Emoluments Suits Status: Keep an Eye on Blumenthal v. Trump

The Fourth Circuit recently issued its decision in District of Columbia v. Trump (the emoluments lawsuit brought by DC and Maryland against President Trump) and, not surprisingly, the court ordered the case dismissed for lack of standing. Equally unsurprising was the court’s criticism of the district judge, who it found had committed a “clear abuse of discretion” in refusing to certify the case for appeal.

The court’s reasoning with respect to the plaintiffs’ standing theory (namely that these jurisdictions or their citizens are suffering competitive injury from the Trump Hotel in DC) largely tracks my earlier observations. This standing theory fails because (1) it is sheer speculation whether Trump’s alleged violations of the emoluments clauses inflict any injury at all, i.e., Trump’s relationship with the Trump Hotel may help its competitors as much or more than it hurts them; and (2) these competitive interests are not in any event within the zone of interests protected by the emoluments clauses.

The court gives short shrift, however, to one theory that seemed more plausible to me. The domestics emoluments clause appears designed to ensure that no state exercises undue influence over the president. To the extent Trump has accepted prohibited emoluments from certain states, it is arguable that other states (such as Maryland) have suffered an injury within the zone of interests protected by the clause. The Fourth Circuit rejected this theory as an attempt to assert a “generalized grievance,” but it did not directly confront the proposition that the clause protects the states qua states, not just the general public.

What does this mean for the prospects for the three emoluments lawsuits against Trump? Although the plaintiffs may seek further review, D.C. v. Trump is unlikely to go anywhere now. The other suit predicated on a competitive injury theory, CREW v. Trump, was dismissed by the district court and is now pending before the Second Circuit. It seems unlikely to make it to the discovery stage either, at least anytime soon.

The case to keep an eye on is Blumenthal v. Trump, which was filed by Democratic members of Congress in federal court in D.C. It presents distinct standing issues. The plaintiffs claim that they have suffered an institutional injury due to Trump’s failure to present (alleged) foreign emoluments to Congress for its consent under the Foreign Emoluments Clause. Judge Sullivan accepted this theory and refused to dismiss the case for lack of standing. This decision, however, is questionable at best under existing Supreme Court precedent, particularly in light of the Court’s most recent ruling on legislative standing.

The Justice Department has sought a writ of mandamus from the D.C. Circuit to prevent Judge Sullivan from moving forward with discovery in the Blumenthal case. It has indicated that if it does not receive a decision from the appellate court by July 22, it may seek relief from the Supreme Court, (hat tip: Seth Barrett Tillman). Should the Supreme Court agree to hear the case, it could use the opportunity to address broader questions of legislative standing that remain unresolved, which could affect the Ways and Means committee lawsuit to obtain Trump’s tax returns and other contemplated House litigation against the administration.

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