04/07/2019
If you're trying to understand the legal issues in the Michael Avenatti/Nike situation, this may help:
In the past couple of years, federal prosecutors charged an executive at sporting goods maker Addidas and two college basketball officials with wire fraud for making payments to high school basketball players to try to steer them to attend certain colleges and use certain shoe companies. Those men went to trial and were convicted in LA. Last month they got prison sentences of between 6 and 9 months. This forms the background for Avenatti's conduct.
Apparently, Avenatti believes that Nike was doing the same thing and he was allegedly engaged by a client to bring a case against Nike about it. So, he approached Nike with a demand on behalf of the client based on the client's claim. There's nothing illegal about that at all; lawyers do that all the time - it's not extortion to offer to settle a matter out of court. And, a lawyer certainly can hold a press conference about his or her client's claims against a company. So far, nothing to see here.
However, the allegations by federal prosecutors are that Avenatti also told Nike that they would need to hire him to conduct an internal investigation of their practices, in addition to settling with his client. And, he allegedly threatened to publicly disclose his client's claims against them if they did not agree to pay both him and the client.
Now, as I said, a lawyer can demand money for a client; and a lawyer can hold a press conference about the client's claim. But what a lawyer cannot ethically or legally do is demand money for the lawyer separate from the client's claim or couple demands for money with a threat of exposing the alleged misconduct. That puts you squarely into the realm of extortion. Had Avenatti stuck to pursuing his client's claim, he'd have been legally fine. By trying to profit personally off his client's case and threatening exposure if his financial demands weren't met, Avenatti turned something he could - and should - do on behalf of a client, into something that violates the law.