Outside the Beltway

Federal Judge Allows Emoluments Clause Case To Proceed

A Federal Judge in Maryland has ruled that discovery can proceed in a case alleging that President Trump has taken payments from outside sources in violation of the Constitution

Doug Mataconis · Monday, November 5, 2018 · 19 comments

A Federal District Court Judge in Maryland rejected late last week an effort by the Trump Administration to put a lawsuit filed against the President by Maryland and District of Columbia over alleged violations of the Emoluments Clauses of the Constitution on hold pending the President’s appeal of a ruling made by the Court last month:

WASHINGTON — A federal judge in Maryland on Friday ordered evidence-gathering to begin in a lawsuit accusing President Trump of violating the Constitution by maintaining a financial interest in his company’s Washington hotel.

The plaintiffs are seeking records that could illuminate potential conflicts of interest between Mr. Trump and foreign leaders or state officials who patronize Trump International Hotel, blocks from the White House.

The judge, Peter J. Messitte of the United States District Court in Greenbelt, Md., said the Justice Department had failed to show a compelling reason to hold up the case while its lawyers appeal his earlier rulings. He ordered the parties to come up with a timeline within 20 days to produce evidence.

The lawsuit, filed by the District of Columbia and the State of Maryland, seeks for the first time to define the meaning of constitutional language that restricts the president from accepting financial benefits, so-called emoluments.

So far, Judge Messitte has ruled against Mr. Trump at every step. But the case is still in its early stages, and the Justice Department signaled on Friday that it would seek emergency relief from a higher court rather than comply with his latest order.

“This case, which should have been dismissed, presents important questions that warrant immediate appellate review,” said Kelly Laco, a department spokeswoman.

If necessary, the president’s lawyers will ask the Supreme Court to intervene, predicted Josh Blackman, a constitutional law professor at the South Texas College of Law in Houston.

“It’s a really big deal,” he said of the plaintiff’s goal. “They want to depose the president and get his records. There are a lot of legal questions to resolve before you get there.”

The attorneys general for Maryland and the District of Columbia contend that the Trump hotel unfairly competes with convention centers and hotels in their jurisdictions. Among other documents, they are expected to seek records that reveal the identity of hotel guests who visited the White House on official business, as well as how much the president has profited. Ultimately, they could try to go after the president’s tax returns.

Judge Messitte found earlier that the local governments had standing to sue the president, and that the emoluments clauses should be broadly interpreted as measures to protect against corruption.

The Justice Department asked for the judge’s permission to appeal his rulings and to delay discovery in the meantime. But Judge Messitte said the department could follow the typical legal process and appeal when the case is over.

“If the president is permitted to appeal the court’s decisions in piecemeal fashion, ultimate resolution of the case could be delayed significantly, perhaps for years,” he wrote. “That, as a matter of justice, cannot be countenanced.”

The judge also dismissed the president’s argument that discovery would be unduly burdensome, noting that Mr. Trump had threatened to sue his former campaign chief and others. “The president himself appears to have had little reluctance to pursue personal litigation despite the supposed distractions it imposes upon his office,” he wrote.

The Washington Post has more:

A federal judge on Friday denied President Trump’s request to stay a lawsuit alleging he is violating the Constitution by doing business with foreign governments, a decision that paves the way for plaintiffs to seek information about customers at his hotel in the District.

U.S. District Judge Peter J. Messitte in Greenbelt, Md., denied the Justice Department’s request that he pause the case to allow a higher court to intervene. And Messitte sharply questioned the president’s position that his business does not improperly accept gifts or payments — called emoluments — as defined by the Constitution.

By Trump’s analysis, Messitte wrote, the term emoluments is the subject of such “substantial grounds of disagreement” that payments his business received from foreign governments could not qualify. The judge did not agree: “The Court finds this a dubious proposition.”

Messitte ordered the plaintiffs, the attorneys general for the District and Maryland, to submit a schedule for discovery — the process of producing evidence for the case — within 20 days. That decision is subject to appeal.

The judge has limited discovery to information related to the president’s District hotel. This is the second civil case in which Trump’s business is now subject to discovery, after Trump agreed Tuesday to produce portions of his calendar from 2007 and 2008 in a defamation lawsuit brought by former “Apprentice” contestant Summer Zervos.

In his 31-page opinion, Messitte rejected Trump’s argument that this case should be halted so it could be appealed midstream — a request typically granted in extraordinary circumstances, where an unresolved legal question makes it hard to go on.

Justice Department attorneys argued that the lawsuit should ultimately be dismissed because it was a burden for Trump, distracting from his duties as a sitting president. The department issued a statement signaling it would appeal again.

“The Department of Justice disagrees with and is disappointed by this ruling,” said spokeswoman Kelly Laco. “This case, which should have been dismissed, presents important questions that warrant immediate appellate review.”

The Trump Organization did not immediately return requests for comment.

The Justice Department “is attempting to delay discovery in our case,” said Maryland Attorney General Brian E. Frosh (D), who brought the case along with D.C. Attorney General Karl A. Racine (D). “Their ultimate argument was that this the president of the United States, he’s too busy.”

But Messitte had rejected that argument earlier, and in this opinion he noted, wryly, that — instead of avoiding legal battles — Trump seems to seek them out while in the White House.

Messitte noted Trump’s threats to sue author Michael Wolff and former adviser Stephen K. Bannon, and Trump’s taunting of former CIA director John Brennan in August. After Trump revoked Brennan’s security clearance, Trump wrote on Twitter: “I hope John Brennan, the worst CIA Director in our country’s history, brings a lawsuit.”

“It bears noting that the President himself seems to have had little reluctance to pursue personal litigation despite the supposed distractions it imposes on his office,” Messitte wrote.

The claims being made against Trump are based on two provisions of the Constitution that, until this ruling, have never been litigated before or ruled upon by a Judge at any level of the Federal Judiciary or in any of the states in the 229 years since the Constitution was ratified.The first provision, which has been called the “Foreign Emoluments Clause” is found in Article I, Section Nine, Clause 8 of the Constitution and prohibits any Federal official from receiving without Congressional consent “any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince or foreign State.” The second clause, which has been called the “Domestic Emoluments Clause” can be found in Article II, Section 1, Clause 7 and states that the President “shall not receive within that Period any other Emolument from the United States or any of them.” Generally speaking, an “emolument” is defined as ” the returns arising from office or employment usually in the form of compensation or perquisites.” ‘Until President Trump came along, though, there has never been any real discussion about what these provisions of the Constitution mean, what constitutes an improper emolument under either provision, or what the proper remedy is if a President is found to be in violation of either provision.

In addition to this lawsuit, there is a separate lawsuit pending in the U.S. District Court in Washington, D.C. that was filed by a group of more than 200 Democratic Congressmen and Senators.  That case is brought solely under the Foreign Emoluments Clause because that provision provides that the President must obtain Congressional Consent before accepting any such emolument from a foreign official or state. In a ruling in early October, the Judge presiding over the Congressional lawsuit issued a ruling rejecting an effort by the Justice Department to dismiss the case, ruling that the more than 200 Democratic members of the House and Senate who are parties to the lawsuit had proper standing to bring the suit and whether the Complaint plead sufficient facts to state claims on which relief can be granted. That case is proceeding forward at a somewhat slower pace than the case in Maryland, but we can expect a similar battle over appeal and discovery there that we see dealt with in Judge Missette’s ruling last week.

This latest decision in the Maryland case comes just about three months after Judge Messitte had ruled in favor of Maryland and Washington, D.C. in a preliminary ruling in the case pending in the U.S. District Court in Maryland. That ruling rejected arguments raised by the Justice Department, which is defending Trump in these cases, that the two jurisdictions lacked standing to bring the lawsuit and that their Complaint alleged sufficient facts to allow the lawsuit to proceed. The ruling was historic in the sense that it is, as far as anyone knows, the first decision by any court over the past 231 years to issue any kind of ruling at all regarding these provisions of the Constitution. Prior to that July ruling, Judge Messitte had rejected a motion to dismiss the case that had been filed by the Justice Department. In this decision, Messitte was dealing with a follow-up issue to the July ruling in that the attorneys for the President were seeking permission to appeal the ruling on their Motion to Dismiss before the case is permitted to go forward, and asking Judge Messitte to essentially put the case on hold pending the resolution of the appeal of that ruling. Ordinarily, of course, a case cannot be appealed until a final ruling is issued by the Court, but the Federal Rules of Civil Procedure permit the parties to seek leave to file what is called an interlocutory appeal on issues such as those raised by a Motion to Dismiss, but the decision on whether the case would remain on hold while that appeal is pending is entirely within the discretion of the trial court judge. Messitte has chosen to deny the request in this case, meaning that the case can proceed to discovery notwithstanding the fact the Motion to Dismiss is being appealed.

From here, the appeal on the Motion to Dismiss, and on this ruling, would go to the Fourth Circuit Court of Appeals in Richmond, Virginia. However, the attorneys for the President could seek to directly appeal the matter to the Supreme Court via a procedural rule that seldom results in the high court granting an appeal. Whichever procedural route the Justice Department takes, though, it would likely be not until sometime in the spring of 2019 that the appeal of these matters would be resolved. In the meantime, this case would continue to move forward unless an appellate court grants a request to issue a stay on the proceedings until the appeals are resolved. This would mean that the Plaintiffs in the case would be free to begin seeking documents and other discovery from the President regarding his personal and business finances. If that happens, though, it’s likely that we’ll see even more political battles as the President’s lawyers seek to limit the scope of discovery and, most likely, a ruling that anything revealed in discovery would be kept confidential unless and until the case goes to trial. Nonetheless, this ruling is yet another victory for the parties seeking to use these obscure provision of the Constitution against the President, and the lack of any previous precedent on the issue makes it entirely unclear where the legal and factual future of this case and the one pending in the District of Columbia is heading.

Here’s the opinion:

District of Columbia Et Al … by on Scribd