President Donald Trump’s lawyers persuaded a federal appeals court to throw out a lawsuit claiming he is profiting from foreign-government business at his deluxe Washington hotel in violation of the U.S. Constitution.
The ruling by a Richmond, Virginia-based appeals court hands a victory to the president, who can now avoid having the Democratic attorneys general in the District of Columbia and Maryland take a deep dive into his financial affairs.
“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,” the 4th U.S. Circuit Court of Appeals said in its decision.
The ruling by a panel of three Republican-appointed judges leaves one surviving challenge to the president’s receipt of financial benefits from his business holdings. In that case in another court, more than 200 congressional Democrats, led by Connecticut Sen. Richard Blumenthal, are seeking an order compelling Trump to come to them for permission before accepting any foreign-government-derived benefits, as they contend the Constitution requires him to do.
A federal appeals court in New York is also weighing whether to reinstate an emoluments case that a trial court judge dismissed.
“Unanimous decision in my favor from The United States Court of Appeals For The Fourth Circuit on the ridiculous Emoluments Case. I don’t make money, but lose a fortune for the honor of serving and doing a great job as your President (including accepting Zero salary!),” Trump tweeted after the ruling.
But the decision doesn’t mean Trump’s finances are entirely off limits to investigators. In addition to the pending congressional lawsuit, federal judges in Washington and New York have rejected the president’s attempts to quash congressional subpoenas for financial information from his accounting firm and two banks. Congress has also sued to enforce a demand for Trump’s tax returns.
Trump handed the day-to-day control of his global business empire to his two sons and a chief financial officer before taking office but refused to divest any of his holdings including the Trump International Hotel just blocks from the White House. According to D.C. Solicitor General Loren AliKhan, Trump even hired a director of diplomatic sales.
In their June 2017 suit, D.C. Attorney General Karl Racine and Maryland Attorney General Brian Frosh accused the president of benefiting from the business of at least one U.S. state, violating the second of the Constitution’s two so-called emoluments clauses. The AGs didn’t immediately respond to a request for comment on Wednesday’s ruling.
The president’s businesses reported a profit of $191,538 attributable to foreign governments in 2018, a 26% increase over the prior year. The Trump Organization has said it donated an equivalent sum to the Treasury.
Frosh and Racine sued in Maryland federal court to dismiss the suit, and U.S. District Judge Peter Messitte twice refused to dismiss it. The appeals court has now returned the case to Messitte and told him to do so, saying the suit “amounts to little more than a general interest in having the law followed.”
The AGs had briefly started to collect evidence, serving subpoenas on Trump’s businesses including the Washington hotel and the Donald J. Trump revocable trust, as well as some of the establishment’s competitors. The Richmond court put all that on hold while it considered the appeal.
The AGs claimed taxpayers they represent are being harmed because the Trump International Hotel has become a magnet for foreign dignitaries, state government officials and lobbyists, drawing business away from its Maryland and DC competitors. They sought a court order compelling Trump to abide by constitutional restrictions.
The case spurred two opinions — one involving Trump as president and one involving him as a private citizen. The panel included U.S. Circuit Court Judges Dennis Shedd, who was appointed to the court in 2001; Paul Niemeyer, named in 1990; and Trump appointee A. Marvin Quattlebaum. Niemeyer wrote both opinions.
The cases are In Re Donald J Trump, 18-2486, U.S. Court of Appeals, Fourth Circuit (Richmond) and District of Columbia v. Trump, 18-2488, U.S. Court of Appeals, Fourth Circuit (Richmond).