Law&Crime Sidebar - How Will Amber Heard Pay Johnny Depp?

Episode Date: June 6, 2022

In the aftermath of the Depp v. Heard verdict, the question is how can Amber Heard pay the $10.35 million judgment? Jesse Weber chats with Bruce Markell, a professor of bankruptcy law and practice at Northwestern. Markell is also a former bankruptcy judge. The two break it all down. SUBSCRIBE TO OUR OTHER PODCASTS:Court JunkieThey Walk Among AmericaCoptales and CocktailsSpeaking FreelyLAW&CRIME NETWORK SOCIAL MEDIA:Instagram: https://www.instagram.com/lawandcrime/Twitter: https://twitter.com/LawCrimeNetworkFacebook: https://www.facebook.com/lawandcrimeTwitch: https://www.twitch.tv/lawandcrimenetworkTikTok: https://www.tiktok.com/@lawandcrimeSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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that will keep you on the edge of your seat. Don't let your fears take hold of you as you dive into this addictive series. Love thrillers with a paranormal twist? The entire Oracle trilogy is available on Audible. Listen now on Audible. We the jury award compensatory damages in the amount of $10 million. As against Amber Heard, we the jury award punitive damages in the amount of $5 million. Welcome everybody to Sidebar, presented by Law and Crime. This is where we recap the biggest moments in the day's biggest cases. I'm Jesse Weber. We are continuing the discussion of the Johnny Depp and Amber Hurd defamation trial aftermath. Because in the aftermath of this trial, one of the biggest questions that we have been getting on the network is how is Amber

Hurd going to pay off this damages award? And if everybody recalls, Johnny Depp won on each of his three claims of defamation against Amber Hurd, the three statements in the the Washington Post op-ed piece. The jury awarded him $10 million in compensatory damages and $5 million in punitive damages, although that amount was actually reduced by law to $350,000. So in total, Heard owes debt $10.35 million. That is pretty steep. And her attorney, Elaine Brenthoff, even mentioned when she was doing the mediator that Amberhood's not going to be able to pay that judgment. So now she did win, I should tell you, one of her count. counterclaims against Depp for the defamatory statement of Depp's attorney Adam Waldman,

who was acting as Depp's agent. He alleged that Heard and her friends had staged a scene to frame debt. So all in all, if you take the $10.35 million, the $2 million that she won in her counterclaim, really Amber Heard is going to pay out or have to pay out $8,000,350,000 to debt. Well, how is she going to pay it? That's not for me to answer. I have an amazing guest who's joining me right now. Someone who helped answer this question of how Hurd can pay off depth.

Bruce Markell, a professor of bankruptcy law and practice at the Northwestern Pritzer School of Law in Illinois. Markelle is also a former bankruptcy judge. Professor Markell, it's great to have you here on the program. Thanks for inviting me. You know, I should tell you that the reason, it wasn't me who found you, it was our very own Aaron Keller who wrote a stellar article on this on law and crime. And we saw your comments. We saw your analysis. It was spot on.

So we definitely wanted to have you here on the podcast. We really appreciate the time. Thank you. All right. So before we get into whether or not she can do this, just generally speaking, without getting too much into the weeds, generally speaking, bankruptcy law can extinguish someone's liabilities, right? Pretty much, yes.

I mean, bankruptcy, you know, unfortunately, it's a complex area. what bankruptcy can do is it can stop people from enforcing their claims. What tends to happen is, and actually the statute set up, to leave the claim in limbo, but just to preclude anybody from trying to enforce it. So it's essentially you can go around as though you didn't know it because they can't try and collect it. Now, again, the reason we're bringing this up is because one of the big talking points as well, could Amber Heard declare bankruptcy and not be forced to pay off the money to Johnny Depp? Now, you have said, and you can correct me if I'm wrong, that you don't see.

see that as a likely possibility, right? That's correct. Based on what I know, based on what anybody knows, I think that's right, yes. Why is that? There's a couple of reasons. I mean, the first reason is if she files bankruptcy, bankruptcy doesn't erase any and all debts. There are certain debts that are accepted from what's called the bankruptcy discharge,

the prohibition against collection. Some debts are, you would think, for example, child support is not dischargeable, bankruptcy, certain taxes are not dischargeable in bankruptcy. But in this case, debts that are incurred, you know, through basically intentional torts. If, you know, you don't like what I'm saying and I was in the studio and you punched me out and I sued you, you know, that would be an intentional tort. And that type of claim would not be dischargeable. Here, the defamation claim, because there were celebrities involved, involved the finding of malice,

that the injuries were intentionally caused. If that's the case, then bankruptcy would look at it and say, we passed. This is a debt that is not going to be affected by a typical Chapter 7 or a liquidation bankruptcy. She might still be able to manipulate it somewhat in a Chapter 11, but a Chapter 7 isn't going to help her. I mean, it might help her credit card debt,

might help other debts that she might have. But intentional torts like definition where malice is found, those are accepted from bankruptcy. And that makes sense because if you intend to harm someone, you shouldn't be able to just run over to bankruptcy and not have to pay out what's due. The problem, there's the question I have, right? If she immediately appeals this, isn't this kind of a fluid issue, the idea of intent? So yes, the jury came back and found that she acted with actual malice and knew these statements were false that she made or acted with reckless disregard for the truth. This was intentional. But if it's appealed, isn't that now, well, this isn't an unsettled issue? And the bankruptcy court could the bankruptcy court

and say, we want to wait for this to be extinguished? Let's see how the appeals courts handle it. And then we'll decide if we're going to let you off the hook. Am I totally off here? Not totally, but pretty much. What happens is, I mean, a common misconception that a trial and appeal are part of a continuum, that kind of everything's open until it's all settled. And that's really not the case. The way the United States justice system is set up based upon England was that once you get a trial court verdict, certain presumptions attached to that that it's no longer fair game to, for example, argue facts on appeal. when a judgment is entered.

An appellate court will only set aside those facts if in the federal system the standard is clearly erroneous, if it's irrational. And here, as everyone saw who was watching, there was lots of testimony back and forth. You can't say, well, the jury should have believed this, but not believe that. Can't do it.

It's already been done. So the, the, the, the civil procedure aspect of it is that once a judgment is entered, its findings are preclusive in other courts as to what's been found. So, for example, just to take, you know, malice, you could then go into bankruptcy court and say, yeah, I know I have to prove malice as part of my non-dischargeability complaint, but here's a judgment from Virginia that says she acted with malice. And a bankruptcy court, you know, there are complex rules, but for the most part, will say, gee, if it's been found in another court, I'm not retrying that. I'm going to take that as

found here. Same thing on appeal. The second aspect of that is Depp, you know, when the judgment's entered, he's a holder of a judgment. An appeal doesn't stop you from collecting the judgment. Once the appeal is made, it's, in essence, ho-hum, Depp can enforce that judgment as if the appeal had never been occurred. Now, Heard could stop that. There are ways to post a bond and all that sort of stuff. But for the most part, when there is a jury verdict, lots of presumptions spring up and attached to it and such that a bankruptcy court could, you know, there's lots of flexibility in the court system and say, well, let's, you know, I want to see what happens on appeal. 99 times out of 100, though, a court won't do that. A court will say, listen,

I've got a judgment from a court. It's been entered. It may be on appeal, but there's actually a split about how in most courts in the federal system, the preclusive effects of a judgment obtain, even though there's an appeal pending. In California, there's a different rule. But for the most part, the appeal is for ultimate justice, and things would get, you know, backed out one way or the other. But for now, the judgment is what the judgment is. And there's no difference in terms of compensatory damages that she owes or punitive damages. You know, the punitive are much worse because it's punishing her. And, you know, right now $350,000, I would probably say, okay, she definitely has to pay that. But the compensatory damages, any avenue through bankruptcy law

or any other avenue, you think, that that could be reduced? Well, I mean, take bankruptcy first. I mean, if the judgment is for something involving an intentional tort, then all damage that flow from that are non-dischargeable. For example, lots of the cases under the particular section that we're dealing with, which is 523A6 of the Bankruptcy Code, involve barfights. Strangely enough, you know, people get in bar fights all the time, and they get injured and then they file bankruptcy, and then the court has to say, well, all the damages arising from the bar fight

were intentional damages and or were intentional torts, and thus damages, it doesn't matter, whether compensatory, punitive, add-on cost for attorney's fees, what have you. The whole rigmarole is going to be non-dischargeable. Now, you know, I haven't been following the trial day by day on appeal. She may argue that some of the damages weren't justified by law. I don't know that, but that's going to be a Virginia common law issue. It's not going to be something.

The bankruptcy court just looks at the judgment and says a judgment says what someone, owes someone else. And so it takes it at its face. Okay. So what we've narrowed down is that in terms of bankruptcy law, very limited options and for her to not being able to pay the full judgment, she's going to have to probably pay it. But in terms of whether or not she can structure it, that she could pay over time because she doesn't have this money right here. Her career after this trial, I don't know what that's going to look like. I mean, I don't know if she's going to be making big movies again, generating this kind of income, garnishing wages, things like that. So in the general sense, can the bankruptcy code help her to pay off debt over a period of time?

Basic answer to that is yes. Okay. But what would happen is, you know, bankruptcy comes in different flavors. We call it different chapters in the bankruptcy world. And most of what people have been thinking about have been the typical Chapter 7 bankruptcy. And that accounts for 70% of all bankruptcies fought for consumers. She might be able, given the numbers filed and given kind of her position, file a Chapter 11. Now, Chapter 11 allows you to adjust debts. Now, she's still going to probably have to pay the full amount. And indeed, under general law, a judgment is immediately payable. That is to say, debt without bankruptcy could go in and try and enforce the judgment in full whatever assets she may have that's not exempt. But in bankruptcy in a chapter

11, she would say, listen, can't pay at all, and either could settle with debt because Depp has said, I'm not in it for the money. I'm not in it for punishment. Maybe he settles for, you know, something who knows. I mean, and there's precedent for that. As I mentioned in the earlier article, in the early 90s, Texaco got hit with a $10-plus billion judgment for interference with a contractual deal. And Penzoil, who held the judgment, could have gone and basically taken all of Texaco's property. So Texaco filed bankruptcy. It was wildly solvent. It had more than $10 billion in net worth. But it just couldn't pay, you know, not many of us can pull together $10 billion on a moment's notice. And so what Texaco did is it said, listen, you know,

let's work this out and they ultimately I believe came to they they reduced the judgment to three billion still not a bad payday but they paid it out over time and what would happen in bankruptcy is that Hurd would say that yeah listen I am unable to pay this now I maybe I can pay it over time and what there's a lot of creativity there and I'm not you know I'm not the most creative person but one of the things that she could do is to say listen I'll give you X percent of all future earnings for 10 years, and at the end of 10 years, that's it. And she might be able to confirm that kind of plan. I mean, it's still difficult to kind of understand that individual Chapter 11s are not common.

I mean, there's really, these days, not more than 5,000 Chapter 11s filed in the entire U.S. in any year. And so, you know, individual Chapter 11s tend to be California homeowners who've got, you know, large housing debt. And so there's not a lot of precedent in terms of what you could do. So, you know, creative lawyers could probably come up with something. But the point being is, given the nature of the judgment, you're going to start with, you know, it's, you know, 10.35 million. And how you're going to pay that over time. is going to be something that, I mean, she's going to have to disclose what her potential future earnings are and the like. And also it just may be that just doesn't work for her.

And, you know, there are lots of cases in which people haven't filed bankruptcy. I mean, this is a disaster scenario, but she decides, listen, my career is not going anywhere after this. I don't have much. And, I mean, I hate to put it up as a role model. But, you know, O.J. Simpson has been fighting a $60 million judgment from the Goldman family for the wrongful death of his wife for 30 years, 20, 30 years, through a creative use of individual state exemption laws and the fact that his NFL pension of 15,000 a month, I think, is fully exempt. So she could, and she may be doing this now. She may be moving assets around so that she can have the benefit of them without filing bankruptcy. I mean, I think Nelson Rockefeller once said the goal is to own nothing and control everything. And so that's what she may be doing.

Who knows? I don't know our finances. I know, Professor, you don't know our finances, but do they look at it whether or not she can even declare bankruptcy at this point? You know, I read an article the other day. Can't say if it's true or not, that she was paying over $22,000 a month for this house in Virginia to stay at during the course of the trial. know if that's true. I don't know if someone was paying that on her behalf, but looking at what she has right now becomes a question even if she can declare bankruptcy, right? I mean, there has to be an investigation to what she has, right? Well, there will be an investigation, whether

it has to be, depends on what she asked the court for. There are lots of cases, for example, where individuals, you know, if they come into bankruptcy, they have, and they're going to do a chapter 11, they're going to have to present basically a budget, which any creditor can say, you know, that's too much to pay for X. You're not going to pay $22,000 for a house. You can live very nicely for one-tenth that. And so part of the problem with bankruptcy for someone like Amber Hurd is it's a fishbowl. All of your financial dealings are going to be public. All of your assets and your liabilities are going to be public. I mean, her deal with the ACLU is going to come out and be public. She probably's not going to be able to continue to pay that. There's going to

all sorts of things that she may not want financial things she may not want to have disclosed. Nobody would want that. I mean, nobody wants to live in a financial fishbowl. But that's the cost of getting the protection of bankruptcy, is giving those to whom you owe money the assurances that you're doing what you can. I mean, the motto in bankruptcy is it's to help the honest but unfortunate debtor. Yeah. And here we'll see what happens. Yeah, and, you know, we're focusing so much time on Amber Hurd paying out to Johnny Depp here.

And the interesting thing about it as well is I just want your opinion on that. I know you didn't follow the case that much, but one of the points that's been coming up is, is it not a possibility that Johnny Depp might actually waive the monetary judgment and say, you know what, it was never about the money. It was more about my reputation, getting my career back, getting my name back. Amber Hurd, I won't force this monetary judgment on you. You just don't appeal it. You don't fight this anymore.

I mean, have you ever seen anything like that happened before? Do you think it could be a possibility? Sure. I mean, I mean, Depp would ask for more. I mean, he would say don't appeal. But he would also say, I want an agreement from you not to keep repeating the stuff that got us in this in the first place. And so, you know, some form of an injunction or some sort of provision. vision that says, you know, a non-disparagement clause, right? You know, let's put this behind

us, but let's put us behind it. Don't keep bringing it up. Don't go, you know, don't write another editorial saying that you were harmed in the Virginia case, right? Because if Depp takes the position that he was harmed by this as much as her, and he just wants it over, he could very easily, I mean, I've seen things, you know, the typical trope is he's in the driver's seat. He really is. He can just say, listen, you know, we're going to net out eight, $8 million, so because her $2 million is going to be satisfied by him, you know, reducing his judgment by $2 million. And he can impose whatever terms he wants for not enforcing that judgment. Whether she agrees to those is another matter. And so that's that's really something

that, you know, will turn on the hearts and minds of the parties involved. What is Depp Juana of this? What is her willing to give up? I mean, she's staked a lot on being someone who's speaks out. And Depp is in a position where he doesn't want her to speak out about him. And that's going to be, I would imagine, one of the cruxes of the negotiation. Yeah. And so, you know, to summarize here, we talked about, you know, the bankruptcy code, not going to provide her much avenue. Possibility. Johnny Depp may be deciding to waive it. And then obviously the third avenue, of course, is could she be successful in an appeal of the judgment in any which way, right? And, you know, do you see?

that going any which way to try to reduce it by law, not even the bankruptcy, but based on, hey, jury, this was, this was the wrong amount here. You know, I know there was a ton of testimony about what she lost and what he lost during the course of, as a result of these defamatory statements, but a court could come back and say, you know what, that 10.35 million, that's just way too much. It could. I doubt it. It gets back to what I had said earlier. I mean, most, I mean, I was an appellate judge for six years as well, and I saw time and time again, lawyers try and say, well, the damages are just wrong. But the point being is, again, this goes back to the presumptions I talked about at the beginning. The presumption is the jury did the right

thing. And unless you can show, for example, that the jury made a calculation under an incorrect jury instruction, right? The judge said, take anything, any damage, and triple it. That would be wrong. And you can reduce it in that respect. But in terms of how much hurt was in it was imposed you know that's a very difficult thing on appeal to attack and that's why you'll hear her say things like the jury was unduly influenced by social media the first amendment you know all of these things are not attacking the fact of the calculation of damages they're saying listen they were they were looking at something through a lens that wasn't correct um they should have been looking at it with this aspect of it.

For example, in the U.K. aspect, lots of the stuff that came out in the U.S. action was not considered or considered differently. But now that we have a verdict, that's what you start with. You don't go all the way back to square one and say, okay, let's recalculate this. Yeah. All right. Uphill Road, uphill battle for Amber Heard moving forward.

Yeah, if I were attorneys, I'd take the money up front. Let's put it that way. Professor Markell, thank you so much. Really appreciate your time and coming on to Sidebar to talk about this really important and very popular issue that people have in the aftermath of the Johnny Depp Amber Hurd verdict. Thank you very much.

By the way, everybody, if you want to continue to follow Sidebar, want to support Sidebar, continue to follow us, subscribe, YouTube, Spotify, Apple Podcasts, wherever you get your podcasts. We really do appreciate all the listeners, all the viewers. Please continue to do so. This has been Jesse Weber. We'll catch you next time.

Thanks, everybody.