The largely unknown man thrust into the center of the scandal involving billionaire Jeff Bezos and The National Enquirer won a significant victory in court on Wednesday that could lead to embarrassing outcomes for both the Amazon.com founder and storied supermarket tabloid magazine.
Michael Sanchez is the brother of Lauren Sanchez, the woman who helped Bezos destroy his marriage with MacKenzie Scott.
Lauren Sanchez’s former publicist and manager, Michael Sanchez was previously involved in a collaborative effort to slow down the release of the Enquirer‘s story about the affair–and dampen the story’s impact–with both his sister, the billionaire and the outlet itself.
Amidst these proactive damage control efforts, however, Bezos simply tweeted out the fact of his extramarital activities.
This self-scooping apparently infuriated the Enquirer‘s top brass who responded by taunting Bezos with the release of a tawdry “below-the belt selfie” of his genital region and by attempting to burn Michael Sanchez by publicly stating he was the “single source” of absolutely everything the outlet had on the Bezos-Scott-Sanchez scandal.
But Michael Sanchez vehemently disagreed with that categorization of his involvement in the debacle–repeatedly insisting that he was only there to help and that he only confirmed the affair to the Enquirer as part of his lengthy and voluble public relations efforts so that his sister and her “golden goose” could “get their houses in order before the story broke,” according to a recent court filing that claims to document the backstory in detail from his perspective.
Defamation suits ensued. Michael Sanchez filed one such lawsuit against Bezos and his personal security boss Gavin de Becker–which was ultimately tossed in accordance with a California’s state law that aims to prohibit certain defamation lawsuits (legal actions intended to chill speech) from moving forward.
Another lawsuit was filed against the Enquirer‘s parent company, American Media, Inc. (AMI) as well as top executives David Pecker and Dylan Howard. On Wednesday, after an initial setback, Michael Sanchez’s second lawsuit was allowed to proceed.
Notably, many of Michael Sanchez’s original claims against AMI were tossed in late December 2020. The defamation claim was allowed to stand and the U.S. District Court for the Central District of California ordered limited discovery.
“The parties conducted discovery on the following topics: (1) from what source(s), if any, AMI received any information relating to its Bezos story prior to [Michael Sanchez’s] admitted involvement in October 2018; (2) who initiated contact between AMI and [Michael Sanchez] regarding the Bezos story; (3) when, how, and to what extent [Michael Sanchez] shared the Pornographic Materials with anyone affiliated with AMI; and (4) if AMI in fact possesses the Pornographic Materials, when, how, and from what source(s) AMI received them,” the court explained in its order.
That limited discovery reaped substantial dividends for Michael Sanchez–specifically to the point of what information AMI had already come into regarding the affair before they contacted him.
The court notes some of that favorable evidence:
Among Plaintiff’s exhibits is an email Howard sent him on November 7, 2018, stating: “I’d like to point out, as you know, we have photos of the two subjects prior to any deal with you – as we had been investigating subject for weeks.” [Former Enquirer reporter Nikolaos] Hatziefstathiou asserts that the initial source of the Bezos-Sanchez affair was not Plaintiff, but Ms. Sanchez’s then-husband, Patrick Whitesell, who informed Defendant Howard of the affair in August 2018. Then a reporter for AMI, Hatziefstathiou attests that Howard assigned him to find a credible alternate source for the affair to cover up Whitesell’s tip, linking Howard’s motivation to a podcast production deal between AMI and a company associated with Whitesell. In another twist, Hatziefstathiou also attests that in June 2019, his laptop, several phones, and other devices containing documents and emails relevant to this litigation were seized by Pennsylvania law enforcement authorities, and he was charged with several misdemeanor violations. According to Hatziefstathiou, AMI reneged on its earlier agreement to cover his litigation costs and put him on administrative leave. Hatziefstathiou resigned from his position at AMI in September 2020. He describes four locations in which he has stored 10 terabytes of data relating to his Bezos investigation and AMI’s questionable legal and investigatory practices.
On the strength of that evidence, the lawsuit is now on firm ground.
“The only remaining issue in AMI’s [motion to strike] is whether [Michael Sanchez] has established a reasonable probability of prevailing on his defamation claim,” the court explains. “The key factual dispute is whether AMI’s allegedly defamatory statements in its March 2019 press release are truthful. Specifically, the parties dispute whether ‘it was Michael Sanchez who tipped the National Enquirer off to the affair on Sept. 10, 2018,’ as AMI asserted in the press release, and whether any source other than [Michael Sanchez] produced the Pornographic Materials to Defendants.”
While rubbishing Michael Sanchez’s claims that he did not provide the Enquirer with the “racy photos” of Bezos, Sanchez and an unidentified penis, the court opines that his broader defamation claim has a not insignificant likelihood of success.
Again the court’s discussion:
It is less clear whether the other allegedly defamatory statements in the press release are also true: “[I]t was Michael Sanchez who tipped the National Enquirer off to the affair on Sept. 10, 2018 . . . .,” he “provided all of the materials for [TNE’s] investigation,” and “[t]here was no involvement by any third party whatsoever.” Plaintiff presents evidence supporting his claim that those statements are false. First, Howard admitted in an email that AMI had photos of Bezos and Ms. Sanchez “prior to any deal with [Plaintiff] – as we had been investigating subject for weeks.”
Second, Hatziefstathiou’s declaration supports Plaintiff’s new assertion that another individual, Patrick Whitesell, first tipped off a TNE reporter to the affair in August 2018. Hatziefstathiou attests that Howard informed him over the phone on August 10, 2018 that Whitesell was the true source of the affair but did not want to be named as the source in order to have a “get out of divorce free card”; and assigned Hatziefstathiou to do a “deep dive” into Bezos’ life to find an alternate source in order to protect Whitesell’s identity.
“Under either the Rule 56 standard or the California anti-SLAPP standard, Plaintiff’s claim survives,” the district court found.
Read the full ruling here:
[image via Drew Angerer/Getty Images]
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