The U.S. Court of Appeals has vacated a lower court decision that blocked the Emoluments case against President Trump. The September 13 ruling in Citizens for Responsibility and Ethics in Washington v. Trump, reversed the United States District Court for the Southern District of New York (George B. Daniels, J.), which had granted the president’s motion to dismiss the action based on the Domestic and Foreign Emoluments Clauses of the Constitution. The Second Circuit vacated and remanded this decision in a decision written by circuit judge Pierre N. Leval.
Judge John M. Walker, Jr. issued a dissenting opinion, largely drawing on a similar case in the Fourth Circuit.
The plaintiffs, some of whom are hoteliers and restaurant-owners, allege that “they directly compete with the president’s establishments for foreign, state, and federal government clientele” and have lost business after November 2016, according to the Second Circuit’s ruling. The plaintiffs also claim that the president has been “implicitly soliciting the patronage of government officials” and that “he favors governments that patronize his businesses” and that this had the desired effect – governments and diplomats spending money at the Trump establishments. The president’s receipt of the revenues would thus violate the Foreign and Domestic Emoluments Clauses. The plaintiffs seek declaratory and injunctive relief, viz. a declaration from the courts that the president’s conduct violates the constitution and an injunction to stop this behavior and release financial records.
The case had been dismissed mostly due to an apparent lack of standing, i.e. because the plaintiffs were not the persons who could or should have brought the claims. The Second Circuit held that the plaintiffs had standing because they plausibly alleged injury in fact as well as a causal connection between the injury and the conduct complained of, and because it is likely that the injury will be redressed by a favorable decision. The dissent found none of these and held that because the lawsuit was political in nature, it cannot have standing. The majority disagreed and held that a political motive is irrelevant if the required bases for standing had been plausibly alleged as was the case here.
The dissent also argued that the Emoluments Clause was not designed to regulate the marketplace and that the plaintiffs’ injuries fall outside the zone of interests of the Emoluments Clause; however, the majority of the appeals court disagreed.
The District Court’s dismissal had also held that the case presents a nonjusticiable political question, and that the issues it raises are not ripe for adjudication. The Second Circuit dismissed both grounds, finding that the Emoluments Clause is well within the jurisdiction of the federal courts, and that sufficient injury had occurred to make the case ripe for adjudication.