Karen McDougal — Impact Litigation

The Challenge

Representing model Karen McDougal in litigation against a major media organization over a contract that kept Ms. McDougal from telling the story of her 2006-07 relationship with President Donald Trump.

The Engagement

On March 20, 2018, we filed a lawsuit on behalf of Ms. McDougal against American Media, Inc. (AMI), a major media organization who owns the National Enquirer and other widely distributed magazines. The complaint alleged that McDougal’s contract with AMI was an attempt to “catch-and-kill” the story of her relationship with President Trump, and sought a declaration of contract invalidity from the court. It asked the court to set aside the contract on three grounds:

First, the contract was invalid for “fraud in the execution”—a legal concept that deems a contract to never have been formed where a party was deceived about its nature. Ms. McDougal was misled about the contract’s nature (believing it to be a legitimate modeling and writing contract) through the misconduct of her attorney, who was secretly colluding with the other side. As a result, the contract was never formed.

Second, the contract represented an illegal in-kind corporate donation to the Trump campaign. Weeks before we filed the complaint, the New York Times reported that, shortly after the contract was signed, Ms. McDougal’s own lawyer called President Trump’s lawyer to inform him that the “transaction” was complete. Because AMI entered into the contract to influence the election without reporting its contribution, the contract was made for an illegal purpose and was void.

Finally, the contract violated fundamental public policy. While discrediting her story, AMI used the contract to coerce Ms. McDougal into refraining from discussing her relationship with President Trump. Because this violated central tenets of American government, including freedom of expression and conscience and freedom of the press, the contract was void.

When the case was filed, it immediately sparked widespread attention from the press and public, and was prominently featured in national news. That created a pathway for Ms. McDougal to set the record straight, and defend herself from lies being spread about her and her relationship with President Trump.

On April 2, 2018, AMI filed an anti-SLAPP motion arguing that the lawsuit violated AMI’s First Amendment rights. On April 18, 2018, AMI agreed to a settlement through which Ms. McDougal achieved her core goal—reacquiring the rights to her life story so that she, and she alone, could exercise control over them.

The Result

We reached a prompt and favorable settlement with a major media organization that accomplished all of our client’s goals, including, crucially, having the rights to her own life story returned to her.

Bumble and bumble CEO — Executive Compensation

The Challenge

Ensuring the chief executive officer of a successful startup received the equity compensation he was promised.

The Engagement

A successful startup was sold for nine figures to a Fortune 500 company. The former CEO of the company, a graduate of the the Stanford Business School, retained us to secure the equity compensation he had been promised by the founder. When the trial court wrongfully dismissed the suit, Brendan Maher successfully obtained reversal in the New York appellate courts. After discovery commenced, the case settled shortly after Peter Stris deposed the founder.

The Result

Confidential settlement in favor of our client.

Merrill Lynch — Securities Victory

The Challenge

Protecting the authority of state courts to enforce their own laws governing market misconduct.

The Engagement

In a case of extraordinary importance to state authorities and the investing public, we were retained to represent before the United States Supreme Court a group of investors who lost over $50 million when the stock of a company called Escala declined by more than $800 million. The complaint accused several major financial institutions of engaging in improper short-selling practices, and sought relief in New Jersey state court for violations of New Jersey law. Led by Merrill Lynch, the financial institutions argued that the federal securities laws required the case to be brought exclusively in federal court. We argued that longstanding principles of jurisdiction entitled state courts to hear disputes concerning their own laws.

The Result

The Court issued an 8-0 decision in our clients’ favor, holding that the lawsuit could proceed in New Jersey state court. Our victory was described by the press as “the most securities significant decision of the term.”

Xerox — $22+ Million Recovered

The Challenge

Representing a group of accomplished Xerox corporate employees in a complex, landmark pension case.

The Engagement

In the late 1990s, Xerox attempted to rehire veteran employees who had earlier worked at Xerox and left by choice. The returning employees were led to believe that their pensions would be straightforwardly calculated, with no hidden reductions for past service. As the employees approached retirement, they learned that Xerox intended to calculate their pension using an improper and undisclosed accounting method that collectively robbed the group of many millions of dollars. For roughly a decade, our firm represented the plaintiffs in this complex, landmark pension case at every level: the district court; the Second Circuit (three times); and the Supreme Court. Although the Supreme Court narrowly ruled against us in one facet of the case, we persuaded the Justices to preserve an argument (regarding improper notice) that we used to persuade the lower courts to award millions to misled employees.

The Result

We recovered over $17 million in benefits, plus $4.9 million in attorney’s fees.