Wow.
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Open in new tab The first thing that jumps out at me is this: if you’re going to contest a nondisclosure agreement in court, you should be filing with the court under seal so the NDA isn’t breached unless/until the plaintiff—the person subject to the NDA—prevails in court. Avenatti (Stormy Daniel’s lawyer) didn’t do this and I am sure it was intentional. Because now, win or lose in the case, the subject matter is… disclosed! It also goes without saying that Avenatti shouldn’t be going on The Today Show confirming that Daniels and Trump had a sexual relationship, but again, that’s intentional.
Daniels clearly intends to disclose the breach the NDA — or rather, admit the sexual relationship because (in her view) there is no NDA. If she does, and if Trump/Cohen are stupid enough to sue her, (a) it’ll open up Trump/Cohen to new public disclosures and liabilities and (b) they may or may not be able to recoup more money than Daniels makes for breaching. So she’s hoping they WON’T sue.
But let’s take her case on its face. Does Daniels have a case to have a judge declare her NDA null and void—clearing her to tell her story for cash without any fear of a lawsuit from Cohen or Trump? On CNN, Paul Callan and Jeffery Toobin said Daniels has no chance because a) Trump wasn’t required to sign the NDA—which is Daniels’ argument for it being null and void (i.e., his refusal to sign it), and b) it’s common for third parties to sign contracts on another’s behalf. And even if a judge finds the contract was no contract at all, Cohen sending Daniels $130,000 and Daniels accepting that money could well turn what otherwise would have been a legally infirm contract into something binding.
What’s the counterargument? Well, although it is true that a third party can sign on behalf of another, there still has to be — in Contract 101 law — “a meeting of the minds” in that both parties must know what is agreed to in the NDA. Daniels could argue that she didn’t even know who she entered into an agreement with. Cohen, to obscure—or perhaps to hedge his bets about—whether he’d decide to (or had) told Trump about the “Hush Agreement,” writes that the parties bound are Daniels on the one hand and, on the other, his shell corporation “and/or” Donald Trump. What the hell does “and/or” mean?
Did Daniels contract with Trump? Maybe not, per the contract. Did she contract with “EC, LLC,” Cohen’s shell corp? Maybe not. Should a court encourage parties to so word their contracts that there’s no clarity whatsoever—indeed no force of law—as to who the contract binds?
Cohen’s phrasing makes for awkward interpretation. Take a look at paragraph 1.1 (“Parties”) in the “Confidential Settlement Agreement”:
But the contract had three signature lines—Daniels, “EC, LLC,” and Trump—and by “EC, LLC” signing but not Trump, it means that the “and/or” in paragraph 1.1 is automatically nullified, such that the contract is formally between “EC, LLC” and Daniels. David Dennison (or his representative) did not sign.
Had Cohen signed this as Trump’s lawyer, different story. But he didn’t — the DD signature is blank. If Cohen were there as Trump’s lawyer, why didn’t he sign that agreement at the same time he signed it as EC’s lawyer?
Instead of doing that, he created a corporation, then wrote a contract that makes representations on Trump’s behalf and seeks to bind Trump legally although Trump is (arguably) not a party to the contract and his tie to EC LLC is zero.
And THAT is a problem for Trump.
But again, win or lose this case, the Stormy story is now out, and Trump is boxed in a little bit about what to do next.
From the public standpoint, this is interesting titillation. But there is a serious legal issue: the lawsuit suggests that Trump was aware of the agreement and that the money was intended to influence the election’s outcome. That intimation bolsters two complaints filed with the Federal Election Commission that say the payment violated election law because it was not reported as an in-kind campaign donation.
Sarah Sanders said the situation with the payment to Stormy Daniels has “already been won in arbitration.” Asked who won and when, she said, “The arbitration was won in the president’s favor.”
— Kaitlan Collins (@kaitlancollins) March 7, 2018
Stormy Daniels lawyer, @MichaelAvenatti responds to me re Sanders’ statement Trump won at arbitration: “yeah and he also won the popular vote.”
— jimrutenberg (@jimrutenberg) March 7, 2018
Footnote: Yes, I am aware if the “EC” initials over the “DD” in the lower right hand corner of every page. But that does not resolve the problem — it only muddies it. If that means that “EC” was Trump’s agent, then why didn’t “EC” or EC’s agent (Cohen) sign the actual NDA itself?