The dispute between porn star Stormy Daniels and Donald Trump continues to dominate the news cycle. Ironically, the nondisclosure agreement (NDA) purportedly entered into between them was designed to avoid any publicity about their alleged affair that happened more than ten years ago. Among other things, the NDA contains a one-sided arbitration clause (NDA Sec.5.2) and Daniels is waging a determined battle to have the NDA, including its arbitration provision, declared invalid. Daniels’ attorney, Michael Avenatti, filed a Complaint in Los Angeles County Superior Court (cause No. BC 696568) seeking that relief. Mr. Trump’s attorneys have recently removed the case to U.S. District Court, at least for the time being. A public trial rather than private arbitration would be a more favorable forum for Daniels, especially if the trial were to be a jury trial for the reasons below.
Arbitration has been the subject of much criticism from the legal profession in recent years. Commercial arbitration is private and binding with no opportunity for appeal. Courts have also been historically reluctant to set aside arbitration awards except under rare and egregious circumstances. Further, arbitration has often been criticized for being as expensive and as inefficient as the civil trial process. Last, the true impartiality of some arbitrators has been questioned in cases where one party is a frequent user of the arbitrator or arbitration service provider. None of the above critiques is reassuring to individuals who seldom litigate. Here, Donald Trump is a notorious serial litigator.
Arbitration Blues:
Stormy Daniels v. Donald Trump
by Gregg Bertram M.A., J.D., LL.M