Extortion v. Negotiation

  • Law

A big headline yesterday was the indictment and arrest of Michal Avenatti for allegedly trying to extort Nike for $22 million. [WSJ] You can view the criminal complaint here. Later in the day, celebrity attorney Mark Geragos was identified as his co-conspirator (CC-1 in the complaint). [WaPo] (As a side note, Avenatti is already out on bail and still going after Nike. [TMZ])  Given the facts presently available, what do you think? Was this extortion? If so, when does making a demand as part of negotiation cross the line into extortion? Any predictions on what happens?

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Anonymous
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Anonymous
March 26, 2019 4:01 pm
Anonymous
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Anonymous
March 26, 2019 4:10 pm
Reply to  Anonymous

This will never fly in Nevada. Judges appointed by governor and then a panel gets to decide if they stay in office–with almost no input from the electorate. They would have had a better shot with the the appointment followed by retention election.

Anonymous
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Anonymous
March 26, 2019 5:09 pm
Reply to  Anonymous

I agree with @9:10. I don't see cutting out the electorate completely for judges. The 'Missouri Plan' to me seems the best option and the one that would be approved by the voters more likely than voting to cut themselves out completely from the process.

Anonymous
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Anonymous
March 26, 2019 5:10 pm
Reply to  Anonymous

If the appointment of people like Jackie Bluth is what we can expect from panels and the governor, I'll take my chances with an election. What a joke. They appointed a rich princess over qualified applicants. She will be a disaster for the next 20 years.

Anonymous
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Anonymous
March 26, 2019 5:47 pm
Reply to  Anonymous

Were appointments made?

Anonymous
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Anonymous
March 26, 2019 10:28 pm
Reply to  Anonymous

Bluth is the only one I have seen so far.

Anonymous
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Anonymous
March 26, 2019 10:43 pm
Reply to  Anonymous

Jesus 10:10. Do you have any idea how bitter and "get off my lawn" you sound?

Anonymous
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Anonymous
March 27, 2019 12:07 am
Reply to  Anonymous

Bluth was appointed over who?

Anonymous
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Anonymous
March 27, 2019 3:27 pm
Reply to  Anonymous

Bluth was appointed over Trevor Atkin and Stephanie Barker.

Anonymous
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Anonymous
March 27, 2019 7:58 pm
Reply to  Anonymous

Wow, well it at least it is not Barker. Hope she shit cans Cadish's staff.

Anonymous
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Anonymous
March 27, 2019 8:53 pm
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This is what it's come to? "At least it's not someone worse?"

Anonymous
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Anonymous
March 27, 2019 9:14 pm
Reply to  Anonymous

12:58 is right. Atkins should have got it. He is the best qualified. Stephanie Barker is OBC bad. Bluth is doogie howser. I would take her over Barker any day of the week.

Anonymous
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Anonymous
March 27, 2019 9:18 pm
Reply to  Anonymous

I have yet to see anything indicating Sisolak has selected anyone yet.

Anonymous
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Anonymous
March 27, 2019 9:50 pm
Reply to  Anonymous

You mean other than the article above?

Anonymous
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Anonymous
March 27, 2019 10:16 pm
Reply to  Anonymous

Sisolak announced Bluth's appointment via Twitter yesterday. I haven't seen the others announced yet.

Anonymous
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Anonymous
March 27, 2019 10:23 pm
Reply to  Anonymous

Real professional. Greg Kamer and the other panel members should be proud. Appoint a 38 year old judge.

Anonymous
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Anonymous
March 27, 2019 11:08 pm
Reply to  Anonymous

Seems like if you are a DA, you are a shoe in for election or appointment.

Anonymous
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Anonymous
March 26, 2019 4:24 pm

I am interested in what others think about the extortion issue. I am usually quite pragmatic when it comes to settlement discussions. I usually begin them when I feel like they will be productive and result in a good outcome for my client. I don't necessarily use settlement as a sabre rattling moment. And I also don't make threats about consequences of not settling (other than the outcome of the litigation itself and attorneys' fees and costs). Where is the line though? I don't feel like I've ever really understood it. It seems like Avenatti is out of line here though. Hubris at work. Another public attorney flame out is in progress.

anonymous
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anonymous
March 26, 2019 4:43 pm
Reply to  Anonymous

He demanded $1.5m on behalf of a client, and then some $20m or so for himself and Geragos to conduct a supposed "internal investigation." The former is probably OK if the claim is at least colorable, but the latter sure sounds like extortion to me. Also you probably shouldn't say the quiet part loud in terms of the timing of it.

Anonymous
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Anonymous
March 26, 2019 5:26 pm
Reply to  Anonymous

I always thought of it as a separation by order of actions in that 1) if I sue, report to a gov entity, etc. and then say I'll settle for X amount that is OK, 2) but if I say give me X amount or I'll sue, report you to whomever, etc. – that is extortionate. I remember reading a CA case to that effect re a lawyer a long time ago. I may be wrong but that is what guided me when I practiced. Thoughts?

Anonymous
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Anonymous
March 26, 2019 5:34 pm
Reply to  Anonymous

10:26 AM, that's what I've always understood. I practice in an area where litigants can report to a government agency. I have seen other parties do this and usually it doesn't actually help their case to report. So I advise clients against reporting to government agencies in litigation just to be safe. I think you can report without triggering an extortion issue, but the risk doesn't usually seem to be worth the benefit. Plus, if my client reports to a government agency and they DO take action, it could make settlement more difficult because the opposing party will not be able to implicitly concede anything in order to defend themselves against the government. In short, I just don't see where reporting to government agencies gets litigants much mileage.

Anonymous
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Anonymous
March 26, 2019 7:00 pm
Reply to  Anonymous

Basically every demand letter I have ever written or seen says makes some kind of a "pay or be sued" threat. Extortion in Nevada requires a threat to  (1) accuse someone of a crime, (2) cause injury to person or property (3) publish a libel (4) "expose or impute to any person any deformity or disgrace" or (5) "expose any secret."

Threatening to sue over a valid claim would not apply to any of these. Threatening to expose illegal business practices would probably violate (1) and (5). I don't know federal law but what Avenatti is accused of would almost certainly be extortion in Nevada.

Anonymous
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Anonymous
March 26, 2019 10:28 pm
Reply to  Anonymous

12:00 I think the missing ingredients from your letters are the extra-judicial threats. For example, one time I had a friend who sued someone, then sued the Board he was licensed under for allowing him to be licensed, deposed every one of his competitors because she thought they had info about his fraud, etc. He finally settled. But had he threatened ALL of that ahead of time – it could have been "misconstrued."

Anonymous
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Anonymous
March 26, 2019 11:44 pm
Reply to  Anonymous

12:00 here, I agree with that. I was not sure if 10:26's list was either/or. I just wanted to clarify that I don't think there is anything wrong with threatening to sue someone for a claim if they do not pay amounts you believe in good faith are owing for that claim. Like with Avenatti here, if all he did was tell Nike "Pay my client 1.5 Million or I will sue and all your misdeeds will be out in the open" that is fine. Obviously, lawyers cannot demand a separate cut to make it go away.

Anonymous
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Anonymous
March 27, 2019 2:33 am
Reply to  Anonymous

For me, a quick rule of thumb was the simple don't link a threat to the desired action by the other person. In other words, don't try to use the "unless you do X, I will do Y".

It is perfectly acceptable to say things such as " unless we find an amicable resolution to this issue, my client will have no alternative but to seek all available legal remedies" (or things to that effect).

That is not a threat to do something unless they surrender but rather an informal settlement attempt short of engaging in litigation.

Anonymous
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Anonymous
March 27, 2019 3:56 am
Reply to  Anonymous

"If you don't honor your contract and pay my client the remaining $1M owed, we'll sue you" – is not extortion.
"If you don't pay my client $1M, we're going to post the video of you receiving a happy ending at the spa in Florida" – is extortion.

Anonymous
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Anonymous
March 26, 2019 4:44 pm

#MAGA

Michael Avenatti Got Arrested

He's indcited on both coasts on the same day for different operative facts? That smells.

The extortion case is bad for lawyers and clients. There's a line somewhere between negotiation and extorition. Based on reports I've read, Avenatti was aggressive but I don't think criminal. If I had to guess, the extortion case is the result of 1) NIKE is huge and has powerful lawyers; and 2) Avenatti is a "no talent ass-clown" who needed to be shut down. I hope he beats this one.

The California case is more trouble for MA. It seems to be an easy case for prosecutor and bar counsel. He supposedly lied to a client and to a bank. Proof of these facts won't be too complex and these are not difficult concepts — even in California. This is where Avenatti's career as a lawyer ends and he may even get a few years in Club Fed.

Anonymous
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Anonymous
March 26, 2019 5:27 pm
Reply to  Anonymous

I don't have a problem with Sleazy Porn Lawyer's demand for $1.5 million on behalf of a client who was somehow wronged by Mike. But to tie that settlement demand with a $20 million demand that SPL and Geragos be hired to conduct some BS investigation just ain't right!

When I make a demand on behalf of a client, my take is my percentage (33 to 45% depending) of the payoff. There is no separate pot for me. That separate payoff for SPL makes it look beyond the pale.

Anonymous
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Anonymous
March 26, 2019 5:00 pm

There is hope for all the out of work cookie eating construction defects bar–AB 421. https://www.leg.state.nv.us/App/NELIS/REL/80th2019/Bill/6799/Overview

Anonymous
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Anonymous
March 26, 2019 5:07 pm
Reply to  Anonymous

Since when does eating cookies reflect poorly on a person? Cookies are delicious.

Anonymous
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Anonymous
March 26, 2019 5:22 pm
Reply to  Anonymous

who said it was negative. It's just a fun, lovingly applied adjective from a position of envy.

Anonymous
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Anonymous
March 26, 2019 6:32 pm
Reply to  Anonymous

Reopening the construction defect bonanza is good for all of us, cookie eaters or not. I assumed this would happen when the Dems swept the last election.

Anonymous
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Anonymous
March 26, 2019 6:51 pm
Reply to  Anonymous

Sucks for CD defense's clients, but good for all the lawyers. Besides, how else will poor homeowners get recompense for the their 1/16" stucco cracks?!

Anonymous
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Anonymous
March 26, 2019 7:07 pm
Reply to  Anonymous

In a macroeconomic sense it doesn't hurt the builders either. The victim, to the extent there is a victim is the insurance industry.

For the builders, granted their claims experience increases and thus their loss runs increase, resulting in higher insurance premiums. That added cost is offset, however, by the lower operating costs on the front end of the project through excessive "value engineering", omitted/improper materials, code violations and general poor workmanship issues.

At the end of the day, the builders (and homebuyers) are going to pay the piper.. only a question of when and in what form. For the purchaser it either higher initial prices or repair costs down the road. For the builders its either higher construction costs (materials and labor) or insurance premiums.

Anonymous
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Anonymous
March 26, 2019 6:31 pm

What are 2nd year laterals going for these days? And let me be specific: I would like to know the price for a 2nd year lateral who graduated in the 90th to 50th percentile and did not work for a regional or national firm.

Anonymous
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Anonymous
March 26, 2019 7:18 pm
Reply to  Anonymous

Boyd grad? Just kidding. Take whatever you think first years are getting plus/minus $10,000. Being a 2nd year lateral is not far enough along to make a ton of difference at this point.

Anonymous
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Anonymous
March 26, 2019 8:23 pm
Reply to  Anonymous

I think you are looking at this wrong. Pay is generally based on the job, not the candidate. A second-year's experience, law school, and class rank go to what jobs that candidate would be qualified for, not what that candidate is worth.

I am a mid-level commercial litigator. I am paid as a mid-level commercial litigator. If I left and went to an insurance defense or personal injury firm here, or a commercial litigation firm in New York, I would be paid differently despite having the same qualifications.

Anonymous
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Anonymous
March 26, 2019 8:52 pm

Who is handling the Discovery Commissioner's calendar now that Bulla is gone?

Anonymous
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Anonymous
March 26, 2019 9:14 pm
Reply to  Anonymous

Erin Truman has been handling them

Anonymous
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Anonymous
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Anonymous
March 26, 2019 9:43 pm
Reply to  Anonymous

If you read to the bottom you'll see other states complaining that Nevada's bar went too easy on him and made it harder for them. Even other states are complaining about our bar.

Anonymous
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Anonymous
March 26, 2019 10:01 pm

While on the topic of attorneys behaving badly, unethical prosecutor, Liz Mercer, is finally being referred to the State Bar for possible discipline.

Sevier v. State NV Supreme Court Order from March 15

Anonymous
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Anonymous
March 26, 2019 10:16 pm
Reply to  Anonymous

I usually give someone the benefit of the doubt when they do things like this. Perhaps she misunderstood the witness. Perhaps it was a slip of the tongue. But the order says this same prosecutor has done this exact same thing before. And some news story says she instructed her witnesses to change their testimony to get convictions. Seems like maybe this is one that's deserved.

Anonymous
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Anonymous
March 26, 2019 11:27 pm
Reply to  Anonymous

I would normally also give someone the benefit of the doubt, however I've had the misfortune of dealing with Liz Mercer. It was not a "slip of the tongue."