Case 2:18-cv-02217-SJO-FFM Document 59 Filed 06/07/18 Page 1 of 6 Page ID #:1453 AVENATTI & ASSOCIATES, APC Michael J. Avenatti, State Bar No. 206929 2 Ahmed Ibrahim, State Bar No. 238739 520 Newport Center Drive, Suite 1400 3 Newport Beach, CA 92660 Telephone: 949.706.7000 4 Facsimile: 949.706.7050 1 5 Attorneys for Plaintiff Stephanie Clifford a.k.a. Stormy Daniels a.k.a. Peggy Peterson 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 STEPHANIE CLIFFORD a.k.a. STORMY DANIELS a.k.a. PEGGY PETERSON, an individual, 13 14 Plaintiff, vs. 15 16 17 18 DONALD J. TRUMP a.k.a. DAVID DENNISON, an individual, ESSENTIAL CONSULTANTS, LLC, a Delaware Limited Liability Company, MICHAEL COHEN and DOES 1 through 10, inclusive, 19 20 CASE NO.: 2:18-cv-02217-SJO-FFM PLAINTIFF STEPHANIE CLIFFORD’S REPLY IN SUPPORT OF MOTION FOR RECONSIDERATION IN PART OF ORDER IMPOSING STAY Hearing Date: June 21, 2018 (Pursuant to Court’s Order Dkt. No. 55) Hearing Time: 1:30 p.m. Location: Courtroom 10C Defendants. 21 22 23 24 25 26 27 28 PLAINTIFF’S REPLY RE: MOTION FOR RECONSIDERATION IN PART OF ORDER IMPOSING STAY Case 2:18-cv-02217-SJO-FFM Document 59 Filed 06/07/18 Page 2 of 6 Page ID #:1454 1 I. INTRODUCTION 2 At the time this Court imposed a 90-day stay, it was assumed that: (1) Defendant 3 Michael Cohen acted on his own without his client Donald J. Trump’s knowledge in 4 negotiating the Agreement underlying this action and paid the $130,000 consideration to 5 Plaintiff out of his own pocket, and (2) that there was no reason to question that Mr. 6 Cohen was being investigated for crimes, including possible campaign finance violations, 7 he may have committed arising out of his legal work for Mr. Trump in connection with 8 the Agreement and $130,000 payment. These assumptions, which along with the notion 9 that Mr. Cohen’s deposition testimony would have to be compelled, formed the 10 foundation of the Court’s ruling that a stay is necessary because Defendants would be 11 powerless to defend the action without testimony from Mr. Cohen. 12 In her motion, Plaintiff proffers new facts and evidence that fundamentally undercut 13 the very basis of the Court’s ruling. This evidence consists of factual revelations directly 14 from Defendant Trump and his attorney Rudy Giuliani’s own recorded words. Rather 15 than confronting these new facts and their ramifications on the stay order under the 16 rationale articulated by the Court, Defendants instead hope to distract the Court from the 17 merits with their continued obsession with launching extraneous attacks on Plaintiff’s 18 counsel. 1 The Court should grant Plaintiff’s motion for reconsideration, in part. 19 II. 20 21 22 23 24 25 26 THE FACT THAT MR. COHEN’S DEPOSITION WILL NOT BE COMPELLED DURING THE REMAINDER OF THE 90 DAY STAY REMOVES ANY JUSTIFICATION TO STAY THE REST OF THE CASE Defendants’ opposition suffers from a glaring omission that is fatal to their position. Defendants fail to address the impact on the Court’s order of the fact that Mr. Cohen’s deposition will not be compelled during the remainder of the 90 day stay period ordered by the Court. Defendants fail to do so because they would have to concede that this changed circumstance removes any conceivable justification for a blanket stay. 1 The Court has already found Plaintiff’s counsel’s advocacy for his client on television to be irrelevant to the issues at hand. Plaintiff, therefore, does not intend to waste the Court’s time (particularly with the limitations on space in this brief) by addressing matters 28 that have nothing to do with the merits of this Motion and are designed to impugn. 27 -1PLAINTIFF’S REPLY RE: MOTION FOR RECONSIDERATION IN PART OF ORDER IMPOSING STAY Case 2:18-cv-02217-SJO-FFM Document 59 Filed 06/07/18 Page 3 of 6 Page ID #:1455 1 As argued in the motion, the Court’s decision to stay the case was influenced in 2 substantial part by Mr. Cohen having to sit for a deposition. The Court found compelling 3 him to do so “bears heavily” on his Fifth Amendment rights and would cause him “undue 4 prejudice.” [Dkt No. 53 at 7-8.] In fact, the perceived issues associated with Mr. Cohen 5 being deposed permeates the Court’s order, as it was found to be material to the Court’s 6 analysis of the first, second, and third Keating factors, along with the Fifth Amendment 7 analysis. [Dkt No. 53 at 4-8.] However, these concerns no longer apply. Defendants fail 8 to explain why concerns about Mr. Cohen’s Fifth Amendment rights remain front and 9 center when he will not be called upon to testify in the short term. 10 Estate of Limon v. City of Oxnard, No. CV 13-01961 SS, 2013 WL 12131359 11 (C.D. Cal. Dec. 10, 2013), is instructive. There, the Court refused to grant a blanket stay 12 and instead ordered a stay only of the depositions of individual officers accused of 13 shooting a victim in a wrongful death case because “Defendants have not explained why a 14 complete stay is the only feasible way to protect the individual officers’ constitutional 15 rights.” Id. at *5. This case is similar. Discovery from Mr. Cohen may be postponed 16 until additional information from the criminal investigation is made public. That does not, 17 however, require staying the remainder of the lawsuit. This time can be used to conduct 18 document and deposition discovery from Mr. Trump, document and deposition discovery 19 through subpoenas from a myriad of third-parties, allow the Court to rule on Plaintiff’s 20 motion to expedite discovery, and conduct case management activities such as issuing a 21 scheduling order with discovery deadlines and setting the matter for an FAA jury trial. 22 None of these activities risks compromising Mr. Cohen’s Fifth Amendment rights. 23 III. 24 25 26 27 28 THE NEW FACTS ARE RELEVANT A. Trump and Giuliani’s Statements Are Assertions of Fact, Not Opinion. Defendants first contend that Mr. Trump’s statements about the FBI’s investigation of Mr. Cohen should be shrugged off as mere “opinions.” But the statements speak for themselves. Regarding the scope of the investigation, Mr. Trump stated: “they’re looking [in]to something having to do with his business. I have nothing to do with his business.” -2PLAINTIFF’S REPLY RE: MOTION FOR RECONSIDERATION IN PART OF ORDER IMPOSING STAY Case 2:18-cv-02217-SJO-FFM Document 59 Filed 06/07/18 Page 4 of 6 Page ID #:1456 1 [See Avenatti Decl., Ex. 1 at 14:43.] On why Mr. Cohen is pleading the Fifth, Mr. Trump 2 replied: 3 understand, they’re looking at his businesses.” [Avenatti Decl., Ex. 1 at 15:40.] These are 4 assertions of fact. And they are being made by a sitting President of the United States— 5 the same President who oversees the Justice Department that is investigating Mr. Cohen 6 and who regularly communicates with Mr. Cohen. 7 misrepresenting the facts is a separate issue. But Defendants should not be permitted to 8 weaponize Mr. Trump’s well known reputation for routinely misrepresenting the facts to 9 their advantage in a court of law by characterizing his factual assertions as “opinions.” “Because he’s got other things. He’s got businesses. And from what I Whether Mr. Trump is 10 Similarly, Mr. Giuliani makes fact assertions. Indeed, that is exactly what Mr. 11 Giuliani told Mr. Hannity: “I’m going to give you a fact now that you don’t know.” 12 [Avenatti Decl., Ex. 2 at 40:06.] This includes, by way of example, the fact that the 13 $130,000 was “not campaign money,” that it was “funneled through a law firm, and the 14 President repaid it,” and that Mr. Trump “did know about the general arrangement, that 15 Michael would take care of things like this.” [Avenatti Decl., Ex. 2 at 40:30.] 16 B. 17 Defendants’ argument that Mr. Trump’s knowledge about the $130,000 payment 18 and reimbursement of Mr. Cohen is irrelevant defies logic. Simply stated, Mr. Trump’s 19 knowledge of the payment demonstrates he knew about the underlying Agreement at 20 issue. There is no other way to interpret Mr. Trump’s admissions. To suggest otherwise 21 would be to accept the absurd notion that Mr. Cohen, an attorney, acted on his own 22 without informing his client by negotiating the Agreement and personally paying $130,000 23 out of his own pocket to Plaintiff and then never told his client why he was requiring a 24 $130,000 reimbursement. Defendants ask the Court to accept this story at face value, but 25 have not supplied the Court with any evidence to support this version of events. There is 26 no declaration from Mr. Trump. None of Mr. Cohen’s previously filed declarations make 27 this claim. In fact, not a single piece of evidence has been put before the Court to even 28 establish that Mr. Cohen is the “mastermind” and “most knowledgeable witness.” Instead, Trump and Giuliani’s Statements About the Payment Are Relevant. -3PLAINTIFF’S REPLY RE: MOTION FOR RECONSIDERATION IN PART OF ORDER IMPOSING STAY Case 2:18-cv-02217-SJO-FFM Document 59 Filed 06/07/18 Page 5 of 6 Page ID #:1457 1 Defendants rely exclusively on the arguments of their attorneys. But the “[a]rguments and 2 statements by lawyers are not evidence.” 9th Cir. Model Civ. Jury Instr. 1.10 (2017). 3 This Court must rely on evidence, not speculation and conjecture. 4 In sum, the new revelations coming directly from Mr. Trump and Mr. Giuliani 5 demonstrate Mr. Trump had knowledge of the payment and creates a very strong inference 6 he also knew about the Agreement. The new evidence is therefore relevant. Defendants 7 are not powerless to mount a defense without Mr. Cohen.2 8 IV. 9 THE NEW FACTS ALTER THE COURT’S KEATING ANALYSIS A. Trump’s Tweet Calling Plaintiff “False and Extortionist” is Prejudicial. 10 In a tweet to his 51 million followers, Mr. Trump threatened Plaintiff with damages 11 and called her “false and extortionist.” [Avenatti Decl., Ex. 3.] Defendants trivialize 12 Mr. Trump’s bullying, claiming Plaintiff has not been deterred from appearing on 13 television. But Defendants continue to mischaracterize the purpose of this lawsuit as 14 merely about being able to speak freely. This description is inaccurate and incomplete. 15 Rather, this suit is about being able to speak freely without being held liable for money 16 damages. Staying the litigation therefore is unmistakably prejudicial to Plaintiff because 17 it delays final judgment declaring the Agreement null and void. The law’s recognition of 18 this interest is undisputed. See, e.g., ESG Capital Partners LP v. Stratos, 22 F. Supp. 3d 19 1042, 1046 (C.D. Cal. 2014) (“Courts have recognized that a civil plaintiff has an interest 20 in having her case resolved quickly.”). Unless Defendants withdraw their claim for 21 money damages, Plaintiff will continue to be prejudiced by delayed resolution of this case. 22 B. 23 Defendants next argue that they will be prejudiced by Mr. Cohen’s unavailability to 24 testify because they wish to file a declaration of Mr. Cohen in connection with their reply 25 in support of their motion to compel arbitration. But Defendants have no reasonable 26 expectation of being able to file new evidence on reply because this Court prohibits such a 27 28 The Prejudice to Defendants Is Minimal. 2 Further, as shown in the concurrently filed response to Defendants’ evidentiary objections, the statements are not inadmissible hearsay. -4PLAINTIFF’S REPLY RE: MOTION FOR RECONSIDERATION IN PART OF ORDER IMPOSING STAY Case 2:18-cv-02217-SJO-FFM Document 59 Filed 06/07/18 Page 6 of 6 Page ID #:1458 1 practice. Standing Order, ¶23(d) (“Reply papers are limited to argument and authorities 2 responsive to the opposition papers. The Court will not address new matter that was 3 improperly 4 CV1108083SJOFFMX, 2016 WL 9711185, at *3 (C.D. Cal. Nov. 16, 2016) (Otero, J.) 5 (“[P]arties may not submit new evidence in their reply papers, as such a tactic fails to 6 provide the opposing party with a fair opportunity to respond.”). Further, Defendants, who 7 have been in possession of Plaintiff’s evidence supporting her opposition to Defendants’ 8 motion to compel arbitration for weeks, fail to specify what aspects of those declarations 9 merit a response that only Mr. Cohen is capable of rebutting. introduced.”); see also Courthouse News Serv. v. Planet, No. 10 C. 11 Defendants continue to ignore the Court’s rationale that compelling Mr. Cohen’s 12 deposition would lead to inefficiencies. [Dkt No. 53 at 8.] As Plaintiff demonstrated, 13 these concerns no longer apply because Plaintiff will not be seeking a deposition of Mr. 14 Cohen in the coming weeks. Defendants provided no response to this argument. Defendants Ignore Plaintiff’s Judicial Efficiency Argument. 15 Defendants instead contend that lifting the stay would risk the merits of the claims 16 and defenses being “tried” without testimony from Mr. Cohen. Defendants misconstrue 17 Plaintiff’s position. Although Plaintiff has previously argued that the FAA jury trial may 18 occur with Mr. Cohen taking the stand and pleading the Fifth Amendment (for which 19 Plaintiff would be entitled to an adverse inference), Plaintiff has made clear that for 20 purposes of the present motion, the Court need not decide at this time whether the trial 21 should actually proceed without Mr. Cohen’s testimony. However, the parties should not 22 be delayed in their ability to conduct all other discovery and litigate the remainder of the 23 case right up to the point at which the parties are prepared to try the arbitrability dispute. 24 V. 25 CONCLUSION For the reasons stated above and in their moving papers, Plaintiff respectfully 26 requests the Court to modify its April 27, 2018 order by imposing a partial stay. 27 Dated: June 7, 2018 28 AVENATTI & ASSOCIATES, APC By: /s/ Michael J. Avenatti Michael J. Avenatti -5PLAINTIFF’S REPLY RE: MOTION FOR RECONSIDERATION IN PART OF ORDER IMPOSING STAY