July 17, 2017 / 8:58 PM / in 6 months

Could it be Kasowitz is actually a voice of restraint for Trump?

(Reuters) - Over the weekend, Axios and Bloomberg ran stories about a shakeup in President Donald Trump’s legal team, reporting that longtime Trump lawyer Marc Kasowitz of Kasowitz Benson Torres is expected to play a diminished role as the president responds to investigations of his campaign’s ties to Russia.

Kasowitz spokesman Mark Corallo told me in an email on Monday that the Axios and Bloomberg stories are incorrect and that Kasowitz remains the head of Trump’s outside legal team. (Kasowitz’s role as outside counsel is distinct from that of newly-hired special counsel Ty Cobb. Cobb will work from within the administration to coordinate its response to Russia inquiries.)

Kasowitz has savored and even promoted his reputation as Donald Trump’s legal pit bull, a lawyer as pugnacious as his most famous client. When Trump needed a lawyer during the campaign to threaten the New York Times with litigation, after the newspaper published accounts of women who claimed Trump had sexually harassed them, Kasowitz was his man. When the president wanted to counter testimony by fired FBI director James Comey, he had Kasowitz announce plans to file a Justice Department complaint against Comey.

It may be hard to think of Kasowitz, who relishes his tough-guy reputation, as a force of moderation. But if you look at the record of the client relationship between Trump and Kasowitz, there’s a notable streak of restraint. Trump and Kasowitz, for instance, never followed through with libel suits against the Times – or against any other news organization in the last 30 years. (Kasowitz did represent Trump in his unsuccessful libel suit against Trump biographer Timothy O’Brien and O’Brien’s book publisher.)

Nor did Kasowitz file the threatened DOJ complaint against Comey. According to Bloomberg, the Trump team decided the wiser course was to stop attacking the integrity of the Russia investigation being conducted by Special Counsel Robert Mueller. In fact, the New York Times has been reporting that the president is chafing under Kasowitz’s advice to keep quiet on Twitter and elsewhere about the Russia case – advice almost every defense lawyer would endorse.

The best example of Kasowitz’s relatively measured approach to litigation for Trump may be an enormous case Kasowitz handled early in his relationship with the president. In a prolonged battle against Hong Kong real estate partners whom Trump accused of underpricing West Side real estate, Trump replaced Kasowitz after he lost a key motion. Once Kasowitz was out, Trump pursued tactics so aggressive that they nearly cost him and Kasowitz’s replacement a sanction finding.

The litigation stemmed from a 1994 deal in which Trump sold a 70 percent majority interest in residential-zoned real estate in midtown Manhattan, along the Hudson River waterfront, to a consortium of Hong Kong billionaires. They maintained the property for 11 years, then reached a deal to sell it in 2005 to a joint venture of the Carlyle Group and Extell Development Company. The sale price was $1.76 billion, at the time the highest publicly-disclosed amount ever paid for residential property in New York.

Trump insisted it wasn’t enough. Represented by Kasowitz, he sued in both federal and state court, offering evidence that New York developers, including Trump friend Richard LeFrak, might have paid $3 billion for the property. The case ended up being litigated in state court before New York State Supreme Court Justice Richard Lowe. Trump asserted both direct and derivative claims, alleging among other things that certain of the Hong Kong majority partners had received kickbacks in exchange for agreeing to undervalue the property. Judge Lowe put enough early credence in Trump’s side of the story to issue an order attaching $1 billion in proceeds from any sale of the property. But the judge eventually came to believe the Hong Kong partners had sold at a fair price. In 2006, he dismissed all of Trump’s claims except for a request to examine his majority partners’ books and records.

Up to that point, with Kasowitz representing Trump, the litigation had been fierce but not outside the bounds of convention. After Trump lost the 2006 dismissal motion, however, he replaced Kasowitz with his appellate counsel, Jay Goldberg. With Kasowitz out of the case, the litigation skipped well beyond those bounds.

Trump’s filings threatened to alert prosecutors about supposedly criminal behavior by the Hong Kong investors and hinted at dire consequences for the investors’ lawyers. In 2008, as Trump and new counsel Goldberg attempted to revive the case with new allegations on the alleged kickbacks, they claimed Judge Lowe was biased because back in 2006, on a day Trump came to court for a hearing, Lowe told Kasowitz during a meeting in his chambers that he wasn’t intimidated by Trump’s presence. Trump also claimed that Lowe later boasted to an unnamed New York congressman about his handling of Trump and Trump’s case.

In response to the recusal motion, Judge Lowe said he had become the latest target of Trump’s “letter writing campaign ... accusing one person or another of spurious conduct.” And though he said he did not need to step aside based on Trump’s evidence, he did anyway.

His recusal left New York State Supreme Court Justice Eileen Bransten to preside over a second Trump lawsuit that raised essentially the same kickback allegations as the first case. Once again, Trump and Goldberg claimed bias by the judge, this time because Bransten referred to their attack on fellow judge Lowe as “reprehensible.”

“Certainly, the court’s characterization of (Trump’s) legitimate motion in another case as ‘reprehensible’ indicates the court’s improper ‘personal predilection’ against (Trump) in this case,” Goldberg wrote in Trump's motion to bounce the new judge.

The recusal motion and other tactics led defendants in the second case – Carlyle and Extell, as purchasers of the West Side properties – to move for sanctions against Trump. In 2010, Justice Bransten dismissed Trump’s second suit. She also denied the motion for sanctions – but emphasized that Trump had only just escaped.

“Plaintiff has here narrowly avoided the imposition of costs of sanctions,” she warned. “Continued prosecution of claims without basis and attacks upon persons will place (Trump) beyond this point.”

In a way, Trump had the last laugh in the case. His unsuccessful attempt to disrupt the sale of the property meant he ended up with a stake in two valuable skyscrapers, one in New York and the other in San Francisco. During the campaign, as the Times reported in a great 2016 story about the West Side real estate fracas, Trump bragged that he had “won” those skyscrapers in a “war” with China.

But Trump unquestionably lost the litigation war, which was, for all intents, over in 2006 when Judge Lowe tossed the first case. After that - through appeals, motions to reopen the first case and the prosecution of the second case – Trump was just throwing money into a barbecue pit.

I don’t know if Trump replaced Kasowitz because he advised Trump against the prolonged and hyper-aggressive pursuit of the Hong Kong investors, or if Kasowitz stepped aside. I emailed Kasowitz to ask but didn’t hear back. I also left a phone message for Jay Goldberg, the lawyer who replaced Kasowitz after the litigation was first dismissed. He didn’t return my call.

I do think it’s telling, though, that Kasowitz wasn’t involved when the litigation ran out of bounds. It’s easy to forget in the glare of his relationship with the president that Marc Kasowitz built from scratch a law firm with revenue of more than $200 million. That wasn’t an accident. Kasowitz is a showy lawyer with an outsized personality. He’s also a litigation pro. If Kasowitz is preaching restraint to the president, the president should probably listen.

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