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Stormy Daniels' case against Trump, Michael Cohen faces knotty legal complexities

The litigation between Daniels, Trump, Cohen, and an entity known as “EC” is already knotted in procedural complexities.
by Danny Cevallos /

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Legal analysis

Adult film star Stormy Daniels filed a civil action against Donald Trump this week. In it, she wants a California court to declare that the nondisclosure agreement between them is not valid because Trump, under the alleged pseudonym of “DD,” never actually signed it. The action comes in response to a restraining order, sought and obtained in late February, that precludes Daniels from violating the terms of the original agreement.

According to the complaint filed Tuesday, Daniels had an intimate relationship with Trump between 2006 and 2007. Years later, during Trump's presidential campaign, she says he and his attorney Michael Cohen "aggressively sought to silence" Daniels, who says she was pressured into signing a nondisclosure agreement and that she was paid $130,000 for her silence.

Image: The actress Stephanie Clifford, who uses the stage name Stormy Daniels, arrives to perform at the Solid Gold Fort Lauderdale strip club on March 9, 2018 in Pompano Beach, Florida.
The actress Stephanie Clifford, who uses the stage name Stormy Daniels, arrives to perform at the Solid Gold Fort Lauderdale strip club on March 9, 2018 in Pompano Beach, Florida.Joe Raedle / Getty Images

The litigation between Daniels, “DD” (allegedly Trump’s nom de plume), the president's personal attorney Michael Cohen, and an entity known as “EC” has just begun, but it is already knotted in procedural complexities.

What could be the next legal maneuvers by EC, Cohen, and Trump, or the Trump Organization?

First, EC and Cohen will likely file a request in the California Court to get Daniels’ case out of court and to compel private arbitration. Because California has a strong public policy in favor of arbitration, any doubts regarding whether a dispute can go to arbitration or not will be resolved in favor of it.

EC only needs to prove the existence of the arbitration agreement; Daniels, on the other hand, would bear the burden of establishing a defense to enforcement of the arbitration agreement. One of Daniels’ defenses to the nondisclosure agreement, which contains the arbitration provisions, is that it wasn’t signed.

In response, EC and Cohen could point out to the court that the main issue is whether Daniels agreed to arbitrate, not whether the overall agreement is enforceable.

Related: Porn star Stormy Daniels didn’t sue Trump for money, but for the right to speak out

Arbitration clauses are generally independent of the larger contract in which they are embedded. Unless there is a specific attack on the arbitration agreement itself, that part must be enforced, even if Daniels, for instance, asserts the invalidity of the overall “Hush Agreement" that contains it.

Cohen and EC have the law on their side: If Daniels agreed to arbitrate, the enforceability of the overall agreement is a question for the arbitrators, not the court.

Keeping the case out of court and in arbitration virtually assures a win for EC. It’s private, and the arbitration rules in the contract are slanted in favor of DD. For example, the restraining order was obtained from an arbitrator ex parte, with no notice to Daniels. It sounds unfair, but it’s the very procedure Daniels ostensibly agreed to when she signed the contract.

EC and Cohen could try to assert the absence of DD’s signature as an escape hatch for Trump, but that has the possibility of creating another legal morass.

In the final signature line, Cohen apparently signs for Essential Consultants (“EC”) only, while the DD signature line is glaringly blank. They would likely argue that Trump knew nothing of the agreement, but it’s still enforceable because EC signed it.

However, on each of the other initialized pages, someone appears to initial on behalf of “DD,” but with the initials “EC.” This further clouds the issue of whether Trump is a party, and whether the overall agreement was executed validly.

Finally, even if the contract was never valid, Cohen and EC might argue that once Daniels accepted payment with knowledge of the contract, she ratified the contract, or she is “estopped” from denying its validity.

Daniels has a number of arguments of her own to make: She has already sued on the theory that the absence of DD’s signature means the original agreement was never really created, or it is unenforceable. She could additionally argue that the arbitration clause itself is independently flawed, because the language only gives DD the right to compel arbitration. It does not reference EC.

Meanwhile, EC and Cohen are the ones seeking to compel arbitration, not DD. It’s interesting to note that the language of the restraining order granted by an ex-judge arbitrator does not specify which party actually sought the restraining order—that can’t be an accident.

Daniels could argue that DD and EC can’t have it both ways: Either they are the same, or they are different. If only DD has the right to take the case to arbitration, and EC is arbitrating on behalf of DD, then DD and EC are the same entities, thereby tying together Trump, Cohen, the Trump Organization, and possibly, the Trump campaign.

Daniels could also argue that the terms of arbitration clause are so slanted against her that they are unconscionable. An agreement to arbitrate is invalid if it is both procedurally and substantively unconscionable. The procedural aspect focuses on unequal bargaining power; the substantive prong looks at overly harsh or one-sided results. This is an uphill battle, however, and the burden is on Daniels to prove unconscionability by a preponderance of the evidence.

Danny Cevallos is an MSNBC legal analyst. Follow @CevallosLaw on Twitter.

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