An Encouraging, Albeit Limited, Development in the Emoluments Clause Litigation Against Donald Trump

Sometimes it feels great to have been wrong. Last week, a United States District Judge ruled that a lawsuit brought by the District of Columbia and the State of Maryland against Donald Trump for alleged violations of the Constitution’s Foreign and Domestic Emoluments Clauses could go forward (at least for now). More specifically, the judge rejected President Trump’s argument that the plaintiffs lacked “standing,” as well as various related but distinct challenges to the court’s jurisdiction to hear the case.

When the first Emoluments Clause suits were filed against Trump (three have been brought so far, in different courts by different plaintiffs), I was one of many commentators who predicted that the cases would be dismissed on jurisdictional grounds. That prediction seemed borne out when the first of these cases, brought by the Citizens for Responsibility and Ethics in Washington (CREW) was dismissed on jurisdictional grounds last December. While some of the legal reasoning of that decision was questionable, I’d assumed that other courts would follow suit, on the logic that most judges would want to avoid having to decide these cases on the merits, and the jurisdictional doctrines are sufficiently malleable that a competent judge would be able to write a defensible opinion dismissing the cases for want of jurisdiction. (Initially I also fretted that a jurisdictional dismissal could be exploited by Trump and his allies to imply that the courts had rejected the merits of the argument that Trump’s mixture of his business affairs and his public office crosses a constitutional line, but on further reflection I now tend to think no development in these cases short of a Supreme Court ruling on the merits—and possibly not even that—would have a measurable impact on public opinion.) So it came as a welcome surprise that the ruling last week held that the Emoluments Clause suit can proceed.

There’s already been a fair bit of coverage of the ruling (see, for example, here, here, here, and here), and I’m not sure if I have that much to add, but since I’ve been commenting fairly regularly on developments in the Emoluments Clause cases, I’ll make a few additional observations: Continue reading

The Dismissal of the CREW v. Trump Emoluments Lawsuit: Some Quick Reactions

As those who follow the debates swirling around President Trump’s extensive conflicts-of-interests are likely aware, last month a United States District Court dismissed, on jurisdictional grounds, a lawsuit asserting that President Trump’s business interests put him in violation of the U.S. Constitution’s foreign and domestic Emoluments Clauses. The opinion came down over a month ago, but I was traveling at the time and didn’t have a chance to read it until recently. There was plenty of informed commentary in the immediate wake of the decision (see, for example, here, here, here, and here), and I recognize that further discussion may not be that useful. But since I had posted several times about the case last year, I thought it might be worth saying a few words about what we might take away from the opinion and its impact.

For those whose memory of the details of the case is a bit fuzzy, a brief recap: The Foreign Emoluments Clause prohibits any official of the U.S. government from accepting any “present [or] emolument” from a foreign government, while the Domestic Emoluments Clause prohibits the U.S. President from receiving any “emolument” from the U.S. government or any state government during his or her term of office. The Citizens for Ethics and Responsibility in Washington (CREW) filed a lawsuit asserting that President Trump was in violation of both clauses. The complaint alleged that several of Trump’s businesses—from which he did not divest—solicited and received the patronage of foreign governments, in contravention of the Foreign Emoluments Clause, and that Trump companies had received business and/or benefits from both federal and state government entities, thereby offending the Domestic Emoluments Clause. The CREW suit, which was later joined by several co-plaintiffs who compete economically with Trump hotels and restaurants, asked the court to enjoin President Trump from continued or future violations of the Emoluments Clauses, and to order him to release his financial records in order to be sure that no such violations took place.

I’m sympathetic to CREW’s arguments on the merits (though I recognize that there are important arguments on the other side, which I admit I haven’t fully worked through – see here and here). But I feared that the lawsuit was likely to be dismissed—not on the merits, but on the grounds that the court lacked jurisdiction to hear the case. Indeed, I thought such a dismissal was almost certain. I also fretted that CREW’s decision to bring the case might be a serious strategic error: My worry was that the near-inevitable dismissal of the suit on jurisdictional grounds would give most of the public the misleading impression that the underlying claims of improper behavior were meritless, and that pro-Trump media outlets would foster that misimpression, with the net result that concern about Trump’s conflicts of interest would dissipate rather than intensify. My concerns somewhat but not fully abated when the additional plaintiffs (competing restaurants, hotels, and their employees) joined the suit. I thought that these additional plaintiffs, unlike CREW itself, were more likely to have “standing” (one of the requirements for the court to have jurisdiction), but that other jurisdictional problems might still stop the court from reaching and deciding the question whether President Trump is in violation of the Constitution.

So, now that the decision is out, what should we think of it, and what can we learn from it? My own reaction is, perhaps, a bit paradoxical: After reading the opinion and the subsequent commentary and news coverage, I’m even more convinced than I was before that this lawsuit and others like it will be dismissed on jurisdictional grounds, but I’m less concerned that pursuing these suits is a strategic mistake (though there are still questions about whether it’s a worthwhile use of scarce advocacy resources, or of the court system). Continue reading

When, If Ever, Does a Favorable Legal or Regulatory Decision Count as an “Emolument”?

Last week, I posted about the amended complaint that the Citizens for Responsibility and Ethics in Washington (CREW) filed in its lawsuit against President Trump for alleged unconstitutional acceptance of “emoluments” from various sources. My post last week, like much of the immediate commentary on the amended complaint, focused on the new plaintiffs who had joined the suit, and the extent to which their addition mitigated concerns about whether the court would have jurisdiction to hear the case. But the amended complaint was notable for other reasons. In particular, it fleshed out more details about President Trump’s alleged violations of the Foreign Emoluments Clause, and also added a new set of allegations focused on separate violations of the Domestic Emoluments Clause.

What was most striking to me about the allegations detailed in the amended complaint is that in several cases, the alleged “emolument” is not a monetary payment or a market transaction, but rather a legal or regulatory decision by a government (U.S. or foreign) that favors businesses owned by President Trump. Consider the following examples:

  • Donald Trump had long sought—and had long been denied—Chinese trademark protection for his “Trump” brand in China. Shortly after his inauguration, President Trump made statements suggesting that he might reconsider the U.S. commitment not to recognize the government of Taiwan (the so-called “One China” policy). On February 9, President Trump met with Chinese President Xi Jinping. Following the meeting, President Trump reaffirmed the U.S. commitment to the One China policy. Five days later, China granted the Trump Organization its trademarks. According to CREW, the decision to grant the trademarks was an emolument, from the government of China to President Trump.
  • The Trump Organization has several ongoing real estate development projects in Indonesia, which require permits from the government. According to the CREW complaint, if and when the government of Indonesia grants these permits, this will constitute an emolument from the government of Indonesia to President Trump.
  • Prior to the election, a company owned by President Trump signed a lease with the U.S. General Services Administration (GSA) to open what is now the Trump International Hotel at a property owned by the U.S. government. The lease agreement stated that “no … elected official of the Government of the United States … shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom.” Prior to President Trump’s inauguration, a GSA official indicated that the GSA thought that Trump would be in violation of the lease unless he fully divests from the hotel. Shortly after the inauguration, President Trump appointed a new GSA Administrator. On March 23, the GSA issued a letter taking the position that President Trump is not in violation of the lease, principally because President Trump would not receive any earnings from the hotel until he leaves office. Many ethics experts derided the GSA’s letter as unpersuasive. The CREW amended complaint goes further, arguing that the GSA’s letter is itself an “emolument” from the U.S. government to President Trump.
  • Prior to the election, the Trump company that owns the D.C. hotel applied for a “Historical Rehabilitation Tax Credit,” which, if approved, could be worth up to $32 million. The application has cleared the first two phases of the three-stage approval process—the first step before the election, the second step after the election (but before inauguration). The National Park Service must provide the third and final approval. If the Service were to grant that approval, according to the CREW complaint, this would be an unconstitutional domestic emolument to the President.

All of these alleged “emoluments” are regulatory or legal decisions by government agencies. Can such decisions count as emoluments? When or under what conditions?

These turn out to be hard legal questions, and to the best of my knowledge there’s very little existing case law or scholarly commentary. I’ll throw out some preliminary thoughts here, but this issue likely deserves more sustained and careful analysis from genuine experts (which I am not). Continue reading

CREW’s New and Improved Legal Complaint Against Trump

Can anything be done about the serious corruption risks posed by Donald Trump’s dual role as President of the United States and patriarch of a vast business empire? Do any of these apparent conflicts of interest break the law? If so, is it reasonable to hope that the courts will step in?

As readers of this blog are likely aware, a group of activists, lawyers, and legal scholars have asserted that the answers to the above questions are Yes, Yes, and Yes. The fact that President Trump’s companies do business with foreign governments, the argument goes, means that the President is in violation of the U.S. Constitution’s Foreign Emoluments Clause, which prohibits any person “holding any office of profit or trust under [the United States]” from accepting, without congressional consent, “any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.” Shortly after the inauguration, Citizens for Responsibility and Ethics in Washington (CREW), a nonprofit advocacy group, filed a lawsuit seeking a declaration that President Trump was in violation of the Foreign Emoluments Clause and a court order enjoining the President from further violations of that clause.

Before CREW filed its suit, I was skeptical about the prospects of a judicial remedy for this alleged Emoluments Clause violation—not because I didn’t think that President Trump was in violation of the clause (quite the opposite), but because I didn’t think it was realistic to expect that a court would be willing to order the sitting President to rearrange his financial affairs (or hold him in contempt if he didn’t). My prediction was that the court would find a way to dismiss the suit on jurisdictional grounds, or deem it a non-justiciable “political question.” And my skepticism only deepened after CREW filed its original complaint. Like many other legal analysts, I thought that CREW’s claimed basis for “standing” (which requires a direct, concrete, non-ideological injury to the plaintiff) was flimsy and would likely be rejected, and I worried that the whole enterprise would prove counterproductive, because a dismissal on jurisdictional grounds would be widely misinterpreted as a judicial rejection of the substantive claim that Donald Trump is violating the Constitution.

Two days ago, CREW filed an amended complaint, which has caused me to rethink (though not entirely abandon) my earlier skepticism. The new complaint includes a number of changes, but by far the two most important are these:

  1. The amended complaint adds two new plaintiffs to the suit—an association of restaurants and a Washington, D.C. event planner—whose claims to have standing are much stronger than CREW’s.
  2. The amended complaint also adds new substantive allegations that President Trump is not only violating the Foreign Emoluments Clause, but is also violating a separate provision of the Constitution, the so-called “Domestic Emoluments Clause,” which states that the President shall receive a fixed salary, which cannot be changed during his term, and that the President “shall not receive within that period any other emolument from the United States, or any [state].”

In a future post I may have something to say about the Domestic Emoluments Clause issue, but for now I want to focus on how much difference the addition of the two new plaintiffs makes to the likelihood that the lawsuit will survive a motion to dismiss on jurisdictional grounds. My initial take is that it makes a big difference—the case for standing, under current doctrine, is now much stronger than it was before—but some problems still remain. Continue reading