose pockets are as deep as or deeper than his (or will be when they get through with him).

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Response to EffieBlack (Reply #35)

Mon Mar 26, 2018, 11:28 PM

36. I agree. "He's goading" - my words have been "he's baiting"

and it has worked like a charm. I think he has them right where he wants them. The game is kind of over even though it has yet to play out.

We are on the precipice of where Bill Clinton was when he was deposed and got caught lying in the Lewinsky scandal. Trump & Cohen are going to be deposed with very similar questions. Stormy's lawyer has hazed them with the DVD of evidence in his safe. I don't think he's bluffing but only time and court proceedings will tell. It's a heck of a poker game with a bluff if it is a bluff.

And now everyone is going to speculate if a dollop of Donald wound up in a pair of blue panties Stormy saved after the alleged unprotected sex. Who is not going to pay attention to that outcome? There's little good political outcome for Trump here because his name is being dragged through the scandal mud for months to come. Karma is about to be on full display as the video of the GOP members supporting impeachment of Clinton for lying about having sex with Monica get looped in the mainstream media as the midterms approach.

Some folks feel the Stormy interview was a dud. I'm not convinced. I think, like Stormy's lawyer says, the real trouble is just starting.

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Response to jberryhill (Original post)

Tue Mar 27, 2018, 09:19 AM

38. From the bleacher seats it seems Michael Avenatti has David Dennison right where he wants him.

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Response to jberryhill (Original post)

Tue Mar 27, 2018, 09:32 AM

40. I think this may be the first time this has ever been claimed by anyone

 


2. It is damaging to Daniels' reputation for people to (
a) agree with her signed statement at the time, and (b) claim that she didn't voluntarily have sex with Donald Trump.

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Response to Lee-Lee (Reply #40)

Tue Mar 27, 2018, 11:26 AM

42. Ewww

He picks the wrong sex partners - Iím sure there are scars of women out there who wouldnít have needed a dime to deny having sex with Trump.

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