Porn star Stormy Daniels and former Playboy model Karen McDougal are suing to get out of nondisclosure agreements that bar them from talking about alleged affairs with President Trump, but neither woman is waiting for a court's permission to speak out.
However confident Daniels, McDougal and their lawyers are of victories, there are still legal risks. So why are Daniels and McDougal unafraid to talk now — and provoke the full fury of the famously litigious president?
One simple explanation could be that the mere act of filing lawsuits broke both women's contracts. Their nondisclosure agreements require all disputes to be resolved in confidential, private arbitration proceedings.
Since Daniels and McDougal are in violation of their deals anyway, they might figure there is no point to taking half-measures — kind of like a dieter on his cheat day figures there is no point to ordering a calorie-free beverage with his triple Whopper. Just get the 40-ounce Dr Pepper, and just do the interview.
Such an all-or-nothing calculus would seem to make sense in McDougal's situation. Her contract is not with Trump himself but with the parent company of the National Enquirer, which paid $150,000 for exclusive rights to her story in 2016 then did not publish it — an apparent “catch and kill” executed by a friend of the president, Enquirer boss David Pecker. According to the deal, McDougal must return the money in the event of “any such breach.”
Daniels is in a different position. Her contract, signed by Trump attorney Michael Cohen, says Daniels owes $1 million for “each breach, it being understood that the liquidated damages calculation is on a per item basis” (emphasis in original).
In a testy exchange on CNN on Tuesday night, Cohen attorney David Schwartz (yes, the lawyer has a lawyer) said to Avenatti, “I hope you have a good malpractice policy because when she owes $20 million, she should go after you to collect the money.” The ominous implication was that Daniels increases her liability every time she speaks about the alleged affair.
Former U.S. solicitor general Charles Fried, who teaches contract law at Harvard Law School, told me the “liquidated damages” referred to in the nondisclosure agreement (i.e. the money Daniels supposedly owes for speaking publicly) “could be treated as a penalty, and penalty clauses are unenforceable.”
Fried said the court’s decision would hinge on whether $1 million per violation of the contract is a “reasonable estimate” of the damage to Trump’s reputation or is “excessive” — and therefore an unfair and unenforceable penalty.
“A court might well throw it out,” Fried said.
Daniels is taking a risk, to be sure, but even if she were to fail in her attempt to void the nondisclosure agreement, she still might avoid the steep cost prescribed in the contract. Having more than one escape hatch could help explain her nerve.
McDougal benefits from Trump's incentive to stay as far away from her lawsuit as possible. The case is ostensibly a fight between McDougal and American Media Inc., the National Enquirer's parent company. The president is not a defendant.
Any involvement by Trump's legal team would bolster one of McDougal's major claims — that Cohen “worked secretly” with American Media to negotiate her silence during the 2016 campaign.
McDougal might be emboldened by a sense that Trump and Cohen cannot come after her without forfeiting plausible deniability.
