Case 2:18-cv-02217-SJO-FFM Document 98 Filed 11/13/18 Page 1 of 18 Page ID #:2766

1 Brent H. Blakely (SBN 157292)
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bblakely@blakelylawgroup.com
Jessica C. Covington (SBN 301816)
jcovington@blakelylawgroup.com
BLAKELY LAW GROUP
1334 Parkview Avenue, Suite 280
Manhattan Beach, California 90266
Telephone: (310) 546-7400
Facsimile: (310) 546-7401

8 Attorneys for Defendants
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Essential Consultants, LLC and Michael Cohen

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

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STEPHANIE CLIFFORD a.k.a.
STORMY DANIELS a.k.a. PEGGY
PETERSON, an individual,

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Plaintiff,

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v.
DONALD J. TRUMP a.k.a. DAVID
DENNISON, an individual,
ESSENTIAL CONSULTANTS, LLC, a
Delaware Limited Liability Company,
MICHAEL COHEN, an individual, and
DOES 1 through 10, inclusive,
Defendants.

Case No. 2:18-CV-02217-SJO-FFM
DEFENDANT ESSENTIAL
CONSULTANTS LLC AND
MICHAEL COHEN’S
OPPOSITION TO
PLAINTIFF’S MOTION
FOR LEAVE TO AMEND
TO FILE SECOND
AMENDED COMPLAINT
[Declaration of Brent H. Blakely Filed
Concurrently Herewith]
Assigned to the Hon. S. James Otero
Action Filed: March 6, 2018
Date:
December 3, 2018
Time:
10:00 a.m.
Location: 350 West 1st Street
Courtroom 10C, 10th Floor
Los Angeles, CA 90012

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TABLE OF CONTENTS

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I.

INTRODUCTION ............................................................................................. 1

II.

FACTUAL BACKGROUND ........................................................................... 2

III.

ARGUMENT .................................................................................................... 4

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13 IV.

A.

Plaintiff’s Motion to Amend Was Filed in Violation of the Local
Rules and this Court’s Orders ................................................................. 4

B.

Plaintiff’s Undue Delay and Bad Faith, along With the Prejudice
to Mr. Cohen, Warrant the Denial of Plaintiff’s Motion to Amend ...... 4

C.

Even If This Court Allows Plaintiff to Dismiss Her Defamation
Claim Against Cohen, It Should Exercise its Discretion to Award
Mr. Cohen His Fees Pursuant to Civil Code Section 425.16(c) ............. 9

D.

This Court Should Place Conditions on Any Amendment ................... 12

E.

This Court Should Exercise its Inherent Powers and Sanction
Plaintiff’s Counsel Pursuant to FRCP Rule 11 ..................................... 13

CONCLUSION ............................................................................................... 14

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TABLE OF AUTHORITIES

1
2 Cases

3 Ascon Properties, Inc. v. Mobil Oil Co.,
4
5

866 F.2d 1149 (9th Cir. 1989) ........................................................................... 5

Carvalho v. Equifax Info. Servs., LLC,
629 F.3d 876 (9th Cir. 2010) ............................................................................. 5

6 Chambers v. NASCO, Inc.
7
8

501 U.S. 32 (1991) .................................................................................... 13, 14

Coltrain v. Shewalter
(1998) 66 Cal. App. 4th 94 ........................................................................... 9, 10

9 Cooter & Gell v. Hartmarx Corp.,
10
11

496 U.S. 384, 392-393....................................................................................... 8

Eminence Capital, LLC. v. Aspeon, Inc.,
316 F.3d 1048 (9th Cir. 2003) ........................................................................... 5

12 Firchau v. Diamond Nat'l Corp.,
13
14

345 F.2d 269 (9th Cir. 1965) ........................................................................... 13

Fleming v. Coverstone,
2009 U.S. Dist. LEXIS 22083 (N.D. Cal. March 18, 2009) ............................. 9

15 Foman v. Davis,
16
17

371 U.S. 178 (1962) .......................................................................................... 5

General Signal Corp. v.
MCI Telecommunications Corp.,
66 F.3d 1500 (9th Cir. 1995) ............................................................................ 13

18 Gertz v. Robert Welch, Inc.
19
20

418 U.S. 323 (1974) .......................................................................................... 7

Ghazali v. Moran,
46 Fed. 3d 52 (9th Cir. 1995) ........................................................................... 12

21 Golden Eagle Distributing Corp. v. Burroughs Corp.,
22
23

801 F. 2d 1531 (9th Cir. 1986) .......................................................................... 8

Gottesman v. Santana,
263 F. Supp. 3d 1034 (N.D. Cal. 2017) .......................................... 9, 10, 11, 12

24 Itel Secur. Litig.,
25
26

791 F. 2d 672 (9th Cir. 1986) ........................................................................... 14

Jackson v. Bank of Hawaii,
902 F.2d 1385 (9th Cir. 1990) ........................................................................... 8

27 Ketchum v. Moses
28

(2001) 24 Cal. 4th 1122 .................................................................................... 12

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1 Liu v. Moore

(1999) 69 Cal. App. 4th 745 ............................................................................. 12

2

McGarry v. University of San Diego
(2007) 154 Cal.App.4th 97 ................................................................................ 7
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4 Mireskandari v. Associated Newspapers, Ltd.,

665 F. App'x 570 (9th Cir. 2016) .................................................................... 10

5

Mireskandari v. Mail,
2014 U.S. Dist. LEXIS 199028 (C.D. Cal. Aug. 4, 2014) .............................. 10
6
7 Nguyen-Lam v. Cao

(2009) 171 Cal. App. 4th 858 ............................................................................. 5

8

Paris Hilton v. Hallmark Cards et al.,
580 F.3d 874 (9th Cir. 2009) ............................................................................. 6
9
10 Reyes v. Wells Fargo Bank, N.A.,

2017 U.S. Dist. LEXIS 198129 (CD Cal. Aug. 7, 2017) ................................ 12

11

Roadway Express, Inc. v. Piper,
447 U.S. 752 (1980) ........................................................................................ 13
12
13 Rogers v. Home Shopping Network, Inc.,

57 F. Supp. 2d 973 (C.D. Cal. 1999)................................................................. 5

14

Roth v. First in Awareness, LLC,
2011 U.S. Dist. LEXIS 103053 (N.D. Cal. Sept. 13, 2011) ........................... 13
15
16 Swanson v. United States Forest Serv.,

87 F.3d 339 (9th Cir. 1996) ............................................................................... 5

17

Uecker v. A Very Nice Pool Co. (In re Mortgage Fund '08 LLC),
2015 U.S. Dist. LEXIS 129548 (C.D. Cal. Sept. 2015) .................................. 13
18
19 Verizon Delaware, Inc. v. Covad Commc’ns Co.,

377 F. 3d 1081 (9th Cir. 2004) ........................................................................... 5

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Washer v. Bank of America
(1948) 87 Cal. App. 2d. 501 .......................................................................... 6, 7
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22 Wilbanks v. Wolk
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(2004) 121 Cal.App.4th 883 .............................................................................. 6

Rules
Fed. R. Civ. P. 15(a)(1)................................................................................................ 4
Fed. R. Civ. P. 15(a)(2)................................................................................................ 5
FRCP 11(b)(1) ........................................................................................................... 14
FRCP 11(b)(2) ........................................................................................................... 14
FRCP 15(a)(1)(B) ........................................................................................................ 5
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1 I.

INTRODUCTION

2

On March 26, 2018 Plaintiff amended her complaint to add a defamation claim

3 against Mr. Cohen targeting his truthful opinion contained in a press release that
4 “[j]ust because something isn’t true doesn’t mean that it can’t cause you harm or
5 damage.” Because this claim arose from acts in furtherance of Mr. Cohen’s right of
6 free speech, on April 9, 2018 Mr. Cohen filed an Anti-SLAPP Motion pursuant to
7 California Code of Civil Procedure Section 425.16. (hereinafter “Civil Code
8 §425.16”) While Plaintiff has failed to articulate the reason why she now seeks (after
9 seven months) to drop her defamation claim, there is only one logical conclusion –
10 Plaintiff just lost a similar motion brought by Donald Trump and now seeks to escape
11 the same result in connection her claim against Mr. Cohen. Not only is there no merit
12 for Plaintiff’s Motion to Amend, it makes no difference to the outcome Plaintiff seeks
13 to avoid. In fact, it makes it worse.
14

In Federal Court, when a plaintiff amends the pleadings to remove a

15 defamation claim while an Anti-SLAPP motion is pending, it will be construed as a
16 voluntary dismissal. Notwithstanding such a dismissal, Federal Courts retain
17 jurisdiction over the motion to determine whether the defendant is a “prevailing
18 defendant” under the Anti-SLAPP statute for purposes of attorneys’ fees and costs.
19 Finally, a plaintiff’s voluntary dismissal raises the presumption that the defendant is
20 the prevailing party.
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Rather than allowing Plaintiff to evade responsibility for the meritless claim

22 she filed against Mr. Cohen, by filing this Motion to Amend Plaintiff’s counsel has
23 shot himself in the foot. If this Court denies Plaintiff’s Motion to Amend, Mr. Cohen
24 should prevail on his unopposed Anti-SLAPP motion, and be awarded his fees in
25 connection therewith. If Plaintiff gets what she seeks, the dismissal of her
26 defamation claim thru an amended complaint, Mr. Cohen will still be deemed the
27 prevailing party for the purpose of attorneys’ fees and costs.
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1 II.

FACTUAL BACKGROUND

2

Plaintiff Stephanie Clifford is an adult-film actress and exotic dancer. Ms.

3 Clifford alleges that she had “an intimate relationship with Mr. Trump” in 2006-2007.
4 (ECF No. 14, First Amended Complaint (“FAC”), ¶ 10) In October 2016, according
5 to an exclusive news report, Ms. Clifford unsuccessfully attempted to sell a story
6 about an alleged one-night-stand with Mr. Trump to tabloid magazines and related
7 outlets for $200,000. (ECF No. 31-1, Blakely Decl., ¶ 4, Ex. D, 3/29/18 Daily Mail
8 Article.)
9

Instead, Plaintiff admittedly signed a written Settlement Agreement and Mutual

10 Release dated October 28, 2016. (ECF No. 14, FAC ¶¶ 17-23 and Exs. 1-2; ECF No.
11 31-2; Cohen Decl., ¶¶ 2-3.) In the Settlement Agreement, Ms. Clifford promised to
12 arbitrate any dispute that might later arise between her and Mr. Trump. (ECF No. 14;
13 FAC Ex. 1 [p. 10].) Plaintiff also promised not to publicly disclose any Confidential
14 Information (as defined in the Settlement Agreement), including any of Mr. Trump’s
15 “alleged sexual partners, alleged sexual actions or alleged sexual conduct.” (Id. pp. 416 8.)
17

As consideration for Ms. Clifford’s promises to arbitrate and to maintain

18 confidentiality, EC paid and Ms. Clifford admittedly accepted, the sum of $130,000.
19 (See ECF No. 14; FAC ¶ 24 and Ex. 1 [p. 4, ¶23]) For the next sixteen months, Ms.
20 Clifford did not reject the Settlement Agreement or make any attempt to return the
21 $130,000 that she was paid by EC. (ECF No. 31-2; Cohen Decl., ¶¶ 2-3.)
22

On or about February 22, 2018, EC filed an arbitration proceeding with ADR

23 Services, Inc. (“ADRS”) in Los Angeles (the “Arbitration”), pursuant to the
24 arbitration provision in the Settlement Agreement. (ECF No. 31-2; Cohen Decl., ¶ 8)
25 Upon EC’s emergency application for a Temporary Restraining Order, the arbitrator
26 (a retired California Superior Court judge) issued an order prohibiting Clifford from
27 violating the Settlement Agreement by, among other things, disclosing any
28 Confidential Information to the media or in court filings. (Id. at ¶ 9)
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In response, Plaintiff filed a Complaint in the Superior Court of the State of

2 California for the County of Los Angeles on March 6, 2018, seeking a declaratory
3 judgment that the Agreement is void, invalid, or unenforceable. (See ECF No. 1-1;
4 generally, Notice of Removal, Ex. 1)
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On March 26, 2018, pursuant to FRCP 15(a)(1)(A), Plaintiff filed the FAC

6 adding several new purported defenses to the arbitration provision and the Second
7 Claim for Defamation against Mr. Cohen. (ECF No. 14) Plaintiff’s FAC asserts two
8 causes of action: (1) a claim for declaratory relief to invalidate the Settlement
9 Agreement, dated October 28, 2016, by and between EC and Plaintiff; and (2) a claim
10 for defamation against Mr. Cohen.
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On March 27, 2018 Mr. Cohen’s counsel sent Plaintiff’s counsel a detailed

12 meet and confer letter setting forth the basis for Mr. Cohen’s Anti-SLAPP Motion and
13 requesting that Plaintiff voluntarily dismiss her defamation claim. (ECF No. 31-1,
14 Ex. H)
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On April 2, 2018 the parties held a meet and confer discussion regarding Mr.

16 Cohen’s anticipated Anti-SLAPP motion. (ECF No. 31-1, pg. 3) During this
17 discussion Mr. Cohen’s counsel explained in detail why Plaintiff’s defamation claim
18 was subject to California’s Anti-SLAPP statute, and urged Plaintiff’s counsel to
19 dismiss same, which they refused to do. (Id)
20

On April 9, 2018 Mr. Cohen filed his Anti-SLAPP Motion. (ECF No. 31) That

21 same day the FBI raided Mr. Cohen’s residence and office. (ECF No. 50)
22

Since March of 2018 Plaintiff and her attorney have used this litigation as a

23 platform to malign others to advance their own selfish interests. Mr. Cohen, who was
24 largely unable to defend himself due to the criminal investigation, has been the
25 primary target of Plaintiff’s counsel. As described in detail in Mr. Cohen’s Motion
26 for a Restraining Order (ECF No. 60), Plaintiff’s counsel maligned Mr. Cohen in
27 hundreds of television appearances and tweets, which have been heard by millions of
28 listeners, heedless of the impact that this would have on Mr. Cohen and his family.
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On September 24, 2018 the Parties stipulated to hearing dates on Defendants’

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2 Motions to Dismiss for Subject Matter Jurisdiction and Mr. Cohen’s Anti-SLAPP
3 Motion, and this Court issued an Order in connection with same. (ECF No. 83)
4 On October 15, 2018 this Court granted Donald Trump’s Motion to Strike in Clifford
5 v. Trump, USDC Cent. Dist. California, case no. 18-06893. (Blakely Decl. Exh. #1;
6 ECF No. 96, Exh. A) On November 5, 2018, seven (7) months after Mr. Cohen’s
7 counsel urged Plaintiff’s counsel to dismiss the defamation claim and was forced to
8 file an Anti-SLAPP motion, Plaintiff has now filed this present Motion to Amend
9 which seeks to dismiss her defamation claim. (ECF No. 91)
10 III.

ARGUMENT

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A. Plaintiff’s Motion to Amend Was Filed in Violation of the Local Rules

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13

and this Court’s Orders
As discussed in Mr. Cohen’s Objection (ECF No. 92), Plaintiff’s counsel did

14 not follow Local Rule 7-3 and this Court’s Orders when they filed Plaintiff’s Motion
15 to Amend. (ECF No. 91).
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B. Plaintiff’s Undue Delay and Bad Faith, along With the Prejudice to

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Mr. Cohen, Warrant the Denial of Plaintiff’s Motion to Amend

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Motions to amend are governed by Rule 15(a) of the Federal Rules of Civil

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Procedure. A party may amend their pleading once as a matter of course within

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twenty-one days of service, or, if the pleading is one which a responsive pleading is

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required, twenty-one days after service of a responsive pleading or twenty-one days

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after service of a motion under 12(b), (e), or (f), whichever is earlier. Fed. R. Civ. P.

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15(a)(1). After that period, the decision to grant or deny leave to amend lies within

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the discretion of the court or the opposing party. See Swanson v. United States Forest

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Serv., 87 F.3d 339, 343 (9th Cir. 1996). Rule 15(a) provides the Court "should freely

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give leave [to amend] when justice so requires." Fed. R. Civ. P. 15(a)(2).

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Nonetheless, a court "may exercise its discretion to deny leave to amend due to

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"undue delay, bad faith or dilatory motive on part of the movant, repeated failure to
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cure deficiencies by amendments previously allowed, undue prejudice to the

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opposing party . . . , [and] futility of amendment." Carvalho v. Equifax Info. Servs.,

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LLC, 629 F.3d 876, 892-93 (9th Cir. 2010) (quoting Foman v. Davis, 371 U.S. 178,

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182 (1962)) Prejudice to the opposing party carries the greatest weight. Eminence

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Capital, LLC. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). “The district

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court's discretion to deny leave to amend is particularly broad where plaintiff has

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previously amended the complaint." Ascon Properties, Inc. v. Mobil Oil Co., 866

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F.2d 1149, 1152 (9th Cir. 1989).

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Verizon Delaware, Inc. v. Covad Commc’ns Co., 377 F. 3d 1081 (9th Cir. 2004)

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stands for the general proposition that federal courts sitting in diversity are bound by

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federal, not state, pleading standards where an Anti-SLAPP motion challenges the

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legal sufficiency of a complaint.1 See also Rogers v. Home Shopping Network, Inc.,

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57 F. Supp. 2d 973, 982-983 (C.D. Cal. 1999). Nothing in Verizon requires courts to

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automatically grant a motion to amend. Rather, as with any other motion to amend,

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courts retain their discretion under FRCP 15(a)(1)(B) to grant or deny same.
Plaintiff amended her complaint on March 26, 2018 to add a claim for

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defamation against Mr. Cohen. (ECF No. 14) Shortly thereafter, the parties

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respective counsel engaged in detailed meet and confer discussions in an attempt to

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avoid unnecessary law and motion. In fact, on March 27, 2018 Mr. Cohen’s counsel

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sent the following letter to Mr. Avenatti:
I am writing to request an in-person meet and confer conference pursuant to

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1

In Verizon the District Court granted defendant’s motion to dismiss Verizon’s

24 initial complaint and deferred ruling on defendant’s Anti-SLAPP motion pending
25 Verizon’s amendment of the pleading. The district court observed that it was unclear,

based on the current record, whether Verizon’s claims were in fact based upon acts in

26 furtherance of the defendant’s rights of free speech and petition. Accordingly, the
27 district court granted leave to amend in order to resolve the ambiguities as to the basis

for its claim. See Nguyen-Lam v. Cao (2009) 171 Cal. App. 4th 858 (order granting
28 leave to amend to show probability of prevailing on merits). (Blakely Decl. Ex. #3)
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Local Rule 7-3 regarding the First Amended Complaint you recently filed.
Defendant Michael Cohen is considering filing an anti-SLAPP motion pursuant
to California Code of Civil Procedure §425.16 in connection to Clifford's
Second Cause of Action for Defamation. Under the statute, “[a] cause of
action against a person arising from any act of that person in furtherance of
the person's right of petition or free speech under the United States or
California Constitution in connection with a public issue shall be subject to a
special motion to strike, unless the court determines that the plaintiff has
established that there is a probability that the plaintiff will prevail on the
claim.”
Here, Cohen's alleged statement arose in connection with a public issue. See
e.g., Paris Hilton v. Hallmark Cards et al., 580 F.3d 874 (9th Cir. 2009). Ms.
Clifford will have the burden of establishing that there is a probability of her
prevailing on her defamation claim.
As set forth in the First Amended Complaint, Clifford's defamation claim is
premised on the following statement by Mr. Cohen:
“Just because something isn’t true doesn’t mean that it can’t cause you
harm or damage. I will always protect Mr. Trump.”
“Defamation consists of, among other things, a false and unprivileged
publication, which has a tendency to injure a party in its occupation.”
Wilbanks v. Wolk (2004) 121 Cal.App.4th 883, 901. Washer v. Bank of
America (1948) 87 Cal. App. 2d. 501, 509. The sine qua non of recovery for
defamation … is the existence of falsehood.’ Because the statement must
contain a provable falsehood, courts distinguish between statements of fact and
statements of opinion for purposes of defamation liability. Although statements
of fact may be actionable as libel, statements of opinion are constitutionally
protected.” McGarry v. University of San Diego (2007) 154 Cal.App.4th 97,
112.
Truth is an absolute defense to defamation. Washer v. Bank of America (1948)
87 Cal. App. 2d. 501, 509. Nothing about the aforementioned statement, which
is not directed at anyone in particular, is untrue. Indeed, as of this date, Ms.
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Clifford had stated on at least three different occasions, including in a letter
that she signed one month before Mr. Cohen’s alleged statement, that she did
not have an intimate relationship with Mr. Trump. Thus, her statements which
are completely contradictory—that she did not, and that she did, have an
intimate relationship—cannot both be true.
Ms. Clifford's defamation claim also will fail because when Mr. Cohen made
the alleged statement, he was engaging in his constitutionally protected right to
express his opinion. “Under the First Amendment there is no such thing as a
false idea. However pernicious an opinion may seem, we depend for its
correction not on the conscience of judges and juries but on the competition of
other ideas.” Gertz v. Robert Welch, Inc. 418 U.S. 323, 339-340 (1974).
Finally, Ms. Clifford will be required to establish a prima facie claim that she
suffered actual damages. Because the purported libelous statement would
require further consideration of extrinsic facts, it is not libel per se. Cal. Civil
Code §45a. Thus, Ms. Clifford would have to prove that she suffered special
damages as a proximate result thereof. Again, as of the time Mr. Cohen made
this statement, Ms. Daniels had stated on at least three different occasions that
she did not have an intimate relationship with Mr. Trump. Even if one were to
distort Mr. Cohen's statement to the length that you attempt in the First
Amended Complaint, it can hardly be said that Mr. Cohen's statement, which
nowhere contradicts Ms. Clifford's stated position at this time, somehow
damaged Ms. Clifford.
Should Ms. Clifford's defamation claim fail to survive an anti-SLAPP
challenge, she would be held responsible for Mr. Cohen's legal fees.
Moreover, you have exposed yourself personally to potential sanctions for
filing a frivolous pleading in violation of Federal Rule of Civil Procedure, Rule
11, which was enacted to deter abusive pretrial tactics and to streamline
litigation by excluding baseless filings. Cooter & Gell v. Hartmarx Corp., 496
U.S. 384, 392-393; Golden Eagle Distributing Corp. v. Burroughs Corp., 801
F. 2d 1531, 1542 (9th Cir. 1986).
We therefore ask that you reconsider Ms. Clifford’s Second Cause of Action for
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Defamation against Mr. Cohen, and stipulate to the voluntary dismissal of
same.
I have a trial beginning on April 3, 2018 in another matter and therefore
request that we hold the meet and confer conference regarding Mr. Cohen's
anti-SLAPP motion this week. As the prior meet and confer conference was
held at my office, I’ll be happy to travel to Newport Beach for this one.
Naturally, all of my client’s claims are expressly reserved and none are waived.
(ECF No. 31-1, Ex. #H)
Consequently, as of March 27, 2018, the day after Plaintiff sued Mr. Cohen
for defamation, Plaintiff knew or should have known the facts underlying his Motion
to Amend, but Plaintiff chose not to file a Motion to Amend for over seven months.
That is undue delay. See Jackson v. Bank of Hawaii, 902 F.2d 1385, 1388 (9th Cir.
1990)(holding that it was unreasonable to delay filing an amended complaint eight
months after obtaining the pertinent facts). During this time Plaintiff and her counsel
have used this frivolous lawsuit as a platform to further their own notoriety at the
expense of Mr. Cohen. Not only was Mr. Cohen required to remain silent in the face
of their relentless attacks, which included numerous instances of slander and the
unlawful release of Mr. Cohen’s confidential bank records (ECF No. 60), Mr. Cohen
has gone to considerable expense to defend himself against Plaintiff’s allegations.
Now, on the eve of this Court deciding Mr. Cohen’s Anti-SLAPP Motion, Plaintiff
seeks dismiss her defamation claim thru an amended complaint.
Plaintiff’s delay amending the complaint to dismiss her defamation claim for
the purpose of prolonging this litigation and forcing Mr. Cohen to incur unnecessary
expenses demonstrates bad faith. The grant of leave to amend in this situation will
cause substantial prejudice to Mr. Cohen. Instead of prevailing on his Anti-SLAPP
Motion and having Plaintiff’s SLAPP claim dismissed with prejudice, Mr. Cohen
may have to defend against a similar lawsuit in another jurisdiction – something
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California’s Anti-SLAPP statute was specifically designed to prevent. Under these

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circumstances it is appropriate for this Court to deny Plaintiff’s Motion to Amend.

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C. Even If This Court Allows Plaintiff to Dismiss Her Defamation Claim,

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It Should Exercise its Discretion to Award Mr. Cohen His Fees

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Pursuant to Civil Code Section 425.16(c)

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It is well established that Plaintiff cannot avoid an award of attorneys’ fees

7 and costs under CCP section 425.16(c) by dismissing her defamation claim.
8 “Plaintiff’s amendment of the first amended complaint to remove the defamation
9 claim is tantamount to a voluntary dismissal of his defamation claim which was the
10 subject of a pending anti-SLAPP motion.” Fleming v. Coverstone, 2009 U.S. Dist.
11 LEXIS 22083 *15 (N.D. Cal. March 18, 2009). “Where the plaintiff voluntarily
12 dismisses an alleged SLAPP suit while a special motion to strike is pending, the trial
13 court has discretion to determine whether the defendant is the prevailing party for
14 purposes of attorney’s fees under section 425.16(c). Fleming at *13, citing Coltrain
15 v. Shewalter (1998) 66 Cal. App. 4th 94, 107.
16

As the district court in Gottesman v. Santana, 263 F. Supp. 3d 1034, 1040

17 (N.D. Cal. 2017) aptly observed when it retained jurisdiction to award fees pursuant
18 to §426.16(c):
19

The anti-SLAPP statute . . . anticipates circumstances in which parties dismiss

20

their cases while motions to strike are pending. In such circumstances, the trial

21

court is given the limited jurisdiction to rule on the merits of the motion in

22

order to decide if it should award attorney fees and costs to the defendants."

23

The reasoning for this retention of limited jurisdiction makes intuitive sense. As

24

the court in Coltrain v. Shewalter explained, a voluntary dismissal should not

25

automatically preclude an award of attorneys' fees to a defendant because

26

‘[o]therwise, SLAPP plaintiffs could achieve most of their objective with little

27

risk—by filing a SLAPP suit, forcing the defendant to incur the effort and

28

expense of preparing a special motion to strike, then dismissing the action
-9DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION TO AMEND COMPLAINT

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1

without prejudice. The specter of the action being refiled (at least until the

2

statute of limitations had run) would continue to have a significant chilling

3

effect on the defendant's exercise of its First Amendment rights. At that point,

4

the plaintiff would have accomplished all the wrongdoing that triggers the

5

defendant's eligibility for attorney's fees, but the defendant would be cheated of

6

redress.’

7

Thus, consistent with the courts of the Ninth Circuit and of this state, the Court

8

will consider the merits of Attorney Defendants’ anti-SLAPP motion, in spite of

9

Plaintiff’s voluntary dismissal, for the limited purpose of determining whether

10

Attorney Defendants are ‘prevailing defendants’ under the statute.

11 See also Mireskandari v. Mail, 2014 U.S. Dist. LEXIS 199028, **11-13 (C.D. Cal.
12 Aug. 4, 2014), aff'd in part, appeal dismissed in part sub nom. Mireskandari v.
13 Associated Newspapers, Ltd., 665 F. App'x 570 (9th Cir. 2016) (finding same and
14 collecting authority).
15

Federal courts applying California’s anti-SLAPP statute have generally

16 followed the Coltrain approach, which states that a plaintiff’s voluntary dismissal
17 raises a presumption that the defendant is the prevailing party that the plaintiff can
18 rebut by explaining its reason for dismissal. Gottesman at 1042; Coltrain, 66 Cal.
19 App. 4th at 107; Mireskandari at **15-16 (concluding same and collecting authority);
20 see also Associated Newspapers at 572 (affirming court’s grant of attorneys’ fees
21 under the Coltrain approach)
22

Like the plaintiff in Gottesman, Ms. Clifford has not opposed the merits of Mr.

23 Cohen’s Anti-SLAPP Motion nor explained in her Motion to Amend why she seeks to
24 dismiss her defamation claim while Mr. Cohen’s Anti-SLAPP motion is still pending.
25 Gottesman at 1043. In fact, other than citing authority for the undisputed proposition
26 that this Court has discretion to grant a motion to amend pursuant to FRCP 15(a),
27 Plaintiff gives no explanation whatsoever as to why, after seven months, she now
28 seeks to abandon her defamation claim. As the court in Gottesman held, “[w]ithout
-10DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION TO AMEND COMPLAINT

 Case 2:18-cv-02217-SJO-FFM Document 98 Filed 11/13/18 Page 15 of 18 Page ID #:2780

1 more, the Court finds that Plaintiff has not rebutted the presumption that Attorney
2 Defendants are the prevailing party for purposes of attorneys’ fees and costs under the
3 ant-SLAPP statute.” Gottesman at 1043; See also Fleming at **14-15 (finding that a
4 defendant was a prevailing party within the meaning of California’s anti-SLAPP
5 statute where the plaintiff “did not assert that he dismissed the defamation claim
6 because Plaintiff has substantially achieved his goals through settlement, because
7 Defendant was insolvent, or for other reasons unrelated to the probability of success
8 on the merits.”)
9

Even if Plaintiff’s counsel attempts to offer some belated explanation in a reply

10 brief, doing so would be futile. While Plaintiff’s counsel has failed to give any
11 motive for the dismissal, the only reasonable conclusion is that it is directly related to
12 the probability of success on the merits. In a ten (10) day period preceding the filing
13 of Plaintiff’s Motion to Amend, Plaintiff’s counsel was:
14

-defeated in connection with Mr. Trump’s Anti-SLAPP Motion;

15

-hit with a personal judgment of $4.85 million;

16

-evicted from his law office; and

17

-referred to the FBI by the Chairman of the Senate Judiciary Committee in

18

connection with the false claims made concerning Justice Brett Kavanaugh. 2

19 Plaintiff’s counsel (who portrays himself ad nauseum as winner, has political
20 aspirations, and is keenly aware of the media) seeks to avoid further losses and the
21 imposition of fees against his client. Correctly perceiving that his chances of
22 prevailing against Mr. Cohen’s Anti-SLAPP motion as hopeless, Plaintiff’s counsel
23 has opted for the legal equivalent of running away – dismissing Plaintiff’s defamation
24 claim through a motion to amend. As the district courts in Gottesman and Fleming
25 both concluded when confronted with this same issue, under these circumstances Mr.
26 Cohen is the prevailing party for purposes of attorneys’ fees and costs under
27
28

2

Blakely Decl. Exs. ##1,2 & 4.

-11DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION TO AMEND COMPLAINT

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1 California’s Anti-SLAPP statute.
2

This conclusion would be the same even if this Court were to rule on Mr.

3 Cohen’s Anti-SLAPP Motion. Plaintiff did not oppose Mr. Cohen’s Anti-SLAPP
4 motion on the merits, but instead only argued that New York law, rather than
5 California law, applies. Thus, Plaintiff conceded that: a) her claim arose from acts “in
6 the furtherance of Mr. Cohen’s right of petition or free speech, and b) she cannot
7 prevail on her defamation claim. Reyes v. Wells Fargo Bank, N.A., 2017 U.S. Dist.
8 LEXIS 198129 *8 (CD Cal. Aug. 7, 2017); Local Rule 7-12; Ghazali v. Moran, 46
9 Fed. 3d 52, 53 (9th Cir. 1995). As discussed in Mr. Cohen’s Anti-SLAPP Motion
10 (ECF No. 31 pp. 15-17) and Reply Brief (ECF NO. 95), California law governs the
11 application of California’s Anti-SLAPP statute.
12

However, this Court doesn’t need to cross that bridge. As discussed above,

13 federal courts have generally adopted the Coltrain approach over the reasoning set
14 forth in Liu v. Moore (1999) 69 Cal. App. 4th 745. See Mireskandari at **12-14;
15 Gottesman at 18; Fleming at **14-15. Even if Plaintiff cobbles together some reason
16 for the dismissal of the defamation claim unrelated to the probability of success on the
17 merits, no amount of spin will change the fact that Mr. Cohen is the prevailing party.
18 Plaintiff brought one claim against Mr. Cohen, her Second Cause of Action for
19 defamation, which will have been dismissed. Civil Code §425.16(c); Ketchum v.
20 Moses (2001) 24 Cal. 4th 1122, 1131(“any SLAPP defendant who brings a successful
21 motion to strike is entitled to mandatory attorney fees”); Mireskandari at **17-18.
22

Accordingly, if this Court decides to grant Plaintiff’s Motion to Amend, Mr.

23 Cohen respectfully requests that Mr. Cohen be deemed the prevailing party for the
24 purpose of awarding fees pursuant to California’s Anti-SLAPP statute.
25

D. This Court Should Place Conditions on Any Amendment

26

A district court, in its discretion, may impose attorneys’ fees and costs as a

27

condition of granting leave to amend in order to compensate the opposing party for

28

expenses incurred because the original pleading was faulty. See General Signal
-12DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION TO AMEND COMPLAINT

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1

Corp. v. MCI Telecommunications Corp., 66 F.3d 1500, 1514 (9th Cir. 1995)(“we

2

find no abuse of discretion arising from the court's justifiable attempt to compensate

3

GSX for MCI's backpedaling on its counterclaims.”); Firchau v. Diamond Nat'l

4

Corp., 345 F.2d 269, 275 (9th Cir. 1965); Uecker v. A Very Nice Pool Co. (In re

5

Mortgage Fund '08 LLC), 2015 U.S. Dist. LEXIS 129548 **25-26 (C.D. Cal. Sept.

6

2015); Roth v. First in Awareness, LLC, 2011 U.S. Dist. LEXIS 103053 **5-6 (N.D.

7

Cal. Sept. 13, 2011)(original pleading meritless, defendant pointed this out to

8

Plaintiff, but Plaintiff refused to amend the complaint to state valid claim against her

9

in order avoid the need of a motion). If this Court allows Plaintiff to amend yet

10

decides not to exercise its discretion to determine whether Mr. Cohen is the

11

prevailing party for purposes of attorney’s fees under section 425.16(c), it should

12

make any amendment conditioned upon the payment of Mr. Cohen’s fees and costs.

13

Like Roth, Ms. Clifford’s defamation claim against Mr. Cohen is meritless, Mr.

14

Cohen’s counsel pointed this out to Plaintiff’s counsel on March 27, 2018, yet

15

Plaintiff refused to amend at that time thus forcing Mr. Cohen to incur the expense of

16

filing an Anti-SLAPP Motion.

17

E. This Court Should Exercise its Inherent Powers and Sanction Plaintiff’s

18

Counsel Pursuant to FRCP Rule 11

19

This Court has the inherent power to impose attorneys’ fees for bad faith

20

conduct in litigation. Chambers v. NASCO, Inc. 501 U.S. 32, 43 (1991); Roadway

21

Express, Inc. v. Piper, 447 U.S. 752, 764-766 (1980). The court’s inherent powers

22

“are governed not by rule or statute but by the control necessarily vested in courts to

23

manage their own affairs os as to achieve the orderly and expeditious disposition of

24

cases.” Chambers, 501 U.S. at 43. Additionally, this Court has the power to impose

25

sanctions Pursuant to Federal Rule of Civil Procedure, Rule 11 sua sponte. FRCP

26

11(c)(3); In re Itel Secur. Litig., 791 F. 2d 672, 675 (9th Cir. 1986). Plaintiff’s

27

defamation claim against Mr. Cohen was meritless from the start. Far from being a

28

developing area of the law, any attorney with a basic understanding of First
-13DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION TO AMEND COMPLAINT

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1

Amendment jurisprudence would have recognized that Plaintiff’s claim, which

2

attacks Mr. Cohen’s Constitutionally protected speech, was untenable. FRCP

3

11(b)(2). Nonetheless, even after having been warned, Plaintiff’s counsel maintained

4

this cause of action for the improper purpose of harassing Mr. Cohen. FRCP

5

11(b)(1). Plaintiff’s attempt to dismiss her defamation claim thru a motion to amend

6

is a tacit acknowledgment that this claim is frivolous. This Court should hold

7

Plaintiff’s counsel, Michael Avenatti, personally responsible for his actions and order

8

that he and Plaintiff be jointly responsible for Mr. Cohen’s fees in connection with

9

the Anti-SLAPP motion.

10 IV.

CONCLUSION

11

For the foregoing reasons, Mr. Cohen respectfully requests that the Court deny

12 Plaintiff’s Motion to Amend her complaint to dismiss her Second Cause of Action for
13 defamation. Alternatively, that this Court deem Mr. Cohen the “prevailing party” for
14 the purpose of awarding fees pursuant to California’s Anti-SLAPP statute, and that
15 Plaintiff and her counsel be held jointly responsible for the payment of same.
16
17
18
19
20
21

Dated: November 13, 2018

BLAKELY LAW GROUP
By: /s/ Brent H. Blakely
Brent H. Blakely
Jessica C. Covington
Attorneys for Defendants
Essential Consultants, LLC and Michael
Cohen

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24
25
26
27
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-14DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION TO AMEND COMPLAINT