Michael R. Wolford, BridgeTower Media Newswires
When Donald Trump was elected president in November 2016, voices were raised as to whether he would be in violation of the Emoluments Clauses in view of his significant financial interests in hotels, restaurants and other business entities that were patronized by foreign and domestic government clientele.
Shortly after President Trump was sworn in, three separate lawsuits were commenced that claimed that he was in violation of the Emoluments Clauses as a result of his retaining ownership of these business entities.
The lawsuits were filed in the Southern District of New York, the District Court of Maryland and the Washington, D.C. District Court. Although the cases are still pending, we now have a glimpse of the divergent conclusions that have been reached in all three cases.
It is evident that they partially reflect the polarization that exists in the country as a whole. Although one or more of these cases may reach the U.S. Supreme Court for a final decision, it is also very possible that if President Trump leaves office before the Supreme Court addresses this issue, the cases may be dismissed on the grounds that the issues have been rendered moot. Accordingly, we may never know whether his conduct violated the Emoluments Clauses.
There are two Emoluments Clauses in the Constitution and they are referred to as the Foreign and Domestic Clauses.
The Foreign Emoluments Clause contained in Article I, Section 9, Clause 8 of the Constitution provides: “...no Person holding any Office of Profit or Trust under them, shall, without the Consent of Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.”
The Domestic Emoluments Clause contained in Article II, Section 1, Clause 7 of the Constitution provides: “The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.”
The Merriam-Webster dictionary defines emoluments as “returns arising from office or employment, usually in the form of compensation or perquisites.”
Interestingly, plaintiffs in the three separate lawsuits are asserting similar claims but they are different entities. In the Southern District of New York, plaintiffs are owners of high-end hotels and restaurants in New York City and Washington, D.C. They allege that their businesses have suffered because foreign and state government officials want what only the Trump establishments can offer: “access to, influence on and the goodwill of the President of the United States.”
In the District Court for the District of Maryland, plaintiffs are the State of Maryland and the District of Columbia who claim that they are protecting their citizens from violations of the Foreign and Domestic Emoluments Clauses.
In the Washington, D.C. District Court, plaintiffs are Democratic members of Congress, including Senator Richard Blumenthal (D., Conn.), who have commenced an action against the president for allegedly violating the clauses.
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What is the evidence that foreign government clientele were patronizing Trump businesses?
In all three cases, plaintiffs have made claims and supported those claims with evidence that foreign governments patronize Trump business entities. For example, the Trump International Hotel in Manhattan received a noticeable revenue boost from a five-day stay by associates of Saudi Crown Prince Mohammed bin Salman a/k/a MBS. The Trump International Hotel in Washington, D.C., which is housed in a building that Trump’s company leases from the U.S. government, also obtains business from foreign governments and their representatives. A further example of a government official patronizing a Trump hotel was revealed in the infamous telephone call between President Trump and Volodymyr Zelensky, the recently elected president of the Ukraine, when President Zelensky noted that “I stayed at the Trump Tower” in discussing his last visit to the United States and to New York City.
Plaintiffs have also presented evidence in the Southern District of New York that foreign government officials who patronize Trump’s hotels suggest that it “would be rude to come to this city and stay with a competitor.”
It was also demonstrated in the litigation that Plaintiffs in the Southern District compete directly with approximately a half a dozen of Trump’s establishments over the same customer base. The court found that it was evident that the president implicitly solicited patronage of government officials and acknowledged that in making governmental decisions, he favors governments that patronize his businesses.
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What are the primary defenses to these lawsuits?
President Trump is represented by the U.S. Department of Justice in all three lawsuits, and the primary defenses raised by the president are the following:
• The Emoluments Clauses were intended to guard against corruption and foreign influence on federal officials in order to ensure the independence of the president and are not intended to protect anyone from competition;
• Plaintiffs lack standing to file these lawsuits since the alleged injury that the owners of hotels and restaurants suffered is wholly speculative and therefore, Defendant’s actions are too tenuous to satisfy the causation requirement;
• The case presents a non-justiciable political question and is not ripe for adjudication; and
• The language of the Foreign Emoluments Clauses makes clear that this is an issue committed exclusively to Congress and it is the only political branch with the power to consent to a violation of the clauses.
Therefore, it is up to Congress to determine to what extent the president’s conduct unlawfully infringes on that power.
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What is the present status of the three cases and what are the next steps?
In the Southern District of New York, District Court Judge Daniels granted the president’s motion to dismiss on the basis that plaintiffs lacked standing, but the Second Circuit Court of Appeals on September 13, 2019, reversed the district court and remanded the case for further proceedings. The reversal was premised on the Court of Appeals’ conclusion that plaintiffs had standing to file this action since their establishments did directly compete with approximately a half a dozen of Trump’s establishments over the same customer base.
In the District Court of Maryland, Federal Judge Peter Messitte denied the president’s motion to dismiss, but the Court of Appeals for the Fourth Circuit reversed the district court and dismissed the case primarily on the issue of standing. However, plaintiffs have filed a motion to have the entire Circuit Court hear re-argument of the case.
In the District Court for the District of Columbia, Federal Judge Emmett Sullivan denied the president’s motion to dismiss the lawsuit and has permitted discovery to proceed, including allowing plaintiffs to subpoena the president’s financial information. Furthermore, Judge Sullivan recently denied the president’s request to delay the case while he appeals.
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Conclusion
In view of the conflict between the circuits, it is likely that the Supreme Court would grant permission to appeal and be the final decision-maker on this issue. However, it is very possible that even if the Supreme Court were to grant a petition to appeal, the case may be rendered moot if Trump is no longer president. Although the meaning of the Emoluments Clauses has gone unanswered for 230 years, it is very possible that it will remain unanswered for the immediate future.
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Michael R. Wolford is a partner with The Wolford Law Firm LLP, which concentrates its practice in the area of litigation, with a special emphasis in commercial/business litigation, personal injury matters, employment litigation and white collar criminal defense.
