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. 

 

Trump’s Tweets Sink a Non-Disclosure Agreement

Businesses have a legitimate interest in protecting confidential and sensitive information as well as their public reputation. Requiring employees to sign non-disclosure and non-disparagement agreements (NDAs) are one method of ensuring that. These written agreements may also be used with third-party contractors and volunteers (especially to political campaigns).

NDAs may also have the effect of limiting an individual’s free expression rights under the First Amendment. Therefore, the agreements require a delicate balancing of the inherent rights of the two parties.

Jessica Denson was hired by the Trump campaign in 2016 as a Hispanic outreach director. She accused the campaign of sex discrimination. Under the terms of the NDA, an arbitrator was appointed and issued a $50,000 award against her for violating the terms of the agreement. The arbitrator based his ruling only on the terms of the NDA. It was not his role to decide whether the NDA was actually enforceable. That award was later overturned.

Denson then filed suit against Donald J. Trump For President, Inc. in Federal court, claiming that the NDA was so broad in its scope that it was not enforceable and was an unwarranted intrusion on her Constitutional right of free expression.

The Federal District Court judge examined the NDA to see if it was “reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee.” Yesterday's ruling said it was clearly not.

For example, the agreement placed NO limits on time and area. It also was incredibly broad as to the people and entities who were “protected” by the agreements.

The provision applies not only to President Trump and his family members – including unnamed spouses, children, and grandchildren – but also to any legal entity ‘that, in whole or in part, was created by or for the benefit of . . . or is controlled or owned by’ President Trump or any of his family members. President Trump himself is affiliated with more than 500 companies, and his family members may be affiliated with yet more.

Showing that the NDA was overly broad was only half of Denson’s battle. She next needed to show that her free expression would likely be infringed by it. In other words, would there be an attempt to enforce it?

In many cases, this would be difficult to prove. Here, Trump did it for her. All the court needed to do was to quote his tweets. Here is one of the many that the court quoted.

[On] August 31, 2019, President Trump tweeted, ‘...Yes, I am currently suing various people for violating their confidentiality agreements. Disgusting and foul mouthed Omarosa is one. I gave her every break, despite the fact that she was despised by everyone, and she went for some cheap money from a book. Numerous others also!”

The court concluded: 

[T]he Campaign has engaged in a pattern of enforcing or threatening to enforce the Employment Agreement’s non-disclosure and non-disparagement provisions against former Campaign employees, including Denson, Newman, Sims, and Johnson. And the primary intended beneficiary of the Employment Agreement – President Trump – has tweeted about his efforts to enforce non-disclosure agreements. Given this record, Denson has demonstrated a “well-founded fear” that the Employment Agreement will be enforced against her.

Trump’s lawyers tried one last gambit. Maybe the court could salvage the good parts of the NDA, something called “blue lining.” The judge said no, that the agreement was not salvageable without a complete rewrite.

To summarize, the NDA attempted to do much more than just protect legitimate business interests and Denson was harmed by it. 

Denson’s win only applies to her own NDA. However, it is likely that others who were required to sign similar agreements may also try to get them declared invalid.

Considering that dozens, if not hundreds, of similar NDAs exist out there, the exposure to the Trump organizations is extensive. Therefore, expect an appeal of this ruling.