A federal judge signaled Monday that she is unlikely to grant President Donald Trump's request to let him unilaterally determine what material seized last week from his personal lawyer is privileged, but she indicated that she may appoint an outside attorney to assess the records in an effort to carefully navigate the high-stakes case.
The investigation of Cohen — which has pitted the president against his own Justice Department — took another unexpected turn Monday with the courtroom revelation that one of Cohen's legal clients was Fox News commentator Sean Hannity.
Hannity played down the relationship, saying he occasionally asked Cohen legal questions but never paid him. On his show Monday night, he described it as a "minor relationship" that had to do with real estate.
But the connection between the two men inserted another high-profile, polarizing Trump ally into the drama surrounding the criminal investigation of the president's longtime lawyer.
The legal showdown began last week when FBI agents searched Cohen's office, home, hotel room and safe-deposit box, seizing records and documents as part of a probe by federal prosecutors in New York into possible bank fraud and wire fraud.
Attorneys for Cohen and Trump have argued that the seizure could lead to violations of attorney-client privilege.
At a hearing Monday before U.S. District Court Judge Kimba Wood, federal prosecutors sparred with lawyers for Cohen and a lawyer for Trump, who Sunday night asked the judge to let the president review the seized material before investigators go through it.
Last week, Cohen's attorneys asked to review the documents, or have a court-appointed special master do so, to determine what material is protected by attorney-client privilege.
Wood did not dismiss Cohen's motion, dealing the government team a setback by keeping open the possibility of having a third party evaluate the seized documents.
The judge did not make a decision but said she was considering appointing a special master — not because of legal precedent but in the interest of avoiding the appearance of bias in the politically charged case. Wood said she wanted more information before ruling.
"I have faith in the Southern District U.S. Attorney's Office that their integrity is unimpeachable," she said.
But she added that to address concerns about "fairness" raised by Trump and Cohen's attorneys, "a special master might have a role here. Maybe not the complete role, but some role."
Assistant U.S. Attorney Thomas McKay urged the judge to reject the requests from the president and Cohen.
"Just because he has a powerful client doesn't mean he should get special treatment," said McKay, who warned that if the judge gives them an inch, "they're going to take a mile."
Trump attorney Joanna Hendon told the judge that the president "is objecting to anyone other than himself making the initial determination of privilege," urging caution over haste.
"This is an extraordinary case," she said. "There's tremendous risk that privileged material could not be recognized as such."
It is unusual but not unprecedented for criminal investigators to seize documents from a lawyer, and there is a policy in place designed to shield information covered by attorney-client privilege.
That procedure involves having a "taint team" — also called a "filter team" — of prosecutors outside the investigation review all the material and separate what is covered by the privilege. A lawyer's communications with a client are not covered by the privilege if they did not involve legal advice or were used to further a crime or fraud.
Under the procedure, the taint team would turn over to the case investigators all the material that is relevant and not covered by attorney-client privilege.
Wood said Monday that "a taint team is a viable option," but it was unclear how she would ultimately decide to assess the possibly privileged material.
The judge asked the government to make digital copies of all the material it had seized and share those files with Cohen's lawyers, who would in turn share relevant information with lawyers for Trump and the Trump Organization.
The goal, Wood said, would be to have a sense of how much work would be required of a special master and, therefore, how long that process might take.
Over the Trump and Cohen teams' objections, Wood allowed the government's filter team to run mechanical searches on the material collected to determine an estimate of how many documents it thought might be privileged.
The masses of reporters outside and inside the courthouse in Lower Manhattan underscored the importance of the case — and the strange circumstance of a Justice Department lawyer squaring off in court against a lawyer for the president to argue about potential evidence in a criminal probe of the president's private attorney.
In the course of those arguments, Cohen's lawyers acknowledged that he has had only about three legal clients in the past year and a half — Trump, former Republican National Committee deputy finance chairman Elliot Broidy and a mystery third client whom Cohen initially didn't want to name.
Under pressure from the judge, Cohen's legal team eventually revealed that Hannity was the third client — drawing gasps and some chuckles in the courtroom.
The firebrand commentator is a close informal adviser to Trump, who has urged the public to watch Hannity's show, during which he regularly attacks the special counsel investigation into Russia's interference in the 2016 campaign.
Last week, Hannity criticized the raids on Cohen's office and residences as "an unprecedented abuse of power," never mentioning his relationship with the Trump lawyer.
Hannity said Monday that he occasionally turned to Cohen when he had legal questions but that he never paid him to be his attorney.
"Michael Cohen has never represented me in any matter," the conservative commentator wrote on Twitter. "I never retained him, received an invoice, or paid legal fees. I have occasionally had brief discussions with him about legal questions about which I wanted his input and perspective."
"I assumed those conversations were confidential, but to be absolutely clear they never involved any matter between me and a third-party," Hannity added.
McKay's arguments for having a government filter team evaluate the seized material focused on the incentives that each side might have in its analysis of the documents. He noted that the U.S. Attorney's Office would face legal repercussions if it was overly narrow in its determination of privilege. He also argued that the effort to keep Hannity's name from being made public was "a perfect illustration of what will happen if Cohen's proposal carries the day."
"If they are going to continue to hide behind overbroad claims of privilege, the process isn't going to work," he said.
As he had on Friday, McKay said that the Cohen team's inability to demonstrate its claim "thousands, if not millions" of documents were likely subject to privilege mean that the court should dismiss Cohen's request out-of-hand.
Cohen, who is under criminal investigation in possible bank fraud and campaign finance violations, has come under scrutiny by federal prosecutors for his efforts to tamp down negative stories about Trump. In late 2016, he paid adult-film star Stormy Daniels $130,000 in exchange for her agreement not to discuss an alleged sexual encounter with Trump.
Last week, it was revealed that Cohen had helped Broidy negotiate a $1.6 million settlement with a former Playboy model who got pregnant after they had an affair.
Daniels attended Monday's hearing, telling reporters afterward that "for years, Mr. Cohen has acted like he is above the law."
"He has never thought that the little man — or especially, women, and even more, women like me — matter," she said. "That ends now. My attorney and I are committed to making sure that everyone finds out the truth."
A letter from Cohen lawyer Todd Harrison filed Monday said that during last week's raids, agents seized "more than a dozen electronic devices and other items that include documents and data regarding topics and issues that have nothing to do with" the material sought in the search warrant.
The letter says that from 1996 to 2006, Cohen had hundreds of clients, adding that he did not know if any material from those clients was in the seized files. From 2007 to 2017, Cohen worked as a lawyer for Trump and the Trump Organization.
The letter said that in 2017 and 2018, Cohen had "at least ten clients," but seven of those were business consulting clients whose work did not involve legal advice.