Stephanie Clifford v. Donald J. Trump et al

Filing 14

FIRST AMENDED COMPLAINT against Defendants All Defendants amending Complaint - (Discovery) JURY DEMAND, filed by Plaintiff Stephanie Clifford(Avenatti, Michael)

1
2
3
4
5

Michael J. Avenatti, Bar No. 206929
AVENATTI & ASSOCIATES, APC
[e-mail]
520 Newport Center Drive, Suite 1400
Newport Beach, CA 92660
Tel: [phone]
Fax: [phone]

6
7

Attorneys for Plaintiff Stephanie Clifford
a.k.a. Stormy Daniels a.k.a. Peggy Peterson

8
9
10
11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

12

STEPHANIE CLIFFORD a.k.a. STORMY Case No. 2:18-CV-02217-SJO-FFM
13 DANIELS a.k.a. PEGGY PETERSON, an
individual,
FIRST AMENDED COMPLAINT
14
FOR:
15
Plaintiff,
(1) DECLARATORY
16
vs.
RELIEF/JUDGMENT; AND
17

DONALD J. TRUMP a.k.a. DAVID
DENNISON, an individual, ESSENTIAL
19 CONSULTANTS, LLC, a Delaware
Limited Liability Company, MICHAEL
20
COHEN, an individual, and DOES 1
21 through 10, inclusive
18

22

(2) DEFAMATION
DEMAND FOR JURY TRIAL

Defendants.

23
24
25
26
27
28

FIRST AMENDED COMPLAINT

1
2

Plaintiff Stephanie Clifford a.k.a. Stormy Daniels a.k.a. Peggy Peterson (“Ms.
Clifford” or “Plaintiff”) hereby alleges the following:

3
4

THE PARTIES

5

1.

Plaintiff Ms. Clifford, an individual, is a resident of the State of Texas.

6

2.

Defendant Donald J. Trump a.k.a. David Dennison (“Mr. Trump”), an

7
8
9
10
11

individual, is a resident of the District of Columbia (among other places).
3.

Defendant Essential Consultants, LLC (“EC”) is a Delaware limited

liability company formed on October 17, 2016.
4.

Defendant Michael Cohen (“Mr. Cohen”), an individual, is a resident of

the State of New York.

12

5.

13

“Defendants.”

14

6.

Mr. Trump, EC, and Mr. Cohen together shall be referred to hereafter as

The true names and capacities of the defendants DOES 1 through 10,

15

inclusive, whether individual, plural, corporate, partnership, associate or otherwise, are

16

not known to Plaintiff, who therefore sues said defendants by such fictitious names.

17

Plaintiff will seek leave of court to amend this Complaint to show the true names and

18

capacities of defendants DOES 1 through 10, inclusive, when the same have been

19

ascertained.

20

7.

Plaintiff is also informed and believe and thereon alleges that DOES 1 to

21

10 were the agents, principals, and/or alter egos of Defendants, at all times herein

22

relevant, and that they are therefore liable for the acts and omissions of Defendants.

23
24
25

JURISDICTION AND VENUE
8.

Pursuant to 28 U.S.C. § 1332, this Court has original jurisdiction over

26

Plaintiff’s claims based on the parties’ diversity of citizenship and because the amount

27

in controversy exceeds $75,000.

28
-1FIRST AMENDED COMPLAINT

1

9.

Venue is appropriate in this judicial district pursuant to 28 U.S.C. § 1391,

2

and this Court has personal jurisdiction over Defendants and each of them, by reason of

3

the fact that, among other things, (a) the alleged agreement that is at issue in this

4

Complaint was purportedly made and negotiated, at least in substantial part, in the

5

County of Los Angeles, and (b) many of the events giving rise to this action arose in

6

California, including within the County of Los Angeles.

7
8
9

FACTUAL BACKGROUND
10.

Ms. Clifford began an intimate relationship with Mr. Trump in the summer

10

of 2006 in Lake Tahoe and continued her relationship with Mr. Trump well into the

11

year 2007. This relationship included, among other things, at least one “meeting” with

12

Mr. Trump in a bungalow at the Beverly Hills Hotel located within Los Angeles

13

County.

14
15

11.

In 2015, Mr. Trump announced his candidacy for President of the United

States.

16

12.

17

President.

18

13.

On July 19, 2016, Mr. Trump secured the Republican Party nomination for

On October 7, 2016, the Washington Post published a video, now

19

infamously known as the Access Hollywood Tape, depicting Mr. Trump making lewd

20

remarks about women. In it, Mr. Trump described his attempt to seduce a married

21

woman and how he may start kissing a woman that he and his companion were about to

22

meet. He then added: “I don’t even wait. And when you’re a star, they let you do it,

23

you can do anything . . .”

24

14.

Within days of the publication of the Access Hollywood Tape, several

25

women came forward publicly to tell their personal stories about their sexual

26

encounters with Mr. Trump.

27
28

15.

Around this time, Ms. Clifford likewise sought to share details concerning

her relationship and encounters with Mr. Trump with various media outlets.
-2FIRST AMENDED COMPLAINT

1

16.

As a result of Ms. Clifford’s efforts aimed at publicly disclosing her story

2

and her communications with various media outlets, Ms. Clifford’s plans came to the

3

attention of Mr. Trump and his campaign, including Mr. Michael Cohen, an attorney

4

licensed in the State of New York. Mr. Cohen worked as the “top attorney” at the

5

Trump Organization from 2007 until after the election and presently serves as Mr.

6

Trump’s personal attorney. He is also generally referred to as Mr. Trump’s “fixer.”

7

17.

After discovering Ms. Clifford’s plans, Mr. Trump, with the assistance of

8

his attorney Mr. Cohen, aggressively sought to silence Ms. Clifford as part of an effort

9

to avoid her telling the truth, thus helping to ensure he won the Presidential Election.

10

Mr. Cohen subsequently prepared a draft non-disclosure agreement and presented it to

11

Ms. Clifford and her attorney (the “Hush Agreement”). Ms. Clifford at the time was

12

represented by counsel in California whose office is located in Beverly Hills, California

13

within the County of Los Angeles.

14

18.

The parties named in the Hush Agreement were Ms. Clifford, Mr. Trump,

15

and Essential Consultants LLC. As noted above, Essential Consultants LLC (“EC”)

16

was formed on October 17, 2016, just weeks before the 2016 presidential election. On

17

information and belief, EC was created by Mr. Cohen with Mr. Trump’s knowledge for

18

one purpose – to hide the true source of funds to be used to pay Ms. Clifford, thus

19

further insulating Mr. Trump from later discovery and scrutiny.

20

19.

By design of Mr. Cohen, the Hush Agreement used aliases to refer to Ms.

21

Clifford and Mr. Trump. Specifically, Ms. Clifford was referred to by the alias “Peggy

22

Peterson” or “PP.” Mr. Trump, on the other hand, was referred to by the alias “David

23

Dennison” or “DD.”

24

20.

Attached hereto as Exhibit 1 is a true and correct copy of the Hush

25

Agreement, titled Confidential Settlement Agreement and Mutual Release; Assignment

26

of Copyright and Non-Disparagment [sic] Agreement. Exhibit 1 is incorporated herein

27

by this reference and made a part of this Complaint as if fully set forth herein.

28
-3FIRST AMENDED COMPLAINT

1

21.

Attached hereto as Exhibit 2 is a true and correct copy of the draft Side

2

Letter Agreement, which was Exhibit A to the Hush Agreement.

3

incorporated herein by this reference and made a part of this Complaint as if fully set

4

forth herein.

5

22.

Exhibit 2 is

Importantly, the Hush Agreement imposed various conditions and

6

obligations not only on Ms. Clifford, but also on Mr. Trump. The agreement also

7

required the signature of all parties to the agreement, including that of Mr. Trump.

8

Moreover, as is customary, it was widely understood at all times that unless all of the

9

parties signed the documents as required, the Hush Agreement, together with all of its

10

terms and conditions, was null and void.

11

23.

On or about October 28, 2016, only days before the election, two of the

12

parties signed the Hush Agreement - Ms. Clifford and Mr. Cohen (on behalf of EC).

13

Mr. Trump, however, did not sign the agreement, thus rendering it legally null and void

14

and of no consequence. On information and belief, despite having detailed knowledge

15

of the Hush Agreement and its terms, including the proposed payment of monies to Ms.

16

Clifford and the routing of those monies through EC, Mr. Trump purposely did not sign

17

the agreement so he could later, if need be, publicly disavow any knowledge of the

18

Hush Agreement and Ms. Clifford.

19

24.

Despite Mr. Trump’s failure to sign the Hush Agreement, Mr. Cohen

20

proceeded to cause $130,000.00 to be wired to the trust account of Ms. Clifford’s

21

attorney. He did so even though there was no legal agreement and thus no written

22

nondisclosure agreement whereby Ms. Clifford was restricted from disclosing the truth

23

about Mr. Trump.

24
25
26

25.

Mr. Trump was elected President of the United States on November 8,

26.

In January 2018, certain details of the draft Hush Agreement emerged in

2016.

27

the news media, including, among other things, the existence of the draft agreement, the

28

parties to the draft agreement, and the $130,000.00 payment provided for under the
-4FIRST AMENDED COMPLAINT

1

draft agreement. Also in January 2018, and concerned the truth would be disclosed,

2

Mr. Cohen, through intimidation and coercive tactics, forced Ms. Clifford into signing a

3

false statement wherein she stated that reports of her relationship with Mr. Trump were

4

false.

5

27.

On or about February 13, 2018, Mr. Cohen issued a public statement

6

regarding Ms. Clifford, the existence of the Hush Agreement, details concerning the

7

Hush Agreement, and an attack on Ms. Clifford’s truthfulness. He did so without any

8

consent by Ms. Clifford, thus evidencing Mr. Cohen’s apparent position (at least in that

9

context) that no binding agreement was in place. Among other things, Mr. Cohen

10

stated: “In a private transaction in 2016, I used my own personal funds to facilitate a

11

payment of $130,000 to Ms. Stephanie Clifford. Neither the Trump Organization nor

12

the Trump campaign was a party to the transaction with Ms. Clifford, and neither

13

reimbursed me for the payment, either directly or indirectly.” Mr. Cohen concluded his

14

statement by stating: “Just because something isn’t true doesn’t mean that it can’t

15

cause you harm or damage. I will always protect Mr. Trump.” (emphasis added). This

16

statement was made in writing by Mr. Cohen and released by Mr. Cohen to the media

17

with the intent that it be widely disseminated and repeated throughout the United States.

18

Attached hereto as Exhibit 3 is a true and correct copy of Mr. Cohen’s statement.

19

Exhibit 3 is incorporated herein by this reference and made a part of this Complaint as

20

if fully set forth herein.

21

28.

Importantly, at no time did Mr. Cohen make a direct assertion that Ms.

22

Clifford did not have an intimate relationship with Mr. Trump. Indeed, were he to

23

make such a statement, it would be patently false. Mr. Cohen’s statement was not a

24

mere statement of opinion, but rather has been reasonably understood to be a factual

25

statement implying or insinuating that Ms. Clifford was not being truthful in claiming

26

that she had an intimate relationship with Mr. Trump.

27
28

29.

Because the agreement was never formed and/or is null and void, no

contractual obligations were imposed on any of the parties to the agreement, including
-5FIRST AMENDED COMPLAINT

1

any obligations to keep information confidential. Moreover, to the extent any such

2

obligations did exist, they were breached and/or excused by Mr. Cohen and his public

3

statements to the media.

4

30.

To be clear, the attempts to intimidate Ms. Clifford into silence and “shut

5

her up” in order to “protect Mr. Trump” continue unabated. For example, only days

6

ago on or about February 27, 2018, Mr. Trump’s attorney Mr. Cohen surreptitiously

7

initiated a bogus arbitration proceeding against Ms. Clifford in Los Angeles.

8

Remarkably, he did so without even providing Ms. Clifford with notice of the

9

proceeding and basic due process.

10

31.

Put simply, considerable steps have been taken by Mr. Cohen in the last

11

week to silence Ms. Clifford through the use of an improper and procedurally defective

12

arbitration proceeding hidden from public view.

13

involvement in these efforts is presently unknown, but it strains credibility to conclude

14

that Mr. Cohen is acting on his own accord without the express approval and

15

knowledge of his client Mr. Trump.

16

32.

The extent of Mr. Trump’s

Indeed, Rule 1.4 of the New York Rules of Professional Conduct

17

governing attorneys has required Mr. Cohen at all times to promptly communicate all

18

material information relating to the matter to Mr. Trump, including but not limited to

19

“any decision or circumstance with respect to which [Mr. Trump’s] informed consent

20

[was] required” and “material developments in the matter including settlement or plea

21

offers.” Moreover, this same Rule required Mr. Cohen at all times to “reasonably

22

consult with [Mr. Trump] about the means by which [his] objectives are to be

23

accomplished” and to “keep [Mr. Trump] reasonably informed about the status of the

24

matter.”

25

33.

Further, Rule 1.8(e) of the New York Rules of Professional Conduct

26

provides that attorneys “shall not advance or guarantee financial assistance to the

27

client[.]” Although the Rule provides for certain exceptions, such as permitting lawyers

28

to pay court costs and expenses for indigent clients, plainly, none of these exceptions
-6FIRST AMENDED COMPLAINT

1

apply to Mr. Cohen’s purported financial assistance of $130,000 on behalf of his client,

2

Mr. Trump.

3

34.

Accordingly, unless Mr. Cohen flagrantly violated his ethical obligations

4

and the most basic rules governing his license to practice law (which is highly

5

unlikely), there can be no doubt that Mr. Trump at all times has been fully aware of the

6

negotiations with Ms. Clifford, the existence and terms of the Hush Agreement, the

7

payment of the $130,000.00, the use of EC as a conduit, and the recent attempts to

8

intimidate and silence Ms. Clifford by way of the bogus arbitration proceeding.

9

35.

Because there was never a valid agreement and thus, no agreement to

10

arbitrate, any subsequent order obtained by Mr. Cohen and/or Mr. Trump in arbitration

11

is of no consequence or effect.

12
13

FIRST CAUSE OF ACTION

14

Declaratory Relief/Judgment

15

(Against Defendants Mr. Trump and EC)

16
17
18

36.

Plaintiff restates and re-alleges each and every allegation in Paragraphs 1

through 35 above as if fully set forth herein.
37.

This action concerns the legal significance, if any, of the documents

19

attached hereto as Exhibit 1, entitled Confidential Settlement Agreement and Mutual

20

Release; Assignment of Copyright and Non-Disparagment [sic] Agreement, and Exhibit

21

2, entitled Side Letter Agreement.

22

38.

California Code of Civil Procedure § 1060 authorizes declaratory relief for

23

any person who desires a declaration of rights or duties with respect to one another. In

24

cases of actual controversy relating to the legal rights and duties of the respective

25

parties, such a person may seek a judicial declaration of his or her rights and duties

26

relative to an instrument or contract, or alleged contract, including a determination of

27

any question of construction or validity arising under the instrument or contract, or

28

alleged contract. This includes a determination of whether a contract was ever formed.
-7FIRST AMENDED COMPLAINT

1

39.

28 U.S.C. § 2201 creates a remedy for the entry of a declaratory judgment

2

in cases of “actual controversy”, whereby the court may declare the rights and other

3

legal relations of any interested party seeking such declaration. Any such declaration

4

shall have the force and effect of a final judgment or decree.

5

40.

An actual controversy exists between Plaintiff and Defendants as to their

6

rights and duties to each other. Accordingly, a declaration is necessary and proper at

7

this time.

8
9
10

A.

No Agreement Was Formed – Lack of Signature, Consideration, or Consent
41.

Specifically, Plaintiff seeks an order of this Court declaring that the

11

agreements in the forms set out in Exhibits 1 and 2 between Plaintiff and Defendants

12

were never formed, and therefore do not exist, because, among other things, Mr. Trump

13

never signed the agreements (which was an express condition of the Hush Agreement

14

that had to occur for the formation of a valid and binding agreement). Nor did Mr.

15

Trump provide any other valid consideration. He thus never assented to the duties,

16

obligations, and conditions the agreements purportedly imposed upon him, which

17

included express obligations imposed on Mr. Trump to provide Plaintiff with releases, a

18

covenant not to sue, and representations and warranties (all of which were separate and

19

apart from the $130,000 payment). Plaintiff contends that, as a result, no agreement

20

was ever formed or ever existed and, consequently, she is not bound by any of the

21

duties, obligations, or conditions set forth in Exhibits 1 and 2. Moreover, as a further

22

result, there is no agreement to arbitrate between the parties.

23
24
25

B.
42.

The Agreement Is Unconscionable

In the alternative, Plaintiff seeks an order of this Court declaring that the

26

agreements in the forms set out in Exhibits 1 and 2 are invalid, unenforceable, and/or

27

void under the doctrine of unconscionability.

28

limitation), the Hush Agreement contains a “Liquidated Damages” provision in favor of

By way of example only (and not

-8FIRST AMENDED COMPLAINT

1

“DD” (Mr. Trump) purporting to require Plaintiff to pay $1 Million for “each breach”

2

calculated on a “per item basis.” However, $1 Million for “each breach” bears no

3

reasonable relationship to the range of actual damages that the parties could have

4

anticipated would flow from a breach. Instead, the liquidated damages clause was

5

intended to inflict a penalty designed to intimidate and financially cripple Plaintiff. It is

6

therefore void as a matter of law.

7

43.

By way of further example, while on the one hand, the Hush Agreement

8

purports to impose astonishingly broad restrictions on speech and disclosure upon

9

Plaintiff (including prohibiting disclosure of matters that are of public record), on the

10

other hand, Defendants, with few exceptions, have no such restrictions imposed upon

11

them and are thus permitted to disclose matters covered by the Agreement, and publicly

12

disparage Plaintiff and impugn her credibility. As but one illustration of the one-sided

13

nature of the Hush Agreement, EC, through Mr. Cohen, violated paragraph 7.1 of the

14

Agreement by disclosing terms of the Agreement to the Wall Street Journal on or about

15

January 12, 2018.

16

Draconian consequences and penalties upon Plaintiff for a breach of the Agreement, no

17

such remedies are available to Plaintiff for Defendants’ breach of the Agreement. An

18

agreement that sanctions such overly-harsh, one-sided results without any justification

19

and which allocates risks of the bargain in such an objectively unreasonable and

20

unexpected manner is unconscionable as a matter of law. Plaintiff contends that, as a

21

result, she is not bound by any of the duties, obligations, or conditions set forth in

22

Exhibits 1 and 2. Moreover, as a further result, there is no agreement to arbitrate

23

between the parties.

Although the Agreement attempts to impose astonishingly

24
25

C.

26
27
28

The Agreement Is Void Ab Initio Because It Is Illegal and
Violates Public Policy

44.

In the further alternative, Plaintiff seeks an order of this Court declaring

that the agreements in the forms set out in Exhibits 1 and 2 are invalid, unenforceable,
-9FIRST AMENDED COMPLAINT

1

and/or void because they are illegal, or that they violate public policy. Essential to the

2

“existence” of a contract is that the contract have a “lawful object” or lawful purpose.

3

See, e.g., Cal. Civ. Code § 1550.

4

Agreement for at least the following reasons.

5

45.

No such lawful purpose existed in the Hush

First, the Hush Agreement was entered with the illegal aim, design, and

6

purpose of circumventing federal campaign finance law under the Federal Election

7

Campaign Act (FECA), 52 U.S.C. §§ 30101, et seq., and Federal Election Commission

8

(FEC) regulations. The purposes and aims of the FECA include the promotion of

9

transparency, the complete and accurate disclosure of the contributors who finance

10

federal elections, and the restriction on the influence of political war chests funneled

11

through the corporate form.

12

46.

In order to effectuate these purposes, FECA imposes various contribution

13

limits, and reporting and public disclosure requirements, on candidates for Federal

14

office, including the office of President of the United States. With regards to the 2016

15

Presidential Election, FECA required that the maximum any “person”—defined to

16

include “an individual, partnership, committee, association, corporation, labor

17

organization, or any other organization or group of persons” —was permitted to

18

contribute to any candidate was $2,700. 52 U.S.C. §§ 30101(11); 30116(a)(1)(A), (c);

19

see also FEC, Price Index Adjustments for Contribution and Expenditure Limitations

20

and Lobbyist Bundling Disclosure Threshold, 82 Fed. Reg. 10904, 10906 (Feb. 16,

21

2017). Mr. Trump and his campaign for the presidency were subject to FECA and its

22

contribution limit at all relevant times.

23

47.

The term “contribution” is defined broadly to include “any gift,

24

subscription, loan, advance, or deposit of money or anything of value made by any

25

person for the purpose of influencing any election for Federal office[.]” 52 U.S.C. §

26

30101(8)(A) (emphasis added); see also 11 C.F.R. §§ 100.51-100.56. The phrase

27

“anything of value” includes “all in-kind contributions.” 11 C.F.R. § 100.52(d)(1). In

28

other words, “the provision of any goods or services without charge or at a charge that
-10FIRST AMENDED COMPLAINT

1

is less than the usual and normal charge for such goods or services is a contribution.”

2

Id.

3

48.

In addition, under FECA, Mr. Trump and his campaign for the presidency

4

were required to report the identification of each person who made a contribution to his

5

campaign with an aggregate value in excess of $200 within an election cycle. 52

6

U.S.C. § 30104(b)(3)(A). Mr. Trump and his campaign for the presidency were also

7

required to report the name and address of each person to whom an expenditure in an

8

aggregate amount in excess of $200 within the calendar year was made by his campaign

9

committee.

10

49.

FECA

also

imposes

similar

requirements

on the reporting of

11

“expenditures.” 52 U.S.C. § 30104(b)(4)-(5). The term “expenditure” includes “(i) any

12

purchase, payment, distribution, loan, advance, deposit, or gift of money or anything of

13

value, made by any person for the purpose of influencing any election for Federal

14

office; and (ii) a written contract, promise, or agreement to make an expenditure.” 52

15

U.S.C. § 30101(9) (emphasis added). As with “contributions,” the phrase “anything of

16

value” in the context of “expenditures” includes “all in-kind contributions.” 11 C.F.R.

17

§ 100.111(e)(1).

18

50.

Moreover, “contributions from the candidate” or “expenditures” from the

19

candidate must also be reported.

20

Advisory Opinion 1990-09.

21

51.

11 C.F.R. § 104.3(a)(3)(ii); see also, e.g., FEC

Here, the Hush Agreement did not have a lawful object or purpose. The

22

Hush Agreement, and the $130,000 payment made pursuant to the agreement, was for

23

the “purpose of influencing” the 2016 presidential election by silencing Plaintiff from

24

speaking openly and publicly about Mr. Trump just weeks before the 2016 election.

25

Defendants plainly intended to prevent American voters from hearing Plaintiff speak

26

about Mr. Trump. This $130,000 payment was a thing “of value” and an “in-kind”

27

contribution exceeding the contribution limits in violation of FECA and FEC

28

regulations. It was also a violation of FECA and FEC regulations because it was not
-11FIRST AMENDED COMPLAINT

1

publicly reported as a contribution. Further, it was a violation of FECA and FEC

2

regulations because it was a thing “of value” and an “in-kind” expenditure that was

3

required to be reported as such. Therefore, because the Hush Agreement did not have a

4

lawful object or purpose, the Agreement was void ab initio. Plaintiff contends that, as a

5

result, she is not bound by any of the duties, obligations, or conditions set forth in

6

Exhibits 1 and 2. Moreover, as a further result, there is no agreement to arbitrate

7

between the parties.

8

52.

Second, the Hush Agreement is also void ab initio because it violates

9

public policy by suppressing speech on a matter of public concern about a candidate for

10

President of the United States, mere weeks before the election. Agreements to suppress

11

evidence are void as against public policy, both in California and in most common law

12

jurisdictions.

13

discreditable facts, or of facts that the promisee is under a fiduciary duty not to disclose,

14

is illegal.” Restatement (First) of Contracts § 557 (1932). Remarkably, illustration 1 in

15

the official comments to section 557 provides the following example of a bargain that is

16

illegal:

“A bargain that has for its consideration the nondisclosure of

17

1. A, a candidate for political office, and as such advocating

18

certain principles, had previously written letters to B, taking a

19

contrary position. B is about to publish the letters, and A

20

fearing that the publication will cost him his election, agrees

21

to pay $1000 for the suppression of the letters. The bargain is

22

illegal.

23
24

Restatement (First) of Contracts § 557, Illustration 1 (1932)(emphasis added).
53.

Third, the Hush Agreement is also without a lawful object or purpose and

25

thus void ab initio based on illegality because it was entered for the purpose of

26

covering-up adulterous conduct, a crime in New York, Mr. Trump’s home state at the

27

time of the Hush Agreement and at the time of the intimate relationship between

28

Plaintiff and Mr. Trump. N.Y. Penal Law § 255.17 (“A person is guilty of adultery
-12FIRST AMENDED COMPLAINT

1

when he engages in sexual intercourse with another person at a time when he has a

2

living spouse, or the other person has a living spouse.

3

misdemeanor.”).

4

54.

Adultery is a class B

Fourth, the Hush Agreement is also without a lawful object or purpose and

5

thus void ab initio based on illegality because it was entered into by Defendant EC at

6

the behest of Defendant Cohen, a New York attorney then subject to the New York

7

Rules of Professional Conduct. If Mr. Cohen’s public statements are true (which is

8

unlikely), he violated Rule 1.4 of the New York Rules of Professional Conduct by

9

entering into an agreement on his client Mr. Trump’s behalf without notifying him of

10

the agreement, including, among other things, the fact that the agreement required a

11

payment of $130,000 to be made, that he was making the payment for Mr. Trump on

12

Mr. Trump’s behalf, that Mr. Trump was being encumbered with various duties and

13

obligations under the Agreement, that the Agreement and $130,000 payment would

14

possibly subject Mr. Trump to violations of federal campaign finance laws, and that the

15

Agreement would raise questions about whether he had an adulterous affair that Mr.

16

Trump apparently now denies ever occurred.

17

55.

Moreover, if Mr. Cohen’s public statements are true, he also violated Rule

18

1.8(e) of the New York Rules of Professional Conduct by advancing or guaranteeing

19

financial assistance to a client by paying $130,000 from his own personal funds to

20

benefit his client Mr. Trump.

21
22

D.

There Was No Agreement to Arbitrate Between Plaintiff and EC

23

56.

Separate and apart from Plaintiff’s request for an order declaring that no

24

agreement was ever formed between the parties, or that the entirety of the Hush

25

Agreement be declared void ab initio, all as set forth above, Plaintiff alternatively seeks

26

an order of this Court declaring that no agreement to arbitrate exists between Plaintiff

27

and EC. Under paragraph 5.2 of the Hush Agreement, entitled “Dispute Resolution,”

28

only those “claims and controversies arising between DD [Mr. Trump] on the one hand,
-13FIRST AMENDED COMPLAINT

1

and PP [i.e., Plaintiff] on the other hand” are subject to arbitration. To be clear, there is

2

not presently nor has there ever been any agreement to arbitrate between Plaintiff and

3

EC.

4
5

E.

The Arbitration Clause Is Void Ab Initio Because It Is Unconscionable,

6
7

Illegal, and Violates Public Policy
57.

Moreover, also separate and apart from Plaintiff’s request for an order

8

declaring that no agreement was ever formed between the parties, or that the entirety of

9

the Hush Agreement be declared void ab initio (as set forth above), Plaintiff

10

alternatively seeks an order of this Court declaring that no agreement to arbitrate exists

11

because no agreement was formed (see Complaint, ¶41, supra), and further, that no

12

agreement to arbitrate exists because paragraphs 5.2 of the Agreement (which contains

13

the arbitration clause) along with various parts of paragraph 5.1 of the Agreement

14

(describing “DD’s” remedies that Defendants would presumably argue are available to

15

them in a confidential arbitration proceeding) are void ab initio because they

16

unconscionable, illegal, and violates public policy.

17

58.

First, the arbitration clause is unconscionable, particularly when combined

18

with the remedies section of the Agreement. The clause is extremely one-sided by

19

conferring significant rights exclusively to Mr. Trump (as “DD” referred to in the

20

Agreement), provided he is a party to the agreement. Among other things, (a) Mr.

21

Trump is given the right to seek injunctive relief either in court or arbitration, while

22

Defendants contend Plaintiff must pursue all rights in arbitration, (b) Mr. Trump is

23

given the exclusive right to elect which state’s laws will apply to the arbitration

24

(California, Nevada, or Arizona) and he is not required to provide notice of which

25

state’s laws he elects will be applied until after he has filed an arbitration proceeding,

26

and (c) Mr. Trump is given the exclusive right to choose venue in any location (i.e.,

27

anywhere in the country) he selects and is permitted to elect which of two arbitration

28
-14FIRST AMENDED COMPLAINT

1

agencies the arbitration proceeding may be initiated in (either JAMS or Action Dispute

2

Resolution Services).

3

59.

Second, the arbitration clause is illegal and without lawful object or

4

purpose because it was entered with the purpose of keeping facts concerning federal

5

campaign contributions and expenditures secret and hidden from public view by using a

6

confidential arbitration proceeding in violation of FECA’s mandates to publicly report

7

campaign contributions and expenditures. In other words, the principal aim and design

8

of the arbitration clause is to keep confidential that which, by law, must be publicly

9

disclosed. Indeed, the clause plainly is designed to prevent the public disclosure of an

10

illegal campaign contribution by mandating that disputes between Plaintiff and Mr.

11

Trump be resolved in a confidential arbitration proceeding shielded from public

12

scrutiny.

13

60.

Third, the arbitration clause is void because it violates public policy by

14

suppressing speech on a matter of enormous public concern about a candidate for

15

President of the United States mere weeks before the election. See Restatement (First)

16

of Contracts § 557.

17

61.

Fourth, the arbitration clause is illegal and without lawful object or

18

purpose because it was designed to cover up adulterous conduct, a crime in New York,

19

Mr. Trump’s home state at the time of the Hush Agreement and at the time of Plaintiff

20

and Mr. Trump’s intimate relationship. N.Y. Penal Law § 255.17. It is also illegal and

21

without lawful object or purpose because it was designed to cover up Mr. Cohen’s

22

ethical violations, including his violations of Rule 1.4 and 1.8(e) of the New York

23

Rules of Professional Conduct.

24

62.

Defendants dispute all of the foregoing contentions.

25

63.

Accordingly, Ms. Clifford desires a judicial determination of her rights and

26

duties with respect to the alleged agreements in the forms set out in Exhibits 1 and 2.

27
28
-15FIRST AMENDED COMPLAINT

1

SECOND CAUSE OF ACTION

2

Defamation

3

(Against Defendant Mr. Cohen)

4
5
6

64.

Plaintiff restates and re-alleges each and every allegation in Paragraphs 1

through 64 above as if fully set forth herein.
65.

On or about February 13, 2018, Mr. Cohen issued a public statement. The

7

entirety of the statement is attached hereto as Exhibit 3. In it, he states in part: “Just

8

because something isn’t true doesn’t mean that it can’t cause you harm or damage. I

9

will always protect Mr. Trump.” (emphasis added). Mr. Cohen’s statement was made

10

in writing and released by Mr. Cohen to the media with the intent that it be widely

11

disseminated and repeated throughout California and across the country (and the world)

12

on television, on the radio, in newspapers, and on the Internet.

13
14
15

66.

It was reasonably understood by those who read or heard the statement that

Mr. Cohen’s defamatory statement was about Ms. Clifford.
67.

Both on its face, and because of the facts and circumstances known to

16

persons who read or heard the statement, it was reasonably understood Mr. Cohen

17

meant to convey that Ms. Clifford is a liar, someone who should not be trusted, and that

18

her claims about her relationship with Mr. Trump is “something [that] isn’t true.” Mr.

19

Cohen’s statement exposed Mr. Clifford to hatred, contempt, ridicule, and shame, and

20

discouraged others from associating or dealing with her.

21

68.

Mr. Cohen’s defamatory statement was false.

22

69.

Mr. Cohen made the statement knowing it was false or had serious doubts

23
24

about the truth of the statements.
70.

As a result, Plaintiff Ms. Clifford has suffered damages in an amount to be

25

proven at trial according to proof, including but not limited to, harm to her reputation,

26

emotional harm, exposure to contempt, ridicule, and shame, and physical threats of

27

violence to her person and life.

28
-16FIRST AMENDED COMPLAINT

1

71.

In making the defamatory statement identified above, Mr. Cohen acted

2

with malice, oppression, or fraud, and is thus responsible for punitive damages in an

3

amount to be proven at trial according to proof.

4
5

PRAYER FOR RELIEF

6

WHEREFORE, Plaintiff prays for judgment against Defendants, and each of

7

them, declaring that no agreement was formed between the parties, or in the alternative,

8

to the extent an agreement was formed, it is void ab initio, invalid, or otherwise

9

unenforceable.

10
11

ON THE FIRST CAUSE OF ACTION (DECLARATORY

12

RELIEF/JUDGMENT)

13

1.

For a judgment declaring that no agreement was formed between the

14

parties, or in the alternative, to the extent an agreement was formed, it is

15

void, invalid, or otherwise unenforceable;

16

2.

For a judgment declaring that no agreement to arbitrate was formed

17

between the parties, or in the alternative, to the extent an agreement was

18

formed, it is void, invalid, or otherwise unenforceable;

19

3.

For costs of suit; and

20

4.

For such other and further relief as the Court may deem just and proper.

21
22
23
24
25
26
27

ON THE SECOND CAUSE OF ACTION (DEFAMATION)
1.

For damages in an amount to be proven at trial;

2.

For punitive damages;

3.

For pre-judgment and post-judgment interest;

4.

For costs of suit; and

5.

For such other and further relief as the Court may deem just and proper.

28
-17FIRST AMENDED COMPLAINT

DEMAND FOR TRIAL BY JURY

1
2

Plaintiff demands a trial by jury on all causes so triable. Said demand includes a

3 demand, pursuant to 9 U.S.C. § 4, for a trial by jury concerning whether the parties
4 entered into the agreement at issue by which EC, Mr. Trump, or both, will seek to compel
5 arbitration.
6 DATED: March 26, 2018

AVENATTI & ASSOCIATES, APC

7
8
9
10

/s/ Michael J. Avenatti
MICHAEL J. AVENATTI
Attorneys for Plaintiff

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-18FIRST AMENDED COMPLAINT

EXHIBIT 1

EXHIBIT 2

EXHIBIT 3