Don’t Be Like Mike (Avenatti):
Idle Your Threats of Negative Publicity
No matter how bad you may think 2019 is going for you, Michael Avenatti has almost certainly had a tougher go of it than you have.
He began 2019 still smarting from U.S. District Judge S. James Otero of the Central District of California awarding President Donald Trump almost $300,000 in attorney fees in a defamation lawsuit filed by Avenatti’s client, Stormy Daniels.
In late March, Avenatti was indicted—on the same day (what were the chances?)—by federal prosecutors from both the U.S. District Court of the Southern District of New York and the U.S. District Court of the Central District of California.
The New York indictment alleged that Avenatti threatened to hold a press conference about misconduct on the part of Nike right before the NCAA men’s basketball tournament. Doing so would have likely negatively affected Nike’s reputation and market value—at least in the short term. According to prosecutors, Avenatti offered to not hold that press conference if Nike paid Avenatti’s client $1.5 million and hired Avenatti and another attorney (rumored in news reports to be Mark Geragos) to conduct an internal investigation of the company. If Nike hired another firm, prosecutors alleged, under Avenatti’s proposal Nike would still owe Avenatti and the second attorney twice the fees of the firm that was eventually hired to conduct the investigation.
On the other side of the country, the California indictment alleged that Avenatti evaded a $1.6 million settlement with a client over allegations that Avenatti misappropriated the client’s funds so that he could keep Tully’s Coffee stores (which he owned) running on the West Coast. Avenatti was also alleged to have submitted false tax returns in order to obtain more than $4.1 million in loans for his law firm and the Tully’s business.
About a week later, Avenatti agreed to step down as lead plaintiffs counsel in a class action suit where he won a $454 million verdict that is now on appeal.
And, finally, just a few short weeks ago, Central District of California prosecutors charged Avenatti with 36 counts of bankruptcy fraud, tax fraud and stealing millions of dollars from clients.
Like I said, comparatively speaking, I am sure you are doing just fine.
But let’s get back to that New York indictment.
In that indictment, the federal government alleged that Avenatti extorted Nike under 18 U.S.C. Section 1951 by “using threats of economic harm in an attempt to obtain multimillion dollar payments by Nike.” The legal claim is based on Avenatti’s threat of a press conference during which he would publicly announce, presumably, allegations that Nike did some very bad things. As that theory goes, the publicity generated by that press conference would have been overwhelmingly negative, which would have caused Nike economic harm.
In other words, Avenatti allegedly threatened Nike with bad publicity in order to get the company to do what he wanted—pay his client and hire him to run an internal investigation at the company.
Avenatti is not exactly an innovator in this regard. Attorneys frequently make threats against adversaries on behalf of their clients or—and let’s be honest here—those attorneys’ own interests.
When it comes to threatening adversaries with negative publicity, I advise my clients —regardless of whether they are attorneys or not — to stay away from doing so.
You could say that I suggest that they idle their threats of negative publicity.
I give them two reasons why they should.
First, depending on the facts of a given situation and depending on how it’s phrased, a threat of negative publicity or even a threat of merely contacting a media outlet could be extortion. Such threats could even amount to blackmail depending on the facts and the aggressiveness of a prosecutor.
Second, I advise clients not to threaten adversaries with bad publicity because there is no guarantee that someone seeking publicity for a legal issue or dispute will actually be able to secure that publicity, let alone ensure that it is favorable publicity.
We are not talking about an attorney or client buying an ad where each would have control over the ad’s design, content and placement.
We are not talking about drafting and filing a complaint or a motion, or sending a letter, where in each instance the content is controlled by a client and the client’s attorney.
Nope. We are talking about “earned media.”
Publicity is often referred to as “earned media” because people seeking publicity have to earn the opportunity for media outlets to cover the stories they are pitching.
As in-house communications teams at law firms are quick to remind partners at those firms, there is no guarantee that a reporter, blogger or media outlet will cover a particular topic such as a legal issue or dispute—even when it previously covered that same legal issue or dispute.
An attorney could end up with egg on his face if the attorney threatens to get publicity for a matter but then comes to find that he is unable to actually secure that publicity. Even worse, that attorney could get publicity for that matter but the publicity ends up being unfavorable to the attorney’s client and legal position.
That failure is going to undercut the attorney’s negotiating leverage in the legal dispute or litigation going forward. It will also undermine the attorney’s credibility.
Oh, yeah—it will also make the attorney look like a fool.
There is an effective alternative approach available, however. It is the approach to use when an attorney wants to raise the prospect of bad publicity to an adversary but prefers to avoid making explicit threats that might subject the attorney to criminal liability or for which the attorney may not be able to follow through on.
That alternative approach is simply to make it known to an adversary that there could be reporters, bloggers and media outlets who could learn about the legal dispute and who might want to cover it. (The attorney need not mention to the adversary that he might be the one to tip those reporters, bloggers and media outlets off about the dispute.)
An attorney could remind the adversary that if the dispute cannot be resolved prior to whatever (absolutely not artificial) deadline is given, the client wants to move forward with whatever legal maneuver or action is in play at that time.
The attorney could further note to the adversary that once this maneuver or action is put into motion, the attorney cannot promise that he will be able to keep things quiet and out of public view.
The attorney could also let the adversary know that the attorney thinks that there could be some media outlets and reporters who would want to cover the dispute once it is made public. And, the attorney might add, based on the allegations in the complaint, letter, etc., any media coverage is unlikely to be favorable to the adversary’s client.
Hinting at the possibility of unfavorable publicity is as effective as an outright threat because it plants the seed of adverse publicity in an adversary’s mind.
But this “Just wanted to let you know” approach should keep an attorney from either inching toward potential criminal conduct or making an explicit threat that he might not be able to follow through on.
Say what you will about Avenatti. But he knows exactly how to pull the right levers that lead to boatloads of publicity about his clients and his cases. While these recent indictments and other allegations of misconduct on his part paint a different picture of the person he is as compared to what we might have thought when he first burst onto the scene, there is no denying the fact that he is media savvy.
But it is possible for attorneys to venture, as the cliché goes, too far out over their skis when it comes to tapping their media savviness for a particular legal dispute. This includes explicitly threatening adversaries with negative publicity.
I highly recommend that attorneys and clients—that includes you, dear reader—idle their threats of negative publicity directed toward adversaries.
They might never be called out for making such threats.
They might never be indicted for doing so.
But if they make threats that they cannot follow through on, they are going to wreck their credibility and seriously damage their ability to resolve a particular dispute favorably for their client.
And at that point, publicity will be the least of their concerns.
Wayne Pollock is the founder and managing attorney of Copo Strategies in Philadelphia, a national legal services and communications firm. Attorneys and law firms enlist Copo Strategies to engage the media and the public regarding their clients’ cases (to help resolve those cases favorably), and to engage the media, referral sources and prospective clients regarding their firms (to help bring new client matters in the door). Contact him at email@example.com or 215-454-2180.
Reprinted with permission from the May 7, 2019, edition of The Legal Intelligencer © 2019 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or firstname.lastname@example.org.