Fourth Circuit Dismisses Emoluments Lawsuit Over Trump’s D.C. Hotel

July 10, 2019 by Dan McCue
The lobby bar at the Trump International Hotel in Washington. (Photo by Dan McCue)

WASHINGTON – The 4th U.S. Circuit Court of Appeals handed a legal victory to President Trump Wednesday, dismissing a lawsuit claiming he’s been illegally profiting from foreign and state government officials who stay at his luxury hotel on Pennsylvania Avenue.

“Word just out that I won a big part of the Deep State and Democrat induced Witch Hunt,” Trump tweeted when the ruling by the three-judge panel was announced.

“Unanimous decision in my favor … on the ridiculous Emolument Case,” the president said. “I don’t make money, but lose a fortune for the honor of serving and doing a great job as your president (including accepting Zero salary!).”

Since taking office, the president has stepped back from day-to-day management of the hotel, but he continues to maintain an ownership interest.

The emoluments clause at issue in the case, which was filed in 2017, was designed to prevent undue influence on government officials, but has never been applied in court to a sitting president.

In its ruling, the 4th Circuit panel said the attorneys general of Maryland and the District of Columbia lacked legal standing to bring the lawsuit alleging the president violates the Constitution every time the Trump International Hotel accepts payment from foreign officials.

“The District and Maryland’s interest in enforcing the Emoluments Clause 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,” wrote U.S. Circuit Judge Paul Niemeyer.

The decision, one which Niemeyer was joined by U.S. Circuit Judges Dennis Shedd and A. Marvin Quattlebaum, also voided scores of subpoenas issued to Trump business entities and government agencies for financial records tied to the downtown hotel.

All three judges on the panel were nominated by Republican presidents: Niemeyer, by George H.W. Bush; Shedd, by George W. Bush, and Quattlebaum, by Trump.

In their lawsuit, the attorneys general attempted to argue that Trump’s hotel diverts business from hotels and high-end resorts within their jurisdictions.

But the panel said the notoriety of the president could cut two ways.

“There is a distinct possibility … that certain government officials might avoid patronizing the Hotel because of the President’s association with it,” Niemeyer wrote, opining that this was a possibility the attorneys general completely ignored in their filings.

“Even if government officials were patronizing the Hotel to curry the President’s favor, there is no reason to conclude that they would cease doing so were the President enjoined from receiving income from the Hotel,” Niemeyer said. “After all, the Hotel would still be publicly associated with the President, would still bear his name, and would still financially benefit members of his family.”

Trump’s attorney, Jay Sekulow was no more reserved in his response to the ruling than his client.

When asked to comment by reporters, Sekulow said the lawsuit was just one in a long line of efforts to harass the president and he called Wednesday’s dismissal, “a complete victory.”

Meanwhile Kellu Laco, a spokeswoman for the Justice Department said it was pleased “the Fourth Circuit unanimously decided to dismiss this extraordinarily flawed case.”

Maryland Attorney General Brian Frosh and D.C. Attorney General Karl Racine, both Democrats, said they are considering appealing for a rehearing by a full panel of the 4th Circuit.

“Although the court described a litany of ways in which this case is unique, it failed to acknowledge the most extraordinary circumstance of all: President Trump is brazenly profiting from the Office of the President in ways that no other President in history ever imagined and that the founders expressly sought — in the Constitution — to prohibit,” the attorneys general said in a joint statement.

A federal appeals court in Washington is considering a separate emoluments lawsuit brought by Congressional Democrats, who this week began issuing subpoenas for financial records from the president’s private entities.

The 37 subpoenas, issued “to a number of Trump business enterprises, including the Trump Organization, [seek] information about foreign government payments accepted by six Trump properties, as well as trademarks granted to Trump businesses by foreign governments,” according to a statement from Senator Richard Blumenthal, D-Conn., and Representative Jerry Nadler, D-N.Y., on behalf of the more than 200 Democrats who signed on to the lawsuit.

Democrats sued President Trump last summer, arguing that under the foreign emoluments clause in the Constitution, Congress must consent to all foreign payments his businesses earn, including the Trump International Hotel.

On Monday, the Justice Department petitioned the D.C. appeals court for a stay of the subpoenas issued in that case. 

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