On June 9, 2023, Justice Robert Reed of the New York State Court, Commercial Division, issued a decision in Trump v. Trump, 192 N.Y.S.3d 891 (Sup. Ct. N.Y. Cnty. June 9, 2023). This decision largely denied Mary Trump’s motion to dismiss the claims brought by former president Donald Trump alleging that she breached a settlement agreement by disclosing documents to The New York Times and publishing a book that discussed the finances of the Trump family. This decision provides an example of how a court can approach the interactions between New York’s recently amended anti-SLAPP law and traditional breach of contract claims.
Background
This decision comes out of a long-running dispute over the publication of financial information from the Trump family in the pages of the Times—specifically, in a 2018 article titled “Trump Engaged in Suspect Tax Schemes as He Reaped Riches from His Father”—as well as Mary Trump’s 2020 book, “Too Much and Never Enough: How My Family Created the World's Most Dangerous Man.”[1]
As the Court recounted, in 2017, a reporter from The New York Times started reaching out to Mary Trump, a niece of Donald Trump, to seek information about the finances of the Trump family.[2] Previously, Mary Trump was involved as an objectant in litigation over the estate of Frederick C. Trump—opposite a set of proponents that included Donald Trump. That litigation generated “voluminous discovery, which, among other things, produced certain tax and financial records concerning [Donald Trump].”[3] The case was ultimately resolved with a 2001 settlement agreement that stated that, absent consent from the proponents, Mary Trump and her fellow objectants:
shall not disclose any of the terms of [the Settlement Agreement], and in addition shall not directly or indirectly publish or cause to be published, any diary, memoir, letter, story, photograph, interview, article, essay, account, or description or depiction of any kind whatsoever, whether fictionalized or not, concerning their litigation or relationship with the “Proponents/Defendants” or their litigation involving the Estate of FRED C. TRUMP, and the Estate of MARY ANNE TRUMP, or assist or provide information to others in connection therewith.
Trump, Index No. 453299/2021, Doc. No. 26 at 6 (Settlement Agreement). Eventually, Mary Trump retrieved documents from her counsel for the estate litigation and gave them to the Times.
On October 2, 2018, the Times published an article titled “Trump Engaged in Suspect Tax Schemes as He Reaped Riches from His Father.” The opening sentence stated: “The president has long sold himself as a self-made billionaire, but a Times investigation found that he received at least $413 million in today’s dollars from his father’s real estate empire, much of it through tax dodges in the 1990s.”[4]
On July 14, 2020, Mary Trump released her book, “Too Much and Never Enough: How My Family Created the World's Most Dangerous Man.” Prior to publication, Donald Trump’s brother and proponent in the estate litigation, Robert Trump, sought and briefly obtained a temporary restraining order preventing publication under the settlement agreement; however, the Second Department partially vacated the temporary restraining order on July 1, 2020 on First Amendment grounds, observing that “[c]onfidentiality agreements are alternatively enforceable through the imposition of money damages.”[5] After losing the 2020 election, the former president did just that: he sued Mary Trump for money damages. Specifically, in 2021, Donald Trump brought claims against Mary Trump for the publication of the book, as well as claims against Mary Trump, the Times, and several Times journalists related to the Times article.[6]
In the interim, New York expanded the scope of its anti-SLAPP law—which is aimed at frivolous strategic lawsuits against public participation (SLAPP) that seek to deter free speech. Mechanistically, New York’s anti-SLAPP law operates by, inter alia, requiring a showing either that (a) the “cause of action has a substantial basis in law” or (b) the cause of action “is supported by a substantial argument for an extension, modification or reversal of existing law” under CPLR § 3211(g).[7] However, this heightened standard only applies to actions “involving public petition and participation.”[8] Prior to the 2020 expansion, actions involving public petition and participation were limited “to instances where speech was aimed toward a public applicant or permittee.”[9] In 2020, New York expanded the scope of those actions to include “any communication in a place open to the public or a public forum in connection with an issue of public interest.”[10] This expansion was inspired, in part, by Donald Trump’s “history of litigation — that some observers have described as abusive and frivolous.”[11]
The Times, its employees, and Mary Trump all filed motions to dismiss under the revised anti-SLAPP law. On May 3, 2023, the Court found that the anti-SLAPP law applied to claims asserted against the Times and its employees and dismissed those claims.[12] This left three claims—for (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, and (3) unjust enrichment, against Mary Trump—to be decided in her motion to dismiss.
Discussion
As a threshold matter, the Court first addressed whether or not the claims against Mary Trump were covered by New York’s anti-SLAPP law. As Justice Reed noted, “Mary Trump argues that each claim asserted against her predicates liability on protected speech—the publication of the book and the provision of documents to a journalist reporting on issues of public interest and concern.”[13] In contrast, Donald Trump argued that “his claims against Mary Trump are not subject to the anti-SLAPP law because the claims . . . are based upon on Mary Trump’s alleged violation of a binding settlement agreement that explicitly prohibited such publication.”[14] Given the recent amendment to the New York anti-SLAPP statute, both parties cited to California cases for persuasive authority to resolve this dispute—as California has an analogous statute.[15] The Court agreed to consider California law, observing that this approach was approved in a recent First Department decision.[16]
Reasoning through dueling citations from California cases, the Court found the California court’s decision in City of Alhambra v. D’Ausilio, 193 Cal. App. 4th 1301 (Ct. App. 2011) to be persuasive. In City of Alhambra, the City sued the defendant for breaching a settlement agreement that prohibited him from certain speech-related conduct. As Justice Reed summarized, “the court of appeal held that the ‘City did not sue [D’Ausilio] because he engaged in protected speech,’ but rather because ‘it believed he breached a contract which prevented him from engaging in certain speech-related conduct and a dispute exists as to the scope and validity of the contract,’ and that the suit, therefore, did not ‘arise from’ the protected activities.”[17] Applying the same logic to this case, the Court found that “New York’s amended anti-SLAPP law does not apply to prohibit plaintiff’s claims as asserted against Mary Trump.”[18]
As a part of this discussion, the Court also distinguished its determination in this motion sequence from the Times’ motion by noting first that the claims against the Times sounded in tort, not contract, and then that “a wealth of case law supports the notion that the press is constitutionally protected to engage in the activity of newsgathering.”[19] “In contrast,” Justice Reed noted, “Mary Trump has not cited any case law in which a court has held that breaching one’s own confidentiality obligations, by virtue of engaging in commercial speech and publishing a book that specifically addresses matters that are deemed confidential, constitutes, as a matter of law, a protected activity under the anti-SLAPP statute.”[20]
After determining that the heightened standard of the anti-SLAPP law did not apply to Mary Trump’s motion to dismiss, the Court evaluated Donald Trump’s pleadings under the traditional standards of CPLR § 3211(a)(1) and 3211(a)(7). As to the breach of contract claim, Justice Reed rejected the defendant’s argument that, due to the absence of an end date, the agreement was terminable at will as a matter of law. Instead, binding First Department precedent from Ashland Mgmt. Inc. v. Altair Invs. NA, LLC, 59 A.D.3d 97 (1st Dep’t 2008) “recognized that, in the absence of a definitive expiration term, courts have the authority to find an unlimited duration to be overbroad, and that the proper remedy in such circumstances is to ‘modify the agreements’ duration to one more reasonable under the circumstances.’”[21] Determining the scope of any modifications would require discovery to resolve questions over the parties’ intent for the provision. Similarly, the Court rejected Mary Trump’s argument that the confidentiality provision was impermissibly vague; instead, the ambiguity only rose to the level for a court to have “insufficient data to dismiss a complaint for failure to state a claim.”[22]
The Court also rejected Mary Trump’s argument that Donald Trump was barred from enforcing the confidentiality provision due to his own breaches. Justice Reed observed that, while performance “is a necessary element of a breach of contract claim,” the breach from the lack of performance has to be material.[23] Materiality is generally a question of fact, and, here, the Court noted that there were disputes as to whether those alleged breaches were material—preventing resolution at this stage. The Court then rejected the defendant’s final argument—that the confidentiality agreement violated public policy. The Court referred to case law holding that “[p]arties are free to limit their First Amendment rights by contract.”[24] With that, the breach of contract claim survived Mary Trump’s motion to dismiss.
However, Donald Trump’s breach of the implied covenant of good faith and fair dealing and unjust enrichment claims did not fare as well. The Court dismissed the implied covenant claim as duplicative of the surviving breach of contract claim, as it was based on the same “disclosure of purportedly ‘confidential information’ to the Times and in her book.”[25] The unjust enrichment claim was dispatched with similar speed, because “simply put, an unjust enrichment claim cannot lie where a ‘relevant contract exists.’”[26]
Conclusion
The recent Commercial Division decision on Mary Trump’s motion to dismiss in Trump v. Trump provides an example of how a New York court can approach the interactions between the state’s anti-SLAPP statute and breach of contract claims. We will continue monitoring this space to see if other New York courts adopt this approach.
[1] See Trump v. Trump, Nos. 2020-05027, 51585/2020, 2020 WL 3602286 (2d Dep't July 1, 2020) (Second Department denies Robert Trump’s effort to obtain a TRO to block the publication of Mary Trump’s book).
[2] Trump v. Trump, 192 N.Y.S.3d 891, 896 (Sup. Ct. N.Y. Cnty. June 9, 2023).
[3] Id. at 895.
[4] Trump, Index No. 453299/2021, Doc. No. 45 at 1-2.
[5] Trump v. Trump, Nos. 2020-05027, 51585/2020, 2020 WL 3602286 (2d Dep't July 1, 2020)
[6] Trump, Index No. 453299/2021, Doc. No. 1 at 17-25 (Donald Trump also brought claims against Doe individuals and ABC corporate defendants for their unspecified role in causing or contributing to the events).
[7] CPLR § 3211(g).
[8] Id.
[9] Trump v. Trump, Index No. 453299/2021, 189 N.Y.S.3d 430, 436 (Sup. Ct. N.Y. Cnty. May 3, 2023) (decision in same case granting the Times’ motion to dismiss).
[10] Id. at 436 (quoting N.Y. Civ. Rights Law § 76-a(1)(a)(1)).
[11] Id. at 436.
[12] Id., 189 N.Y.S.3d at 445.
[13] Trump v. Trump, Index No. 453299/2021, 192 N.Y.S.3d 891, 898 (Sup. Ct. N.Y. Cnty. June 9, 2023).
[14] Id. at 898.
[15] Id. at 898-99.
[16] Id. at 898 (citing to Aristocrat Plastic Surgery, P.C. v. Silva, 206 A.D.3d 26 (1st Dep’t May 19, 2022)).
[17] Id. at 899 (quoting City of Alhambra v. D'Ausilio, 193 Cal. App. 4th 1301, 137-08 (Ct. App. 2011)).
[18] Id. at 901.
[19] Id. at 900.
[20] Id. at 901.
[21] Id. at 902-03 (quoting Ashland Mgmt. Inc. v. Altair Invs. NA, LLC, 59 A.D.3d 97, 105 (1st Dep’t Dec. 23, 2008)).
[22] Id. at 904 (quoting Eternity Glob. Master Fund. v. Morgan Guar., 375 F3d 168, 178 (2d Cir. 2004)).
[23] Id. at 904-05.
[24] Id. at 906 (quoting Trump v. Trump, Nos. 2020-05027, 51585/2020, 2020 WL 3602286 (2d Dep't July 1, 2020)
[25] Id. at 907 (citing ARS Kabirwala, LP v. El Paso Kabirwala Cayman Co., No. 1:16-cv-6430-GHW, 2017 WL 3396422 at *4 (S.D.N.Y. 2017)).
[26] Id. at 907 (quoting In re Gen. Motors LLC Ignition Switch Litig., 257 F Supp 3d 372, 433 (S.D.N.Y. 2017)).
