Fourth Circuit Tosses Emoluments Suit Against Trump

The Trump International Hotel is seen on Jan. 23, 2019, in Washington. (AP Photo/Alex Brandon)

RICHMOND, Va. (CN) – Finding that attorneys general for Maryland and the District of Columbia lack standing, the Fourth Circuit on Wednesday dismissed a lawsuit accusing President Donald Trump of violating clauses in the Constitution that bar him from receiving gifts from foreign or state governments while in office without congressional consent.

In a unanimous 36-page opinion penned by U.S. Circuit Judge Paul Niemeyer, a George H.W. Bush appointee, the court rejected the argument that hotels in D.C. and Maryland have been harmed by government officials spending money at the Trump International Hotel to gain the president’s favor.

“The District and Maryland’s theory of proprietary harm hinges on the conclusion that government customers are patronizing the hotel because the hotel distributes profits or dividends to the president, rather than due to any of the hotel’s other characteristics,” Niemeyer wrote. “Such a conclusion, however, requires speculation into the subjective motives of independent actors who are not before the court, undermining a finding of causation.”

At the heart of a dispute are the so-called emoluments clauses, which have bubbled up in recent years even before the lawsuit against Trump, such as when former President Barack Obama sought and received congressional approval to accept the Nobel Peace Prize in 2009.

Back in the 80s, President Ronald Reagan surrendered his retirement benefits from his term as governor of California to comply with the rules. Even President Jimmy Carter famously put his peanut farm into a trust to make sure the Carter family would not, in his words, “be affected financially from profits or losses of any of the farm operations.”

But Trump has bucked that trend. While he relinquished daily management of his sprawling business, he did not divest from or place his business interests into a truly blind trust. He has also not sought congressional consent for anything that would qualify as an emolument, such as foreign income from his properties.

U.S. District Judge Peter Messitte ruled last year that Maryland and Washington D.C., have standing to bring their challenge over the Trump International Hotel, but the Fourth Circuit reversed Wednesday morning.

Neimeyer wrote that the plaintiffs’ “alleged harm amounts to little more than a general interest in having the law followed,” and the U.S. Supreme Court has “consistently held that a plaintiff raising only a generally available grievance about government — claiming only harm to his and every citizen’s interest in proper application of the Constitution and laws, and seeking relief that no more directly and tangibly benefits him than it does the public at large — does not state an Article III case or controversy.”

The judge cited the Supreme Court’s 2013 ruling in Already LLC v. Nike, which rejected a “boundless theory of standing” and found that harms should be “more concrete than the mere assertion that something unlawful benefited the plaintiff’s competitor.”

“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,” Neimeyer concluded.

U.S. Circuit Judges A. Marvin Quattlebaum Jr., a Trump appointee, and Dennis Shedd, a George W. Bush appointee, rounded out the panel.

In a joint statement issued by District of Columbia Attorney General Karl Racine and Maryland Attorney General Brian Frosh, the two plaintiffs said the Fourth Circuit “got it wrong.”

“Although the court described a litany of ways in which this case is unique, it failed to acknowledge the most extraordinary circumstance of all: President Trump is brazenly profiting from the Office of the President in ways that no other president in history ever imagined and that the founders expressly sought—in the Constitution—to prohibit,” they said.

The attorneys general added, “All Americans suffer when our chief executive is vulnerable to corrupt foreign influence. The idea that the District of Columbia and Maryland are not harmed by the president’s violation of the Constitution is plain error.”

While their statement didn’t specify if Racine and Frosh will appeal, it said they will continue to pursue their legal options to hold Trump ““accountable for violating the nation’s original anti-corruption laws.”

Justice Department spokeswoman Kelly Laco expressed satisfaction with the ruling, calling the case “extraordinarily flawed.”

“The court correctly determined that the plaintiffs improperly asked the courts to exceed their constitutional role by reviewing the president’s compliance with the emoluments clauses,” she said in a statement.

A separate emoluments challenge brought by Democratic lawmakers is pending in the nation’s capital. On Monday, Justice Department attorneys asked the D.C. Circuit to dismiss that case.

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