(Updated March 27) Unless you are living under a rock, you know that Stormy Daniels and Donald Trump are locked in multiple lawsuits over the alleged tryst and subsequent non disclosure statement.
And the press is only concentrating on the scandalous or political aspects.
But if you put aside the politics and the indelicate facts underlying this story, there are several very interesting legal questions here. This case is becoming a perfect example of legal issues that real people seldom see in the real world.
The first shot was fired by Ms. Daniels. She sued the President to have her non disclosure agreement invalidated (voided, in legal terms). This is not your typical lawsuit. She is not looking for money damages from the President.
This is a suit for declaratory judgment – a very special kind of lawsuit that is fairly rare in the experience of the average civil lawyer. I have only handled two in my career that I remember.
A claim for declaratory judgment is technically a lawsuit, so the press is not wrong. But it is not what you think of when you think of a lawsuit. It is better to think of this as sort of a “pre-lawsuit” action where the court has to make some decisions on strictly legal and technical issues before there is a “real” lawsuit.
Maryland allows a court to “declare” the rights of the parties to a contract or deed or similar legal instrument, in a situation where there may be some doubt as to what those rights are. The purpose is to allow the parties to resolve uncertainty and ambiguity in their legal status, without requiring a real, full on, lawsuit.
If there were no such thing as a declaratory judgment action, the parties to an uncertain contract would have to actually violate it and have a real lawsuit before a court would figure out what their rights are. That would require a breach (or potential breach) of the contract before you could get the court involved.
The Stormy Daniels case is a perfect example. She is claiming the contract between her and Donald Trump is not valid because he never signed it. She says it is not even enforceable, and therefore she can ignore it.
By filing a declaratory judgment action, she can get the answer to that question now before she (potentially) violates the agreement and gets sued.
Otherwise, the only way to find out whether that is a valid contract is for her to violate it, let Trump sue her, and then see what the court thinks after a long and painful and expensive litigation process. Obviously, that would be the difficult way to get a relatively simple answer to a relatively simple question.
Behind the Scenes
As an attorney, i think I know what is going on behind the scenes. But let me first say I have NO inside information into this case. I am just speculating based on my experience as a lawyer.
We know Stormy Daniels threatened to tell her story about a month ago. Then everything went silent. What I think happened is that Donald Trump’s lawyer sent her a letter warning her not to go public in violation of the agreement, and threatening to sue her for huge damages if she did. In that situation, the right thing to do would be file this declaratory judgment action and get the court’s blessing before going public with her story.
There is another option. If Ms. Daniels is shopping her story around to a publisher or media outlet, the wise publisher or media outlet would force her to go through this declaratory judgment action before they publish her story. Otherwise, Trump could sue the publisher or media outlet for damages for publishing the story they know to be in violation of this agreement. In that case, the right thing to do is get the court to declare the rights of the parties before Ms. Daniels can tell her story.
Donald Trump and his attorney have denied all of the allegations raised by Stormy Daniels, including the allegation that they had any sort of relationship.
The agreement signed by Ms. Daniels contains an arbitration clause. That means the agreement requires the parties to litigate any dispute about it in private arbitration – not open court.
Arbitration clauses are very common in contracts. They take the case out of the public court system, and keep it private and less formal. Maryland has an arbitration law that should be the subject of its own post later. It is way too much to discuss in detail here.
So the court may find that this entire matter has to go to arbitration. If so, there will be no public decision on the issues Ms. Daniels has raised. You will only know if she won or lost by whether or not she eventually publishes her story. If it stays in court, there will be a public order that anyone can see.
The Claim of a Threat = Duress
In her 60 Minutes interview on March 25, Stormy Daniels claimed she only signed the non-disclosure agreement after a man threatened her in a parking lot as she was carrying her daughter. She claims that the only reason she signed the agreement was because of this threat and her fear for her life.
This is an interesting legal development because it provides a good reason for the court to void the contract between her and Trump. Under Maryland law (and I presume California is the same) you can only void a contract in certain specific conditions. One of those is when the contract was made “under duress.”
If I force you to sign a contract because I am holding a gun on you, you can later go to the court and void the contract because it was made “under duress.” The court will view the contract as invalid if you only did it because of the threat.
So this claim of a threat is way more than a scandalous tidbit in this story. It is a legal defense to a contract. If the court believes Ms. Daniels only signed the contract because she was threatened – she was under duress – then they may void the contract and treat it like it never happened. Then she can do whatever she wants with her story. (But she will have to return the $130,000.)
Defamation Lawsuit vs Trump’s Lawyer
And another interesting legal development happened after the 60 minutes interview. Ms. Daniels sued Donald Trump’s lawyer for defamation. Trump’s lawyer is Michael Cohen. In February he publicly said Ms. Daniel’s claims were not true. She sued him Monday March 26 for defamation, claiming he basically called her a liar.
On the surface, this looks like a classic spitting match between two attorneys. But legally speaking, this is a scorched earth litigation tactic being used by Ms. Daniels and her lawyer to put Trump in a very awkward position.
The next move will almost certainly be a claim that Trump’s lawyer should get out of the other lawsuit because he has a conflict in that he is also a defendant in this defamation suit.
This puts enormous pressure on the Trump team because Michael Cohen is essentially carrying all the water for this case. He has been handling this matter as a one man band. If he is out, where will they turn? Will Donald Trump be able to find another lawyer that is half as loyal?
Once you see the tactical reasons for this suit, you understand it is much more than two lawyers getting into a spitting match.
The Stormy Daniels vs Donald Trump lawsuit is interesting for a lot of issues. But it raises the interesting legal issues of declaratory judgment, arbitration, defamation, and conflicts of interest.
Stay tuned! This promises to get even more interesting!
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