My Style - Reclaim My Identity

Thursday, April 19, 2018

Today in WaPo: The Fault Lies Not In Our Lawyers But Ourselves

I have a post up at The Washington Post today.

Wednesday, April 18, 2018

Lawsplainer: Can A State University Fire a Professor For Being An Ass On Twitter?

Yesterday Fresno State Professor Randa Jarrar effusively celebrated the death of former First Lady Barbara Bush on Twitter.

Lots of people are clamoring for her to be fired.

Can she be, legally, consistent with the First Amendment?

Maybe.

I've written plenty of times before about the relevant legal analysis. I also discussed the lead case on the issue, and interviewed its plaintiff, in Episode Three of the "Make No Law" podcast. Here it is again, in shorter form:

Generally, the First Amendment prevents only the government, not your employer, from punishing you for your speech. But what if the government is your employer? Well, then the First Amendment offers you some protection from being punished by your employer for your speech. That protection is governed by a multi-stage analysis.

The first stage of the analysis is a question: was the public employee speaking on a matter of public interest? The quality or decency of the speech does not factor into this question. Here, Jarrar was making political comment on the death of a public figure. It's a matter of "public interest," as that is defined in the relevant cases. Had she tweeted about some purely internal matter — for instance, about how terrible her teaching assistant is — it would not have been.

The second stage of the analysis is another question: was the government employee acting as a private citizen, or as part of their job duties? If they were speaking as part of their job duties, the First Amendment doesn't protect them. There's a relevant emerging area of law here: that rule probably doesn't apply to public university professors. So, most likely, the First Amendment protects a state university professor even if they are speaking as part of their duties — with respect to the content of their classes, for instance.

Here, it seems clear that Professor Jarrar was not tweeting in the course of her duties as a professor. She was apparently on leave at the time and the scope of her duties do not include Twitter. Fresno State proclaimed in a tweet that she was speaking in her private capacity. (That was a clear reference to this analytical structure.) Therefore, we get to the next step of the analysis without having to address the emerging area of law about state college professors.

The third stage of the analysis involves a balancing test: the interest of the public employee against the interest of the public employer in promoting the efficient delivery of public services. This is by far the most touchy-feely part of the analysis. Can the government employer show that the speech in question so disrupted the workplace that it interfered with orderly business in a way that outweighs the employee's speech rights? A court is likely to give more weight to the employee's speech right if freedom of expression is an inherent part of the job, as it is (or ought to be) for a college professor. For instance, the Supreme Court has said:

Our Nation is deeply committed to safeguarding academic freedom, which is of transcendent value to all of us, and not merely to the teachers concerned. That freedom is therefore a special concern of the First Amendment, which does not tolerate laws that cast a pall of orthodoxy over the classroom. "The vigilant protection of constitutional freedoms is nowhere more vital than in the community of American schools.

So, to justify firing someone like Professor Jarrar, a state school would need to demonstrate that her speech caused rather substantial disruption of education. Of course, Professor Jarrar may have made it easy for them:

She also provided a telephone number as if it was her contact number. But the listed number ended up going to a suicide/crisis line.

Causing your school's suicide hotline to be flooded with troll phone calls presents a very arguable case for substantial disruption, depending on the evidence.

(If you think that this structure creates an incentive to react disruptively to speech, in order to supply a basis for a professor to be fired, you'd be right. If you think that schools might lie about the amount of disruption, you'd be right.)

My assessment: Professor Jarrar was speaking as a private individual on a matter of public interest. It would be difficult for Fresno State to establish that the tweets about Barbara Bush themselves caused the sort of disruption of the school's business that so outweighs her free speech interests so that it would justify her termination. However, her tweet directing people to the school's suicide hotline presents a substantially stronger case for disciplinary action by the school.

Note that this analysis does not address other limits on discipline against her, such as California state law and the union contract between Fresno State and its professors.

Also beyond the scope of this post: effusive condemnations of her behavior, discussions of which "side" is hypocritical about free speech, discussions of foreign policy circa 1988-1992, etc.

Monday, April 16, 2018

Lawsplainer: Michael Cohen's Attempt To Delay The Stormy Daniels Litigation

Oh my God. Oh my God. Ohmigod ohmigod OMG.

Now what?

This Michael Cohen thing.

You're going to have to be way more specific.

He's trying to take the Fifth! He wants the Stormy Daniels lawsuit stopped so he can take the Fifth!

Well. Sort of.

Isn't that huge?

Yes and no.

That's not helpful. You're not being helpful.

Imagine my guilt. What is it that you want to know about? What part of the Stormy Daniels lawsuit don't you understand?

Just a tiny bit of it. Just a bit. Some. Part of it. Just part . . . all of it. I don't understand any of it. I don't know what's going on, I just nod when people talk about it.

Okay. Let's start from the beginning.

So. Stormy Daniels, whose real name is Stephanie Clifford, claims she had a relationship with Donald Trump in 2006 and 2007. She claims that when the infamous "grab them by the pussy" Access Hollywood tape became public, she wanted to tell her story to the media. Once she started shopping her story, she says that Trump — through Michael Cohen — approached her and negotiated a non-disclosure agreement — $130,000 for her silence. The parties to the agreement were "Essential Consultants LLC", a company formed just before the 2016 election, Mr. Trump (referred to as "David Dennison,") and Ms. Clifford (referred to as "Peggy Peterson."

Is . . . is it normal to have a nondisclosure agreement with aliases and a party that's a new company that you just started?

No. No it is not.

Anyway, Ms. Clifford got a $130,000 payment under the agreement. When the existence of the agreement became public in February 2018, Mr. Cohen began making statements about it and about Ms. Clifford, and sought to enforce the provisions of the agreement (including the gag order on Ms. Clifford and the penalty provision) in a secret arbitration proceeding.

Ms. Clifford, through her current attorney Michael Avenatti, filed a lawsuit in Los Angeles County Superior Court asking the court to hold that the agreement is not enforceable, so that (1) she can talk freely and (2) she won't be penalized for talking. You can read that here. Clifford sued Donald Trump "aka David Dennison" and Essential Consultants, the company Mr. Cohen created.

Then, in what they thought was a shrewd move but was not, Essential Communications removed the case to federal court.

Removed it! Wow. Removal, with the removing and stuff. Exciting. I understand.

. . .

I don't know what that means.

OK. Federal courts, broadly speaking, can hear two types of cases. One type is a case that alleges a violation of a federal statute. The other is a case under what's called "diversity jurisdiction." The idea, historically, is that state courts might not treat someone from another state fairly, so if a case involves disputes from people from different states, you can "remove" it to federal court, and litigate it there. Put simply, if someone sues you in state court, you can remove it — that is, transfer it — to federal court if there is "complete diversity" — if no plaintiff is from the same state as any defendant. Also, the amount at issue has to be high enough.

So here, Essential Communications (supported by Trump) moved the case from California state court to United States District Court for the Central District of California, because Clifford is from Texas, Trump lives in DC, and Essential Communications is a Delaware company. The notice of removal is here.

Was that a good idea?

No it was not. Conventional wisdom is that federal courts are better for the defense and more likely to enforce arbitration agreements. However, federal judges move faster and abide by deadlines and rules more closely, and are substantially less tolerant of bullshit than state judges. If substantial portions of your defense are premised on bullshit and delay, don't remove to federal court.

So. What's the issue in federal court?

Well, the main issue is whether the nondisclosure agreement — and especially the part that requires disputes to be arbitrated in private — are enforceable. If they are enforceable, then Trump (and, I suppose, "Essential Communications") could conceivably get a gag order against Clifford and get massive damages against her for breaching the confidentiality agreement, and could do so through a private arbitration proceeding instead of in public.

But wait a minute. Stormy Daniels already told her story in public. It's been all over the media. All this litigation does is draw more attention to it and, potentially, make Trump or Cohen answer questions about the hush money. How does it make sense for Trump and Cohen to try to enforce the nondisclosure now that the cat's out of the bag?

It's a very foolish move.

Unless, of course, Trump and Cohen are worried that failing to pursue Clifford will signal to others than other nondisclosure agreements will not be enforced.

But really, even then.

Okay. So even Ms. Clifford says that she signed this agreement and got the $130,000, right? So how can she say that she's not bound by the nondisclosure agreement and the arbitration clause?

You can read her arguments in her amended complaint in federal court.

She has three main arguments. First, she says that there was never an enforceable contract. Her argument is this: Trump never signed the contract. Now, normally, that wouldn't be a good argument — Clifford signed it, and she accepted the money, which is enough to enforce it against her. But here the contract has some ill-considered boilerplate language that it's only effective once everyone signs it. Don't put that in your contracts if you're not going to get everyone to sign them.

Second, she says that the contract is unconscionable. Very rarely, a court will refuse to enforce a contract if its terms are too shocking and one-sided. Clifford claims that the million-dollar penalty and other terms, all one-sided, and that there's no penalty if Trump or Cohen breach (by, for instance, Cohen's rant to the media).

Third, she argues that the contract is void because it's against public policy. Courts refuse to enforce certain contracts that contradict strong public policy — as one example, you can't contract to conceal a crime from the police, and can't contract to kill someone. Here, Clifford argues that the contract is against public policy because it's meant to evade federal campaign contribution limits (in the sense that the $130,000 to silence Clifford represents an undisclosed and excessive contribution to Trump's campaign) and because it suppresses speech about a candidate for President.

Clifford argues that because the whole contract is void, the arbitration clause is void.

These are, at least, plausible arguments.

Is that all?

No, in her amended complaint, Clifford threw in a defamation claim against Cohen, on the theory that he justified paying her hush money by saying "Just because something isn't true doesn't mean it can't cause you harm or damage." Clifford claims that's defamatory because it states that she's lying.

I think that's an unusually weak defamation claim — the statement is hyperbole in the context of trash-talking about litigation, and isn't even definite, and therefore isn't a provable statement of fact. Cohen has filed an anti-SLAPP motion against that claim, which I think he might win if the case ever moves forward.

Wait a minute. If there's an agreement saying all disputes are arbitrated, who decides the dispute over whether the agreement is valid?

You spotted the loophole! People trying to enforce arbitration agreements always argue that the arbitrator should decide whether they are enforceable. People trying to break them always argue that a judge should decide first. The law in the area is something of a mess, but it's often the case that the arbitrator decides.

There's a significant exception, and Clifford is trying to take advantage of it. The Federal Arbitration Act generally controls arbitration agreements in federal court. Under that Act, if a party disputes that the arbitration agreement was formed at all (as Clifford does here), the federal court can hold a mini-trial on that issue alone. Essential Communications has asked the federal court to send the whole thing — including the attacks on the validity of the agreement — to arbitration. But Clifford has asked the Court first to hold a mini-trial on whether the contract was ever formed at all, and — crucially — to allow limited discovery into that point through depositions of Cohen and President Trump.

That's where it was when the shit hit the fan.

The search of Michael Cohen's office?

The search of Michael Cohen's office, which was huge.

This immediately created grave dilemma for Michael Cohen. On the one hand, the litigation in California would require him to testify — in arbitration if not in the deposition Clifford requested — and would require him to otherwise commit himself to facts. But based on that search, the FBI is clearly investigating him based on the hush-money agreement with Clifford. It's likely that the government's theory is that Cohen engaged in transactions that broke campaign finance laws by paying the $130,000 to protect Trump's campaign, and perhaps committed other violations arising from that core violation. It would be absolutely reckless for him to start talking about the circumstances; the only good advice is to lawyer up and shut up.

Incredibly — and uniquely, in the course of the Trump people's behavior in the last year — Cohen has done something smart. Well, sort of. He's decided to preserve his option to shut up. He's asked the federal court to stay the case — freeze it without activity — because it implicates his Fifth Amendment rights in the criminal investigation.

He can take the Fifth in a civil case? I thought that was for criminal cases.

You can take the Fifth anywhere. The difference is the consequence. If you take the Fifth in a criminal proceeding in which you are the defendant, it can't be held against you. The prosecutor can't even mention it to the jury. But in a civil case, taking the Fifth — that is, asserting your Fifth Amendment right to remain silent — can have serious negative consequences. If you're the plaintiff in a civil case and take the Fifth, the case can be dismissed. If you're a defendant, there can be all sorts of other bad consequences. The jury can be told to consider that you took the Fifth. The Court can prohibit you from introducing any evidence on the issues on which you took the Fifth, so that you can't effectively contradict the Plaintiff's evidence. You can be left unable to prove essential parts of your defense. It's pretty disastrous and it's very hard to defend a civil case while taking the Fifth.

So, when faced with a criminal investigation, both plaintiffs and defendants often ask the civil court to stay — freeze — the civil case while the criminal investigation or prosecution is going on.

And do courts to that?

Sometimes they do, sometimes they don't. The Court is supposed to use a five-part test to decide whether to stay the case. The factors are (1) the plaintiff's interest in moving forward and the harm to plaintiff if there is a delay, (2) the burden on the defendant if the case moves forward, (3) the convenience of the court, (4) the interests of third parties, and (5) the interests of the public.

How do you think it will go?

I think Clifford has the better argument by far.

Her opposition brief is very strong. She points out that Cohen has already run his mouth extensively about the hush money transaction in the media, so his interest in shutting up can't be that strong. She points out that Cohen himself initiated an arbitration proceeding to try to shut Clifford up. She points out that Cohen filed a declaration in this civil case about the formation of the contract even after the FBI's search warrant, and gave a statement about the matter the day after the search.

Moreover, Clifford points out that Cohen's motion is extremely vague — it amounts to saying "look, the FBI is investigating the same general subject." He doesn't explain what specific subjects of testimony (including, for instance, the source of funds or his communications with Trump) that could incriminate him. Finally, she points out that the case is of national interest and has attracted huge public attention, weighing against a stay.

Cohen's failure to commit that he will take the Fifth doesn't help either. Perhaps because taking the Fifth is so widely perceived as a sign of guilt (which, of course, it is not), Cohen's not ready to say definitely that he will take the Fifth to any questions about the transaction — he's sticking with the wishy-washy argument that his rights are "implicated." That's compounded by the fact that his lawyers, asked about him taking the Fifth, publicly denied that he had decided to do so, and suggested that doing so was premature. In other words, they undercut their own stay request.

Wow. That's . . . wow.

I KNOW, RIGHT? I think you only get one smart move per quarter out of Cohen. Contemplating taking the Fifth was his. Now it's all downhill until July or so.

So where does this leave us?

Judge Otero, who is hearing this, is a very no-nonsense judge who likes things to be orderly. I expect a thorough written opinion from him on the stay promptly — within days, I suspect. The best thing Cohen has going for him is that he's only asking for a 90-day stay. Judge Otero may look at this daily-escalating national legal catastrophe and decide that shutting down the civil case for a few months to see how things work out is not a bad idea. Or he may just say Cohen hasn't carried his burden of showing he need a stay.

What happens then?

It depends on the ruling. If Judge Otero grants the stay, then Cohen will have mitigated the harm from this very foolish litigation for the time being, allowing him to focus on his troubles in New York. If Judge Otero denies the stay, next he'll have to rule on whether Clifford gets to take limited discovery and get a mini-trial to determine whether the contract was ever formed and therefore whether the case should go to arbitration. If Judge Otero allows that, then Cohen will have to decide whether actually to take the Fifth when confronted with questions. Buckle up.

Will you update this post when Judge Otero decides?

If I feel like it.

Thursday, April 12, 2018

Make No Law Podcast Episode Five: Crush

Make No Law Episode Five is up! Listen to it at Legal Talk Network or stream right here:

Some resources from this episode:

United States v. Stevens, the subject of the episode

Miller v. California, the obscenity case discussed in the episode

New York v. Ferber, the child porn case mentioned in the episode

Put Bull Victory, Robert Stevens' site about his case and business.

Tuesday, April 10, 2018

New York Times Op-Ed On Cohen Search

It's here.

Monday, April 9, 2018

The Search of Trump Lawyer Michael Cohen's Office: What We Can Infer Immediately

The Very Big News of the day: FBI Agents raided the law office of Michael Cohen, President Trump's lawyer who was involved in payment of $130,000 to adult performer "Stormy Daniels" for a nondisclosure agreement.

Recently I've been listening to the Podcast "Slow Burn," about Watergate. There's a fascinating theme throughout it: when you're living a historical event, how do you know? How can you tell when a development is a Big Deal?

This is a big deal. It's very early on, but here's some things we can already tell.

1. According to Cohen's own lawyer, the U.S. Attorney's Office for the Southern District of New York (widely regarded within itself as being the most important and prestigious U.S. Attorney's Office in the country) secured the search warrants for the FBI. Assuming this report is correct, that means that a very mainstream U.S. Attorney's Office — not just Special Counsel Robert Mueller's office — thought that there was enough for a search warrant here.

2. Moreover, it's not just that the office thought that there was enough for a search warrant. They thought there was enough for a search warrant of an attorney's office for that attorney's client communications. That's a very fraught and extraordinary move that requires multiple levels of authorization within the Department of Justice. The U.S. Attorney's Manual — at Section 9-13.320 — contains the relevant policies and procedures. The highlights:

The feds are only supposed to raid a law firm if less intrusive measures won't work. As the USAM puts it:

In order to avoid impinging on valid attorney-client relationships, prosecutors are expected to take the least intrusive approach consistent with vigorous and effective law enforcement when evidence is sought from an attorney actively engaged in the practice of law. Consideration should be given to obtaining information from other sources or through the use of a subpoena, unless such efforts could compromise the criminal investigation or prosecution, or could result in the obstruction or destruction of evidence, or would otherwise be ineffective.

Such a search requires high-level approval. The USAM requires such a search warrant to be approved by the U.S. Attorney — the head of the office, a Presidential appointee — and requires "consultation" with the Criminal Division of the U.S. Department of Justice. This is not a couple of rogue AUSAs sneaking in a warrant.

Such a search requires an elaborate review process. The basic rule is that the government may not deliberately seize, or review, attorney-client communications. The USAM — and relevant caselaw — therefore require the feds to set up a review process. That process might involve a judge reviewing the materials to separate out what is privileged (or what might fall within an exception to the privilege), or else set up a "dirty team" that does the review but is insulated from the "clean team" running the investigation. Another option is a "special master," an experienced and qualified third-party attorney to do the review. Sometimes the reviewing team will only be identifying and protecting privileged material. Sometimes the reviewing team will be preparing to seek, or to implement, a court ruling that the documents are not privileged. (Robert Mueller is aggressive on this sort of thing; he already sought and obtained a court ruling that some of Paul Manafort's communications with his lawyers were not privileged because they were undertaken for the purpose of fraud — the so-called "crime-fraud exception" to the attorney-client privilege.

3. A Magistrate Judge signed off on this. Federal magistrate judges (appointed by local district judges, not by the President) review search warrant applications. A Magistrate Judge therefore reviewed this application and found probable cause — that is, probable cause to believe that the subject premises (Cohen's office) contains specified evidence of a specified federal crime. Now, Magistrate Judges sometimes are a little too rubber-stampy for my taste. But here, where the Magistrate Judge knew that this would become one of the most scrutinized search warrant applications ever, and because the nature of the warrant of an attorney's office is unusual, you can expect that the Magistrate Judge felt pretty confident that there was enough there.

4. The search warrant application (the lengthy narrative from the FBI agent setting for the evidence) is almost certainly still under seal, and even Michael Cohen doesn't get to see it [yet]. But the FBI would have left the warrant itself — and that shows (1) the federal criminal statutes they were investigating, and (2) the list of items they wanted to seize. Much can be learned for those. Assuming Michael Cohen doesn't release it, watch for it to be leaked.

Again: this is a Big Deal.

I'll follow up with more as it becomes available.

Wednesday, April 4, 2018

What It Means That Trump Is "Only A Subject"

Yesterday the Washington Post reported that Special Counsel Robert Mueller views the President of the United States as a subject, not a target, of his grand jury investigation:

Special counsel Robert S. Mueller III informed President Trump’s attorneys last month that he is continuing to investigate the president but does not consider him a criminal target at this point, according to three people familiar with the discussions.

In private negotiations in early March about a possible presidential interview, Mueller described Trump as a subject of his investigation into Russia’s interference in the 2016 election. Prosecutors view someone as a subject when that person has engaged in conduct that is under investigation but there is not sufficient evidence to bring charges.

The hot takes, predictably, are raining down. Here's one by John Podhoretz — not to pick on him, because it's not unusually bad or wrong, but by way of example:

Yes, the story goes on to say that he might become a target later. But Mueller has been at this now for nine months with an aggressive staff. He has issued indictments of various figures and might be going after others. So telling Trump that he’s not a target is a very big deal.

Well, no. That's an overconfident overstatement.

The feds, by doctrine and tradition, divide everyone of interest to a federal grand jury investigation into three categories: target, subject, and witness. A witness is someone who has useful information but isn't considered a potential suspect in any wrongdoing. Here's how the U.S. Attorney's Manual defines targets and subjects:

A "target" is a person as to whom the prosecutor or the grand jury has substantial evidence linking him or her to the commission of a crime and who, in the judgment of the prosecutor, is a putative defendant.

. . . .

A "subject" of an investigation is a person whose conduct is within the scope of the grand jury's investigation.

This is rather dry. Colloquially, most federal prosecutors and defense attorneys would probably describe it this way: calling someone a target means "we're planning on indicting you if we can." Calling someone a subject means "we're developing evidence about what you did and if we find support for it we may indict you." The distinction has some legal significance — under the provision linked above, prosecutors aren't allowed to subpoena a target into the grand jury without warning them that they are a target, for instance. But the practical differences are murky.

Different prosecutors have different practices about when they call someone a target. Some will use that label as soon as they think it is likely they will be indicted. Some are more "cautious" and only classify someone as a target when they are quite sure that they'll indict. Some prosecutors — ones who risk a bad reputation — will disingenuously classify someone as a subject in order to lure them and their attorneys into talking to the government, even if talking to the government would be manifestly a bad idea. Other prosecutors are overcautious in the other direction and label people targets so no one can accuse them of hiding the ball.

There's a benefit to knowing you're a target — there's no ambiguity and you can focus on going to the mattresses. It's trickier if you're a subject. Clients — and some lawyers — will clamor to talk to the prosecutors to convince them that they shouldn't be a subject, that they should only be a witness. They see the "subject" designation as an opportunity to talk their way out of it. But for more cautious federal defense attorneys, the "subject" classification doesn't change the strategy very much. The client can still become a target at any time. Talking to the government may well provide the information they need to make that decision. Furthermore, talking to the government often generates its own new crimes, as we've seen again and again in Mueller's investigation as defendants have been charged (and in several cases pleaded guilty) to lying to the government. The situation is still one of intense danger, and no experienced defense attorney is relieved to hear their client is "only a subject."

The analogy I sometimes use with clients is this: if you're a target, you're walking across an open field and a sniper is shooting at you from a tower. If you're a subject, you're walking across an open field and a sniper is shooting, but not shooting at you at this particular moment. How much safer do you feel?

Robert Mueller is rather by-the-book. Even when his goals are aggressive, his methodology is not envelope-pushing — he is meticulous about seeking judicial approval in the form of warrants and court orders. Some have speculated that he's classifying Trump as a subject only because Trump can't be indicted while in office and therefore can't be a target. That logic strikes me as fanciful: no court has held that a sitting President can't be indicted, Mueller has not said or done anything to indicate he holds that constrained view of his powers, and Mueller's more likely to take a conservative read of the U.S. Attorney's manual and warn Trump if he's a target under any theory without applying such concealed logic.

Given Mueller's caution (applying for judicial approval whenever necessary) and standard methodology (developing the case through subpoenas and interviews, catching suspects in lies and using those lies to flip them as cooperators, steadily indicting new defendants as they become vulnerable), the most reasonable explanation is that he means what he says — Trump is a subject. That doesn't mean he's made a determination that Trump won't be indicted, or that it's unlikely he'll be indicted, or that he hasn't committed crimes or wrongdoing. It doesn't reflect a judgment on whether there has been a crime. It means he's not there yet. Calling Trump a subject is completely consistent with continuing to pursue evidence that would move Trump into the target column. It doesn't reduce Trump's exposure at all. It doesn't change the dilemmas his godforsaken criminal defense lawyers face. It doesn't reduce the manifest dangers of him making a statement to Mueller. It doesn't stop the process or the process stories or the steady rolling-up of Trump associates for various crimes and foolishness.

In this post-factual and obstinately legally illiterate world, though, the distinction will be used for propaganda. Don't fall for it.