Emoluments: Maryland Federal Court Holds Plaintiffs Have Standing in Challenge

By Matt Propper and Norman Siegel

On March 28, 2018, a Maryland District Court denied-in-part President Trump’s Motion to Dismiss a lawsuit (The District of Columbia and The State of Maryland v. Donald J. Trump, individually and in his official capacity as President of the United States), alleging that Trump violated the Foreign and Domestic Emoluments Clauses. The case was filed by the Attorneys General of the District of Columbia and Maryland. The plaintiffs argue that Trump’s emoluments violations harm the sovereign, quasi-sovereign, proprietary and parens patriae interests of Maryland and the District of Columbia. In addition, the plaintiffs argue that Trump’s violations harm the interest of Maryland and D.C. in “protecting their economies and residents.”

In the ruling, Judge Messitte found that the plaintiffs “have standing to challenge the actions of the President with respect to the Trump International Hotel and its appurtenances in Washington, D.C., as well as the operations in the Trump Organization with respect to them.” However, the ruling grants the Motion to Dismiss “with respect to the operations of the Trump Organization and the President’s involvement in the same outside the District of Columbia.”

The court ruled that the plaintiff’s injuries-in-fact to their quasi-sovereign, proprietary and parens patriae interests have been shown. In regard to the quasi-sovereign interests, the court held that “there is a decent possibility, at least as far as the Hotel in Washington is concerned, that the District of Columbia may have felt itself effectively ‘coerced’ into granting special concessions to the Hotel and that Maryland may feel itself under pressure to respond in similar fashion.” As far as the propriety interests, Judge Messitte found that the “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, allowing an inference of impending (if not already occurring) injury to Plaintiffs’ proprietary interests.” Lastly, for the parens patriae interests, the court held that “Plaintiffs are not attempting to ‘stand in the shoes’ of a limited number of businesses as the President suggests, Hr’g Tr. at 34, 83; they are, quite plausibly, trying to protect a large segment of their commercial residents and hospitality industry employees from economic harm.”

Thus, the court concluded that the “Plaintiffs have demonstrated their standing to challenge those purported violations because they have shown injury-in-fact, fairly traceable to the President’s acts, and that the injury is likely redressable by the Court.”

Judge Peter Messitte explicitly disagreed with a previous Emoluments case decision (see January 2, 2018 Declaration 17 update “Emoluments: December Ruling”) when he stated: “The court disagrees with the conclusion reached by Judge Daniels in CREW et al. v. Trump, No. 17-cv-458, that the draftsmen of the Constitution did not have competitors in mind when they composed the Emoluments Clauses, with the implication that no competitors anywhere are ever within the zone of interests of the Clauses. But the Emoluments Clauses clearly were and are meant to protect all Americans…there is no reason why Plaintiffs, a subset of Americans who have demonstrated present injury or the immediate likelihood of injury by reason of the President’s purported violations of the Emoluments Clauses, should be prevented from challenging what might be the President’s serious disregard of the Constitution” (page 41 of the opinion).

Stay tuned to observe how the Emoluments challenge proceeds.