The Value of the Judicial Branch - Perspective

My father once told me “If I EVER hear that you refer to your mother as ‘my old lady’, it will not go well with you.” He was a master at understatement. What he provided in that one statement was something I came to appreciate. It is critical to look beyond immediate statements and to see their overall impact. And that leads us to today’s discussion of the most important quality of the judicial branch--perspective.

Our constitutional framers recognized that the executive and legislative branches were inherently pollical. James Freeman Clarke famously noted that “A politician thinks of the next election; a statesman of the next generation.” Human nature being what it is, it is easier to be a politician than to be a statesman.

Immediate gratification in the news cycle simply reinforces that. When you couple grandiose statements of policy and the desire of the media to find headline material, statesmen are simply not newsworthy. Rather, derogatory shorthand terms are an easily digestible way to make snap and often unfounded judgments more palatable.

Back to the framers. The balance to short-sighted political machinations was provided by the judicial branch. It is there that a defined, meticulous process looks beyond bravura to see whether an action actually has merit under our system of laws. Unlike others, the role of the courts is not to grab headlines but to provide analysis. That is not sexy and, frankly, you cannot summarize a 45-page legal opinion in 25 words or less.

The process also takes significant time. It is more important to get things right than quickly. So, after the dust settles and the courts reach their decisions, the news cycle has long since moved on. However, it is the principle of the decisions that have the greatest lasting impact.

Within the last few days, some court opinions have illustrated the benefit of a reasoned approach to legal issues.

-  A dismissed lawsuit against CNN was unanimously affirmed on appeal by the appellate court sitting en banc (meaning ALL of the justices participated). This included six justices appointed by President Trump.

·    - The Supreme Court found that tariffs were illegally imposed, noting that the executive branch had unconstitutionally usurped power restricted to the legislative branch.

·    - The attempted dissolution of Voice of America was an abuse of discretion.

·   -  The appointment of US attorneys in New Jersey violated the process for appointment and put into question the legality of some prosecutions.

·   -  The change in vaccination protocols not only violated the process to change the rules but also attempted to circumvent the appointment of members to an advisory council.

As a society, we can take comfort in the continued role of the judicial branch to provide perspective. We may not always agree with the outcomes of these cases (and US Supreme Court decisions often have extensively argued dissents). However, maintaining the rule of law is our greatest protection against actions that are, to put it most kindly, self-serving.

If we have one thing to fear, it is that respect for this co-equal branch of government may diminish, particularly through the use of name-calling. As Chief Justice John Roberts said earlier this week:

“You get used to the criticism right away, and it can very much be healthy. We don’t believe that we’re flawless in any way, and it’s important that our decisions are subjected to scrutiny, and they are. The problem, sometimes, is that the criticism can move from a focus on legal analysis to personalities.” 

 One more thing. I never called my mother “my old lady.”

Why the Conservative Split on the Tariff Case Is So Intriguing

Friday’s 6-3 Supreme Court opinion decided that Trump’s use of tariffs was an improper exercise of power that was reserved to Congress under the Constitution. The reason for the conservative split is perhaps the most intriguing part of the decision. As always, I am not going into the weeds and much of follows is a dramatic oversimplification for purposes of clarity.

Before getting to the disagreement among the conservative justices, we need to back up. Just because six justices agree on a result, that does not mean that they agree on the reasons for their ruling. Where there is a second, separate reason for a decision, the justices using that alternate rationale will write what is called a concurring opinion. Here, the three liberal justices found a separate reason for agreeing with Chief Justice Robert’s decision. In other words, they agreed with the result but not the reasoning. This means that in this case, there were at least two distinct reasons why what President Trump did was improper.

 In many cases, Supreme Court decisions rest on differing views about how to construe the Constitution and statutes. Typically, opinions on how to apply the Constitution is what separates the conservatives from the liberals. That was not the case here.

In the tariffs case, the conservatives agreed on the standards by which to judge Trump’s actions. That would often result in them voting in a block—but not here.

The standard applied in the tariffs case is one which has often been used by the courts to give the President a significant amount of discretion and leeway. Chief Justice Roberts’ opinion said that even this broad authority has its limits. President Trump exceeded that authority by attempting to take away something given to the Legislative branch by the Constitution. The dissenting justices would put no such limitation on the president.

Dissenting Justice Kavanaugh, in one of the weakest arguments you will likely see, noted that trying to return the ill-gotten tariffs would be extremely complicated. Think about that in another context. Say that a business defrauded millions of customers. Would you let it off the hook because of the difficulty in repaying those who were defrauded?

The bottom line is that although the conservative justices have generally agreed on expanding the powers of the executive branch, in the tariffs case, three of them said enough is enough.

Why the Million-dollar Sanction Was Imposed Against Trump

In 2022, President Donald Trump filed a lawsuit against dozens of defendants, including Hillary Clinton, making several claims, including two under the Racketeer Influenced and Corrupt Organizations Act (RICO) and three under Florida law. The District Court ultimately found that all of these claims were “frivolous” and that the conduct of Trump and his attorney, Alina Habba, were so egregious that they were ordered by the District Court to pay nearly $1 million to the defendants as sanctions (penalties) for how they brought and pursuing such a meritless case. The 11^th Circuit Court of Appeals affirmed the penalty.

The purpose of this note is not to talk about the actual merits of the case, such as they were, but instead to show how many ways a plaintiff can screw up their own case.

The most difficult, yet extremely important, course your first semester of law school is called “Civil Procedure.” It outlines in great detail all of the rules you must follow in pursuing your case. It is not unusual to not understand how the rules all work together until two-thirds of the way through the course. However, unless you understand these rules, you are simply not qualified to practice law in the courts.

To appreciate why the million-dollar sanction was imposed, we will look as the exceptionally basic ways in which Trump and Babba violated the rules of civil procedure.

First, a case must be brought in a timely manner. The Statute of Limitations outlines how long you have to file a case, which varies depending on the type of case. The complaint against Clinton et al was filed after the Statute of Limitations had expired. That by itself was enough to kill the case.

Second, when a complaint is filed, the allegations must be “clear and concise.” If your complaint simply throws everything against the wall hoping something will stick, this is called a shotgun pleading. There is an easy way to avoid this problem. If you are claiming different reasons to win, you file these reasons in separate counts. Here, there were five theories, hence five counts.

To make things easier for the court, and to keep the complaint from becoming incredibly long, relevant fact paragraphs from the first count are often “incorporated by reference” in subsequent counts. The key here is that you only incorporate relevant facts into later counts. In this case, count three incorporated 633 paragraphs from the previous counts, whether or not they were relevant to the third count. This is classic shotgun pleading.

Third, a complaint is often amended to add additional information or to correct misstatements from the original complaint. The amended complaint failed to correct a number of misstatements in the original complaint, even though these errors had been brought to the plaintiffs’ attention.

 Fourth, once sanctions have been imposed, any objection to those sanctions must be filed according to specific rules. Plaintiffs failed to follow those rules.

Fifth, once you decide to appeal, the appeal must state ALL of the errors you believe were committed by the district court judge. Any arguments not presented in your appeal documents are considered “waived.” Trump and Babba decided to argue a few of the waived arguments on appeal, which is a basic no-no.

Sixth, supporting arguments on appeal generally have the following format. Appellants (Trump and Babba) file their initial brief in support of their appeal. This brief contains all of their arguments. Appellees (Clinton et al) file their brief in opposition. Appellants then may file a Reply Brief to address arguments made by appellees. Here, Trump and Babba raised entirely new arguments in their reply brief, something that appeals courts view with derision.

Committing even one of these errors is enough to cause the ire of a judge. Commit all six of these (including numerous minor errors that I haven’t bother to mention), and the judges can easily determine that your case is frivolous and brought in bad faith.

When all of these procedural errors were considered, along with ludicrous nature of the underlying arguments, The appellate court had little difficulty in concluding that the District Court judge properly exercised his discretion in imposing the sanction on Trump and Babba.

 

Was the $355 million judgment against Trump “fair”?

When Kary Tur on MSNBC asked this question of legal analyst Lisa Rubin, the mere question caused outrage among some who thought the question was inappropriate. It is a legitimate question that deserves an answer.

The difficulty of addressing the question is that the legal issues involved in the case are not ones that we normally encounter. Further, the reason for the amount of the judgment may seem to be counterintuitive.

In a typical civil case that requests money damages, the focus is on the amount of loss suffered by an injured party. So, for example, if someone breached a contract with me, I would be entitled to receive what the wrongdoing cost me. This is not that kind of case. Instead, this case comes from a New York statute that evaluates the improper benefits to an individual who gained that benefit through fraud. Recovering that money is called “disgorgement.’ It is not necessary to show, for example, that a bank suffered due to nonpayment of a debt. It is sufficient to show that the conscious manipulation of valuations gave an individual better contract terms than if he had been honest with values.

Try this analogy. I am applying for a mortgage on my home. My credit score is 500. A bank would charge me 7% interest based on that credit rating. However, I have fraudulently convinced the bank that my credit score is 780, entitling me to an interest rate of 5%. During the course of the loan, I made all the payments on time; never defaulted. The financial result to me is that I saved thousands of dollars in interest and the bank, though making some money, did not get what they would have been entitled to had I been honest in my application. Furthermore, having gotten away with it in my home mortgage, I used the same fraud to get more favorable rates on a series of rental properties. Since there is no question that I saved a lot of money by my fraud, I have received an improper benefit. When the case of disgorgement comes to court, I am liable for my ill-gotten gains. In addition, since I am showing no remorse for doing this, the court imposes punitive damages, recognizing that unless I am penalized, I will continue that same fraudulent conduct.

During the course of a six-week bench trial before Justice Engeron (no jury trial is available under the statute), Engeron listened to and evaluated the credibility of numerous witnesses. He heard notable examples of fraudulently inflated property values. He learned that Trump’s New York apartment of 10,000 square feet was valued as though it was 30,000 square feet. He also found out that the Florida Mar-a-Lago property, though restricted by deed forever as a “social club,” was valued as though it was a personal residence.

Justice Engeron’s 93-page decision is fastidious in recounting the testimony of all the witnesses and his rationale for determining the witnesses’ credibility. His conclusion was that Trump and his family, business associates and companies engaged in pervasive misrepresentation of property values over a number of years. The Judgment amount calculated the benefit they received as a result of their fraud.

So was the damage amount “fair”? According to the rules set forth in the New York statute, it was certainly defensible, though the total amount can always be reduced on appeal.

I have two side comments.

One contrarian argument about the case is that the statute had never been used before where there was no established loss to another party, Hence, it was ”selective enforcement.” This is a garbage argument. Consider that Al Capone’s conviction for tax evasion was the first time the tax laws were used to convict a crime boss. Just because a statute is infrequently used does not mean that it has any less value in a particular case.

Reluctantly, I also need to make brief mention of Trump’s legal representation in this case. Excusing for the moment Aline Habba’s disregard for courtroom decorum, she made some mistakes about admitting evidence that would make a first-year law student cower in embarrassment. Her actions will dramatically harm rather than help any attempted appeal.

FAQs About the New York Judgment Against the Trump Organization and Family

There is a lot to unpack from Judge Engoron’s 39-page opinion and order yesterday finding fraud by the Trump Organization and its principals. Due to the multiplicity of issues, I’m going to use a “frequently asked questions” format. 

What is this case all about?

The New York State Attorney General filed a civil suit against the Trump Organizations, some of its related companies and individuals who were officers in those companies, including Donald Trump, Donald Trump, Jr. and Eric Trump. Ivanka Trump has been excluded as a defendant due to a prior appellate court decision. 

The suit claims that all of the defendants “committed repeated and persistent fraud by preparing, certifying and submitting to lenders and insurers false and misleading Statements of Financial Condition,” all for the benefit of Donald Trump. Although there is a great deal of accounting wiggle room in determining the value of property, the Attorney General claims that the defendants’ overvaluations were “egregious.” 

Did this opinion and order come after a trial?

No, we are still in the pretrial stage of this. There has previously been an injunction issued against the Trump Organization (upheld on appeal twice) to prevent it from transferring or otherwise disposing of property. 

The current matter concerns Motions for Summary Judgment, one filed by the Attorney General and the other by the Trump Organization. A Motion for Summary Judgment usually claims that the facts are clear enough that it is not necessary to go through an entire trial to establish them. Defendants in their motion claimed that “there is nothing here” and that the suit should be dismissed. The Attorney General asked for Summary Judgment on only one of the claims, the one alleging fraud. 

Why is this case going to a bench trial where the judge makes the decisions rather than by a jury?

Since Donald Trump is claiming in the media that this judge is biased against him, you would think he would be demanding a jury trial where 12 people would decide the case. There is a limited time after a case is filed in which to demand a jury trial. For reasons I am at a loss to explain, the defendants’ lawyers did not make a timely demand and the period to demand a jury trial has expired. Therefore, Judge Engeron is hearing the case because of a decision (or lack thereof) by the defendants. 

Who prevailed in the Motions for Summary Judgment?

The Attorney General did. Defendants’ Motion for Summary Judgment was denied. The Court found that the defendants committed fraud, the Trump Organization’s certificate to exist in New York is revoked, defense attorneys were fined, and the only matter remaining on the first count of the lawsuit is how much the State of New York is going to be owed. 

Why were the defendant’s attorneys each fined $7,500?

Judges hate it when lawyers do two things: continue to argue matters that have already been decided (here, TWICE on appeal) and make legal arguments that misquote cases. 

The first analogy that comes to mind is when someone contends that the Bible says: “There is no God.” Though that is an accurate quote, the phrase preceding it says: “The fool has said in his heart.” Defendants did the exact same thing in quoting one of their supporting cases. Really, really bad form. 

Isn’t pulling a corporation’s certificate to operate a truly severe action?

Yes, and it does not happen often. Judge Engoron noted that civil cases do not offer the same remedies as criminal ones, such as jail. When everything else has been tried and nothing else worked, only extreme measures are left. 

Some parts of the judge’s opinion have led to some talking points by the defendants. 

“How can there be fraud if we have never defaulted on a loan resulting from the financial statements?”

This is worth a Lawdromat article of its own. We usually think of money damages as restitution to the person harmed. If I am guilty of fraudulently obtaining $1,000 from you, I owe you that money back. This is restitution. 

The Attorney General here is asking for up to $250 million under a completely different, but well established, legal principle called disgorgement. Disgorgement focuses on the gain to the wrongdoer rather than the loss to the victim. As a previous New York case said: “Disgorgement aims to deter wrongdoing by preventing the wrongdoer from retaining ill-gotten gains from fraudulent conduct. Accordingly, the remedy of disgorgement does not require a showing or allegation of losses to consumers or the public; the source of the ill-gotten gains is ‘immaterial’.” 

It therefore makes no difference whether there was a default or not so long as there was fraudulent activity. 

“Even wrong valuations aren’t fraudulent because there was a disclaimer about the accuracy of the numbers.” 

From the opinion:

In his sworn deposition, Donald Trump said: “Well, they call it a ‘disclaimer.’ They call it a ‘worthless clause’ too because it makes the statement ‘worthless’.” Donald Trump goes on to say that “I have a clause in there that says, don’t believe the statement, go out and do your own work. This statement is ‘worthless;’ it means nothing.”

In finding that the “worthless” claim was indeed worthless (judge’s words, not mine), the judge cited a New York case finding that disclaimers are not effective when the facts are “peculiarly within the defendant’s knowledge.” The judge goes into much greater detail, but you get the point – disclaimers cannot be used to cover up misconduct that you create. 

“Mar-a-Lago is not overvalued. If anything, it is UNDERvalued.”

Mar-a-Lago was one example the judge used to show defendants’ fraudulent use of overvaluation. It is contained in pages 25-27 of the opinion. It makes little sense to go into the weeds about the judge’s analysis here. 

What is curious, however, is that the defendants’ current post-decision comments are not referencing (as far as I have seen) the court’s other detailed overvaluations: Seven Springs Estate in Westchester County, NY; Trump Park Avenue, 40 Wall Street, The Trump Tower Triplex, Aberdeen in Scotland; and U.S. golf clubs. These analyses cover twelve pages of the opinion. 

What is coming next?

The Summary Judgment only dealt with Count I of the complaint. The remaining counts will require additional evidence at a trial that is scheduled to begin next month. You can also expect the defendants to appeal yesterday’s order. It is never wise to predict what an appellate court will decide, but decisions such as this one, exhaustively annotated, are seldom overturned.

What Happens When You Ignore the Rules of Discovery – Rudy Guiliani

We have all seen those movies where people are frantically running papers through a shredder to destroy a “paper trail.” We normally associate that with criminal activity. Lawyers, though, immediately relate that to the rules of evidence because once there is even a threat of litigation, you are under a duty to keep potential evidence from being destroyed.

Once any litigation starts (civil or criminal), the first step in preparing for trial is to find out what the side has in terms of physical documents. If materials are not voluntarily turned over to the other side, as the prosecutor typically does for a defendant in a criminal matter, you can get access to documents by “discovery.” A paper is filed with the court, asking the other side to produce a variety of records that you believe are relevant to the case.

The other side may ask to limit the request if seems too all-encompassing, but they will ultimately turn appropriate material over or face penalties if they refuse. Yes, some of the material turned over may be harmful to one’s case, but the entire purpose of discovery is to make sure that the trial is based on all the facts.

So what happens if someone does not turn over those documents? The impacts increase in severity. First, the court will ask you politely to comply. Second, the court will tell you firmly to comply. Third, the court will impose financial penalties, including attorney’s fees. Fourth, the court may completely hammer your case: as a plaintiff, dismissing the case entirely; as a defendant, enter a judgment against you without even going to trial. 

Today, Rudy Guiliani got the hammer. Guiliani had been sued by two election workers in Georgia, claiming that they had been defamed by his comments. These plaintiffs repeatedly asked for documents, and even after a number of court proceedings, little was produced. Even the award of damages and attorney’s fees (which still have not been paid) had no effect. The judge had no alternative but to proceed to the next stage.

The judge’s 57-page order noted that Guiliani did not claim ignorance of the rules of evidence, having stated in Court that “he ‘understand[s] the obligations’ because he has ‘been doing this for 50 years’.” Guiliani’s total course of conduct, according to the judge, “demonstrated utter disregard for the court’s deadlines by employing tactics plainly intended to do nothing more than delay the resolution of this matter.” 

The judge, having exhausted every other means to get compliance, entered a default judgment against Guiliani, effectively finding that he did indeed defame the election workers. A jury will still meet, however, with the limited job of deciding how much Guiliani will owe the plaintiffs in punitive damages. 

As part of the jury instructions, the judge said that the jury will be instructed “that they must, when determining an appropriate sum of punitive damages, infer that Guiliani is intentionally trying to hide relevant discovery about his financial assets for the purpose of artificially deflating his net worth.” 

When the fines, attorney’s fees and punitive damages are added together, this will be a most expensive case. The failure to comply with the discovery rules also made it almost completely avoidable. 

Note: this post was written to show the importance of complying with the rules of discovery. A number of components of this particular case have been omitted for purposes of clarity.

Why You’d Want to Move Your Case in Georgia to the Federal District Court

A number of defendants in the Georgia state racketeering case against Donald Trump and 18 others are attempting to have the case removed (or transferred) to the Federal District Court.

There is no question that the charges against these 19 individuals are for violations of Georgia state law. It made sense, then, that the prosecutor filed the charges in the state court.  As of this writing, at least two of the defendants have asked that their cases be transferred to the Federal District Court because there are federal law issues that arise from their conduct.

Here is where it gets a bit complicated. As a general rule, purely state law violations are tried in state court. Similarly, federal law violations are tried in the federal courts. The defendants are suggesting that there are state AND federal implications to their charges. As such, the only proper place to hold the trial (if the case is not dismissed) is the Federal District Court. That argument is correct. A state court does not have jurisdiction (or the authority to hear the case) when there are Federal law issues, but a federal court properly takes jurisdiction if there are both federal and state issues.

In order to have the case removed to federal court, defendants must show that their conduct raised federal law issues that were not considered when the charges against them were brought. Those federal issues are, according to the argument, essential to their defense.

As a defendant, I am telling the court that even if everything in the indictment against me is true, I still should not be found guilty because I have a complete federal excuse for what I did. Federal law provides many protections for individuals who are serving in a federal office, including being immune (free) from prosecution if what they did was part of their job. This is an important and legitimate safeguard.

The problem for defendants is that they cannot even raise the federal defense issue in the state court. Therefore, the defendants in the Georgia state case have asked the Federal District Court in Georgia to take the case to raise them. 

What the district court judge needs to decide from the outset is whether there truly is a federal issue. This is not an automatic decision. The judge must determine whether there is an actual federal issue or whether the defendant is simply trying to get the case moved to the federal court to get it out of the state court. In other words, is this a legitimate defense.

There are a number of reasons why a defendant would want the case transferred to the federal court.

The best outcome is a finding that the defendant has a complete federal defense to his or her actions. The case is then dismissed before a trial even takes place. Even if the judge rules against the defendant on the federal arguments, the case does not then go back to the state court. The federal court retains jurisdiction.

If the case goes to trial, I want it heard in the federal court. Here are a few of the many reasons.

First, delay. If one of my goals is to stretch out the process, removing the case to the federal court adds additional procedural steps before trial, and each of these take time. Some federal issues (if decided against the defendant) can be appealed even before a trial occurs. Also, due to the federal court calendar, trials will often be scheduled later.

Second, there is a larger pool of qualified attorneys to defend you. The federal rules of evidence and procedure are generally universal (with some notable exceptions). Rules and procedures in the state courts vary substantially. Therefore, lawyers who practice in the federal courts anywhere in the country have a degree of familiarity on their side.

Third, the jury pool for the district court is larger and presumably more diverse. This is especially helpful in geographic areas where the state court populace is not particularly favorable to your side. The goal of every defendant is to have jury members who do not think alike and are even antagonistic to each other.

Fourth, if you lose, you generally are processed through the federal incarceration system where conditions are generally better (a relative term) than state prisons.

With all that said, there is one “benefit” to a federal court trial that is absent when a case is removed from the state court—pardons. Federal convictions can generally be pardoned by the president; state convictions cannot. However, since the federal court is ultimately hearing a case on state issues, any pardoning options remain the same as if the trial were held in the state court.

  

What You May Not Know About the Right to a Speedy Trial

Individuals have many familiar Constitutional rights. Freedom of Speech and the Fifth Amendment protection against self-incrimination are notable. Nobody but the individual may claim or waive those rights. So, for example, I cannot appear in court and demand that you testify against yourself.

The right to a speedy trial is an exception to that rule. This right applies to individuals AND to society. The courts have repeatedly held that justice is best served when a defendant’s trial occurs as soon as reasonably practicable. The benefits to society of a speedy trial are many and varied. A delayed trial may affect the availability of witnesses and memories of particular events. In more egregious cases, it limits the amount of time a defendant can use to intimidate witnesses or to attempt to try the case in the media.

Interestingly, the ability (and duty) to schedule a trial as soon as practicable is one of the most valuable arrows in a judge’s quiver. In some cases, it is impractical to hold a defendant in jail pending trial. Assessing fines for improper conduct may not deter wealthy individuals. And, most significantly, issuing a gag order may arguably violate the defendant’s free speech rights.

In cases where the alternatives are ineffective, society is protected by having the trial date accelerated. A judge frequently asks both the prosecutor and defendant for a proposed trial date and, absent a clear abuse of discretion, the judge’s determination will stand.

Sometimes defendants desperately want a trial delayed. Well-disciplined prosecutors can short circuit many delay attempts. Consider what the prosecutors in the DC case against Donald Trump did.

First, they only named one defendant. The more defendants there are in a case, the more individual delay arguments that can be raised.

Second, they limited the charges to those that have a strong history of judicial interpretation, even though there were other potential charges available to them. Many delays are caused by a defendant claiming that the charges they face are “unique.”

Third, they provided trial evidence (often called “discovery”) to the defendant promptly and well outlined, giving them more time to prepare a defense. 

Parenthetically, you will hear that there are millions of pages of discovery that have been turned over. Defendants claim that it will take years to read it all. This is a red herring. The state-of-the-art in reviewing discovery is to use computer-aided, key word searches. The idea that there are paralegals actually sitting down and reading millions of pages harkens back to a bygone era. It is simply unnecessary and no longer happens in the real world. Sounds good, though.

On August 28, the judge is scheduled to hear arguments about when the trial should begin. Prosecutors will argue in favor of a speedy trial, suggesting a highly aggressive date of January 2, 2024. Defendants will counter with a date of April 2026 or the Rapture, whichever occurs first.

The judge will set the trial date based largely on the elements discussed above.

What Is Missing From the Georgia Indictments?

Lawyers read legal filings differently from the general public. Whereas most people (including the talking heads) react to what is there, lawyers are more interested in what is omitted. The Georgia indictment handed down in today’s early hours is no exception. 

Unlike the DC court indictment which reads like a crime novel, the Georgia indictment is intricate and tedious. Such is the nature of a racketeering case. The first count of the indictment lays out, in sequential order, the 161 acts that constituted the “criminal enterprise.” All of the 19 named defendants participated in the alleged criminal behavior at some point or another, with some of the cast of characters appearing at different times. 

There are at least two important things missing from the indictment. 

First, detail. An indictment is not required to recount in excruciating detail what the evidence is that support each of the 161 criminal acts. Therefore, at this point we do not know exactly what happened on each of these occasions. That evidence will come out later. All that is required in the indictment is to lay out the bare bones of the criminal activity. 

Second, and here’s where it gets interesting, there are 30 unindicted co-conspirators mentioned in the indictment. What this means is that there were not “just” 19 people who engaged in the criminal activity; there were 49. 

The remaining 30 individuals are most likely people who have cooperated in the investigation (or were minor characters) and have therefore not been charged. The testimony that cooperating witnesses provide at trial will help the prosecutor prove the case. Should they fail to continue cooperating, there is nothing to prevent the prosecutor from adding them as defendants at a later date. 

The existence of unindicted co-conspirators generally points to a much stronger case. It is one thing for an independent witness to recount what “they” did (and then to have their credibility challenged on cross-examination). It is entirely another to have someone testify what “we” did. 

So, what is the takeaway from the “missing” parts of the indictment?  Of the 49 people who allegedly were part of the criminal enterprise, at least some of the 30 unindicted co-conspirators are likely cooperating with the investigation in some manner. In other words, they have already flipped. Does this mean that all of the remaining 19 will go to trial? Not likely. As the strength of the evidence against them increases, expect some of the remaining defendants to change their pleas in exchange for testimony and/or a reduced sentence. If that occurs, any criminal enterprise that existed will implode on a limited number of people. 

Note that my comments are first impressions. The case is exceptionally complex, and a lot of unexpected twists and turns are likely to occur before any trial takes place.  

Gag Orders and Protective Orders – One Affects Free Speech, the Other Does Not

“Objection, Your Honor!” I am not a fan of TV court dramas, but the one thing these programs generally get right is that both sides to a criminal trial may make objections. More often than not, these objections relate to how evidence is provided in court—or whether the “evidence” can even be heard by a jury.

The rules of evidence are highly complex, but they are designed for only one purpose –to make sure that the jury only hears what will allow them to properly make an impartial decision concerning guilt. In order to guarantee a fair trial, the jurors should be hearing that evidence for the first time in court.

The purpose of a protective order is to safeguard both the process and the people involved.  One component of such an order is that the defendant should not attempt to intimidate witnesses or jurors. You would think that this is an unnecessary admonition. Sadly, some people need to hear that.

More important for our purposes is the less frequent requirement that some information that may become evidence should be withheld from the defendant.

If you have ever taken small children to a party, you understand far too well that you never know what’s going to come out of their mouths. One way to limit the potential damage is to not discuss sensitive matters within their hearing. This is a day-to-day example of a protective order. If they haven’t heard something, they can’t repeat it.

Some defendants do not need the admonition to not speak inappropriately. Other defendants have a history of speaking without a filter. In those cases, the prosecutor will ask that some information not be shared with the defendant personally. This part of a protective order is designed to protect the integrity of the jury process and trial. On other words, it is a legitimate attempt to insure that the trial is conducted in court and not in the media.

A defendant retains the right to speak about his or her innocence and to say that the evidence, at trial, will offer vindication. A protective order, then, is not a violation of one’s First Amendment rights to free speech, and the judge may impose penalties, including fines or even imprisonment, for defendants who will not honor the rule of law. In exceptional cases, when the defendant remains intransigent, the judge may take the next step and issue a gag order.

Gag orders severely restrict what a defendant may say prior to trial, beyond weighing in on the evidence. These are orders of last resort because they have the potential to prevent defendants from strenuously affirming their innocence. Due to the severity of the restrictions, issues of the First Amendment right to free speech may arise.

Therefore, the terms “protective order” and “gag order” should not be used interchangeably. You should be wary of anyone who attempts to confuse the two.

Parenthetically, lawyers may also be subject to protective orders and disobedience to those orders may subject the lawyer to additional disciplinary action, including disbarment.

Is there enough to charge?

The most intriguing news last week was that a federal grand jury issued a 37-count indictment against former president Trump. The purpose of this note is not to take a position on the strength of the case. Rather, we will look at how the grand jury process safeguards the rights of a defendant. 

Federal felony charges can have devastating results. A conviction carries more than potential fines and jail time. It can also impact other individual rights such as the right to vote or the opportunity to obtain a security clearance. 

In our legal system, the seriousness of those impacts on individual freedom results in an added layer of protection for people charged with serious federal crimes. To put it simply, a defendant has THREE chances to win. 

A grand jury is a group of individuals, similar to a regular jury, that is selected from the general populace. It is not a politically appointed group. Their role is to examine evidence and testimony presented by the prosecutors and, on that basis, to recommend whether formal charges should be brought against a particular defendant. 

Grand juries are empaneled all the time and most of their work never receives media coverage. The reason is that many grand juries decide that there is simply not enough evidence to recommend an indictment. If the grant jury finds that evidence of a crime is lacking, the defendant wins without ever facing trial. 

The grand jury’s role, then, is to prevent the government from bringing charges to simply aggravate or penalize a defendant. The testimony and evidence that the grand jury receives is concededly one-sided. Its job is simply to look at evidence most favorable to the government and to see if there is enough evidence to warrant filing charges. In other words, the grand jury process prevents a “witch hunt” on a most basic level. 

Once charges are filed, there is a second chance for the defendant to win without going to trial. This is the pre-trial stage where the defense attorneys will argue that the charges should be dismissed from the outset. Dismissal can be granted for a variety of reasons including: the indictment was filed in the wrong court, the charges do not fall within the charged federal statute, or that the facts alleged in the indictment (when viewed most favorably to the government) do not provide enough evidence of a crime. If the judge dismisses the case at this early stage, the defendant once again wins. 

Finally, there is the trial. If the jury does not find that the government has proved its case beyond a reasonable doubt, the defendant wins. 

All of these procedural steps illustrate “due process” at its best. The systematic method of case preparation and presentation also answers the question of selective prosecution, or “why hasn’t so-and-so also been charged?” The straight-forward answer is that the prosecutor looks at the three stages where a defendant can win and decides not to waste time on those cases where success is not extremely likely.

 

Goodbye to the Special Master in the Mar-a-Lago Search Warrant Case

The Department of Justice (DOJ) obtained numerous boxes of materials from Donald Trump’s residence at Mar-a-Lago, pursuant to a validly issued search warrant based on a finding of “probably cause.” Many of the documents collected were marked “classified” and should have been turned over to the National Archives and Records Administration. 

Mr. Trump was not pleased. In response, he filed a new action in the United States District Court for the Southern District of Florida, which he styled as a “Motion For Judicial Oversight And Additional Relief.” This case was assigned to Judge Aileen Cannon—whom Trump had appointed.  Judge Cannon decided that the Justice Department should not have access to the materials for investigative purposes until a Special Master reviewed them and decided what the DOJ should properly have. 

The DOJ appealed the decision to the 11^th Circuit Court of Appeals. The DOJ argued that the appointment of a Special Master was ludicrous and that Judge Cannon should not have entertained the case in the first place. Today, a three- judge panel (one appointed by Bush and two by Trump, for those who are keeping score), issued a scathing opinion in favor of the DOJ. The first paragraph of the decision says it all: 

“This appeal requires us to consider whether the district court had jurisdiction to block the United States from using lawfully seized records in a criminal investigation. The answer is no.” 

This was not a difficult decision for the Court of Appeals to make. It all comes down to a fundamental rule in the Federal court system. Federal courts are called courts of limited jurisdiction. In other words, there are specific rules and classifications that apply before a federal court will even accept your case. If the case that you, as a plaintiff, want to file does not fit into those classifications, you are out of luck. 

There is one exception to that rule, however. If you can show that an extremely rare reason exists, the court may exercise “equitable” jurisdiction. As the Court of Appeals said here, “Only the narrowest of circumstances permit a district court to invoke equitable jurisdiction. Such decisions ‘must be exercised with caution and restraint,’ as equitable jurisdiction is appropriate only in ‘exceptional cases where equity demands intervention.’” 

The judicial test to see if it should exercise equitable jurisdiction has four components—and you need to satisfy all of them. The Court of Appeals found that Judge Cannon was incorrect on all four. Therefore, not only did the judge not have the authority to appoint a Special Master, but she lacked jurisdiction to hear the case at all. 

The result is that the entire case filed by Trump is being dismissed and the DOJ can continue with its investigation, using all of the materials obtained in the search warrant. 

It is, of course, possible that Trump’s attorneys will ask the Supreme Court to overturn this decision. A reversal is exceptionally unlikely.

Search Warrants and National Security

 

When we last discussed the search warrant for Trump’s Mar-a-Lago residence, Trump was flummoxed that his appointed judge had found probable cause to issue the warrant. So he went to a different judge that he had appointed (Judge Cannon) to get an injunction against the use of the materials seized. His belief was that a Special Master should be appointed to review the seized items. The ultimate goal was to have some of the items returned to him and to have others taken from investigators for a number of inconsistent and mutually exclusive reasons.

Trump’s lawyers and the Department of Justice both proposed two names to be the Special Master, with the DOJ eventually agreeing to one of Trump’s proposed Special Masters, Judge Raymond Dearie. 

In Cannon’s appointment of Judge Dearie, she also set the rules for his review of the items seized in the warrant. She said he was to review everything but that the DOJ could continue, for classification purposes only, the review of approximately 100 documents with top secret or similar markings. The DOJ was prohibited from using the materials for any other purposes, including the continuation of their criminal investigation. 

It was clear to the DOJ that Trump’s goal in having a Special Master appointed was to delay and obfuscate the proceedings as long as possible and to throw in as many objections as possible. So they had a choice. They could either sit back and wait for Judge Dearie to complete his review (which could take months) or to appeal Judge Cannon’s order to the 11^th Circuit Court of Appeals. 

The cynical among us would first look at the composition of the 11^th Circuit. In all likelihood, they would be Trump-appointed judges. The DOJ decided to appeal but did so in a brilliant manner. They could have appealed the appointment of a Special Master, but the 11^th Circuit could very well deny that appeal on the grounds that Judge Cannon was simply exercising judicial discretion.

Instead, the DOJ focused on a singular issue – the national security interest in protecting top secret documents and in taking prompt and prudent action to make sure that (1) our national security was not compromised and (2) any criminal activity related to those documents was vigorously pursued. 

It came as no surprise that the three-judge panel hearing the DOJ appeal had two members appointed by Trump. That mattered not. It took the court mere days to rule, unanimously, that the DOJ was correct in its analysis. Their decision reversing Judge Cannon was as brutal a rebuke as you will ever see from a court. Typically, a court will say that the judge “erred” in her analysis. This court said that she had “abused her discretion.” This is the judicial equivalent of asking “Are you kidding me????” There are four legal standards that Judge Cannon was supposed to meet to justify her order. The 11^th Circuit found that she was wrong ON ALL FOUR. 

Within 18 hours of the 11^th Circuit decision, Judge Cannon “amended” her previous order, giving the DOJ full authority to use those 100 documents for criminal investigation purposes. 

Special Master Judge Dearie, who is highly respected jurist, was in the unenviable position of sitting in the middle of this ping pong match. He had been dutifully following Judge Cannon’s directives, but when the 11^th Circuit ruling came down, his marching orders changed in an instant. 

Judge Dearie has adopted a no-nonsense approach. He hired another judge to help expedite the review of the materials (at $500/hour with the cost to be paid by Trump). He also gave Trump’s attorneys one week to decide whether Trump would argue, under oath, the various claims he has been promoting on Truth Social and his favorite talk shows. This is the judicial equivalent of “put up or shut up.” The smart money is not on “put up.” 

This would be the end of my post were it not for something I have never seen before. Decisions of appellate courts are often quoted in later cases as a matter of establishing the credibility of those rulings. It is typically months, if not years, before a decision is quoted. 

The 11^th Circuit decision was quoted in, get this, 17 hours! 

Mike Lindell, the My Pillow guy, had his phone taken by the FBI at a Wendy’s drive-through. He argued that he should get it back. Forget for the moment that his legal argument was poorly constructed. What was notable was that the court denied his request, quoting the 11^th Circuit. 

I’ve had cases where the judge has asked whether I had any more recent case authority to support my position. That was probably not an issue here.

The How and Why of New York’s fraud case against Donald Trump

The long-expected civil fraud case against Donald Trump and others was finally filed this week. It is 220 pages of allegations against 16 defendants, covering 11 years of alleged misdeeds, 20 different properties, and 16 different varieties of fraud. To say the complaint is comprehensive is an understatement. 

It is not my purpose here to get into whether or not the case has merit, though there is certainly enough to survive a motion to dismiss. Instead, it makes sense to step back and answer some frequently (and not so frequently) asked questions. 

Why file a civil case rather than a criminal one? There are a number of reasons. First, civil cases are easier to prove. You only need to prevail by a preponderance of the evidence rather than showing guilt beyond a reasonable doubt. Second, a defendant has no fifth amendment rights in a civil case. You may recall that when Trump was subpoenaed to testify, he refused to answer more than 400 times. That refusal may be used by a jury to infer culpability. Third, in a civil case you may get a money judgment. Here, we are looking at the possibility of $250 million. Fourth, in a civil case you can get more than just money. One of the results of this case could prohibit Trump from doing business in the State of New York. Fifth, you can sue someone without stating he is a criminal, something that defendants often decry to show that they are being unjustly prosecuted. Sixth, a state civil case cannot be dismissed with a pardon. Seventh, there is still the possibility that Trump and his family may face criminal charges. However, those cases should be filed by a different party, such as the IRS. 

Why file the case now for conduct going back to 2011? The timing seems a bit suspect. Blame Trump for this one. For many years he has used every possible legal maneuver to keep relevant information from the attorney general, including tax and accounting records. It was only last month that the attorney general was finally able to obtain records from Mazars, one of Trump’s accounting firms. This was the missing piece of the puzzle. 

Why are there so many defendants besides Donald Trump? The answer to this is finger pointing. One common defense to fraud is that “somebody else did it” and that the complaint should be dismissed for that reason. The complaint names all of the major parties who could be that “somebody else.” A second reason to name multiple defendants is that they may have different levels of involvement or defenses to the actions. In many cases, defendants within the same lawsuit may throw others under the bus in order to escape personal liability. 

Why does the alleged fraud cover 11 years? Proving that conduct occurred over multiple years eliminates the defense that this was an inadvertent, one-time “mistake.” 

Why does the alleged fraud include 20 different properties owned by Trump or his organizations? Similar to the multi-year rationale, the attorney general can show that fraud was pervasive and took many forms. 

Why didn’t the attorney general sue Trump for other wrongdoing? First, the fraud complaint is complicated enough without adding in other allegations. Second, lawyers try to not add weak allegations when they already have a strong one. Third, confining the allegations to fraud eliminates the defense that the attorney general is “piling on.” Furthermore, there is no reason why a separate lawsuit covering other matters could not be brought later on. 

If this case goes to trial, when will that happen? Years from now. 

Then what will the impact of the lawsuit be between now and trial? The lawsuit provides sunlight. Much of Trump’s traditional answer to prospective charges is that they are politically motivated or a “witch hunt.” Here, the attorney general has provided chapter and verse of wrongdoing. In addition, prospective lenders are now on actual notice that the Trumps may have engaged in questionable business practices. Lenders tend to be reluctant to provide financing to those with a history of fraud.

The complaint, as lengthy as it is, is only required to show that bare bones of the fraudulent conduct. Much greater and potentially damaging detail will come out as the lawsuit progresses. By the same token, any defenses will also come to light.

So Now We Have a Special Master

Today, Judge Aileen Cannon, a federal district court judge in Florida, granted Donald Trump’s request for the appointment of Special Master to independently review materials acquired during an authorized search in Mar-a-Lago. 

The reasoning in Judge Cannon’s 26-page order showed that even a moderately qualified judge can be a talented contortionist. I’ll leave the legal shortcomings of the opinion to be parsed by others. Stepping back, though, a few things are notable. 

First, there is nothing in the order to indicate that the search of the premises was either illegal, ill-advised or politically motivated. In fact, the judge noted that: 

[T]he Court agrees with the Government that, at least based on the record to date, there has not been a compelling showing of callous disregard for Plaintiff’s constitutional rights. This factor cuts against the exercise of equitable jurisdiction.

That talking point about the search warrant has bitten the dust. 

Second, one of Judge Cannon’s reasons to appoint a Special Master is, to use her words, “the interest in ensuring the integrity of an orderly process amidst swirling allegations of bias and media leaks.” She further noted that “[a] commitment to the appearance of fairness is critical, now more than ever.” 

As reasonable as this sounds, Judge Cannon failed to address the fact that she was appointed by then-president Trump, and that she had indicated, even before the government was able to present its arguments, that she was “inclined to grant the injunction.” 

When the “appearance of fairness” is at issue, a judge will often recuse (refuse to hear the case). She never even mentioned that possibility, as ethical judges are wont to do. Instead, she also found that “[t]hough somewhat convoluted, this filing is procedurally permissible.”

Third, even while stopping the investigative use of the seized materials, the judge held that “The Government may continue to review and use the materials seized for purposes of intelligence classification and national security assessments.” Allowing this review to continue showed that there were national security concerns raised by Trump holding onto official archival records. Apparently, including this review in the injunction order was a bridge too far. 

The Department of Justice is currently weighing whether or not to appeal Judge Cannon’s order. The investigative delay caused by appointing a Special Master is a minor inconvenience at best.

 

Cutting through the search warrant noise

I have spent considerable time this afternoon sorting through the contents of the warrant, reading the statutes, and gauging the various reactions to it.

We can get rid of a couple of talking points right away. 

First, from a legal standpoint it does not matter whether the materials seized were classified or not. It also does not matter whether Trump did (or could) declassify these documents on his own volition. Those arguments are smokescreens. The statutes underling the warrant, especially those dealing with espionage, make no distinction between classified and unclassified materials. The only question is whether Trump was, as a matter of law, entitled to retain these documents and materials.

Second, as Attorney General Garland pointed out, search warrants are not issued lightly, particularly at this level. The record shows that the materials seized this week had previously been subpoenaed. It was Trump’s failure to produce them under the terms of the subpoena that made the search warrant the only available remedy to get them. 

Moving on. It is the job of lawyers to cut through the noise (and there’s plenty of it here). While most people are talking about what was seized, the most critical piece of the puzzle is the criminal statutes listed in the probable cause affidavit that led to the warrant being issued. 

In order for the judge to grant the search warrant, he needed to find probable cause for EACH of the statute violations that would constitute a crime. Therefore, if the judge decided that the only violated statute was retaining government records, he would have rejected the part of the warrant pertaining to other crimes, including espionage.

Do you see why this is important? It means that the judge found probable cause that there was a violation of the espionage statute. THIS is what people should be talking about. 

Further, because espionage necessarily involves more than one person, the seized materials may be used to charge additional individuals with numerous felonies, including treason. 

If indictments eventually come down for a number of people, the serious finger pointing will start and plea deals for cooperation will begin.  Typically, the smaller fish rat out the larger ones and we know who the largest fish is. 

Some are suggesting that the issuance of the search warrant smacks of political vindictiveness. However, both the FBI Director and judge were appointed by Trump. They had every excuse to not act. However, probable cause of espionage simply could not be ignored. 

“Taking the Fifth“ has its risks

We normally associate “taking the Fifth” with a criminal case. Refusing to testify or answer questions where you are a criminal defendant cannot be used against you by the jury. This is your constitutional right against self-incrimination. 

In civil cases, the impact of refusing to testify is more complicated. Consider what happened today in New York. 

Donald Trump appeared this morning for questioning under oath in New York’s continuing investigation into his business practices. He refused to answer questions, citing his Fifth Amendment rights. 

Although he certainly had the right to refuse to answer, that refusal may come back to bite him. In a CIVIL case, a jury may consider the refusal to testify or answer questions as evidence of wrongdoing.  This is especially true where there is independent evidence of the facts at issue. 

Trump’s argument against testifying today is at least partially based on the fact that he is currently also under criminal investigation. His fear is that his statements under oath in the civil case could be used against him in a criminal case. When he previously raised that argument in order to delay the civil investigation, the New York courts rejected it. 

Trump’s failure to succeed in what are his typical delaying tactics have now placed him in a quandary. If he does not testify in the civil matter, the jury could later use that silence to find him liable for significant money damages. If he does testify in the civil case, that testimony might damage his defense in a criminal matter. 

In spite of what has the potential of being a massive financial judgment against him, Trump really cannot afford to testify in the civil case. 

In my summation before the jury, I would note Trump’s own statement at an Iowa rally in 2017: "You see the mob takes the Fifth. If you're innocent, why are you taking the Fifth Amendment?" 

His attorney would respond with his statement posted today on his social media site: “I once asked, 'If you're innocent, why are you taking the Fifth Amendment?' Now I know the answer to that question. I declined to answer the questions under the rights and privileges afforded to every citizen under the United States Constitution." 

My rebuttal then would be short and sweet. “It is clear that the defendant feels comfortable taking completely opposite positions when it suits him. As such, he has no credibility.”

Search Warrants and Whataboutisms

Criminal investigations can be highly complex matters. The gathering of evidence is critical to making certain that any case that is brought is supported by only the most credible supporting documents. 

Some of the documentation can be obtained from third party sources, such as credible eyewitnesses, confidential informants, video and audio records, and paperwork in the possession of others. However, the frequently most damaging evidence is in the possession of the potential defendant. 

Obtaining materials from a potential defendant can be obtained in number of ways.  The defendant can always provide the materials voluntarily. Obviously, this does not happen often. 

Absent cooperation, information may be obtained by a subpoena, a court-authorized demand for relevant papers. There are a couple of downsides to the subpoena process. 

First, a subpoena may be challenged as to relevancy or scope. Challenges to subpoenas have the effect of dramatically delaying the production of documents, often for years if appeals are pursued. The reason delays are implicit in this process is that subpoenas are often fishing expeditions. Prosecutors will often ask for broad categories of information, some of which may not actually be germane to the charges. The challenges to the subpoena frequently are designed to narrow the scope of what should legitimately be produced. 

Second, and perhaps the more critical limitation of subpoenas, is that once someone knows that records are being demanded, there is ample opportunity to hide or destroy evidence. 

The final way to obtain documents is through the use of a search warrant. This method is most frequently used when there is a fear that evidence will be hidden or destroyed. 

Although subpoenas are relatively easy to obtain, the requirements for obtaining a search warrant are stringent. There are sound constitutional and public policy reasons for this. By their very nature, search warrants involve invading the homes and businesses of individuals without the opportunity for them to object. The general “fishing for information” goal is therefore not enough to obtain a warrant. 

In order to get a search warrant, a judge must approve the request. The judge must find that there is “probable cause” to believe that a SPECIFIC crime has been committed (which is outlined in the warrant request). The judge must also be convinced that material evidence about the crime is located in the premises to be searched. Finally, the judge will specifically circumscribe when and where the search is to be conducted. 

Once the materials are seized, this is not the end of the protections for the defendant. Seized materials are still subject to evidence rules pertaining to what may be used in a court case. 

In a lower level criminal case, the prosecutor may ask for a warrant based on the sworn affidavit of a reliable confidential informant. For example, the informant may say that he is personally aware of drug-making materials at a particular address. That will usually be enough to issue the warrant, because if the defendant knew someone is coming, there would be nothing left to find. 

The standard for obtaining a search warrant for a former president is incredibly and nearly impossibly high. Any judge would be extremely reluctant to issue the warrant unless the rationale for obtaining it was almost unassailable. In the Trump case, the Justice Department imposed an even higher degree of difficulty upon themselves by requesting the warrant from a judge that Trump appointed. Therefore, to say that the DOJ likely had a strong case coming in is a massive understatement. 

Those reacting negatively to this warrant have variously described the process as “corrupt” or as evidence of the “deep state.” That argument is pure garbage. The process to obtain this warrant followed the precise procedural safeguards that forms the basis of our system of government. 

Further, for those who are saying “other people have committed crimes too, why isn’t the DOJ going after them?”, remember the exceptionally high standard for obtaining the warrant. Mere supposition of a crime, even if it fits your preferred narrative, is simply not enough.

Why Stopping a Subpoena Can Be a Big Thing

The State of New York has sued the Trump Organization and Trump family members individually as part of investigation into several questionable financial dealings. Oversimplified, the suit suggests that the defendants carried at least two sets of financial books. One set of books purportedly inflated property values for purposes of obtaining financing. Another one deflated values for tax purposes. 

This is a civil suit that seeks financial damages, unlike a criminal suit that might result in jail time. 

New York issued subpoenas to Trump family members to testify under oath in a deposition. Today’s hearing was to hear Trumps’ objections to these subpoenas. The court denied Trumps’ objections and ordered the family members to appear for depositions within a few weeks’ time. The order will certainly be appealed. 

One may ask why this is such a big deal. After all, Eric Trump has had his deposition taken previously in this case and “pleaded the fifth” more than 500 times. 

As anyone who has taken a Government class will recall, you are never forced to testify against yourself. You are completely protected from incriminating yourself. The effect of refusing to testify (or answer questions), however, is markedly different in criminal and civil cases. 

In a criminal case, the refusal to testify may not be used against you. Thus, a jury must disregard your willingness or unwillingness to testify in determining your guilt or innocence. 

In a civil case, you retain the right to refuse to answer questions or testify. However, the jury make take that into account in deciding the case. In other words, a jury could infer bad intent if the Trumps were to refuse to answer questions. 

Donald Trump has repeatedly said publicly that people who “take the fifth” or refuse to testify are likely guilty of charges against them. The State of New York will undoubtedly introduce those statements into evidence at the eventual civil trial if testimony is refused. 

That is why it was so important for the Trumps to win on the subpoena motion. Having lost, they are now facing a true quandary. Do they testify and subject themselves to explaining financial discrepancies (and possible perjury) or do they remain silent and accept the consequences of that inference? 

The answer to that question has taken on even greater weight this week when their accounting firm stated in a letter that financial statements over the last ten years are unreliable. In the same letter, the Trump Organization was fired as a client due to a “conflict of interest.” 

In this context, “conflict of interest” means that the accounting firm believes that their interests and that of the Trump Organization are in conflict. The Trump Organization was, to use a common phrase, thrown under the bus.

Stormy Daniels – the Importance of Four Days

It has been a while since Stephanie Clifford, aka Stormy Daniels, has been in the news. You will recall that she was paid $130,000 to keep quiet about her dalliance with Donald Trump. After this liaison became known, two lawsuits were filed. 

In the first, Daniels claimed that the non-disclosure agreement she signed was fatally defective and that she was entitled to tell her story. She won this case.

In the second suit, Daniels filed a defamation lawsuit against Trump for his disparaging remarks about their presumed relationship. That case was dismissed by the court because the statements made by Trump did not meet the legal standards for defamation. 

In both cases, the winning side was entitled to attorneys’ fees. Daniels was awarded $44,100 in the nondisclosure case. In the defamation case, Trump was awarded $292,062.33. Much of the disparity in attorneys’ fees was due to the relative complexity and time involved in the cases. 

From the outside, one would think that the two cases could be brought together financially, with Daniels paying Trump the difference between $292k that he won and the $44k she did. That apparent solution is not that simple legally. 

On the Trump-winning side, we have the issue of her liquidity. She simply does not have it. The reason is that her former attorney and short-term media darling, Michael Avenatti, absconded with funds belonging to her as the result of a book deal. It has since been revealed that the now disbarred Avenatti made a practice of spending his clients’ money and attempting to extort others. It is also apparent that the defamation case he filed on her behalf was not done for her benefit but to keep him in the public eye. 

Arguably, then, the reason Daniels owes Trump any money at all is because of Avenatti’s avarice. Daniels could, of course, attempt to get that money back from Avenatti, but she is near the back of a long line of creditors. 

The bottom line for attorneys’ fees payment from Daniels is that she is simply “not collectable.” 

The “four days” referenced in the title to this article concerns the $44k owed by Trump to Daniels. Trump’s then attorneys attempted to appeal the attorneys’ fee award. That is where the legal stuff comes in. 

There is a legal adage that lawsuits are nothing more than a series of hurry up and wait. The “hurry up” is caused by specific, strictly enforced timelines that lawyers are required to follow. 

In the present case, Trump’s lawyers had 60 days from the court clerk’s certification of the lower court attorney’s fee order to file their appeal. This time limit is called “jurisdictional,” meaning that if you miss the deadline by even a day, your case is finished. No exceptions. This strict rule probably causes lawyers more panic than anything else. Miscount the days? You lose. 

Trump’s attorneys’ fees appeal missed the deadline by four days. They attempted to argue that the clerk’s certification really had not occurred until days later than appeared on the certification form. This time difference would have given them additional time to file the appeal. The appellate court panel said the evidence simply was not there to prove that. Therefore, since the appeal was not timely made, the case is finished.

It is highly unlikely that money will ever change hands between Trump and Daniels. So financially, there is no winner. The true losers are Trump's former lawyers who will now need to explain to their forgiving and longsuffering boss why they lost. I hope their malpractice insurance premiums are up to date.