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Emoluments Trouble for Congress

As expected, Judge Messitte has issued an opinion finding that plaintiffs have standing to pursue their claims against President Trump for alleged violations of the Foreign and Domestic Emoluments Clauses in D.C. v. Trump, a case brought by the D.C. and Maryland governments in the U.S. district court in Maryland. Although I think this decision is mostly wrong, it may not matter much. The court is likely to fulfill the plaintiffs’ legal/political objectives before an appellate court has a chance to opine on the matter.

I will not bore you with the mind-numbing details of the standing analysis. The flavor of the court’s decision can be found on page 29, where it states “[i]t can hardly be gainsaid that a large number of Maryland and District of Columbia residents are being affected and will continue to be affected when foreign and state governments choose to stay, host events, or dine at the [Trump Hotel in DC] rather than at comparable Maryland or District of Columbia establishments, in whole or in substantial part simply because of the President’s association with it.”

Well, actually it can be gainsaid, and I hereby gainsay it. First, while the court cites anecdotal evidence that foreign governments (and, in one case, a state government) have frequented the Trump Hotel to curry favor with the president, this is not proof that the Trump Hotel is gaining a net advantage over its competitors because of its association with Trump. Are the Four Seasons and the Ritz Carlton (literally, the alleged “victims” being represented here) suffering an increase in room vacancies, a decline in revenue, or any other indicia of unfair competition? Undoubtedly some people are staying at the Trump because they like the president, and others are staying elsewhere because they feel differently. If the polls are to be believed, the Four Seasons should be a net winner.

Second, if the alleged injury is caused merely by the “association” between the president and the hotel, this would not be redressable by an order from the court requiring the president to divest his financial interest in the hotel. The court cursorily addresses this by saying that such an order would reduce the incentive to stay at the Trump Hotel “by some extent.” Op. at 37. This strikes me as sheer speculation (or, more accurately, speculation upon speculation).

Finally, and most importantly, I still do not see how the alleged competitive injuries are within the zone of interest protected by the emoluments clauses. The court’s conclusory assertion that competitors are within the zone of interests because the “the Emoluments Clauses clearly were and are meant to protect all Americans” is utterly unpersuasive. See op. at 41.

The opinion is closer to the mark when it discusses the Domestic Emoluments Clause. It points to the fact that Maine Governor LePage stayed at the Trump Hotel “on an official visit to Washington during the spring of 2017, met with the President, and not long after appeared with the President at a news conference” in which the latter signed an executive order that could help LePage reverse an Obama administration decision regarding a national monument in Maine. Op. at 18. Judge Messitte asserts that this “rather clearly suggests that Maryland and the District of Columbia may very well feel themselves obliged, i.e., coerced, to patronize the Hotel in order to help them obtain federal favors.” Op. at 19.

As a technical question of standing, it seems to me that if Governor LePage’s staying at the Trump Hotel constituted a violation of the Domestic Emoluments Clause (which presumably the court should assume for purposes of the analysis), there is a reasonable argument that Maryland (not DC, which is still not a state) has standing to sue as an injured party. The theory would be that the clause prohibits states from providing emoluments to the president so as to avoid any favoritism on his part with respect to one or more states. Arguably, therefore, a state should be able to sue to prevent the president from accepting a prohibited emolument from another state. See op. at 15 (plaintiffs claim standing “to protect their ‘position among . . . sister States’”) (citations omitted).

On the other hand, the court’s opinion seems to go well beyond this. It posits a causal connection between LePage’s stay at the Trump Hotel and the president’s signing of a favorable executive order. It seems rather unlikely that whatever tangential financial benefit Trump received from the governor’s stay at his hotel was actually the motivating factor for the executive order. But if this connection is part of the basis for the plaintiffs’ standing, is the court going to require them to prove it? Or is this something the court is just going to assume?

The court also cites reports that the Trump Organization has “been accorded substantial tax concessions by at least the District of Columbia and the State of Mississippi.” Op. at 17. The court goes on to say “while ordinarily there may be a presumption of regularity as far as the decisions of the tax authorities are concerned, the fact remains that Trump Organization hotels, from which the President allegedly derives substantial illegal profits, have been the beneficiaries of these actions.” Id. If I read this right, the court is holding that D.C. has standing in part based on the assumption that an agency of D.C. acted illegally.

Regardless, it is pretty clear from the court’s opinion that it has a decidedly jaundiced view of Trump’s business interests. At points it appears to have already decided the merits. See, e.g., op. at 24-25 (“Plaintiffs have alleged sufficient facts to show that the President’s ownership interest in the Hotel has had and almost certainly will continue to have an unlawful effect on competition . . .”). It cannot even resist taking an entirely inappropriate political shot at a party not even before the court, referring to “how Maine’s citizens may have felt about the propriety of their Governor living large at the Hotel while on official business in Washington . . .” Op. at 18-19. I personally think governors should stay at the Hilton Garden Inn when traveling, but this really doesn’t belong in a legal opinion. (Not to mention, “living large”?)

In short, if I were Trump’s lawyers, I would not be looking forward to the decision on the merits in this case.

None of this is to suggest that the court’s concerns are groundless from a public policy and, potentially, a constitutional perspective. The (alleged) fact that foreign governments are booking rooms at the Trump Hotel in order to win the president’s favor is unseemly at best. See op. at 4-5. While this alone would not constitute a violation of the Foreign Emoluments Clause, suppose it turned out that the Kingdom of Saudi Arabia, for example, had booked a couple floors of the hotel and had placed a standing order for the most expensive room service meals to be delivered three times a day to each room? Just a hypothetical, of course, but without any independent oversight of the president’s business arrangements, it is hardly beyond the realm of possibility.

Which brings us to Congress. It is not unreasonable to think that had Congress shown even a modicum of interest in overseeing Trump’s business dealings and the arrangements (allegedly) made to prevent conflicts of interest, this case would not be moving forward. For example, the court notes that although the president claims “he has now paid to the U.S. Treasury the profits the Hotel has received from foreign governments,” there is no detail to substantiate this claim. Op. at 4 n.5. This is the type of information that congressional oversight committees should have demanded and obtained.

Judge Messitte leaves little doubt that he intends to fill the vacuum that Congress has left. See op. at 42 (noting that under president’s standing theory “no one—except Congress which . . . may never undertake to act—would ever be able to enforce these constitutional provisions.”). In a pointed footnote, he notes that “[s]uppose” Congress is controlled by the same party as the president and it “never undertakes to approve or disapprove” the president’s receipt of emoluments; the president could receive “unlimited” emoluments “without the least oversight and with absolute impunity.” Op. at 46 n.18. It hardly needs saying that this is exactly what the judge believes has happened.

The district court’s ultimate decision will undoubtedly render a harsh verdict on Trump’s conduct and probably entail serious (though perhaps temporary) legal consequences for the president. But the real institutional loser will be Congress, which once again will see its constitutional functions usurped by another branch.

In this case, at least, it has no one to blame but itself.

 

 

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