U.S. Court of Appeals Dismisses Emoluments Lawsuit Against Trump

By Krista Doherty

On July 10, 2019, the judges of the fourth circuit Court of Appeals ruled against the District of Columbia and the State of Maryland in their lawsuit against Donald Trump for violating the Foreign and Domestic Emoluments Clauses of the U.S. Constitution.

Judges Paul Niemeyer, A. Marvin Quattlebaum, and Dennis Shedd concluded “the District and Maryland’s interest in enforcing the Emoluments Clauses is so attenuated and abstract that their prosecution of this case readily provokes the question of whether this action against the President is an appropriate use of the courts, which were created to resolve real cases and controversies between the parties” (Opinion, 35-36). The court granted President Trump’s writ of mandamus, and reversed the District Court’s ruling.

The Plaintiffs argue that the President has harmed their sovereign, quasi-sovereign, and proprietary interests, and “[f]or relief, the District and Maryland seek a declaratory judgment that the President has violated the Emoluments Clauses and injunctive relief prohibiting future violations” (Opinion, 4).

The Foreign Emoluments Clause asserts that the President of the United States cannot “‘accept any present, Emolument, Office, or Title . . . from any King, Prince, or foreign state” (Opinion, 3) (citation omitted). The Domestic Emoluments Clause declares the President cannot “receive ‘compensation’ ‘for his Services’ but not ‘any other Emolument’ from the United States or any State” (Opinion, 3) (citation omitted). President Trump “filed a motion to dismiss the complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), contending, among other things, that the District and Maryland lack standing to bring their action; that they do not have equitable causes of action to enforce the Emoluments Clauses; and that he has not received “emoluments” as prohibited by the Clauses”  (Opinion, 4).

The Plaintiffs explain that the Trump International Hotel in D.C., where the President has 76% interest, “markets itself to the diplomatic community” which results in the President receiving “benefits.” Additionally, the President receives income from foreign states staying at the Trump Tower and Trump World Tower in New York City, “a favorable trademark decision from the Chinese government,” income from “The Apprentice” spinoffs, and “income from real estate projects in which the Trump Organization is engaged in the United Arab Emirates and Indonesia” (Opinion, 7-8).  The Plaintiffs provide many more examples such as the State Department and U.S. Embassies supposedly promoting the Mar-a-Lago Club which is owned by President Trump (Opinion, 8).

The court saw six issues with this lawsuit: (1) “the Emoluments Clauses which, by their terms, give no rights or remedies,” (2)  it is an injunction against a sitting President, (3) never before has a court “entertained a claim to enforce” the Emoluments Clauses, (4) this lawsuit raises “novel and difficult constitutional questions, for which there is no precedent,” (5) the Plaintiffs have had “substantial difficulty articulating how they are harmed by the President’s alleged receipts of emoluments and the nature of the relief that could redress any harm conceived,” and (6) the court believes that if this lawsuit were to move forward it “could result in an unnecessary intrusion into the duties and affairs of a sitting President.” The court goes on to say, “accordingly, not only is this suit extraordinary, it also has national significance and is of special consequence” (Opinion, 14).

The court notes that the District Court had “recognized the Supreme Court’s instruction that ‘district courts should not hesitate to certify an interlocutory appeal’ under  § 1292(b) when a decision ‘involves a new legal question or is of special consequence” (Opinion, 16). However, § 1292(b) also states “that resolution of a ‘controlling question of law . . . may materially advance the ultimate termination of the litigation,’” and “there can be no doubt that the questions the President sought to have certified under § 1292(b) were ‘controlling’ and that their prompt appellate resolution could ‘materially advance the ultimate termination of the litigation’” (Opinion, 20). Therefore, the court concluded, “because there is no other mechanism for prompt appellate review of the threshold legal issues raised by the District and Maryland’s complaint, which asserts unprecedented claims directly against a sitting president . . . and because the district court erred so clearly in applying the § 1292(b) criteria, we conclude that granting the President’s petition for mandamus is appropriate” (Opinion, 20). However, the court is quick to caution “that disturbing an exercise of broad discretion conferred on district courts to determine whether to certify orders for interlocutory appeal should be rare and occur only when a clear abuse of discretion is demonstrated” (Opinion, 21).

The District court had ruled the Plaintiffs have standing. Beginning with proprietary interests, the District Court believed the District and Maryland proprietary interests in the Washington Convention Center and Montgomery County Convention Center are harmed due to “the President’s receipt of emoluments from the Trump International Hotel provides the Hotel with an illegal competitive advantage and thus diverts business away from these properties” (Opinion, 27). However, the court stated, “the District and Maryland’s theory of proprietary harm hinges on the conclusion that government customers are patronizing the Hotel because the Hotel distributes profits or dividends to the President, rather than due to any of the Hotel’s other characteristics. Such a conclusion, however, requires speculation into the subjective motives of independent actors who are not before the court, undermining a finding of causation” (Opinion, 28). Furthermore, “when counsel for the District and Maryland, upon being questioned, was repeatedly unable to articulate the terms of the injunction that the District and Maryland were seeking to redress the alleged violations” (Opinion, 30).

As for the Quasi-Sovereign interests of the Plaintiffs, the court applied Supreme Court precedent that states, “to seek injunctive and declaratory relief, “a plaintiff must show that he is under threat of suffering ‘injury in fact’ that is concrete and particularized” and that ‘the threat is actual and imminent, not conjectural or hypothetical” (Opinion, 33) Therefore, the court concluded, “the District and Maryland’s interest in constitutional governance is no more than a generalized grievance, insufficient to amount to a case or controversy within the meaning of Article III” (Opinion, 35).  

Overall, the court said the District and Maryland failed to “make a sufficient showing” of harm and how “enjoining that conduct would redress harm” (Opinion, 28). Moreover, the court stated, “when plaintiffs before a court are unable to specify the relief they seek, one must wonder why they came to the court for relief in the first place” (Opinion, 30).