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Emoluments Challenge to Trump Picks Up Steam

Auguring success for a challenge to the president’s business ties, a Maryland federal judge cast doubt Thursday on why an earlier case that invoked the U.S. Constitution’s emoluments clauses failed.

GREENBELT, Md. (CN) - Auguring success for a challenge to the president’s business ties, a Maryland federal judge cast doubt Thursday on why an earlier case that invoked the U.S. Constitution’s emoluments clauses failed.

"I'm not really bound by the logic of the opinion at this point, in all respect to Judge Daniels," U.S. District Judge Peter Messitte said Thursday, referring to U.S. District Judge George Daniels.

Just last month, in the Southern District of New York, Daniels dismissed a lawsuit by a host of restaurants, hotels and other businesses that compete with the Trump Organization.

Led by Citizens for Responsibility and Ethics in Washington, the group claimed unfair competition in the context of the emoluments clauses.

Daniels tossed the case for lack of standing, finding that the restaurants could not claim more than hypothetical injury.

Today in Greenbelt, Messitte opened an all-day hearing about similar allegations filed against Trump in June. The judge said this morning he struggled to see the rationale that led to Daniels, a fellow Clinton appointee, to dismiss the New York case.

The challengers here, Maryland and Washington, D.C., note that the foreign and domestic emoluments clauses serve distinct purposes.

By prohibiting the president from receiving gifts, or emoluments, from foreign officials, the foreign emoluments clause ensures that the president's loyalty to the United States is uncompromised. The domestic clause, which bars a president from receiving benefits from states, meanwhile ensures all states come before the federal government on equal footing.

Maryland and the District of Columbia both claim Trump receives such benefits every time a diplomat or state delegation stays at the Trump International Hotel in downtown Washington or any other Trump property.

To kill the case before it can be heard on the merits, the government is again attacking the challengers on the basis of standing.

"All they have alleged is that their businesses compete with the president's businesses," Justice Department attorney Brett Shumate said. "That's it."

But Maryland and Washington’s statuses as local governments complicate matters. They say Trump’s continued hand in the hospitality sector pressures them to frequent his businesses so that they can curry favor with the president. Regardless of whether Trump actually skews policy based on who stays at his hotel, the challengers say his mere acceptance of emoluments are unconstitutional.

"All we need to show to show a violation of the domestic emoluments clause is that he's accepting emoluments, even without a quid pro quo," D.C. Deputy Solicitor General Loren AliKhan said Thursday.

Competition is a factor as well, the challengers say, noting that the business being drawn to Trump International Hotel in downtown Washington hurts other hotels and conference centers on the Beltway, reducing tax revenues and disrupting local economies.

Messitte questioned why the challengers did not sue Trump both his individual and official capacities, in the same vein that someone might sue a police officer.

"You keep saying the United States is being sued," the judge said. "He's being sued.”

AliKhan said the suit could be amended to include claims against Trump in his individual capacity. If the challengers refile to list Trump in both his individual and official capacities, AliKhan and Shumate agreed they would have to return to the drawing board: a new lawsuit and a new motion to dismiss.

When the hearing resumed after lunch, AliKhan identified the Walter E. Washington Convention Center and the Montgomery County Conference Center as two locations that are now vying against the U.S. president for business.

"Having shown they compete in the same arena, that is sufficient to show an injury in fact for standing purposes," AliKhan said.

Shumate stumbled in asking what evidence there is that the hope of staying in favor with Trump, as opposed to price, comfort or other hotel amenities, has made any customers shift their events.

"That's what they've said," Messitte said. "That's what the press reports are, that some people have specifically said that."

Shumate also doubted Messitte or any judge would be able to make a ruling that would solve the problems Maryland and Washington raised in their suit. Known as redressability, the reasonable likelihood of a court being able to resolve a plaintiff's complaints is a key part of showing standing.

Pivoting to redress, Shumate questioned what power the court has to stop this perceived injury. Even if Trump were enjoined from benefitting financially from his properties, he said, government officials might still shift their business to his hotel because it carries his name.

"How does that cure their competitive injury?" Shumate asked. "Not one bit."

Messitee also balked at Schumate’s argument about tracing any harm to Trump, noting the harms here implicate the actions of customers who are not involved in the suit.

"You seem to be arguing that because foreign governments may always have the choice, you can't enforce the clause ever," Messitte said.

The judge promised to rule as quickly as he could.

AliKhan told Messitte she would expect limited discovery to begin if he allowed the case to go forward, with Maryland and D.C. looking into the Trump International Hotel's financial records.

Categories / Business, Government

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