Outside the Beltway

Trump Emoluments Suit Dismissed Over Standing

A federal appeals court has ruled that DC and Maryland officials have no right to bring the suit.

James Joyner · Wednesday, July 10, 2019 · 15 comments

President Trump is in violation of his lease, federal law, and the Emoluments Clauses with his hotel in taxpayer-owned space. He has nonetheless won a lawsuit over the matter.

A federal appeals court Wednesday sided with President Trump, dismissing a lawsuit claiming the president is illegally profiting from foreign and state government visitors at his luxury hotel in downtown Washington.

The unanimous ruling from the U.S. Court of Appeals for the 4th Circuit is a victory for the president in a novel case brought by the attorneys general of Maryland and the District of Columbia involving anti-corruption provisions in the emoluments clauses of the U.S. Constitution.

In its ruling, the three-judge panel said the attorneys general lacked legal standing to bring the lawsuit alleging the president is violating the Constitution when his business accepts payments from state and foreign governments. The decision — from Judges Paul V. Niemeyer, Dennis W. Shedd and A. Marvin Quattlebaum Jr. — also stops dozens of subpoenas to federal government agencies and Trump’s private business entities for financial records related to the D.C. hotel.

“The District and Maryland’s interest in enforcing the Emoluments Clauses is so attenuated and abstract that their prosecution of this case readily provokes the question of whether this action against the President is an appropriate use of the courts, which were created to resolve real cases and controversies between the parties,” Niemeyer wrote in the 36-page opinion.

Trump attorney Jay Sekulow called the dismissal a “complete victory.”

“The decision states that there was no legal standing to bring this lawsuit in the first place,” he said after the ruling. “This latest effort at Presidential harassment has been dismissed with prejudice.”

This is nothing like a “complete victory.” Indeed, the court didn’t rule on the merits at all. But they almost surely got this right: the attorneys general from DC and Maryland had no reasonable standing to bring this suit.

The most obvious avenue would be for owners of competing hotels to bring suit. They can reasonably argue that they have been materially harmed by having to compete with a hotel owned by a sitting President, who not only lends the prestige of his office to the business but demonstrably attracts clients wishing to court him and his government for favors.

UPDATE: Several early commenters are expressing frustration with this interpretation of standing. FindLaw has an excellent explainer citing the caselaw. Excerpting generously:

Substantial Interest: Standing

Perhaps the most important element of the requirement of adverse parties may be found in the ”complexities and vagaries” of the standing doctrine. ”The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated.” 322 The ”gist of the question of standing” is whether the party seeking relief has ”alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.” 323 This practical conception of standing has now given way to a primary emphasis upon separation of powers as the guide. ”[T]he ‘case or controversy’ requirement defines with respect to the Judicial Branch the idea of separation of powers on which the Federal Government is founded. The several doctrines that have grown up to elaborate that requirement are ‘founded in concern about the proper – and properly limited – role of the courts in a democratic society.”’ 324  

Standing as a doctrine is composed of both constitutional and prudential restraints on the power of the federal courts to render decisions, 325 and is almost exclusively concerned with such public law questions as determinations of constitutionality and review of administrative or other governmental action. 326 As such, it is often interpreted according to the prevailing philosophies of judicial activism and restraint and narrowly or broadly in terms of the viewed desirability of access to the courts by persons seeking to challenge legislation or other governmental action. The trend in the 1960s was to broaden access; in the 1970s, 1980s, and 1990s, it was to stiffen the requirements of standing, although Court majorities were not entirely consistent. The major difficulty in setting forth the standards is that the Court’s generalizations and the results it achieves are often at variance. 327  

The standing rules apply to actions brought in federal courts, and they have no direct application to actions brought in state courts. 328  

Citizen Suits .–Persons do not have standing to sue to enforce a constitutional provision when all they can show or claim is that they have an interest or have suffered an injury that is shared by all members of the public. Thus, a group of persons suing as citizens to litigate a contention that membership of Members of Congress in the military reserves constituted a violation of Article I, Sec. 6, cl. 2, was denied standing. 329 ”The only interest all citizens share in the claim advanced by respondents is one which presents injury in the abstract. . . . [The] claimed nonobservance [of the clause], standing alone, would adversely affect only the generalized interest of all citizens in constitutional governance.” 330  

Taxpayer Suits .–Save for a narrowly cabined exception, standing is also lacking when a litigant attempts to sue to contest governmental action that he claims injures him as a taxpayer. In Frothingham v. Mellon, 331 the Court denied standing to a taxpayer suing to restrain disbursements of federal money to those States that chose to participate in a program to reduce maternal and infant mortality; her claim was that Congress lacked power to appropriate funds for those purposes and that the appropriations would increase her taxes in future years in an unconstitutional manner. Noting that a federal taxpayer’s ”interest in the moneys of the Treasury . . . is comparatively minute and indeterminate” and that ”the effect upon future taxation, of any payment out of the funds . . . [is] remote, fluctuating and uncertain,” the Court ruled that plaintiff had failed to allege the type of ”direct injury” necessary to confer standing. 332  

Taxpayers were found to have standing, however, in Flast v. Cohen, 333 to contest the expenditure of federal moneys to assist religious-affiliated organizations. The Court asserted that the answer to the question whether taxpayers have standing depends on whether the circumstances of each case demonstrate that there is a logical nexus between the status asserted and the claim sought to be adjudicated. First, there must be a logical link between the status of taxpayer and the type of legislative enactment attacked; this means, a taxpayer must allege the unconstitutionality only of exercises of congressional power under the taxing and spending clause of Article I, Sec. 8, rather than also of incidental expenditure of funds in the administration of an essentially regulatory statute. Second, there must be a logical nexus between the status of taxpayer and the precise nature of the constitutional infringement alleged; this means, the taxpayer must show the challenged enactment exceeds specific constitutional limitations imposed upon the exercise of the congressional taxing and spending power, rather than simply to argue the enactment is generally beyond the powers delegated to Congress. Both Frothingham and Flast met the first test, because they attacked a spending program. Flast met the second test, because the establishment clause of the First Amendment operates as a specific limitation upon the exercise of the taxing and spending power, while Frothingham had alleged only that the Tenth Amendment had been exceeded. Reserved was the question whether other specific limitations constrained the taxing and spending clause in the same manner as the establishment clause. 334  

Since Flast, the Court has refused to expand it. Litigants seeking standing as taxpayers to challenge legislation permitting the CIA to withhold from the public detailed information about its expenditures as a violation of Article I, Sec. 9, cl. 7, and to challenge certain Members of Congress from holding commissions in the reserves as a violation of Article I, Sec. 6, cl. 2, were denied standing, in the former cases because their challenge was not to an exercise of the taxing and spending power and in the latter because their challenge was not to legislation enacted under Article I, Sec. 8, but rather was to executive action in permitting Members to maintain their reserve status. 335 An organization promoting church-state separation was denied standing to challenge an executive decision to donate surplus federal property to a church-related college, both because the contest was to executive action under a valid piece of legislation and because the property transfer was not pursuant to a taxing and spending clause exercise but was taken under the property clause of Article IV, Sec. 3, cl. 2. 336 It seems evident that for at least the foreseeable future taxpayer standing will be restricted to establishment clause limitations on spending programs.

Local taxpayers attacking local expenditures have generally been permitted more leeway than federal taxpayers insofar as standing is concerned. Thus, in Everson v. Board of Education, 337 such a taxpayer was found to have standing to challenge the use of public funds for transportation of pupils to parochial schools. 338 But in Doremus v. Board of Educ., 339 the Court refused an appeal from a state court for lack of standing of a taxpayer challenging Bible reading in the classroom. No measurable disbursement of public funds was involved in this type of activity, so that there was no direct injury to the taxpayer, a rationale similar to the spending program-regulatory program distinction of Flast.

Constitutional Standards: Injury in Fact, Causation, and Redressability .–While the Court has been inconsistent over time, it has now settled upon the rule that, ”at an irreducible minimum,” the constitutional requisites under Article III for the existence of standing are that the party seeking to sue must personally have suffered some actual or threatened injury that can fairly be traced to the challenged action of defendant and that the injury is likely to be redressed by a favorable decision. 340  

For some time, injury alone was not sufficient; rather, the injury had to be ”a wrong which directly results in the violation of a legal right,” 341 that is, ”one of property, one arising out of contract, one protected against tortious invasion, or one founded in a statute which confers a privilege.” 342 The problem was that the ”legal right” language was ”demonstrably circular: if the plaintiff is given standing to assert his claims, his interest is legally protected; if he is denied standing, his interest is not legally protected.” 343 The observable tendency of the Court, however, was to find standing frequently in cases distinctly not grounded in property rights. 344  

Much more at the link, including the footnotes.