One of the issues we’ve been following (on and off) over the last couple of years concerns the lawsuits (three in total) that various plaintiffs have brought against President Trump for alleged violation of the U.S. Constitutions “Emoluments Clauses” (see here, here, here, here, and here). In brief, Article I, Section 9 prohibits officers of the United States from accepting “any present, Emolument, Office or Title, of any kind whatever, from any … foreign state” unless Congress consents, while Article II, Section 1 prohibits the President specifically from receiving (during his or her term in office) “any other Emolument [other than the President’s official salary] from the United States, or any of them.” Critics of President Trump have argued that, because President Trump has not fully divested himself from his various businesses, and foreign governments have purchased goods and services from those businesses (or granted them other advantages, such as regulatory approvals or tax breaks), President Trump is in violation of the Foreign Emoluments Clause. Similar sorts of transactions between state governments and Trump-owned businesses give rise to alleged violations of the Domestic Emoluments Clause. And these various lawsuits have sought a judicial remedy for these alleged violations—presumably an injunction requiring either divestment, or else a transfer of any proceeds or profits from prohibited transactions to the U.S. Treasury or some third party (though the plaintiffs in these suits have been a bit vague on exactly what sort of relief they’re seeking).

A potential hurdle for these suits, though, is whether these plaintiffs are allowed to bring them in the first place—a question independent of, and prior to, the merits of their claims. Under U.S. law, a plaintiff bringing a challenge in federal court must have “standing” to bring the claim, a requirement that has been interpreted (pursuant to an aggressive extrapolation from Article III of the Constitution) to require the plaintiff to demonstrate that the defendant’s unlawful conduct causes the plaintiff a direct, concrete injury that is fairly traceable to the defendant’s conduct and that could be remedied by a court order. In addition to this standing requirement, the plaintiffs must also show that they have a valid “cause of action”—in other words (and simplifying the legal complexities a bit) they must show that the legal provision under which they’re suing (here the Constitution’s Emoluments Clauses) allow plaintiffs like them to sue to enforce those legal requirements. This in turn typically requires the plaintiffs to show that they have at least a colorable argument that their interests fall within the “zone of interests” protected by the law in question. Even some people (me included) who were sympathetic to the merits of the plaintiffs’ claims worried that, under existing doctrine, the plaintiffs in these cases might lose on standing and/or cause-of-action grounds, especially because federal courts might be anxious to make these cases go away without having to reach the merits.

Three weeks ago, the U.S. Court of Appeals dealt a serious blow to one of these Emoluments Clause cases, ruling that the plaintiffs (Washington D.C. and the state of Maryland) lacked standing to bring the case. In doing so, the appeals court reversed—and chastised—a district court judge who had concluded the plaintiffs had standing, and who later rejected the defendant’s other arguments for dismissing the suit before discovery could proceed. It’s taken me a while to read the opinion carefully, but now that I have, I figured it might make sense to offer some quick reactions. (The delay means that this can’t count as a “hot take.” Perhaps we can call it a “lukewarm take”?)

My main reactions—what the kids today would call the “TL;DR” version—are as follows: (1) The appeals court’s standing ruling is badly flawed as a matter of law. (2) That doesn’t mean the suit should have been allowed to proceed, because there are other preliminary barriers that might have been harder to overcome. (3) Despite the serious legal flaws in the Court of Appeals’ ruling, I think it significantly reduces the odds that these cases might proceed to discovery and trial, notwithstanding the fact that the litigation isn’t technically over. (4) The political consequences of the dismissal, though not great, are likely not as significant as people like me had worried, but nonetheless this case is a troubling and unnecessary abdication of a potentially important judicial check on (unconstitutionally) corrupt behavior. Let me elaborate each of these points:

First, on the narrow legal question of whether the Court of Appeals got it right as a matter of doctrine, I think the answer is basically no. I don’t want to go full Law Nerd here, but let me try to give at least a flavor of what I think is wrong with the court’s reasoning.

The main standing theory that the plaintiffs advanced was what is sometimes called “competitor standing.” (There are other theories, but, I’ll focus on this one, since it seems to me the strongest claim.) The idea is that if one competitor in a market place secures a competitive advantage through illegality (say, getting an operating permit that the competitor was not legally authorized to get) then other competitors in the market have standing to sue to challenge the unlawful act (say, the granting of the permit). Furthermore, at this preliminary stage of the litigation, disputes over factual questions relating to the plaintiffs’ standing are (simplifying a bit) supposed to be resolved in favor of the plaintiff. That is, if the plaintiff provides credible evidence that the defendant’s conduct causes the plaintiff’s injury, the court (again, at this early stage) is supposed to accept the allegation as true. In the case under review, D.C. and Maryland presented evidence that both the governments themselves, and people in their jurisdictions, owned and operated businesses that compete directly with Trump hotels, and moreover that Trump’s status as President gave him an advantage in competing with plaintiffs’ businesses for the patronage of foreign governments and state governments.

Not good enough, said the Court of Appeals. The conclusion that state and foreign government customers do business with the Trump Hotel “because the Hotel distributes profits or dividends to the President, rather than due to any of the [Trump] Hotel’s other characteristics … requires speculation into the subjective motives of independent actors who are not before the court” (emphasis in original). And even if foreign and state governments did patronize the Trump Hotel “to curry the President’s favor,” the court continued, “there is no reason to conclude that they would cease doing so were the President enjoined from receiving income from the Hotel… [since] the Hotel would still be publicly associated with the President, would still bear his name, and would still financially benefit members of his family.” Moreover, the court continued, “there is a distinct possibility … that certain government officials might avoid patronizing the Hotel because of the President’s association with it” (emphasis in original). Given this, the Court of Appeals concluded, the plaintiffs’ theory of standing boiled down to the idea that any plaintiff has standing to sue any time a competitor gains an unlawful advantage—a “boundless theory of standing” that the U.S. Supreme Court has decisively rejected.

There’s a lot wrong with this analysis. The main problem is that it essentially ignores or implicitly dismisses the specific allegations in the plaintiffs’ detailed complaint, which laid out the factual allegation that foreign and state governments have been more inclined to do business with the Trump Hotel, rather than competing hotels owned by D.C. and Maryland or their citizens, precisely because Trump is the President. At this stage of the litigation, these allegations should suffice. It is the appeals court, rather than the plaintiffs, that indulges in rampant speculation—most egregiously in the out-of-the-blue suggestion that Trump’s status as President may actually be causing his hotel to lose business from state and foreign governments. Furthermore, as the District Court Judge’s opinion pointed out, the fact that the plaintiff’s injury may involve the action of third parties (not just the defendant) has never been treated as a bar to standing. That’s especially true in a “competitor standing” case. Suppose, to take a more conventional example of a competitive injury, that the plaintiff had sued the defendant for infringing on the plaintiff’s trademark. In such a case, the plaintiff would typically allege that the defendant, by seeking to exploit the positive reputation of plaintiff’s brand, was able to attract customers who would otherwise have purchased the plaintiff’s products. This is an easy case for finding standing, on the grounds that the defendant’s unlawful conduct has caused a direct, concrete injury to the plaintiff. But note that in this case a finding of standing also requires assumptions about the motivations of third parties—customers. Maybe those customers would still have purchased the defendant’s and plaintiff’s products in equal quantities even if the defendant wasn’t able to use the plaintiff’s trademark. Sure, it’s possible. And hey, it’s even possible that the defendant will actually be better off (and the plaintiff worse off) if the defendant can’t use plaintiff’s trademark: Maybe the plaintiff’s products actually have a bad reputation. Sure, these things are possible. But there’s good reason to believe they’re not likely, and it seems absurd to assert that the alleged injury to the plaintiff in such a case is unduly “speculative” just because it depends on the (predictable) behavior of third parties (here customers). Typically as long as the plaintiff in a case like this can establish that the defendant’s illegal action gives the defendant an advantage in competing with the plaintiff for the same pool of customers, the plaintiff should have standing to sue.

The Court of Appeals’ declaration that this amounts to a “boundless theory of standing,” one that the U.S. Supreme Court has rejected, is premised entirely on an out-of-context quote from a 2013 Supreme Court case called Already LLC v. Nike. Read in isolation, the passage from the Already seems to support the Court of Appeals’ conclusion, but read in context, it doesn’t. In Already, the plaintiff (Already) had sued to get a ruling that one of the trademarks held by the defendant (Nike) was invalid. But Nike has already issued an irrevocable covenant not to enforce this trademark against Already. So, the Supreme Court reasoned, Already lacked standing: Already couldn’t be injured by the mere existence of an allegedly invalid trademark that Nike was never going to seek to enforce. Already tried to argue that it had standing simply because Nike presumably benefited in the market in some more diffuse way from its invalid trademark, but the Supreme Court rejected that “boundless theory of standing” in the passage quoted by the appeals court in the Emoluments case. To paraphrase the Supreme Court’s reasoning in Already, there’s no “competitor standing” when the alleged illegality has no direct relationship to the competition between the plaintiff and the defendant. But that situation is a far cry from what (allegedly) is going on in the Emoluments Clause litigation. There, the plaintiffs presented evidence that the Trump Hotel is in direct competition with plaintiffs for government customers, and that the Trump Hotel has a competitive advantage because these governments know that doing business with the Trump Hotel confers material benefits on President Trump.

In short, the Court of Appeals’ reasoning on the standing issue does not seem to me compatible with conventional “competitor standing” doctrine, nor with common sense. Of course, it’s hard to make that case ironclad, in part because standing doctrine is so malleable. At what point does a chain of causation become “too speculative” to count? It’s in the eye of the beholder, and the beholder may not always be totally impartial. But it seems to me that the claim that Competitor X has secured an advantage in a given market by engaging in or benefiting from unlawful conduct ought to suffice to show that Competitor Y, who is trying to attract the same consumers and might have attracted them if not for the illegal conduct, has suffered a concrete, particularized injury that was caused by the illegality and that would be remedied by an order that the unlawful conduct cease.

Now all that said, even if the plaintiffs in this case had succeeded in showing that they had standing (in the constitutional sense), that wouldn’t necessarily mean that the suit can proceed. As noted above, even plaintiffs who have (constitutional) standing also need to have a valid cause of action, which generally requires that the interests that the plaintiff seeks to vindicate (here, the interest in reducing competition with businesses owned by the President) are at least arguably within the “zone of interests” that the legal provision in question (here, the Constitution’s Emoluments Clauses) seeks to protect. The Court of Appeals didn’t need to reach this issue because it rejected the plaintiffs’ suit on standing grounds, but the court strongly hinted that the plaintiffs also did not have a valid cause of action, and that the remedy the plaintiffs seemed to want (an injunction ordering the President to divest from his businesses) might not be one that the courts have the authority to grant. (That latter concern, as other commentators have noted, could have been ameliorated if the plaintiffs had made clear they sought not divestment but an order that profits that would count as Emoluments be turned over the U.S. Treasury. But this would not have addressed the broader zone-of-interests problem.)

This is a very tricky area of legal doctrine, and I won’t delve into it here (not least because I’m still not quite sure what I think). I flag it only because I want to make clear that, even though I think the Court of Appeals was wrong in its treatment of the standing issue, this does not mean that the court was necessarily wrong in its ultimate conclusion that the suit should be dismissed (without further discovery or rulings on the merits). My instinct is that the zone-of-interests test is, and should be, sufficiently forgiving to cover plaintiffs in a case like this. But I’m not going to develop that argument here.

Now, putting aside self-indulgent law professor criticisms of a court’s legal reasoning, we might next ask how much of a setback this ruling is for the parties who want to pursue a judicial remedy for President Trump’s arguable (I would say obvious, but reasonable people may differ) violations of the Emoluments Clauses. I think it’s a big setback, unfortunately. While the decision can be appealed to the U.S. Supreme Court (or possibly first to all the judges of the Court of Appeals sitting en banc), it’s hard for me to see the ruling on standing being overturned—not so much because of the strength of the legal arguments, but because I think the federal judiciary, especially at the higher levels, has little appetite for these cases, and would like to make them go away. That’s also why I don’t have much optimism for the case that was brought in New York, which the trial court dismissed on standing grounds, and for which an appeal is pending. The best hope may be the third case, brought by members of the U.S. Congress. Although the theory of standing in that case seems to me to be more of a stretch than the competitor standing theory that the recent appellate decision just rejected, the fact that the trial court allowed this third case to proceed offers a glimmer of hope: If the federal Court of Appeals in D.C. chooses not to kick the case out on standing grounds, then that one might at least proceed to discovery, and maybe beyond that. But I wouldn’t hold my breath. Indeed, the appellate court in D.C. held that Trump should be able to appeal the trial court’s decision not to dismiss the case right away, and intimated that the standing question was a hard one. This does not bode well.

Now, finally, what are the implications of all this, and especially the most recent court of appeals ruling, politically? Way back when these suits were first getting started, I fretted that the suits might prove counterproductive, because if the suits were dismissed on jurisdictional grounds—an outcome that I thought at the time was overwhelmingly likely—the President and his allies would be to misleadingly spin this jurisdictional ruling as a judicial rejection of the merits of the Emoluments Clause suits, and that this might convince at least some people who aren’t familiar with the legal details that the courts had ruled that President Trump’s business transactions with foreign and state governments were perfectly legal. And President Trump indeed tried to create that impression with (shock of all shocks) a misleading Tweet on the topic. But in my early commentary I vastly overestimated the impact that a standing dismissal would have on the larger narrative. I suspect that on net these suits have helped draw greater attention to the concerns regarding Trump’s various conflict-of-interest problems, and that the dismissal of these suits is not likely to alter many people’s views on whether those problems are real or serious. One might still question whether the investment of resources in these suits was ultimately worth it given the opportunity cost, and that’s a question that would require much more sustained treatment than I can give it here.

The broader concern that I have, given the direction these suits tend to be going, is whether the dismissals on standing grounds will render the Emoluments Clauses, for all intents and purposes, unenforceable. Yes, yes, I know that not every legal right or restriction is or should be judicially enforceable. That’s what they teach us in law school, and that knowledge is supposed to make us feel more sophisticated than the Great Unwashed Masses who naively believe that if someone is engaged in persistently illegal conduct, a court will be able to put a stop to it. And yeah, I’m quite familiar with the usual song-and-dance about how we can and should rely on the political process to supply a remedy for these sorts of political clashes between the branches of government. But, I mean, let’s get real. If the courts are so gun-shy about having to confront this question on the merits that they’ll use the flexibility afforded them by standing doctrine to kick the cases out, this will amount to reading the Emoluments Clause out of the Constitution. There’s no other practical way to enforce it. So why should any future president even make a pretense of complying? Suppose that all three of the pending Emoluments Clause suits are all booted on standing grounds, and the next day the Russian government announces that it will be wiring $1 million to Trump’s personal bank account every month, just because. There would be no judicial remedy as a matter of law, due to the absence of anyone who would have standing to challenge this blatant violation of the Foreign Emoluments Clause. There wouldn’t be a political remedy either, unless you think that this would get the Republican Part to abandon Trump over a matter of constitutional principle. And if you believe that, then, well, I don’t know what to say other than you don’t seem to have been paying attention.