Fourth Circuit Appears Skeptical of Trump Emoluments Case

RICHMOND, Va. (CN) – Lawyers for President Donald Trump asked a sympathetic Fourth Circuit panel Tuesday to reject a lawsuit accusing him of violating the Constitution’s emoluments clauses, which ban the president from receiving gifts from foreign or state governments while in office without congressional consent.

All three judges on the panel were appointed by Republican presidents, including U.S. Circuit Judge A. Marvin Quattlebaum Jr., appointed by Trump himself.

Questioning the need for the emoluments clauses, the judges spent Tuesday morning eviscerating arguments from Maryland and Washington, D.C., which filed a lawsuit in June 2017 claiming the profits the Trump International Hotel in the nation’s capital receives from various government customers qualify as emoluments. They say the president’s continued business ties are harming competing businesses and creating an uncharted constitutional crisis.  

While appeals court judges often use tough questions against both parties in the hopes of shoring up legal arguments and avoiding possible future appeals, Tuesday’s hearing was particularly brutal against the states, topped off with Senior U.S. Circuit Judge Dennis Shedd’s jaw-dropping line of questioning.

“Doesn’t your theory of emoluments, it really is protection for career politicians who want to be president because they generally don’t have any business they’ve grown that's associated with them," he said to Loren L. AliKhan, solicitor general for Washington D.C., who says D.C. businesses have lost revenue to the Trump hotel as national and foreign representatives flock to the president's properties in the hopes of gaining his favor.

"So any person who has a business that they have grown, they have an emoluments problem if they are fortunate to be elected president," Shedd added. "A career politician who can put all his stocks in bonds in a blind trust won't have that problem."

The emoluments clauses questioned by Shedd, a George W. Bush appointee, are actually two sections of the Constitution and part of the framers’ original text. One of the clauses aims to deny emoluments, or gifts, from foreign powers to the president in exchange for benefits, and the other says a sitting president cannot accept gifts from any U.S. state or their representatives.

Gifts can be accepted, like President Barack Obama’s 2009 Nobel Peace Prize, if they’ve been approved by Congress. President Ronald Reagan famously turned down his retirement benefits from his term as governor of California to avoid running afoul of the rules.

“We’re here for the Trump hotel,” AliKhan responded, arguing Trump hotels have hosted people who were later on the receiving end of beneficial executive policies. “We have a president who has a massive empire of international businesses that is soliciting international business through his hotel.”

But the states’ reliance on this financial impact from Trump’s refusal to divest from or place his business interests into a blind trust - something the judges didn’t seem to take issue with - appeared to only further doom the plaintiffs’ argument.  

“Even if he divested, there would still be the Trump hotel as a competitor” to local businesses,” said U.S. Circuit Judge Paul V. Niemeyer, a Reagan appointee.  

“There would still be the hotel there called the Trump hotel and the question is, it's still a competitor and would probably still impact the competitive interest they are claiming.,” said U.S. Circuit Judge Paul V. Niemeyer, a Reagan appointee, who suggested even if Trump was not involved in the daily management of his D.C. hotel, he could see foreign or state actors entering and exiting his hotel from his motorcade and be impacted by that business exchange.  

“And that competitive injury is speculative,” said Department of Justice attorney Hashim Mooppan, who defended Trump in his official capacity.

“The idea that if the hotel was owned by his family, or he didn’t have financial interest, that that would affect any of these decisions is inherently speculative, let alone against the president of the United States," he said.

“When protesters come to D.C., they don’t stay at Trump hotels… That’s not speculation,” Judge Shedd said, noting the president's disapproval could be a boon for competing businesses in some cases.

Other arguments during Tuesday’s hearing involved the immunity afforded to a president from civil lawsuits. Judge Niemeyer did push back on this concept when he asked if a broad precedent existed to keep a sitting president immune in all cases.

Mooppan said successful lawsuits would require congressional approval, but even in that case the question of how the injured parties could get relief in an emoluments case would be hard to determine.

“The point of the emoluments clause is to protect corrupting influence and [the states] are not making that argument,” he said, claiming Maryland and D.C. are instead arguing about market impacts and noncompetitive practices, neither of which are part of the emoluments clauses.

Despite the high level of pushback from the panel, AliKhan said the judges have the power to censure the president.

“The court can determine if the president violated the law,” she said.  

“But he has pulled back, he’s passively holding the interests. He’s only given a monthly report. That gives you a right to sue?” Judge Niemeyer asked.

“He has not divested,” AliKhan stressed.

A report by the government watchdog group Sunlight Foundation found as early as this month Trump has used his office to promote his golf courses, an entity he is still linked to. The president has also been accused of taking suggestions from his golf club’s members, and has appointed some to ambassadorship positions.

Questions Tuesday about legal remedy led to a discussion of the true intentions of the Maryland and D.C. lawsuit.

While AliKhan said the states were seeking a declaratory judgment demanding Trump divest his interests, the judges seemed to suggest such a move would be an overreach. Shedd instead suggested the lawsuit was a scheme to build a case for something much larger.

The judge said violating the emoluments clauses “would be a high crime for impeachment,” after repeatedly pressing AliKhan what kind of relief her client really wanted.

But the attorney stressed she wanted an injunctive order forcing the president to comply with the emoluments clauses.

“It would level the playing field,” AliKhan said. “As president he is not allowed emoluments. If there is an injunction stopping that it would bring him in to compliance.”

Tuesday’s hearing comes after U.S. District Judge Peter Messitte ruled last year that Maryland and Washington, D.C., have standing to bring the challenge over the Trump International Hotel.

Among Judge Messitte’s concerns was a president run amok with foreign and domestic influences, which could violate the emoluments clauses.

The Fourth Circuit panel did not indicate when they will issue a ruling in the case.   

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