SDNY Cohen Case Filing Friday Roundup

[jberryhill]

Last edited Fri May 18, 2018, 08:56 PM - Edit history (1)

An interesting little catfight broke out this week in the Cohen search warrant proceeding, and while I'm reluctant to guess what might yet be in store this early on a #FelonyFriday, there are some bits and pieces that I didn't see covered in the news in any great detail.

First up, some background on what this proceeding is about might be helpful. Michael Cohen is not, as yet, charged with a crime in New York. The basic outline is that he had been under investigation for several months on suspicion of a crime or crimes not yet identified, and that there was probable cause to search the locations which were searched to find evidence of it. The process of connecting that evidence with the crime(s) in mind is taking some time, in order to sort through the material seized and filter out any that might be privileged. Contrary to popular belief, what the USAO-SDNY has made clear is that the investigation pre-dates the Stormy Daniels civil matter in California.

What we learned today was that the search immediately followed a visit to NY by Qataris generously seeking to help out Jared with his rent. The search warrant immediately followed, probably as fast as it could, given the hoops through which one has to jump to get such a sweeping warrant for three locations involving an attorney. It's clear the USAO-SDNY wanted to get whatever may have been left behind while the Qatari trail was still warm.

After this matter concerning the search warrants began, Mr. Avenatti filed for intervenor status of Ms. Daniels. Procedurally, there are two parts of that - (1) Avenatti seeks admission to the court, since he is not licensed in NY, and (2) the intervenor petition itself.

On the matter of the actual intervenor status, Mr. Avenatti has agreed with the USAO-SDNY's motion NOT to allow that for the time being. That filing is here:

https://www.courtlistener.com/recap/gov.uscourts.nysd.491943/gov.uscourts.nysd.491943.35.0.pdf

The Government respectfully submits this letter to advise the Court that the Government
and counsel for proposed Intervenor Stephanie Clifford have met and conferred regarding her
Motion to Intervene (the “Motion”), as the Court directed. At this time, with the consent of
counsel for Ms. Clifford, the Government requests that the Motion be held in abeyance pending
these ongoing discussions.

What that says is that the prosecutors told Avenatti they don't want him in the proceeding, and he agreed pending further developments. Thus Avenatti has said he is "cooperating with the the USAO-SDNY", by agreeing to let the petition for intervenor status chill.

Into these waters waded the odd character of Peter Gleason. Gleason sent a letter to the court to the effect of his having held discussions with Cohen some years back on the matter of two women who were beaten up by Schneiderman, his advice that they not go to law enforcement, and his seemingly unconnected conversations that looped back to Cohen. While that sequence is something of a head scratcher, the picture becomes much clearer when one understands that Gleason had, in the relevant time frame, put up his own residence to secure the bond of a then-celebrated New York madam, and that Trump was in the "modeling agency" business. Hence, "you can't go to police" and what appears to be making other arrangements for compensation seem to line up with those facts a little more clearly.

In any event, Gleason wanted to ensure that the identities of the two women in question, and any records Cohen had about them, would also remain confidential. The judge requested that Cohen file a brief, advancing some legal reasoning as to why that is appropriate.

Gleason has filed his brief, which is a real thing of wonder. That brief is here:

https://www.courtlistener.com/recap/gov.uscourts.nysd.491943/gov.uscourts.nysd.491943.51.0_2.pdf

In summary, the brief says "Attorney work product is confidential, and New York is really, really corrupt." Why this means his dealings with Cohen in the matter of these two women should be protected is anyone's guess. There's one good point in there relating to protecting the identities of victims of sexual abuse, but not tied to what he's seeking here in any meaningful way.

The brief continues with several examples of drive-by accusations to the effect of, "Oh, did I mention that New York is really, really corrupt?"

Along the way, Gleason takes a potshot at Avenatti to the effect of saying that letting Avenatti into the case would pretty much blow any confidentiality relating to the potential documents in question, should there actually be any in existence, given the way that Avenatti has acted in relation to what appear to be unlawfully obtained bank documents.

Avenatti, still not actually admitted to the proceeding, doesn't let that get in the way of firing a gratuitous salvo at Gleason for reasons which are unclear. Although, really, it's unclear why he is seeking intervenor status on behalf of Daniels in the first place, since, in the contract suit in California, nobody disputes that the $130k was paid to Daniels and for the purpose of that contract dispute it doesn't matter one way or the other where Cohen got the money.

Be that as it may, Avenatti has an interesting footnote in his rimshot back at Gleason and as has become routine in his filings, spends quite a bit of time talking about himself, instead of any issue relevant to the case:

https://www.courtlistener.com/recap/gov.uscourts.nysd.491943/gov.uscourts.nysd.491943.52.0.pdf

"As a preliminary matter, even though counsel for Ms. Clifford, Mr. Michael Avenatti, is
addressed by name in the Motion and Mr. Gleason contends that Mr. Avenatti’s conduct
“necessitated the instant motion[,]” the stated request for relief in the Motion does not have
anything to do with Ms. Clifford or Mr. Avenatti. Rather, Mr. Gleason seeks a protective order to
ensure that his “discussions, regarding Eric Schneiderman, with (Plaintiff Michael Cohen), . . .
which Plaintiff may have memorialized, should be privileged communications and not subject to
disclosure to any third party.” [Dkt No. 51 at 10.] To be clear, Mr. Avenatti is not in possession
of these communications. Further, neither Mr. Avenatti nor his client have requested that these
communications be shared with them. Nor do they want access to them. Nor are they aware of
any plans on the part of the government to share these communications with them."

He italizices that last part, just to be "clear".

A sentence later, Avenatti continues with:

"Moreover, Mr. Gleason’s gratuitous ad hominem attacks on Mr. Avenatti are completely unwarranted."

...at which point we are referred to this footnote:

Mr. Avenatti is at a loss as to why Mr. Gleason would have filed pleadings with the Court
attacking him. Mr. Avenatti has absolutely no prior experience with Mr. Gleason. Indeed, Mr.
Avenatti first called Mr. Gleason days ago to discuss his prior letter to the Court and was
promised a call back by Mr. Gleason. He has yet to receive any such return call.

So, as Mr. Avenatti would say, "to be clear" he never wanted any access, information, sharing, etc., in relation to anything having to do with the two women that Gleason says Schneiderman beat up; but when Gleason filed his original letter, Avenatti wanted to talk to him about something. Gosh, one wonders why someone with such a profound lack of interest in the women discussed in the Gleason letter would have wanted to talk to Gleason about.

Oh, hey, by the way, somewhere in here I should probably mention that the USAO-SDNY is interested in pursuing a criminal investigation and likely some charges against Cohen. That's why this proceeding exists.

But, oh well, back to the pressing matters at hand.

Avenatti's brief concludes by hanging out to dry the poor schmuck who gave him the SARS. In defending himself, for no reason since he's not on trial, against the claim that he has done something untoward by leaking the SARS information, and the minor erroneous information about other people's bank transactions (but, well, who are they anyway, fuck 'em), Avenatti makes this brilliant point:

As shown in Ms. Clifford’s recent filing, the facts detailed in the report drafted and
released by Mr. Avenatti were largely proven accurate.

...because attorneys have an obligation to be (largely) accurate.


Moreover, Mr. Cohen in his letter
objecting to Mr. Avenatti being admitted pro hac vice failed to specify what laws Mr. Avenatti
supposedly violated, or what wrongs he committed. Mr. Gleason similarly failed to cite any legal
authority to support his position. This is not surprising, seeing that no Bank Secrecy Act law was
violated by his disclosures. See, e.g., In re JPMorgan Chase Bank, N.A., 799 F.3d 36, 41-42 (1st
Cir. 2015) (explaining that Bank Secrecy Act “expressly forbids disclosure only by reporting
financial institutions and their officers and agents, and by government entities, officials, and
agents on the receiving end of SARs” and concluding that “neither the Act nor the regulations
restrict third parties—that is, parties on neither the financial-institution side nor the government
side of a SAR exchange—from disclosing the existence or non-existence of a particular SAR.”)

First, understand that by "his disclosures", Avenatti means "my disclosures", as the upcoming royal wedding has no doubt led him to refer to himself in the third person.

But I love the takeaway from his argument: "I didn't break any law. The schmuck who got them for me did!" The Ecuadorian embassy was unavailable for comment on whether they have any open rooms in New York.

To finish off the week, Cohen's lawyers filed their brief opposing Avenatti's admission to the case, as the judge had previously requested.

Again, as things still stand, the USAO-SDNY hasn't modified their position that they don't want Avenatti in the case either but, whatever, they are pretty much in the back seat and along for the ride until the special master is finished sorting the evidence seized from Cohen.

Oh, did I mention that this case is about the USAO-SDNY looking to bring criminal charges against Cohen? Just in case you forgot. It's one of those irrelevant details that's easy to forget in all the exciting rock 'em sock 'em action.

So, in comes Cohen to take his turn with potshots against Avenatti. His brief is here:

https://www.courtlistener.com/recap/gov.uscourts.nysd.491943/gov.uscourts.nysd.491943.53.0.pdf

When you apply for PHV admission in a jurisdiction to which you are not directly admitted, you agree to play by the rules of that jurisdiction. Amazingly, New York actually has the same rule that California does on the subject of extrajudicial statements about a case:

Rule 3.6 of the New York Rules of Professional Conduct, provides the following:

A lawyer who is participating in or has participated in a criminal or civil matter
shall not make an extrajudicial statement that the lawyer knows or reasonably
should know will be disseminated by means of public communication and will
have a substantial likelihood of materially prejudicing an adjudicative proceeding
in the matter.

This will likely shock you to know that while the Empire State has no attorney regulation specifically addressing, "Going ape shit over people speaking Spanish in a sandwich shop", they actually DO have a rule against "Shooting your mouth off on television about a case you are involved in." I know, right?

The brief goes on to make the outrageous claim that Mr. Avenatti has made numerous media appearances about the case, and that since he's not following the rules already, the court shouldn't let him in. The flaw in that argument is, of course, that Avenatti is not yet admitted. All Avenatti has to do is to point out that, of course he'd stop appearing on TV to talk about the case just as soon as the court admits him. Boom. Done. Tell him that and send him my paypal address.

It's worth backing up a moment to talk about "Waddya gotta do to get pro hac vice admission anyway?" Ordinarily it is bone-dead simple. You get your state attorney licensing authority to give you a certificate of good standing, you get a local attorney to vouch for you, you fill out the form, pay the fee, and you are in. Avenatti's PHV petition is itself something of a thing of wonder, and is kind of worth backing up to look at and marvel:

https://www.courtlistener.com/recap/gov.uscourts.nysd.491943/gov.uscourts.nysd.491943.49.0_1.pdf

I mean, hey, he got the 2009 Orange County Trial Lawyer of the Year, and was voted best dressed in his high school yearbook, etc., but one little statement slipped by:

"5. There are no pending disciplinary proceedings against me in any State or Federal court."

Well, here we might end up talking about what the meaning of "are" is. I am not directly familiar with the disciplinary mechanism of the California bar. Orly Taitz, multiply sanctioned in federal courts, is an attorney in good standing, and by all accounts healthy gums. So, what constitutes a "pending disciplinary proceeding" or whether Calbar holds theirs in courts, I don't know. The only thing I know about Calbar is that if they invite you to speak at a CLE event, they get you a nice hotel room.

As Cohen's newly-filed motion notes:

The California Bar Association, of which Mr. Avenatti is a member, acknowledged in an
April 18, 2018 letter that it is currently investigating a complaint regarding Mr. Avenatti’s
alleged lack of fitness to practice law in the state. See Brooke Singman, Michael Avenatti being
investigated by California State Bar, Fox News (May 17, 2018), available at
http://www.foxnews.com/politics/2018/05/16/michael-avenatti-being-investigated-by-californiastate-bar.html.

This Court’s Local Rules provide that an applicant for pro hac vice admission to
the Court certify “whether there are any disciplinary proceedings presently against the applicant
and (d) the facts and circumstances surrounding any affirmative responses[.]” S.D.N.Y. Local
Case 1:18-mj-03161-KMW Civ. R. 1.3(c) (emphasis added). In Mr. Avenatti’s affidavit filed with this Court dated May 13,
2018, he stated “[t]here are currently no pending disciplinary proceedings against me in any
State or Federal Court.” ECF 46-1, at 3. Mr. Avenatti has not explained why he failed to
disclose the California Bar’s pending investigation into his conduct. Accordingly, his
submission does not comply with the requirements in the Court’s Local Rules.

Again, whether Calbar is "conducting an investigation" as Calbar has stated, rises to the level of a "pending disciplinary proceeding" may be something of an issue of semantics, which the court might want to look into (as well as whatever Avenatti might fill in on that topic in his next filing in reply to this opposition). Totally IMHO, it might have been better for Avenatti to mention that some jackass filed a bar complaint which is still in an investigational stage up front, and a little less Orange Queen of the 2009 Lawyer Festival.

The two remaining points are fairly nicely done by Cohen's counsel at McDermott Will and Emery, and really point out why it is a good idea to hire a lawyer when the focus of some part of a proceeding is about oneself. They jump on Avenatti's previous filing that he has a "right" to be admitted, by pointing out that there is no right to PHV admission (which is correct), and also have some fun with Avenatti's claim that absent his admission in this proceeding, then Daniels wouldn't have any legal representation. I mean, hey, other than by speaking Spanish at a sandwich shop, it's really hard to find a lawyer in New York City.

At the end, they set up an interesting proposition. Avenatti doesn't have a "right" to admission, and they've kicked up some dust over the claim that he spends a lot of time on television in apparent prospective violation of the relevant rule of practice in New York. But, since his admission is a disputed issue, the court may decide to examine Avenatti on any contested points before proceeding. If that happens, Cohen's motion proposes this:

We believe that it is vital that the Court inquire as to where Mr. Avenatti obtained the
SARs report(s) and related nonpublic bank records of Mr. Cohen. Those bank records and
reports are not attorney work product. They were purloined from protected federal agency files
and made public by Mr. Avenatti. If he fails to answer, he should not be admitted pro hac vice
in this proceeding before the Court.

It's an interesting proposition. As much as we want to see Cohen get nailed to the wall, courts don't work by conducting Twitter polls. This is a criminal proceeding. Among the top priorities in a criminal proceeding is safeguarding the rights of the defendant. The basic argument is "we can't trust Avenatti to act responsibility in connection with any confidential material he might come across by admission to this case". Hence, it is sort of relevant to ask, "what was the deal with the SARS" and if it comes down to him saying, I don't have to tell you (for which it's hard to think of a theory as to why), then the court can just as easily say that it doesn't have to let him into the case either.

So, this case, which is about the USAO-SDNY conducting a criminal investigation into Cohen (in case you forgot) and how to process the materials seized in the raid on Cohen's office is, for the time being, squarely all about Michael Avennati. Pending the special master wrapping up, the bulk of the court's attention is being sought by three parties to weigh the facts and law relating to Mr. Avennati's behavior.

On edit:

It figures - some late-breaking hip-shooting from Avenatti came in, which I posted downthread here:
https://www.democraticunderground.com/100210630928#post6

[procon]

1. The legal stuff is over my poor head, but this has a fascinating soap opera appeal. nt

[Kirk Lover]

2. Don't worry...nobody is forgetting that this is a CRIMINAL case against COHEN and it

is guaranteed it will ensnare many others.

[jberryhill]

8. You'd never guess that from the docket

But it's more like:

Things To Do While Your Special Master Is Busy

I can only imagine how thrilled the judge is with this bullshit nonsense piling up from all sides. This kind of nanny nanny boo-boo stuff among counsel is #1 on the hit parade of "Do you jackasses think I have nothing better to do with my time?" which, mutatis mutandis, is uttered daily in courtrooms across the federal system.

[dixiegrrrrl]

3. Well, that was a fun read.

and apparently a website worth checking out.
A few seasons from now, it will probably make American Crime Story fodder.

thanks....

[Kaleva]

4. Love your posts on this.

[Amaryllis]

5. THis is unsettling:

"Avenatti's brief concludes by hanging out to dry the poor schmuck who gave him the SARS. "
I hope Avenatti doesn't turn out to be a user.

[jberryhill]

7. I though so, but opinions may differ

He could have simply gone with "I didn't break any laws" instead of going on to suggest that someone else did.

[jberryhill]

6. But wait! There's more!

It freaking figures that Avenatti would shoot from the hip in response to Cohen's brief, instead of letting it chill over the weekend and replying on Monday, at least.

One of the more interesting things that can happen in adversarial proceedings is if the other side loses their cool and acts in haste, comical results can follow.

So, in comes Mr. Avenatti, late on a Friday afternoon, just to get in a quick rim shot:

https://www.courtlistener.com/recap/gov.uscourts.nysd.491943/gov.uscourts.nysd.491943.54.0.pdf

For several reasons, he should have waited until Monday. But to highlight just a few.

In his PHV application, he said:

"5. There are no pending disciplinary proceedings against me in any State or Federal court."

Now, he's updated that with:

"6. I have never been formally disciplined by the State Bar of California or any other similar regulatory body."

And here's the problem with supplemental affidavits. The first time, he mentioned "pending disciplinary proceedings against me in any State or Federal court." Well, that's fine, because those types of proceedings aren't held in those courts.

So, in round two, he says "I have never been formally disciplined by the State Bar of California". Well, okay, then. But these two statements, on their face, beg two questions:

1. Have you ever been informally disciplined?

2. Are there any pending proceedings before the State Bar of California?

A few minutes of reflection, instead of "let's act like it's Twitter", would have been advisable here.

On dangling proposition 2, he goes on to say that he hasn't been notified of one, that Cohen didn't provide evidence of one (which is also correct, but not really relevant), and likewise goes on to say that there's no evidence of any of the stuff about the SARS.

That's all well and good. He's quite right that just because some jackass filed a complaint with the state bar, it doesn't mean there is a "proceeding", depending on whatever the disciplinary procedures of that bar might be.

But all of that is largely irrelevant to the point here. Avenatti is not on trial here. Admission pro hac vice is not a right or entitlement - it is completely discretionary with the court. The court doesn't have to admit Avenatti, evidence or not. But if the court gets the notion that Avenatti is playing word games or getting cagey on something that is normally so mundane as PHV admission, it's not really a question of whether there is "evidence" that the SARS were obtained by some dumb schmuck who broke the law and is now pretty much dangling in the wind, nor is it a question of whether there is any "evidence" that there is a pending proceeding at Calbar. By filing the declaration to the effect of "Calbar never finished one", and "I haven't been notified of one", his declaration raises more questions than it answers. Incidentally, insofar as I am familiar with procedures in other states, disciplinary boards don't notify you when they get a complaint, but do spend a little time looking into it before making a decision to go forward with it. Whether that constitutes a "pending proceeding" may be a matter of semantics.

Incidentally, none of this is normal.

Honestly, PHV admission is normally about as complex as ordering a burger at the drive through window. I've never even seen a situation where it was a contested issue.

But by arguing "Cohen didn't prove any of that stuff" instead of "None of that stuff is true", as if there is some sort of burden shifting going on, I can easily see the court suggesting that if Daniels wants intervenor status, then plenty of other attorneys are available.

[The Velveteen Ocelot]

9. Interesting stuff, thanks for your analysis.

Avenatti seems to be getting a bit too fond of the camera. It might be time for him to back off a bit and try to get his pleadings in better order. I do like it that he's getting under Cohen's and Giuliani's skins, but his desire for media time might end up being more of a problem than an advantage.

[grantcart]

10. Great fun, thanks