Rule of Law

Appeals court rejects Democrats’ emoluments suit against Trump

“The Court of Appeals did not in any way approve of President Trump’s repeated and flagrant violations of the Constitution’s Foreign Emoluments Clause.” — CAC President Elizabeth Wydra

A federal appeals court has rejected a lawsuit from Congressional Democrats who accused President Donald Trump of violating the Constitution by receiving profits from foreign governments’ spending at his luxury Washington hotel and other businesses.

The D.C. Circuit Court of Appeals decision did not address the legality of Trump’s business dealings, but held that the more than 200 Democratic senators and House members who banded together in 2017 to bring the suit against the president lacked legal standing to do so.

The unanimous ruling from an ideologically diverse three-judge panel suggested that if the House or Senate had formally authorized the suit, it may have been allowed to proceed, but the lawmakers acting as plaintiffs in the case did not have standing to pursue it on their own.

“Only an institution can assert an institutional injury,” the court wrote in its brief, 12-page decision.

Trump quickly lauded the decision.

“We just won the big emoluments case,” the president told reporters on the south lawn of the White House as he departed for a trip to North Carolina. “It was a total win… It was another phony case and we won it, three to nothing.”

“Another win just in. Nervous Nancy Pelosi and the Democrats in Congress sued me, thrown out. This one unanimous, in the D.C. Circuit,” he added later in a post to his Twitter account.

The lawmakers could seek review by the full bench of the D.C. Circuit or the Supreme Court, but it seems more likely that the battle over Trump’s private businesses’ receipts from foreign sources will continue through other cases currently pending at two other federal appeals courts. Lawyers for the Congressional Democrats signaled they may continue the fight beyond Friday’s ruling.

“We’re disappointed in the panel’s decision and are considering next steps,” said Elizabeth Wydra, the president of the Constitutional Accountability Center and a member of the legal team that helped represent Democrats in the case. “It is important to recognize that today’s ruling is not a decision on the merits. The Court of Appeals did not in any way approve of President Trump’s repeated and flagrant violations of the Constitution’s Foreign Emoluments Clause.”

In July, a 4th Circuit panel threw out an emoluments-focused suit brought by the attorneys general of Maryland and Washington, D.C. Trump celebrated that ruling, but the full bench of the 4th Circuit later decided to take up the case. A spirited argument session took place in December, but no ruling has been issued.

In the parallel fight at the 2nd Circuit, a three-judge panel revived a suit that a district court judge threw out after questioning the standing of New York hospitality business owners and employees to challenge Trump’s actions. The Justice Department — which is defending Trump in the emoluments-focused cases — has asked the full bench of that appeals court to take up the issue, but the court has not ruled on that request.

After Trump’s election, his businesses announced plans to disgorge profits derived from foreign government sources, although Trump’s attorneys contended he was not legally required to do so. The Trump organization sent about $151,000 to the Treasury in 2018 and about $192,000 in 2019 under that program.

However, critics complained about a lack of transparency surrounding how those payments were calculated.

Last October, the Trump Organization announced it was seeking potential buyers for the business that has been the focus of the most scrutiny: the Trump International Hotel, which sits on Pennsylvania Avenue land leased from the U.S. government.

President Trump’s son Eric suggested at the time that the criticism and litigation played a role in the decision to consider selling.

“People are objecting to us making so much money on the hotel, and therefore we may be willing to sell,” Eric Trump said in a statement.

The D.C. Circuit opinion Friday said the Democrats’ suit was foreclosed by a 1997 Supreme Court decision, Raines v. Byrd, which rejected a lawsuit individual lawmakers brought over a law to give the president line-item veto authority.

“This case is really no different from Raines,” the appeals court said in its new opinion, which did not identify any of the three assigned judges as its author.

The Justice Department has argued in other cases that the House and Senate also lack standing to sue as institutions, but the ruling Friday deliberately set that issue aside.

“We need not — and do not — consider whether or how Raines applies elsewhere in order to determine that it plainly applies here,” the court wrote.

Two Republican appointees and one Democratic appointee joined in Friday’s ruling tossing out the Congressional Democrats’ suit. The jurists assigned to the case were George H.W. Bush appointee Karen Henderson, George W. Bush appointee Thomas Griffith and Bill Clinton appointee David Tatel.

There was no sign from the D.C. Circuit Friday of opinions in two other closely-watched cases involving the Trump administration. One involves a House subpoena for testimony from former White House Counsel Don McGahn. The other relates to a House request for access to grand jury secrets and underlying evidence in Special Counsel Robert Mueller’s report.