Authored Articles & Publications Mar 30, 2018

Stormy Daniels’ Attorney May Have Fallen Into SLAPP Trap

Legal Analysis by BB&K Attorneys Damian Moos and Kandice Kim in Law360

By Damian Moos and Kandice Kim

California’s anti-SLAPP statute presents a formidable trap for the unsuspecting plaintiffs attorney, especially when it comes to claims that are based on statements connected to an actual or possible legal matter. The consequences for filing a SLAPP suit (strategic lawsuit against public participation) can be devastating. And it appears that the attorney for adult film star Stormy Daniels, Michael J. Avenatti, may have just stepped on that legal landmine, subjecting himself and his client to an anti-SLAPP special motion to strike and substantial monetary sanctions.

On March 26, Daniels’ attorney filed an amended complaint in which he added a defamation cause of action against President Donald Trump’s personal attorney, Michael Cohen. The defamation claim is based on Cohen’s denial of the truth of Daniels’ claimed affair with President Trump in a Feb. 13 press release in which Cohen stated, “Just because something isn’t true doesn’t mean that it can’t cause you harm or damage.” In the amended complaint, Daniels asserts that Cohen’s statement falsely conveys that Daniels is a liar and that her claims about her relationship with Trump are not true.

In adding the defamation claim, Avenatti may have made a potentially costly blunder given that Cohen initiated arbitration proceedings against Daniels on Feb. 27 — just days following his press release. Moreover, Cohen issued his press release that contained the allegedly defamatory statement to address a complaint that Common Cause filed against him with the Federal Election Commission regarding potential campaign finance law violations, and for which he had engaged legal representation. Given these facts, Cohen’s statements are arguably protected speech made in connection with legal proceedings under California’s anti-SLAPP statute and litigation privilege. Consequently, Daniels’ defamation claim is not only subject to dismissal, but may also subject her to significant sanctions.

California’s anti-SLAPP statute protects any act in furtherance of a person’s right of petition or free speech under the United States or California constitutions in connection with a public issue.[1] Such acts include any written or oral statement made in connection with an issue under consideration or review by a judicial body.[2] The litigation privilege similarly protects communications relating to judicial proceedings, including prelitigation communications, and is an absolute privilege.[3] These protections extend to statements made before a legal action is initiated,[4] as well as arbitration proceedings.[5] Finally, although Cohen removed Daniels’ action to federal court, California substantive law, which includes the anti-SLAPP statute, still applies.[6]

Given their close temporal proximity, it seems likely that Cohen will be able to make a compelling and credible argument that his Feb. 13 statement about Daniels was made in anticipation of the arbitration he initiated against her on Feb. 27, which presumably seeks to enforce the confidentiality provision in their settlement agreement. He can certainly claim that his statement was made in connection with the FEC matter, which predated the Feb. 13 press release. Those proceedings, like the lawsuit Daniels filed on March 6 against Trump and Cohen, all concern the same subject matter: Daniels’ alleged affair with the president and the payment made by Cohen in connection with the infamous “hush agreement” — an issue of widespread public interest. Therefore, it appears that Cohen has a strong basis to pursue an anti-SLAPP special motion to strike. If he does and prevails, then the court will strike Daniels’ defamation claim, and Cohen would be entitled to recover his attorney’s fees and costs in connection with the motion.[7]

Furthermore, filing an anti-SLAPP motion could also blunt Avenatti’s efforts to depose Cohen and Trump. Upon the filing of an anti-SLAPP motion, all discovery proceedings are stayed until notice of entry of an order ruling on the anti-SLAPP motion.[8] Thus, Avenatti’s efforts to depose Trump would be immediately thwarted by Cohen filing an anti-SLAPP motion.

Incredibly, this would not be the first time Avenatti has asserted a claim that ran afoul of the anti-SLAPP statute. Just last month, a Los Angeles judge awarded a law firm $1.6 million in attorney’s fees after it prevailed on an anti-SLAPP motion against a plaintiff that was represented by Avenatti.[9]

Given the potential for seven-figure sanctions, clients should think carefully before bringing a defamation claim, or any tort claim, that is based on a statement that is even loosely connected to an actual or potential lawsuit or arbitration. It is important to examine whether such a lawsuit could be subject to an anti-SLAPP motion to strike. Failure to do so could result in not only the loss of the claim, but an award of substantial monetary sanctions to the plaintiff. It goes without saying that an order requiring you to pay the defendant’s attorney’s fees is not a good start to a lawsuit you’ve just filed.

This article was originally published March 29, 2018 in Law360. Republished with permission.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio​​ Media Inc., or any of its​​ or their respective affiliates. This article is for general info​​rmation p​​urposes an​​d is​​ ​​not ​​intended to be and​​ should not be taken as legal advice.

[1] Cal. Civ. Proc. Code § 425.16(b)(1).

[2] Id., § 425.16(e); see Briggs v. Eden Council for Hope & Opportunity, 19 Cal. 4th 1106, 1115 (1999).

[3] See Cal. Civ. Code § 47(b); Rubin v. Green, 4 Cal. 4th 1187, 1193-94 (1993).

[4] Bailey v. Brewer, 197 Cal. App. 4th 781, 789-90 (2011).

[5] Moore v. Conliffe, 7 Cal. 4th 634, 640-41, 647-48 (1994).

[6] See, e.g., Davis v. Electronic Arts, Inc., 775 F.3d 1172, 1176 (9th Cir. 2015); U.S. ex rel. Newsham v. Lockheed Missiles & Space Co., Inc., 190 F.3d 963, 973 (9th Cir. 1999).

[7] Cal. Civ. Proc. Code § 425.16(c)(1).

[8] Id., § 425.16(g).

[9] Parrish v. Latham & Watkins LLP, No. BC482394 (L.A. Sup. Ct. Feb. 13, 2018).

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