Dominque Strauss-Kahn and Hotel Maid Settle Civil Suit

Dominique Strauss-Kahn and Sofitel Hotel maid Nafissatou Diallo have settled their civil suits against each other for an undisclosed amount. She sued him for the hotel room encounter, he counter-sued her for defamation.

Also settled: Diallo's defamation suit against the New York Post which had reported she was a prostitute.[More...]

Her lawsuit against the Post concerned a series of articles that called her a prostitute and said she sold sex at a hotel where the Manhattan DA's office had housed her during the criminal case. The News Corp. newspaper has said it stands by its reporting; a spokeswoman declined to comment Thursday.

Strauss-Kahn and his wife have separated. Diallo's lawyer says she's ready to move on. Of course she, is, got the money. She'll never have to work again, if reports are correct it's a multi-million dollar settlement. Details of the dismissal of the criminal case against Strauss-Kahn are here.

(Added: She hasn't worked since the encounter. She's been receiving workman's compensation since then, according to Sofitel, for the torn ligament in her shoulder she claimed happened during the encounter. DSK denies causing the torn ligament.

Cases dismissed earlier against Strauss-Kahn: a criminal case on attempted rape claims in Paris(October 2011) and an investigation on "gang rape" claims in Washington after the woman recanted (October 2012). On Dec. 19 a french court will decide whether to drop a judicial inquiry into an investigation in Lille, France linking him to a vice ring (hiring women for s*x at parties.)

The case, known as the "Carlton affair" in France, centres around allegations that business leaders and police officials in Lille operated a vice ring supplying girls for sex parties, some of which are said to have taken place at the Carlton Hotel in the northern city.

Among Strauss-Kahn's fellow accused is Jean-Christophe Lagarde, a police commissioner, and Rene Kojfer, the former public relations officer at the Carlton. Lawyers for Lagarde and Kojfer have claimed their clients have effectively been caught up in a political witch-hunt against Strauss-Kahn, arguing that there would have been no probe but for his involvement.

More on that here. As for DSK, he's quietly trying to resurrect his career.

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    I don't understand this at all. (5.00 / 1) (#1)
    by Mitch Guthman on Mon Dec 10, 2012 at 04:49:12 PM EST
    The press reports are in the $6 million range and apparently DSK had to borrow all of it, so this settlement is simply incomprehensible to me.  A 2L could probably have kept this case going for years given all the complex interactions between the civil plaintiff (and her lawyers) and the DA's office and probably could have done it for well under $500K.  Worst case, COD for motions and trial is still under a million and my guess is that since Diallo's lawyers don't have the deepest pockets, the price of settling would normally have gone done over time (assuming a normal defense---which apparently wasn't attempted at all.  As near as I can tell they filed the one stupid motion and then surrendered).

    Of course, I've never understood DSK's approach to this civil suit at all.  I never understood why he didn't remove it the day it was filed.  I never understood why he didn't file the obvious motions and vigorously defend against a plaintiff with limited resources.  

    In any case, I don't see this as worth much more than cost of defense and I just don't understand going so deeply into debt.  How is DSK going to pay millions of dollars?  He apparently has very limited income, he sure isn't making a lot on speaking engagements and his pariah status looks like it will continue for years to come.  I don't see him making the vig, let alone the nut.

    Just can't see going so massively into debt just to fold.

    A couple points (5.00 / 2) (#4)
    by scribe on Tue Dec 11, 2012 at 05:06:53 AM EST
    re the loan from Anne Sinclair to DSK:  one has to take into account the tax implications both in the US and France/EU when dealing with a transfer of this much money.  It could be construed as a gift, or as income to DSK, or any number of other things, and that's just hypothecating on US law.  I have no idea what French tax law is like but I'm sure it's at least as convoluted as ours.  Moreover, DSK is dealing with the idea of having to pay income taxes - as head of the IMF he was exempt from all income taxes everywhere.  Regardless, it may have tax benefits to do this as a loan rather than an outright transfer.

    Further on the Sinclair loan:  one has to consider that there almost certainly was a prenuptial agreement between them and this loan might have to have been done to satisfy the terms of the prenup.  While DSK was a powerful international figure, he was considerably less wealthy that Sinclair.  You can be sure she (or perhaps the trusts/inheritances she might be a beneficiary of) would have required him to take out a loan rather than just let her give him millions of dollars.  Kind of what could be called an "anti-gigolo clause".

    On the lame defense to the civil suit:  This was, I am almost certain, DSK's first trip through the American civil litigation mill.  Europeans do not have "discovery" in civil litigation anywhere near the way we do here.  In fact, many of the normal procedures of discovery here are either forbidden or even crimes in Europe.  So while knowledge of the intrusiveness of civil discovery is lurking in the background of most sophisticated Americans' minds, it's not so for Euros.  I can tell you from repeated experience that every Euro litigant in the US courts - individual or company - howls great screams of pain and agony when confronted with both the fact and scope of discovery and the cost.  "I have to give him copies of my private emails?  Barbaric!"  "What do you mean I have to testify under oath before trial?  This is raping my privacy!"  It makes for entertaining discovery, more because Euros will put things on paper or in email that Americans never would than because of the howling.  Although that's entertaining, too.

    And then there's the class difference.  Assuming only a fraction of the allegations are true, DSK probebly viewed the maid as someone playing well above her station and deserving of neither respect nor anything else.  After all, he was a "great man" and she was just an insect, a servant.  How dare she.  He probably still does not (and likely never will) get that, for all the manifold flaws we regularly point out here and elsewhere, in the US "equal justice under law" is still more the rule than the exception.  And some poor schlub still gets roughly the same shake as a member of the gentry, especially when it's a highly publicized match of Schlub v. Gentry.

    As to stringing this out.  From a civil defense lawyer's perspective, on getting this file it would get tossed into the pile marked "settle" and not the one marked "try".  DSK had a publicized history of sexually-oriented misadventures that likely would have come in one way or the other.  He would have gotten hit for even more at trial.  And I'll bet (given the existence of the loan) he didn't have insurance or enough insurance to make trying it a good bet.

    There's a lot going on here that we cannot see, but those are my thoughts and deductions, based on trying cases and hanging around courthouses for too many years.

    Nothing you've said explains why Anne Sinclair (5.00 / 1) (#7)
    by Mitch Guthman on Tue Dec 11, 2012 at 01:56:57 PM EST
    want to hand over $3 million to Diallo either as a literal gift or indirectly as a loan to her improvised former spouse when clearly she couldn't ever be compelled to do so.  Regardless of how you want to describe it, I can't think of any reason why she'd be willing to do such a thing and I've seen nothing in the press that even hints at an explanation.  

    As for DSK's possible reasons for settling, discomfort at having to answer questions about his private affairs seems an unlikely reason for settling.  DSK has been answering questions under oath about the most intimate details of his life and he has been doing so for a number of years (including dealing with sexual harassment charges while at the His sexual habits are luridly and regularly displayed in newspapers and television here and in France.  Whatever you think of him as a person, he has almost no privacy left to protect and certainly no secrets remaining worth $6 million to keep.

    As I said, DSK isn't a rich man and you can't get blood from a stone.  He apparently needed to borrow his $3 million contribution to the settlement (or possibly the entire $6 million, since some news reports say that Anne Sinclair lent, rather than gifted to DSK, her $3 million share).    What possible difference would the risk of a judgement for even hundreds of millions make to a man without even $1 million?  (And whose future earnings are almost certainly sheltered from an American judgment).

    Same issue about the lack of a vigorous defense.  You say settle, but I again ask why not grind.  Diallo and her lawyers present the perfect targets for grinding.  They're short on cash and manpower.  The defense can easily and inexpensively raise a large number of good constitutional and other issues that will be very difficult and costly for Diallo to defended.  Yet she must go all out on every singe one of these motions because a loss of any one would probably be fatal.

    Plus, even if they win big, it's hard to see how they collect if DSK doesn't have much money in the first place and what money he does have is probably in France where it will be very, very difficult to touch (even if Diallo and her lawyers could raise enough cash on the strength of the judgment to finance such long and costly campaign).

    Again, if as you surmise, he doesn't have insurance footing his bills then he's got no reason to settle.  He could have removed to federal court and ground Diallo for years upon years for a small fraction of his settlement and then,  assuming he lived long enough so that all his avenues for relatively inexpensive delays would be exhausted,  a tired and broke Diallo would probably  have settle for chump change knowing that even if she eventually tried the case to a verdict it  would take many more years before she would see so much as a single sou and quite possibly she'd never be able to collect her judgment.

    Although I appreciate some of the points you make, I still don't see any rationale for settling for more than cost of defense, plus a bit of a sweetener.  Everything I see reinforces the logic of grinding.  


    his lawyers have (none / 0) (#2)
    by Jeralyn on Mon Dec 10, 2012 at 06:02:23 PM EST
    denied the $6 million figure. Perhaps that included the money from the Post. His wife is reportedly contributing a few million despite their separation.

    Still don't see what DSK gets out of this.. (none / 0) (#3)
    by Mitch Guthman on Mon Dec 10, 2012 at 09:10:08 PM EST
    I've read that Anne Sinclair is coming up with half of the money, too, except that in some versions she's only lending DSK the money. Either way, I just don't understand why somebody with zero possible exposure would make what amounts to a multimillion dollar gift to a total stranger.

    Anyway, Anne Sinclair chipping some dough doesn't do much to clarify things for me. From what I gather, DSK isn't a rich man.  Presently and for the foreseeable future, he seems to have no marketable skills and severely limited earnings capacity.  What assets he does have are probably in France where they are almost certainly untouchable.  

    He is also an old man with, as I say, reportedly few assets and very little capacity for ever recouping the millions supposedly paid in this settlement. If he doesn't have the $3 million or $6 million, or whatever, to lose in the first place, what's the point of going massively into debt if he doesn't have huge assets to protect?  If, however, he turns out he's rich, why not remove to federal court and turn the lawyers lose?  I have to figure that litigating the constitutional issues alone would easily burn up a lot of time and money, neither of which Diallo and her lawyers appear to have.

    I'm just baffled (although I've never really practiced civil law or torts or however this kind of law is called, so I'm certainly open to being educated).  I can see settling for maybe cost of defense and maybe a bit of a sweetener but not millions.


    Why (none / 0) (#5)
    by NYShooter on Tue Dec 11, 2012 at 01:40:39 PM EST
    didn't he file bankruptcy?

    because (none / 0) (#6)
    by scribe on Tue Dec 11, 2012 at 01:48:11 PM EST
    Probably he had too much to be able to recraft his balance sheets to be technically insolvent.  He also may not have had the ability to invoke the jurisdiction of the US bankruptcy courts - he's not a US national nor does he reside here.  And bankruptcy is treated a lot more harshly in Europe than it is here.  Plus, he wants to resurrect his political career.  

    I think scribe is right but then why not just (none / 0) (#8)
    by Mitch Guthman on Tue Dec 11, 2012 at 02:00:32 PM EST
    ignore the case altogether?  Even if she got a judgement, it's very unlikely that she could collect and most of DSK's assets and future earnings in France can easily be shielded from Diallo collection efforts.  

    The logic of going millions into debt to make the case go away continues to elude me.


    If you ever wondered (5.00 / 1) (#9)
    by NYShooter on Tue Dec 11, 2012 at 05:20:21 PM EST
    why so many people feel the system doesn't work for most average people, or why there's such a negative bias against lawyers try suing someone who has done damage to you....and win! Winning your case is only the first step, the collecting, you`re on your own. Whether they file a fictitious bankruptcy or flip the bird to fraudulent conveyance you have to sue them again proving that's the case. By the time you're done you will have spent triple whatever the damages were awarded to you.

    Consumer, or victim, protection laws are a joke.