1 2 3 4 5 6 7 PETER K. STRIS (SBN 216226) peter. stris@strismaher.com ELIZABETH R. BRANNEN (SBN 226234) elizabeth. brannen@strismaher.com DANA BERKOWITZ (SBN 303094) dana. berkowitz@strismaher.com KENNETH J. HALPERN (SBN 187663) ken.halpern@strismaher.com JOHN STOKES (SBN 310847) john. stokes@strismaher.com STRIS & MAHER LLP 725 S. Figueroa Street, Suite 1830 Los Angeles, CA 90017 T: (213) 995-6800 IF: (213) 261-0299 Co ta 10 11 CAROL R. HELLER (pro hac vice application forthcoming) 2750 NE 185th Street, Suite 201 Aventura, FL 33180 COPY . ID ~ ~UBiy MAR 8 9 . I Alli• z,o 2018 Sherri R. vaner, l:Xecut111e Otticer/C\erk By. Marlon Gomez, Deputy Attorneys for Plaintiff KAREN MCDOUGAL 12 13 SUPERIOR COURT OF CALIFORNIA 14 COUNTY OF LOS ANGELES 15 KARENMCDOUGAL, 16 17 18 Plaintiff, v. Case No. COMPLAINT FOR DECLARATORY RELIEF UNDER CALIFORNIA CODE OF CIVIL PROCEDURE § 1060 AMERICAN MEDIA, INC., a Delaware corporation; and DOES 1to25, 19 Defendant. 20 21 22 23 24 25 26 27 28 1 COMPLAINT INTRODUCTION 1 1. 2 3 McDougal, with the collusion of her lawyer, to achieve its own political and financial ends. 2. 4 5 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 In 2006 and 2007, Ms. McDougal had a 10-month romantic relationship with Donald Trump. 3. 6 S T R I S MAH E R This case is about a powerful media company taking advantage of the plaintiff, Karen When Mr. Trump became the Republican presidential nominee a decade later, he and 7 his allies did not want news of the relationship to undermine his campaign. So tabloid giant American 8 Media, Inc. (“AMI”) worked secretly with Mr. Trump’s personal “fixer” and Ms. McDougal’s own 9 lawyer to buy Ms. McDougal’s silence. Ms. McDougal received $150,000 (nearly half of which went 10 to the lawyer, who she did not realize was colluding with the other side) and a false promise to 11 jumpstart her career as a health and fitness model. 4. 12 Today, both the relationship and the cover-up are open secrets, thanks to important 13 reporting by the Wall Street Journal, the New York Times, and the New Yorker. And Ms. McDougal’s 14 agreement has been amended to permit her to respond to “legitimate press inquiries” about her 15 relationship with Mr. Trump. Yet every time prominent reporters contact Ms. McDougal, AMI tells 16 her exactly what she must say—nothing. They threaten her with financial ruin if she does not remain 17 “loyal.” AMI, meanwhile, feeds those same reporters false information about Ms. McDougal, her 18 relationship with Mr. Trump, and its own machinations to bind her to silence. 5. 19 Now that she has become aware of the broad effort to silence and intimidate her and 20 others, Ms. McDougal must speak out. She will no longer allow AMI to profit from and control her 21 with a fraudulent and illegal contract. She therefore asks this Court to declare that contract void. NATURE OF THE CASE 22 6. 23 Karen McDougal is a model and actress who first became known for appearances in 24 Playboy in the late 1990s. After capturing attention as Playmate of the Year in 1998, Ms. McDougal 25 embarked on a successful career as a fitness model, appearing in and on the cover of numerous 26 magazines, including the cover of Men’s Fitness. 27 28 2 COMPLAINT 261246.1 7. 1 For several years, Ms. McDougal led a “Hollywood” life, attending events and parties 2 as both honored guest and hostess. During that time, Ms. McDougal had a 10-month relationship with 3 Mr. Trump. 4 8. Ms. McDougal moved on from this period of her life and lived in relative privacy for 5 the next decade. 6 9. But on May 7, 2016, four days after Mr. Trump became the presumptive Republican 7 presidential nominee, former Playboy playmate Carrie Stevens revealed the past relationship between 8 Ms. McDougal and Mr. Trump on Twitter. In a series of tweets regarding Mr. Trump’s extramarital 9 relationships, Ms. Stevens said: LOS ANGELES CA 90017 11 S T R I S MAH E R 725 S. FIGUEROA ST STE 1830 10 12 13 14 15 16 17 18 19 20 10. 21 Ms. McDougal did not seek hush money from Mr. Trump. But she also didn’t sit back 22 and wait to become tabloid fodder. If the story was going to become national news, she wanted to be 23 the one to tell it to ensure that the account was accurate and not lurid grist for the tabloid mill. She 24 hired entertainment lawyer Keith Davidson, who assured her that the rights to publish her story were 25 worth millions. Unknown to Ms. McDougal, Mr. Davidson was working closely with representatives 26 for Mr. Trump while pretending to advocate on her behalf. 11. 27 28 Mr. Davidson introduced Ms. McDougal to AMI, a leading magazine and tabloid publisher. He told her that AMI had deposited $500,000 in an escrow account toward a seven-figure 3 COMPLAINT 261246.1 1 contract that would be presented to her in person in Los Angeles. He later admitted that the $500,000 2 escrow account was a complete fabrication. 12. 3 4 interviewed her for hours about the details of her relationship. Later that day, Mr. Davidson informed 5 Ms. McDougal that AMI had no interest in purchasing her story. Mr. Davidson failed to mention that 6 after the Los Angeles interview, he and AMI updated Mr. Trump’s representatives about 7 Ms. McDougal. 13. LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 8 S T R I S MAH E R Ms. McDougal flew to Los Angeles, where Dylan Howard, a senior executive of AMI, Ms. McDougal then began discussions with investigative journalists at ABC. After 9 several meetings, ABC made clear that it wanted to do an exposé on her relationship with Mr. Trump. 10 This would allow Ms. McDougal to tell her story with dignity. After ABC signed a confidentiality 11 agreement, Ms. McDougal began to send the network documents. She intended to provide her story 12 to the public on her own terms. 14. 13 Shortly thereafter, AMI suddenly reappeared. According to Mr. Davidson, AMI 14 wanted to buy the story of her relationship with Mr. Trump after all. But it would not publish the story 15 because the owner of AMI, David Pecker, is close personal friends with Mr. Trump. In a series of 16 phone calls, Ms. McDougal was told by Mr. Davidson that AMI would offer $150,000—45% of 17 which he would keep. But Mr. Davidson said that AMI would also give Ms. McDougal a highly 18 lucrative contract by guaranteeing her two magazine covers (including one on Men’s Fitness—the 19 cover on which she had made history 17 years earlier) and 24 months of both monthly feature print 20 articles and weekly online columns. In a hard-sell Skype call, Mr. Howard of AMI repeatedly told 21 Ms. McDougal how important this part of the deal would be for an “old” model like her. 15. 22 AMI and Mr. Davidson failed to tell Ms. McDougal that the contract’s fine print did 23 not actually obligate AMI to run her columns—the central feature of AMI’s promise to create ongoing 24 positive exposure for Ms. McDougal. AMI and Mr. Davidson also failed to mention that they were 25 secretly negotiating deals with other women to kill negative stories for Mr. Trump. 16. 26 27 Ms. McDougal was pressured by AMI and her own lawyer into signing the contract within hours of receiving it, even though she had made clear in emails and on Skype that she could 28 4 COMPLAINT 261246.1 1 not make sense of important aspects of the contract. She relied entirely on AMI and Mr. Davidson’s 2 promises about what the contract said and meant. 17. 3 4 months of radio silence from AMI about her weekly columns—when the Wall Street Journal wrote a 5 story about her and the AMI contract. 18. 6 7 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 Days later, Ms. McDougal fired Mr. Davidson and secured pro bono help from renowned First Amendment lawyer Ted Boutrous and his law firm. 19. 8 S T R I S MAH E R Her first inkling that she had been duped came days before Election Day 2016—after By the end of November 2016, AMI agreed to an amendment which clarified that Ms. 9 McDougal could respond to “legitimate press inquiries” about her past relationship with Mr. Trump. 10 But that turned out to be part of another tactic to suppress Ms. McDougal’s story. AMI offered to pay 11 for a top PR team to assist Ms. McDougal for six months in responding to press inquiries. In the year- 12 plus that has followed, however, AMI has told Ms. McDougal to say nothing about the relationship 13 to reporters that contact her, and instead to forward misleading emails that AMI ghostwrites. AMI has 14 simultaneously provided those same reporters false and misleading information both on-the-record 15 and on-background. And each time that Ms. McDougal has taken steps to set the record straight, AMI 16 has responded with threats and intimidation. 20. 17 Weeks ago, the New York Times reported that AMI and Mr. Davidson had coordinated 18 with representatives for Mr. Trump in Summer of 2016 about Ms. McDougal’s deal. See Jim 19 Rutenberg et al., Tools of Trump’s Fixer: Payouts, Intimidation and Tabloids, N.Y. Times (Feb. 18, 20 2018), https://www.nytimes.com/2018/02/18/us/politics/michael-cohen-trump.html. Neither AMI 21 nor Mr. Davidson told Ms. McDougal about these communications. Nor did AMI make required 22 disclosures under the campaign finance laws, according to recent complaints filed with the Federal 23 Election Commission (FEC) and the Department of Justice (DOJ). 21. 24 As a result, Ms. McDougal finds herself at the center of a national controversy about 25 a major threat to the democratic process. She is the subject of the FEC and DOJ complaints against 26 AMI and the Trump campaign. And her pro bono litigation team has just received a document 27 preservation demand from BuzzFeed lawyers defending a defamation suit by Michael Cohen 28 5 COMPLAINT 261246.1 1 (“Trump’s fixer”) over a column about his alleged collusion with Russia. Nonetheless, AMI continues 2 to intimidate Ms. McDougal with legal and financial threats if she speaks with the press. 22. 3 Ms. McDougal brings this lawsuit seeking a judicial declaration that her agreement 4 with AMI is void due to both fraud and illegality. The agreement is contrary to basic principles of 5 law, fairness, and the public interest. This Court should not sanction AMI’s effort to use it to 6 intimidate Ms. McDougal and deceive the American public. JURISDICTION AND VENUE 7 23. LOS ANGELES CA 90017 S T R I S MAH E R 725 S. FIGUEROA ST STE 1830 8 This Court has jurisdiction over AMI because it conducts significant business 9 operations in the State of California, and negotiated the agreement with Ms. McDougal in the State 10 of California. AMI has thus intentionally availed itself of the laws of this State and has sufficient 11 minimum contacts with this State arising out of the actions that injured Ms. McDougal to warrant this 12 Court’s exercise of jurisdiction. 24. 13 14 Code of Civil Procedure because no defendant resides in this State. PARTIES 15 25. 16 17 Venue is proper in the County of Los Angeles under Section 395(a) of the California Plaintiff Karen McDougal is a prominent health and fitness model, and an advocate for women’s health and wellness. She is a resident of Arizona. 26. 18 Defendant American Media, Inc. is a Delaware corporation headquartered in Florida. 19 It has offices in Los Angeles County, California, where it conducts a major portion of its business 20 related to celebrities, Hollywood, and the entertainment industry. AMI owns, either directly or 21 through subsidiaries, several prominent health and fitness magazines, including Men’s Journal and 22 Muscle & Fitness Hers. It also owns, either directly or through subsidiaries, several celebrity and 23 entertainment tabloids, including the National Enquirer, Star Magazine, and Us Weekly. 27. 24 Does 1 to 25 are persons and business entities, presently unknown, who acted as agents 25 of AMI, or conspired and acted in concert with it, with respect to the conduct that gives rise to the 26 claim in this action. Ms. McDougal therefore sues them under these fictitious names, and will amend 27 this complaint to add their true names and capacities when they become known. 28 6 COMPLAINT 261246.1 FACTUAL ALLEGATIONS 1 28. 2 3 appear on the cover of Men’s Fitness magazine. She has appeared in and on the cover of other 4 prominent fitness magazines including Muscle & Fitness (January 2000), Physical (June 2004), and 5 Iron Man (October 2005, January 2006, June 2007, and November 2009). 29. 6 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 Ms. McDougal first rose to prominence as Playboy magazine’s 1998 Playmate of the 7 Year. Eventually, Ms. McDougal came to live a largely private personal life. Beginning in 2016, 8 however, Ms. McDougal became the subject of national headlines because of an extended romance 9 that she had with Donald Trump a decade earlier. 30. 10 S T R I S MAH E R Ms. McDougal is a successful fitness model. In 1999, she became the first woman to On May 7, 2016, four days after Mr. Trump became the presumptive Republican 11 presidential nominee, former Playboy playmate Carrie Stevens began writing about Ms. McDougal 12 and her past relationship with Mr. Trump on Twitter. 31. 13 14 To this day, Ms. Stevens continues to publicly comment on her contemporaneous knowledge of the relationship. For example, Ms. Stevens recently tweeted: 15 16 17 18 19 20 21 22 23 Carrie Stevens (@CarrieStevensXO), Twitter (Jan. 17, 2018, 9:17 AM), https://twitter.com/Carrie 24 StevensXO/status/953677701356822532 (responding to Katie Reilly, The National Enquirer 25 Covered Up Story of Donald Trump’s Extramarital Affair: Report, Time (Nov. 5, 2016), 26 http://time.com/4559610/donald-trump-national-enquirer-karen-mcdougal, which stated that “Karen 27 McDougal . . . allegedly had a consensual romantic relationship with Trump in 2006, while he 28 was married to his wife, Melania, the [Wall Street] Journal reported, citing interviews with 7 COMPLAINT 261246.1 1 McDougal’s friends, who say she told them about the affair.”). 32. 2 3 Stevens’s tweets. Even though Ms. McDougal had contemporaneous evidence and witnesses of her 4 relationship with Mr. Trump, Mr. Crawford (as he recently told the New Yorker magazine) urged her 5 to write down the details of the relationship “for her protection.” He kept the handwritten notes. 33. 6 Mr. Trump to be revealed, she came to believe the story would soon break widely anyway. 8 Mr. Crawford convinced Ms. McDougal it would be better to get out in front of the story, rather than 9 allow herself to be dragged through the tabloids and other celebrity-gossip media and subjected to inevitable distortions and falsehoods about her relationship with Mr. Trump. 11 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 Although Ms. McDougal did not want the private details of her relationship with 7 10 S T R I S MAH E R Ms. McDougal was at the home of her friend John Crawford when she learned of Ms. Ms. McDougal Hires Keith Davidson As Her Attorney And Begins Discussions With Two Publishers: American Media, Inc. And ABC 12 34. 13 Mr. Crawford introduced Ms. McDougal to attorney Keith Davidson, whom he met 14 through a mutual friend. Ms. McDougal had no idea that Mr. Davidson had a close working 15 relationship with Donald Trump’s personal attorney and “fixer,” Michael Cohen, with whom 16 Mr. Davidson negotiated hush deals to cover up Mr. Trump’s sex scandals. 1 35. 17 On June 13 and 14, 2016, Mr. Davidson met with Ms. McDougal in Arizona. He told 18 her that the rights to publish the story of her relationship were worth millions. Mr. Davidson’s fee 19 agreement granted him 45% of whatever Ms. McDougal received. Over dinner, including multiple 20 bottles of wine, Mr. Davidson falsely told her this was standard in the industry. She signed. 36. 21 Less than a week later, on June 20, 2016, Mr. Davidson introduced Ms. McDougal to 22 1 23 24 25 26 27 28 In the words of a New York Magazine exposé from last month: Davidson and his spokesman invited me to call some of his legal adversaries, who would back him up. His spokesman’s first suggestion, it turns out, was none other than Michael D. Cohen, the personal attorney for President Trump who handled the Stormy Daniels payment. “Keith Davidson . . . is a tireless advocate for his clients,” Cohen wrote in an email. “In each and every interaction I’ve ever had with him, he has always been professional, ethical and a true gentleman.” Molly Redden, How the Hollywood Lawyer for Trump’s Mistresses Turns Celebrity Sex Scandals Into Cash, New York Magazine (Feb. 16, 2018), http://nymag.com/daily/intelligencer/2018/02/lawyerfor-trumps-mistresses-turns-sex-scandals-into-cash.html. 8 COMPLAINT 261246.1 1 AMI executives in Los Angeles. In addition to owning several national celebrity and entertainment 2 tabloids, including the National Enquirer, AMI owned a number of leading health and fitness 3 magazines including Men’s Fitness, Flex, and Muscle & Fitness Hers. 37. 4 5 could open doors for her career in health and fitness. Mr. Davidson told Ms. McDougal that AMI was 6 likewise interested in helping her advance her career. 38. 7 8 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 Mr. Davidson also told Ms. McDougal that AMI had already deposited $500,000 in an escrow account, and that a seven-figure publishing contract awaited her in Los Angeles. 39. 9 S T R I S MAH E R This was highly significant for Ms. McDougal; she believed a relationship with AMI When Ms. McDougal arrived in Los Angeles, she met with Dylan Howard (AMI’s 10 Chief Content Officer) for several hours. Mr. Howard pressed Ms. McDougal for every detail of the 11 relationship, and Ms. McDougal complied. 40. 12 But no deal was forthcoming, and Mr. Davidson revealed that, in fact, there was no 13 money in escrow. Later that day, Mr. Davidson told Ms. McDougal AMI had no interest in purchasing 14 the story. 41. 15 What Mr. Davidson did not tell Ms. McDougal, however, was that (1) AMI is run by 16 David Pecker, a close personal friend of Mr. Trump; (2) AMI has a practice of “catching and killing” 17 unfavorable stories about Mr. Trump; (3) Mr. Davidson himself was involved in catching and killing 18 stories for Mr. Trump; and (4) AMI had shared the details of Ms. McDougal’s story with the Trump 19 campaign. In short, the meeting was a set-up for AMI to hear Ms. McDougal’s story, pass it on to Mr. 20 Trump’s representatives, and prevent it from ever seeing the light of day. 42. 21 Not suspecting that AMI had set in motion back-channel discussions to silence her, 22 Ms. McDougal moved on to another outlet, and on July 7, 2016, she began negotiations with ABC to 23 publish her story. Although ABC lacked AMI’s direct connection to health and fitness outlets, and she 24 would not receive any direct payment from the network, Ms. McDougal believed an ABC television 25 interview would address the negative publicity she expected to result when her relationship became 26 public. 27 28 9 COMPLAINT 261246.1 43. 1 2 Ms. McDougal met with network representatives. She had further meetings with them the next day, 3 and discussions continued thereafter. 44. 4 5 45. LOS ANGELES CA 90017 At this point, Ms. McDougal’s discussions with ABC took another key step toward an 7 agreement. ABC signed a confidentiality agreement and received some of Ms. McDougal’s non- 8 public documentation of the relationship with Mr. Trump. 46. 9 725 S. FIGUEROA ST STE 1830 Meanwhile, on July 21, 2016, Mr. Trump officially won the Republican presidential nomination. 6 S T R I S MAH E R Discussions with ABC moved quickly toward a potential agreement. On July 12, 2016, But as a publishing deal neared, and the reality of what it would mean to speak out set 10 in, Ms. McDougal again became concerned about revealing the details of her story. No major leak 11 had happened in the months since Ms. Stevens’s tweets, and she wondered if there was even going to 12 be a story to get out in front of. She had cold feet. 47. 13 Shortly after she shared this with Mr. Davidson, AMI resurfaced with renewed and 14 urgent interest in purchasing the story. But this time, Mr. Davidson told her, they would buy the story 15 not to publish it, because Mr. Pecker (AMI’s CEO) was a close friend of Mr. Trump. Ms. McDougal 16 thought (naively) that such a deal could give her the best of all worlds—her private story could stay 17 private, she could make some money, and she could revitalize her career. What she did not realize 18 was that she would end up treated as a puppet by powerful men colluding to achieve their own 19 financial and political ends. 20 On August 5, 2016, Mr. Davidson And AMI Trick Ms. McDougal Into Immediately Signing A Contract She Did Not Understand 21 48. 22 Early on August 5, 2016, Mr. Davidson sent Ms. McDougal a proposed agreement 23 from AMI. She had never seen it before. Over the course of that day, the terms of the proposed 24 agreement changed, and it was not until the evening that Mr. Davidson provided a “Final Draft.” 49. 25 That “Final Draft” included (1) the $150,000 payment for her “Life Story” (i.e., the 26 story of her relationship with “any then-married man”), and (2) convoluted, confusing provisions 27 related to Ms. McDougal (a) appearing on the cover of two health and fitness magazines (including 28 Men’s Fitness) and (b) authoring more than a hundred “Columns” in AMI’s various health and fitness 10 COMPLAINT 261246.1 1 magazines over the course of two years. 2 The agreement is attached as Exhibit A. 50. 2 Ms. McDougal raised several concerns with the proposed final agreement. For 3 example, she asked what would happen if details of the relationship leaked—what she could say and 4 whether those leaks “would penalize me.” Mr. Davidson told Ms. McDougal she would be fine as 5 long as she lied about the relationship, writing “IF YOU DENY YOU ARE SAFE.” 51. 6 She also expressed confusion and concern about the health and fitness exposure she 7 would obtain from the contract. But rather than walk Ms. McDougal through the details of what the 8 contract in fact said, Mr. Davidson texted Mr. Howard of AMI, and then forwarded his response to 9 Ms. McDougal (Mr. Howard’s messages in grey): LOS ANGELES CA 90017 11 S T R I S MAH E R 725 S. FIGUEROA ST STE 1830 10 12 13 14 15 16 17 18 19 20 21 22 23 52. 24 25 Mr. Davidson and Mr. Howard then addressed Ms. McDougal’s broader questions— Mr. Howard’s “EVERYTHING”—about the magazine covers and columns on a Skype call. On that 26 2 27 28 Specifically, the agreement refers to two years of weekly posts in an online magazine (104 in total), important to establish a regular presence for readers who follow the publication; and two years of monthly feature articles in print publications (24 in total), important because these are what the general public might encounter when reading the physical magazines. Exhibit A ¶ 1. The contract refers to these collectively as “the Columns.” Id. 11 COMPLAINT 261246.1 1 call, Mr. Davidson and Mr. Howard together represented to Ms. McDougal that the contract would 2 obligate AMI to both (1) place Ms. McDougal on the cover of two magazines, and (2) feature more 3 than one hundred of her articles and columns in AMI’s various print and online magazines. 53. 4 5 now,” and that they would “kickstart and revitalize your career.” They told her “these articles and 6 columns will be great and ongoing exposure for you, because people read them,” and that they would 7 “develop your brand.” 54. LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 8 S T R I S MAH E R They told her these in particular would be a “big opportunity” because she was “old In the end, Ms. McDougal told Mr. Davidson that she simply needed more time 9 because she did not yet understand the agreement. In her words: “I have to read through it more but 10 I can’t focus on it tonight. I leave to the east coast in the early AM and won’t not be back for a 11 week....assuming this can wait until I return ?? Thanks!! I’m sure I’ll have more questions...may be 12 easier t discuss in phone tho. Have a good night.” Mr. Davidson responded in all caps: “WE CAN 13 DISCUSS ANYTIME – HOWEVER WE REALLY DO NEED TO GET THIS SIGNED AND 14 WRAPPED UP SO WE CAN TELL ABC THAT UOUVE CHOSEN NOT TO TELL YOUR 15 STORY.” 55. 16 17 Faced with this pressure from her own attorney to sign a document she did not understand, Ms. McDougal signed the agreement the next morning. 56. 18 Just weeks ago, Ms. McDougal learned in a New York Times article, see Rutenberg, 19 supra, that something else had happened back in August 2016: her own lawyer, Mr. Davidson, 20 emailed Mr. Cohen soon after she signed the agreement, asking Mr. Cohen to call him. He then told 21 Mr. Cohen on the phone that the deal was done—Ms. McDougal had been silenced. 22 Contrary To Its Representations, AMI Displays Its Total Lack Of Interest In Ms. McDougal’s Career 23 57. 24 Based on what Mr. Davidson and Mr. Howard had told her the contract said, 25 Ms. McDougal believed the agreement required AMI to publish more than a hundred columns in her 26 name over the course of two years. She was thus confused when, for three months, AMI did not 27 contact her regarding any columns at all. 28 12 COMPLAINT 261246.1 58. 1 2 clock on the two-year agreement was ticking, Mr. Davidson connected her with Mr. Howard by email. 3 Mr. Howard had a call with Ms. McDougal in October 2016, but there was no follow through by AMI 4 on any of what they discussed. 59. 5 obligate AMI to publish her columns; it merely granted AMI the right to publish them should it so 7 choose. Exhibit A ¶ 1 (“McDougal grants to AMI, for two years from the Effective Date, the right to 8 identify McDougal as the author of, and use McDougal’s name, likeness, and image in connection 9 with [monthly columns in several magazines].”). 11 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 What Mr. Davidson had not told his client was that, in fact, the contract did not 6 60. 10 S T R I S MAH E R When she followed up with Mr. Davidson in late September 2016, noting that the made them concerned that Ms. McDougal might want to break her silence. 61. 12 13 Undoubtedly, AMI would have continued to do nothing had subsequent events not On November 4, 2016 (days before the Presidential election), the Wall Street Journal published an article revealing the agreement between AMI and Ms. McDougal. 62. 14 On November 7, 2016, Ms. McDougal fired Mr. Davidson and hired Ted Boutrous, 15 one of the nation’s leading media attorneys, as pro bono counsel. Weeks earlier, Mr. Boutrous had 16 made a public pronouncement that he would help anyone who found herself in a situation similar to 17 Ms. McDougal’s: 18 19 20 21 22 23 24 25 26 Ted Boutrous (@BoutrousTed), Twitter (Oct. 22, 2016, 10:21 AM), https://twitter.com/BoutrousTed/ 27 status/789879295577587712. 28 13 COMPLAINT 261246.1 63. LOS ANGELES CA 90017 S T R I S MAH E R 725 S. FIGUEROA ST STE 1830 1 This was precisely the sort of help Ms. McDougal needed. The story had now broken 2 widely, but her hands remained tied. She was unable to respond to the barrage of press—from hard- 3 news journalists asking her to join the public discourse, to tabloids dragging her name and reputation 4 through the mud. 5 64. To that end, Mr. Boutrous and his team at Gibson Dunn negotiated an amendment to 6 the August 2016 agreement. The amendment made clear that Ms. McDougal could respond to 7 “legitimate press inquiries” about her relationship with Mr. Trump. The amendment is attached as 8 Exhibit B. 9 65. In what came as a major surprise to Ms. McDougal and the Gibson Dunn team, AMI 10 responded to these efforts not with resentment or anger, but with apparent cooperation and 11 excitement. Not only did Mr. Howard tell Ms. McDougal and her lawyers that AMI was excited to 12 “maintain their partnership,” he even offered to pay for a top PR team to “bring brand endorsements 13 in,” “create a new brand for Karen in the fitness space,” and “preserve her reputation.” In the months 14 since she had signed her agreement, this was the first ostensible interest AMI had shown in promoting 15 Ms. McDougal. 16 AMI Refuses To Honor The Amendment And Uses The PR Firm To Further Silence Ms. McDougal 17 66. 18 Both the amendment and AMI’s offer of a PR team to promote Ms. McDougal were 19 another trick designed to silence her. Even after the amendment, AMI always intended to prevent 20 Ms. McDougal from speaking to anyone about her relationship with Mr. Trump and had no interest 21 in promoting Ms. McDougal’s career in health and fitness. 67. 22 Over the following months, Ms. McDougal reached out to the PR team and AMI on 23 numerous occasions regarding potential career opportunities. But it was not until she received an 24 inquiry about her relationship with Mr. Trump that the PR team showed any interest in her. 68. 25 In June 2017, Jeffrey Toobin of the New Yorker contacted Ms. McDougal in 26 connection with his article on the National Enquirer. Among other things, the article addressed the 27 Wall Street Journal’s 2016 report that AMI and its CEO David Pecker had paid $150,000 for 28 Ms. McDougal’s silence about her relationship with Mr. Trump. See Jeffrey Toobin, The National 14 COMPLAINT 261246.1 1 Enquirer’s Fervor for Trump, New Yorker (July 3, 2017), https://www.newyorker.com/magazine/ 2 2017/07/03/the-national-enquirers-fervor-for-trump. 69. 3 4 she could speak with Mr. Toobin about the relationship. So she passed his inquiry on to AMI and the 5 PR team it had hired. 70. 6 7 71. 9 11 LOS ANGELES CA 90017 Mr. Toobin expressed surprise, writing in return: Thanks for getting back to me, and I very much understand your position. What’s unusual about my request is that David [Pecker (AMI’s CEO)] has spoken about you to me (warmly), and I’d like to get your thoughts as well. He has not spoken to any other journalist about you. David is cooperating fully in my profile, so this is not some kind of gotcha piece about him. I hope we can have a brief chat. 10 725 S. FIGUEROA ST STE 1830 Rather than help her develop a substantive response, AMI and the PR team ghostwrote a “decline-to-comment” email for her to send verbatim. 8 S T R I S MAH E R Notwithstanding the November 2016 amendment, Ms. McDougal was unsure whether 12 72. 13 AMI and their PR firm again ghostwrote Karen’s response, which the New Yorker 14 printed, word for word, in the article: “I don’t really like to talk about things other than my interests 15 and passions—and that’s health, wellness, etc, etc!!” See Toobin, supra. 73. 16 When the New Yorker followed up again for Karen’s comment, AMI went further still, 17 not just ghostwriting responses and suggesting she send them verbatim, but expressly directing her 18 (in all caps) to “SEND THIS”—“I have no desire in discussing anything that is not directly tied to 19 my passions of beauty and health, so thank you for asking, but I see no need to comment on rumors 20 and speculation.” 21 74. 22 But even as AMI told Karen to keep the agreement secret, Mr. Pecker did not hesitate to give a false account of its circumstances to the New Yorker. As Mr. Toobin’s article explains: When I asked Pecker about McDougal, who was Playboy’s Playmate of the Year in 1998, he told me that he first met her when she modelled for the cover of Men’s Fitness, another A.M.I. magazine. “When her people contacted me that she had a story on Trump, everybody was contacting her,” he said. “At the same time, she was launching her own beauty-and-fragrance line, and I said that I’d be very interested in having her in one of my magazines, now that she’s so famous.” But Pecker had a condition for hiring her: “Once she’s part of the company, then on the outside she can’t be bashing Trump and American Media.” 23 24 25 26 27 I pointed out that bashing Trump was not the same as bashing American Media. 28 15 COMPLAINT 261246.1 “To me it is,” Pecker replied. “The guy’s a personal friend of mine.” 1 2 Toobin, supra. AMI Continues To Employ A “Carrot And Stick” Methodology To Keep Ms. McDougal Silent 3 4 75. 5 6 invite from Mr. Pecker to have lunch in New York and discuss their business relationship. 76. 7 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 Inexplicably, AMI coordinated the meeting through Mr. Davidson, continuing to act 8 as if he represented Ms. McDougal despite knowing Ms. McDougal had fired him nearly a year 9 earlier. 77. 10 S T R I S MAH E R When Karen toed the line with the New Yorker, AMI rewarded her with a personal Mr. Davidson continued to mislead Ms. McDougal about AMI’s intentions. When Ms. 11 McDougal asked whether the meeting was a “set up” to further take advantage of her, Mr. Davidson 12 responded that Ms. McDougal should trust AMI, and that they would uphold the deal Ms. McDougal 13 thought she had made with them: LOL - I know it sounds weird saying this - but...Dylan & his boss @ the national enquirer are actually men of their word. No set up. They are powerful guys in media & close to buying Time, Inc. 14 15 78. 16 17 At the lunch, which occurred in August 2017, Mr. Pecker thanked Ms. McDougal for her “loyalty” in handling the New Yorker article. 79. 18 He also made renewed and extravagant promises that AMI would jumpstart her career. 19 He told Ms. McDougal she would be featured on more magazine covers, that she would host 20 television events, that she would have her own skin-care line, that they would start a non-profit and 21 make a documentary about her core health and wellness passions, and that they would feature her 22 articles across numerous AMI publications. 3 80. 23 Days after the meeting, Mr. Howard texted Ms. McDougal and Mr. Davidson that 24 “David was emailing all this morning so he’s clearly into this! I’m going to hit you both with an email 25 tomorrow outlining all we discussed!” The email memorialized many of the grand promises 26 27 28 3 AMI itself confirmed that this meeting happened and these promises were made in a February 2017 statement to the New Yorker: “AMI had no discussions with Karen about a skin-care line, coverage of award shows, and a documentary in the year after she signed the [original] contract. Rather, those discussions occurred at a lunch in New York on August 10, 2017 . . . .” Exhibit C at 2. 16 COMPLAINT 261246.1 1 Mr. Pecker had made to Ms. McDougal. But none of those promises came to fruition over the coming 2 months. 81. 3 4 writer for the New Yorker contacted Ms. McDougal, this time for an exposé devoted entirely to AMI’s 5 efforts to silence Ms. McDougal on behalf of Mr. Trump. The writer was Ronan Farrow, who had 6 months earlier exposed the egregious sexual misconduct and ensuing cover-ups by Harvey Weinstein. 82. 7 involving AMI silencing women on behalf of Donald Trump. Ms. McDougal was his Exhibit 1, but 9 she was not alone: Six former A.M.I. employees told me that Pecker routinely makes catch-and-kill arrangements like the one reached with McDougal. “We had stories and we bought them knowing full well they were never going to run,” Jerry George, a former A.M.I. senior editor who worked at the company for more than twenty-five years, told me. George said that Pecker protected Trump. “Pecker really considered him a friend,” George told me. “We never printed a word about Trump without his approval.” 11 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 Mr. Farrow had gotten wind of another systematic and deeply troubling scheme—one 8 10 S T R I S MAH E R Nonetheless, AMI’s “carrot and stick” tactics worked. In February 2018, a different 12 13 14 83. 15 Without Ms. McDougal’s knowledge, Mr. Farrow had obtained her handwritten notes 16 about the relationship from Mr. Crawford. But when he reached out to her directly for comment, she 17 declined to discuss details of the relationship due to her agreement with AMI, fearing the company’s 18 retribution if she broke her silence. She told him: “[The agreement] took my rights away . . . I don’t 19 know what I’m allowed to talk about. I’m afraid to even mention his name.” 84. 20 21 Mr. Farrow: Karen McDougal came to AMI in June 2016 and wanted to sell her story about an affair she supposedly had with President Donald Trump. She claimed she had been offered more than $1 million for the story, and was also in negotiations with ABC and Brian Ross. She asked AMI to counter for the rights. AMI met with her, and determined she had no documentary proof supporting her account of the affair. Specifically, despite claiming she had been involved with President Trump for ten months, she had no emails, text messages, receipts, or corroborating witnesses. 22 23 24 25 26 27 Once again, however, AMI did not hesitate to share its side of the story, falsely telling AMI’s statement is attached as Exhibit C. 28 17 COMPLAINT 261246.1 85. 1 2 ever ‘instructed’ Karen to send any response to The New Yorker but provided guidance per her request 3 during a phone conversation she initiated regarding the inquiry.” Exhibit C at 2 (emphasis in original). 86. 4 Mr. Trump—despite AMI telling its side, and the fact that the article was devoted to her relationship 6 and its cover-up whether she assisted Mr. Farrow or not—AMI was furious. In the following weeks, 7 it threatened her with lawsuits and financial ruin if she elected to break her silence. Among other 8 things, AMI’s general counsel emailed Ms. McDougal’s lawyer to blame Ms. McDougal for the 9 “barrage of questions your client is facing” from the press, and telling her that “any further disclosures would breach Karen’s contract with AMI and cause considerable monetary damages.” 87. 11 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 Even though Ms. McDougal had still declined to discuss her relationship with 5 10 S T R I S MAH E R AMI also falsely told Mr. Farrow that “[n]either AMI nor an AMI engaged publicist For the time being, she complied with AMI’s demands. But then came several events 12 that drove home just how thoroughly she had been duped; thrust her into the center of a national 13 controversy; and caused her to realize the true inequity that everyone—including AMI—had the 14 opportunity to give their account of her relationship and its cover-up except for Ms. McDougal 15 herself. 16 17 The New York Times Exposes Direct Coordination Between Mr. Davidson, AMI, And Mr. Cohen. And Ms. McDougal Becomes The Subject Of FEC And DOJ Complaints And A Litigation Hold In A Defamation Suit Regarding Russian Collusion 88. 18 Just weeks ago, on February 18, 2018, the New York Times revealed that shortly after 19 Ms. McDougal first discussed her story with AMI, AMI “shared her allegations with Mr. Cohen, 20 though it said it did so only as it worked to corroborate her claims, which it ultimately could not do. 21 But that was not the only heads-up Mr. Cohen received.” See Rutenberg, supra. 89. 22 23 The New York Times also revealed that Mr. Davidson himself—Ms. McDougal’s own lawyer at the time—had coordinated directly with Mr. Cohen: 24 Soon after Ms. McDougal signed the confidential agreement on Aug. 5, 2016, Mr. Davidson emailed Mr. Cohen, “Michael, please give me a call at your convenience.” Mr. Davidson followed up by explaining to Mr. Cohen over the phone that the McDougal transaction had been completed, according to a person familiar with the conversation. 25 26 90. 27 This was the first time that Ms. McDougal learned of either interaction. 28 18 COMPLAINT 261246.1 91. 1 2 watchdog group, filed a complaint with the Federal Election Commission and the Department of 3 Justice challenging AMI’s “catch-and-kill” of Ms. McDougal’s story, on the grounds it violates the 4 Federal Election Campaign Act (FECA). Complaint, Common Cause v. Trump (Feb. 20, 2018), http:// 5 www.commoncause.org/press/press-releases/common-cause-v-trump.pdf. The complaint alleges that 6 AMI’s $150,000 payment to Ms. McDougal is an undisclosed, illegal corporate contribution to the 7 Trump campaign, made “for the purpose of influencing the 2016 presidential general election.” 8 Id. ¶ 37. 92. 9 12 13 14 15 The complaint further alleges: [T]here is reason to believe that American Media, Inc., which, in the summer of 2016, “came to Mr. Cohen with a story involving Ms. McDougal,” made its payment of $150,000 to Ms. Karen McDougal “in cooperation, consultation, or concert, with, or at the request or suggestion of” Mr. Cohen, an[] agent of Donald J. Trump, therefore rendering [the] payment a coordinated expenditure to Donald J. Trump[] . . . in violation of the FECA prohibition on corporate contributions established by 52 U.S.C. § 30118(a).” 11 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 10 S T R I S MAH E R Just two days after the Times story broke, Common Cause, a D.C.-based nonpartisan Id. ¶¶ 39-40. 93. 16 And just days ago, Ms. McDougal’s litigation team received a document preservation 17 request from BuzzFeed, Inc. lawyers as part of a defamation lawsuit filed by Mr. Cohen about 18 BuzzFeed’s famous January 2017 article detailing alleged collusion between Russia and the Trump 19 campaign. Ken Bensinger et al., These Reports Allege Trump Has Deep Ties To Russia, BuzzFeed 20 (Jan. 10, 2017), https://www.buzzfeed.com/kenbensinger/these-reports-allege-trump-has-deep-ties- 21 to-russia?utm_term=.mx6Q7DL9b#.dpdEW8jvq. 94. 22 The document preservation request states that Ms. McDougal “is likely in possession 23 of documents that are potentially relevant to the Action,” based on Mr. Cohen’s role in coordinating 24 Ms. McDougal’s agreement with AMI. (Ms. McDougal, of course, was unaware of Mr. Cohen’s 25 involvement at the time.) 95. 26 These revelations have placed Ms. McDougal at the center of a national controversy 27 with broad implications for our democratic system. Yet through all of it, AMI has continued to 28 intimidate Ms. McDougal and threaten her with financial ruin if she tells her story to the American 19 COMPLAINT 261246.1 1 public—even as AMI itself has readily shared its own false account of both the relationship and its 2 cover up. 96. LOS ANGELES CA 90017 S T R I S MAH E R 725 S. FIGUEROA ST STE 1830 3 Ms. McDougal therefore seeks a declaration that her contract with AMI is void, 4 because she was tricked into signing it while being misled as to its contents (including by her own 5 lawyer, on whose advice she was entitled to rely); because its very object was to illegally influence 6 the 2016 presidential election; and because, at least as interpreted and applied by AMI, it violates 7 fundamental precepts against using threats of legal action to coerce silence on issues of national, 8 public importance. 9 FIRST CAUSE OF ACTION 10 Declaratory Relief (Cal. Code Civ. P. § 1060) 11 97. Ms. McDougal incorporates by reference all prior allegations of this complaint. 12 98. Ms. McDougal seeks a declaration that her agreement with AMI (the “Agreement”) is 13 invalid and void because (1) there was fraud in its execution, (2) the object of the contract is illegal, 14 and (3) the contract violates fundamental public policy. 99. 15 16 Fraud in the execution. The Agreement was a different contract than the one Ms. McDougal thought she had made with AMI. 17 a. Fraud in the execution occurs when one party deceives the other as to the 18 essential character and core terms of the agreement she is signing. It voids the contract 19 in its entirety. 20 b. 21 Ms. McDougal’s own lawyer to make Ms. McDougal think AMI would be obligated 22 to run more than a hundred columns in her name, for the purpose of jumpstarting her 23 health and fitness career. 24 c. 25 granted AMI the right to do so: “McDougal grants to AMI, for two years from the 26 Effective Date, the right to identify McDougal as the author of, and use McDougal’s 27 name, likeness, and image in connection with [monthly columns in several 28 magazines].” Exhibit A ¶ 1. Here, AMI worked secretly, in collaboration with Michael Cohen and In fact, the contract did not obligate AMI to run columns by Ms. McDougal; it 20 COMPLAINT 261246.1 LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 S T R I S MAH E R 1 d. Ms. McDougal was unaware of this because AMI and Mr. Davidson falsely 2 told her otherwise. Because AMI made these representations about the terms and legal 3 effect of the contract in conjunction with Ms. McDougal’s own lawyer, Ms. McDougal 4 reasonably relied on the representations in signing the Agreement. 5 e. 6 McDougal, and his express misrepresentations about the terms of the contract, violated 7 his duty of undivided loyalty to his client. Mr. Davidson acted as an agent for adverse 8 parties in deceiving Ms. McDougal about the terms of the contract. 9 f. Mr. Davidson’s improper and secret interactions with persons adverse to Ms. Ms. McDougal would not have signed the Agreement had she known it did not 10 obligate AMI to carry columns in her name. 11 g. 100. 12 13 The Agreement is therefore void ab initio for fraud in the execution. Illegality. The object of the Agreement was to make an illegal in-kind corporate donation from AMI to Donald J. Trump for President, Inc. 14 a. A contract entered into for an illegal purpose is void. 15 b. AMI entered into the Agreement with Ms. McDougal in coordination with 16 Michael Cohen, an agent of the Trump campaign, and for the purpose of influencing 17 the 2016 presidential election. 18 c. 19 established by 52 U.S.C. § 30118(a). 20 d. 101. 21 Such a contribution violates the FECA prohibition on corporate contributions The Agreement was thus entered into for an illegal purpose and is void. Against public policy. The contract is also void as against fundamental public policy. 22 The State of California does not abide threats of legal action to coerce a person—especially a less 23 powerful and less sophisticated person—to permanently refrain from speaking out on issues of public 24 concern and profound importance to the country. That is particularly so when she herself is implicated 25 in the public discourse about these issues, is a witness to and participant in the relevant events, and 26 the counterparty to the agreement has repeatedly and falsely told its side of the story. Any contract 27 that violates such foundational tenets of our system of government, including freedom of expression 28 and conscience and freedom of the press, is void. That is precisely what the Agreement does. 21 COMPLAINT 261246.1 102. 1 2 State of California to protect free and robust debate on matters of public concern. See, e.g., Citizens 3 United v. F.E.C., 558 U.S. 310, 339 (2010) (“The right of citizens to inquire, to hear, to speak, and to 4 use information to reach consensus is a precondition to enlightened self-government and a necessary 5 means to protect it.”); First Nat’l Bank of Bos. v. Bellotti, 435 U.S. 765, 777 (1978) (speech on 6 governmental affairs is “indispensable to decisionmaking in a democracy”); Fashion Valley Mall, 7 LLC v. N.L.R.B., 42 Cal. 4th 850, 863 (2007) (“free speech clause and its right to freedom of speech 8 [in California state constitution] are not only as broad and as great as the First Amendment’s, they are 9 even ‘broader’ and ‘greater’”). 103. LOS ANGELES CA 90017 725 S. FIGUEROA ST STE 1830 10 S T R I S MAH E R The Agreement offends the unwavering public policy of the United States and the Indeed, our nation recognizes no higher public policy than the unfettered right to 11 criticize our elected officials and petition the government. U.S. Const. amend. I. As the U.S. Supreme 12 Court has held: “Speech is an essential mechanism of democracy, for it is the means to hold officials 13 accountable to the people.” Citizens United, 558 U.S. at 339. 104. 14 The role of Mr. Cohen, who was an agent for the Trump campaign and later 15 represented Mr. Trump after he assumed the office of President of the United States, means that this 16 is no ordinary confidentiality agreement between private parties. AMI, led by its CEO Mr. Pecker 17 who is a close friend and confidant of Mr. Trump, seeks to use the Agreement to silence a person 18 from publicly disclosing information that is critical of the President, relevant to alleged violations of 19 federal law in a presidential election, and potentially relevant to ongoing investigations and litigation 20 in a number of matters related to Mr. Trump, his campaign, and his associates. This is core political 21 speech entitled to the highest protection under the law. 105. 22 The interests at stake are far broader than Ms. McDougal’s individual right to speak. 23 The American public and the people of California have a vital interest in the free and unrestricted 24 dissemination of information about public affairs and most particularly about matters relating to the 25 integrity of the electoral process. The Agreement represents an impermissible effort to censor and 26 distort the marketplace of ideas that is central to American democracy and to democracy in the State 27 of California. 28 22 COMPLAINT 261246.1 1 2 3 4 5 106. Because the Agreement violates public policy of the highest importance, this Court should play no role in enforcing it and should hold the agreement void ab initio. 107. California has a substantial interest in the Agreement. The Agreement was executed in Los Angeles, California. It purports to bind the parties in California. 108. The validity of the Agreement is a proper subject of declaratory relief. See Cal. Code 6 Civ. P. § 1060 (providing for determination "of any question of construction or validity arising under 7 the instrument or contract"). 8 109. There is an actual controversy involving justiciable questions relating to the rights or 9 obligations of Ms. McDougal under the Agreement. See Cal. Code Civ. P. § 1060 (providing for 10 declaratory relief"in cases of actual controversy relating to the legal rights and duties of the respective 11 parties"). Ms. McDougal wishes to speak with the press about her relationship with Mr. Trump. AMI 12 continues to invoke the Agreement to threaten her with financial ruin if she does so. 0 -"' ,_ "' 00 ~ E-< E-< 0 0 "'...: °'...: u 0 ~ ~ p 0 ~ ~ "'>-l 13 110. A judicial declaration is necessary and appropriate to determine the validity of the ~ ~ d 14 Agreement and Plaintiff's rights. z ...: PRAYER FOR RELIEF "'.,., "'0 ,_ >-l "' 15 rn p::: ,..... µ;) p::: ::i::: 16 WHEREFORE, Ms. McDougal prays for judgment against AMI as follows: 17 1. For an order declaring the Agreement void ab initio; 18 2. For all attorneys' fees and costs incurred in bringing this action, to the extent E-< -