Avenatti and Cohen both sued by Davidson

As expected, the case filed by Avenatti on behalf of Daniels against Keith Davidson and Michael Cohen has been removed by the defendants to federal court, just like the original suit against Trump and Cohen was. Kind of a dumb move on their part on account of some quirky evidentiary civil rules of California state courts concerning the Fifth Amendment, but it was IMHO inevitable, as they will probably also seek to join this with the existing case (and fail, for reasons discussed below).

Removal to federal court is proper where there is (a) diversity of citizenship (i.e. no party resides in the same state as an opposing party) and (b) the claim satisfies the federal threshold of $75,000. Here, Clifford was claiming $100,000 in damages because, among other things, Davidson failed to get her a booking on Hannity.

Okay, that last part was sarcasm, but it would have made a better claim anyway.

In any event, when someone sues you, as Clifford did here with Davidson, you get to file counterclaims (i.e. claims against the plaintiff) and crossclaims (claims against another defendant) if you'd like to. Because news reporters virtually never understand that claims in lawsuits can go both ways, it is normally styled in news reporting as a new suit, as in the subject line, which is catchier than explaining what is actually going on.

After having the case removed to federal court, Davidson manages to spectacularly punch himself in the nuts in his counterclaims and cross claims for reasons I'll get to, so hang in there a bit.

His answer to the Complaint is here:

https://www.courtlistener.com/recap/gov.uscourts.cacd.713222/gov.uscourts.cacd.713222.5.0.pdf

There are some interesting nuggets in there worth chewing on, and I'm glad to finally see a shout-out to Common Cause, which had originally filed complaints with the FEC over the Daniels payment back in January, but which gets utterly no recognition for kicking off the relevant sequence of events. Among the "things that make you go 'hmmm'" allegations are these:

At the outset of DAVIDSON’s representation of CLIFFORD he acquired knowledge of what her goals of the matter entailed, and he zealously, ethically and strenuously protected her rights in an effort to accomplish her stated goals of monetizing her reported 2007 sexual relationship with Donald Trump. Suffice to say, since Ms. CLIFFORD has begun working with Mr. Avenatti her goals have transformed

The question that nobody asks, and which puzzled me early on in the Daniels saga was "How did she get hooked up with Davidson in the first place?" Davidson's business, if you want to call it that, has long been what some people casually refer to as 'blackmail'. Although not 'blackmail' in the colloquial sense, Davidson deals in helping people get money from dirty laundry - either helping them sell their stories to tabloids, or getting a better bid from the person who would prefer to keep the story quiet. That's what Davidson does. That's why anyone hires him to do anything. The proposition is "I have a sex tape or dirty secret of some kind and I want money." That's why anybody hires Davidson.

Ms. CLIFFORD states: “[s]tarting in January 2018 at the latest,
Defendants Davidson and Cohen acted in concert to benefit not Ms. Clifford, but a client of
Mr. Cohen's, namely Mr. Trump.” She continued that DAVIDSON and COHEN “colluded
to use and manipulate Ms. Clifford in a manner designed to benefit Mr. Cohen and Mr.
Trump [and presumably to hurt Ms. CLIFFORD].” The tale as weaved by Ms. CLIFFORD
in her complaint goes on to allege that COHEN was eager and “panicked” and was
“desperate” to attempt to convince Ms. CLIFFORD to appear on FOX News with Sean
Hannity in order to lie to the American public about her relationship with Mr. Trump via the
Fox News broadcast. CLIFFORD continues that the purpose of the Hannity interview was
“not for the benefit of Ms. CLIFFORD or to ensure that Ms. Clifford truthfully told her side
of the story to the media, but for Ms. Clifford to provide a false interview and lie to the
American people to serve the best interests of Mr. Trump and Mr. Cohen.”

Ms. CLIFFORD is now remarkably conflicted in that she now seems to argue in
paragraph 15, 16 & 34 of her complaint that her interests of telling the truth to the American
public was also “ in her best interest.” This is contrary to her representations at the time
which were overtly stated that she “would do what [she] needed” in order to maintain the
performance of the October 2016 agreement and ensure she could hold on to the $130,000 in
light of COHEN’s allegations that she breached. Contrary to the assertions in her Complaint,
CLIFFORD was eager to appear on Hannity as she stated her desire to “increase her public
exposure” and thus her earning capacity. Moreover CLIFFORD was clear in her desire that
she would say and do whatever necessary in order to prevent the contractual remedy of
disgorgement of the $130,000.00 settlement funds she had received more than a year earlier.

The quote in that paragraph (and the brackets indicating that a written quote has been changed to make sense of the pronoun in context), suggests that Davidson has a written communication in the first person from Daniels about what the conversation appears to have been in January and February. Again, recapping the chronology - the WSJ had dug up the InTouch interview and published their story on January 12. That triggered additional media inquiries to Cohen and to Daniels, and there were apparently some suggestions by Cohen that Daniels was getting close to breaching the agreement in the way that she was responding to media inquiries.

In that context, that's why there were things like Cohen trying to get Daniels on Hannity to deny it, and later obtaining the written denial as alternative remedies to seeking arbitration under the hush agreement. Davidson, and very foolishly IMHO, first provides some more details about the formation of the hush agreement:

Specifically, DAVIDSON never colluded with COHEN to the detriment of CLIFFORD.
Rather DAVIDSON was hired in 2011 to prevent the continued publishing of a post on
www.TheDirty.com which as Ms. CLIFFORD then stated she did not “kiss and tell.” Later
in 2016, CLIFFORD with her manager, Gina Rodriguez, (Rodriguez), engaged DAVIDSON
in order to maximize CLIFFORD’s financial renumeration with regards to her purported
2007 interlude with Donald Trump. In October of 2016, Ms. Daniels executed two separate
agreements wherein she agreed to accept $130,000.00 for waiving certain claims, assigning
copyrights and agreeing to treat the 2007 interlude as strictly confidential. The first
agreement was executed in Los Angeles in front of Ms. Rodriguez and DAVIDSON.
CLIFFORD demanded that this first contract be rescinded because COHEN failed to meet
his funding deadline.

Roughly two weeks later, while she was in Texas, Ms. CLIFFORD, executed a
substantially similar agreement in the presence of a Texas Notary Public which benefitted
her by receiving $130,000.00 and obligated her to confidentiality regarding
the alleged 2007 interlude. The statement that DAVIDSON and COHEN “colluded” to the detriment of Ms.
CLIFFORD is a demonstrably false narrative in that DAVIDSON acted at all times at the behest
of CLIFFORD in order to fulfill her stated goals of renumeration and ensuring that
disgorgement and other remedies adverse to CLIFFORD not take place.

What puzzles me about the text exchanges between Cohen and Davidson on the subject of the Hannity show is a pretty simple question - if she was under a confidentiality agreement for which she got paid $130k, why not get the additional publicity of going on Hannity to deny it took place? Hannity's audience is her key demographic, and this would get her media exposure of the type that is hard to come by in the adult entertainment business? The counterargument of "but that would be lying!" I guess is one of perspective. From another perspective, one might call it "acting".

Enter Daniels agent, Gina Rodriguez:

21.
DAVIDSON admits the allegations in paragraph 22. CLIFFORD and
Rodriguez expressed to DAVIDSON that CLIFFORD wanted to appear on Fox News to
increase her public exposure.

22.
DAVIDSON admits that he received a text message from COHEN as
annunciated in paragraph 22 but denies anything not specifically admitted herein.
Except as expressly admitted, DAVIDSON denies each and every other allegation of paragraph 22.

23.
DAVIDSON admits that he sent a text message as annunciated in paragraph
23 but can neither confirm nor deny at this time that he was actually trying to get Ms.
CLIFFORD to appear on Fox News’ Hannity show because at some point, Ms. Rodriguez
and Ms. CLIFFORD thought that the interview would be too rushed and that the recording
of the Fox News broadcast would interrupt Ms. CLIFFORD’s professional adult
entertainment obligations, which is what she travelled to Los Angeles for.

...

34.
Davidson denies the false assertions by CLIFFORD perpetuated in paragraph
34. Specifically, DAVIDSON never colluded with COHEN to the detriment of CLIFFORD.
CLIFFORD initially wanted to appear on Hannity in order to increase her public exposure
and to please COHEN in order that he not file an Arbitration and allege that CLIFFORD
suffer the consequences related to a finding of breach.

Davidson further claims that the conversation was getting pretty heated in both directions in January/February, with both of the parties claiming breach of the hush agreement:

38.
CLIFFORD initially states in paragraph 36 that “in late February 2018, Mr.
Davidson became aware that Ms. Clifford was changing counsel and was preparing to
publicly disclose her relationship with Mr. Trump. Then continuing to ¶37: [Yet] despite
[DAVIDSON’s] ongoing duty of loyalty to Ms. Clifford, including the obligation to
maintain client confidences, Mr. Davidson secretly tipped Mr. Cohen off to Ms. Clifford's
plans. Mr. Davidson did so for the express benefit of Mr. Cohen and Mr. Trump.” She
continues in ¶38 that COHEN now “armed with this information, and in an attempt to
intimidate Ms. Clifford into silence, on or about February 27, 2018, [...] initiated an
arbitration proceeding against Ms. Clifford in order to obtain a temporary restraining order
to silence Ms. Clifford and prevent her from publicly telling her story.”
In truth, DAVIDSON’s discussions with his client, her manager and COHEN all had
to do with the parties’ competing claims of breach of the October 2016 agreement.
DAVIDSON’s contacts with COHEN were authorized by made with the full knowledge of
both CLIFFORD and her manager Gina Rodriguez. DAVIDSON was attempting to
negotiate the parties’ participation in a confidential non-binding mediation conducted by a
respected retired judge in Los Angeles County. The nature of the competing claims of
breach are summarized as follows:

A.
COHEN claimed that CLIFFORD had breached by among
other things:
i.
appearing on the Jimmy Kimmel Show and discussing her
affair with Donald Trump on or about January 30, 2018;
ii.
launching an exotic dancer tour entitled Making America
Horny Again which was alleged by COHEN to mock
Donald Trump’s oft referred to 2016 presidential campaign
slogan “ Make America Great Again’;

B.
CLIFFORD claimed that by virtue of the following acts
COHEN had indeed breached the October 2016 agreement
by:
i.
“Shopping a book” which“ promise[d]
to clarify Cohen’s role in the “unfortunate saga” involving Stephanie
Clifford, the porn star known as Stormy Daniels,
who allegedly received $130,000 from Cohen a week before the
2016 election to stay quiet about previous sexual
experiences with the then-reality-TV star Trump.” And
ii.
By filing a response to the Federal Election Committee’s
inquiry, (launched by Common Cause), in which COHEN
admitted his role in and the existence of the Confidential
October 2016 agreement.

Aside from our having a new witness to these events - Gina Rodriguez - for the media pack to go after, Davidson has put himself into some fairly deep doo-doo here. Shortly after Avenatti's suit was filed, Davidson made a statement to the effect that Daniels had entirely waived her right to attorney-client privilege.

Well, first of all, that's not true. When a client sues their attorney, they do not entirely waive privilege. There is an "exception" to the privilege, however, in that the attorney can use what would otherwise be confidential information to defend him or herself, but ONLY TO THE EXTENT NECESSARY FOR THE DEFENSE.

When Avenatti filed the suit, I noted there were reasons why, if you take Avenatti's filing at face value, Davidson was apparently a fine upstanding attorney until January 2018. The reasons, worth pointing out now, are that Avenatti does not want to get into the basic question which puzzled me from the start of this thing - "How and why did Daniels go to Davidson in the first place?" The answer to that question is unhelpful to the way that Avenatti and Daniels have attempted to frame the overall circumstances.

Avenatti and Daniels have carefully avoided any suggestion that Davidson and Cohen were colluding back in October when the hush agreement was originally negotiated. I mean, golly, that would be a blowout win for the contract case itself, since it would constitute what is called "fraud in the inducement" in contract law.

Avenatti and Daniels have not made a claim that the hush agreement is void due to fraud in the inducement, and their resistance to doing that suggests that the situation in October 2016 was along the lines of: (a) Trump is running for president and is likely going to lose because of salacious stuff coming out about him, and (b) how much is there to be gotten out of having had sex with him a decade ago?

But Davidson here has really screwed the pooch. In his belief that he can now say ANYTHING about his representation of Daniels, and by going into some more details on how the October 2016 agreement was formed, he has run right past the narrow exception of attorney-client privilege in relation to Avenatti's Complaint - which begins with the circumstances as they were in January 2018. Davidson could have perfectly well explained that Cohen had concerns about breach and was threatening enforcement of the contract, and that the parties were discussing what sort of remedial actions might suffice to address those concerns (such as the statement of denial which she signed).

So that was nut punch number one by Davidson on himself.

And then the nutpunching extravaganza begins with Davidson's counterclaim against Daniels and Avenatti:

https://www.courtlistener.com/recap/gov.uscourts.cacd.713222/gov.uscourts.cacd.713222.6.0.pdf

In a nutshell, Davidson is going after Daniels, Avenatti, Avenatti & Associates, and Eagan Avenatti, on the basis of Avenatti's tweet as follows:

Keith Davidson should have been charged after his arrest
for extortion not long ago.[...]. Watch him now try and
distract away from his own unethical conduct. Ms. Daniels
deserved better.

Davidson goes on to allege that he was never arrested for extortion. He wasn't. He was detained during an investigation arising out of the Hulk Hogan saga, but was not arrested.

Alas, it may turn out to be a distinction without a difference, since Davidson has pretty much guaranteed that this suit is going to turn around and head back to California state court. I will leave that as an exercise for the careful reader to explain why, since the answer is up at the top of this post (Hint: what do you need for removal to federal court?).

The final item on the banquet menu here is Davidson's claim against Cohen:

https://www.courtlistener.com/recap/gov.uscourts.cacd.713222/gov.uscourts.cacd.713222.7.0.pdf

The skinny on that TLDR is Davidson is suing Cohen for recording their telephone conversations.

Of course, at this point in time with Davidson, Cohen and Avenatti suiting up for a dick swinging contest with no end in sight, whatever Daniels wanted in any of this is going to end up being pretty much a footnote.

Thanks, pals.



Oh, and, please consider donating to Common Cause. They do a lot of good work, and aren't on TV every five minutes telling you what great lawyers they are.