Avenatti Argues Litigation Privilege Bars Prosecution on Nike Extortion Charges
Lawyers for Michael Avenatti on Monday asked a Manhattan federal judge to dismiss a criminal indictment accusing the embattled attorney of waging a multimillion-dollar extortion plot against athletic apparel company Nike Inc., saying their client had been acting in his legitimate capacity as an attorney.
August 19, 2019 at 04:40 PM
4 minute read
The original version of this story was published on New York Law Journal
Lawyers for Michael Avenatti on Monday asked a Manhattan federal judge to dismiss a criminal indictment accusing the embattled attorney of waging a multimillion-dollar extortion plot against athletic apparel company Nike Inc., saying their client had been acting in his legitimate capacity as an attorney.
The filing, in the U.S. District Court for the Southern District of New York, continued a multipronged attack from Avenatti’s Florida-based attorneys, Scott A. Srebnick and Jose M. Quinon, who last week accused federal prosecutors of carrying out a political witch hunt against their client.
Avenatti, who is best known for his representation of adult-film star Stormy Daniels, was arrested earlier this year on charges that he had threatened to go public with supposedly damaging information if Nike didn’t agree to pay his client a $22.5 million settlement or hire him and an unnamed co-conspirator to conduct an internal investigation of alleged wrongdoing at the company.
On Monday, Avenatti’s attorneys said he was trying to settle claims by his client, California basketball coach Gary Franklin Sr., who said he had evidence Nike had funneled money to college basketball recruits in violation of National Collegiate Athletic Association rules. Avenatti’s demand, his lawyers argued, was protected under the First Amendment because the information Avenatti threatened to release at a news conference was true and related to Franklin’s litigation claims.
“Courts have largely exempted such threats from the extortion statutes as a matter of law because, by its very nature, litigation is inherently threatening and poses a risk of economic loss to all parties,” the motion said.
“In light of this well-recognized carve-out for litigation threats, it plainly was acceptable (i.e., not extortion) for Mr. Avenatti to threaten to file a lawsuit against Nike in the public record, exposing the very same misconduct he threatened to first make public in a press conference, if Nike did not satisfy the two components of his settlement demand,” the attorneys wrote.
Last week, Avenatti said in a separate filing that his representation of Daniels, who had accused President Donald Trump of engaging in an extramarital affair with her (Trump has repeatedly denied having an affair with the adult entertainer), made him a target of malicious prosecution in the Southern District, and that prosecutors never investigated his claims against Nike.
The U.S. Attorney’s Office for the Southern District of New York on Monday declined to comment on the filings. But U.S. Attorney Geoffrey Berman in March said the scheme amounted to an illegal “shakedown” of a public company.
“When lawyers use their law licenses as weapons, as a guise to extort payments for themselves, they are no longer acting as attorneys,” he said at the time.
In addition to the alleged extortion plot against Nike, Avenatti is also accused in Manhattan federal court of stealing $300,000 from Daniels, whose real name is Stephanie Clifford, by diverting two payments she received on a book deal.
Meanwhile, Avenatti also faces charges in the U.S. District Court for the Central District of California, where he is accused of embezzling millions of dollars from other clients. An attorney for Avenatti had asked to have those two cases combined in federal court.
A status conference is set for Thursday afternoon in Avenatti’s extortion case.
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