Friday, April 14, 2017

No. 213: Donald Trump and Alleged Violations of the Constitution's Foreign Emoluments Clause

Prior to his inauguration as President of the United States, Donald J. Trump was the subject of allegations that unless he took drastic steps he would be in violation of the Foreign Emoluments Clause of the U.S. Constitution the moment he took his oath of office. He did not take those steps, and he was inaugurated on Friday, January 20, 2017. On Monday morning, January 23, Citizens for Responsibility and Ethics in Washington (CREW) filed a two-count complaint. (See CREW v. Trump, U.S. District Court, Southern District of New York, Case No. 1:17-cv-458.)

The case was assigned to U.S. District Judge Ronnie Abrams. President Obama nominated her in July 2011, and the Senate confirmed her in March 2012 by a 96-2 vote.

The Plaintiff
CREW is a 501(c)(3) nonprofit, nonpartisan corporation. It is "committed to protecting the rights of citizens to be informed about the activities of government officials, ensuring the integrity of government officials, protecting our political system against corruption, and reducing the influence of money in politics."

The plaintiff's attorneys are Norman L. Eisen, Richard W. Painter, Noah Bookbinder, Adam J. Rappaport, and Stuart C. McPhail of CREW; Deepak Gupta, Jonathan E. Taylor, Rachel S. Bloomekatz, and Matthew Spurlock of Gupta Wessler PLLC; Daniel A. Small, Joseph M. Sellers, and Robert Abraham Braun of Cohen, Millstein, Hausfeld & Toll PLLC; Lawrence H. Tribe of the Harvard Law School; Erwin Chemerinsky of the School of Law at the University of California, Irvine; and Zephyr Teachout of the Fordham Law School.

The Defendant
Donald J. Trump is the President of the United States. He is sued in his official capacity as President.

The defendant's attorneys, all associated with the Civil Division of the U.S. Department of Justice, are Chad A. Readler, Jennifer D. Ricketts, Anthony J. Coppolino, Jean Lin, and James R. Powers.

The Foreign Emoluments Clause
The "Legal Background" section of CREW's complaint describes the nature and background of the U.S. Constitution's Foreign Emoluments Clause. Here is the opening paragraph of that section:
Article I, Section 9, Clause 8 of the U.S. Constitution provides as follows: "No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State."
The Complaint
CREW alleges that Trump has violated the Foreign Emoluments Clause in various ways. Here is the opening paragraph of the complaint:
Never before have the people of the United States elected a President with business interests as vast, complicated, and secret as those of Donald J. Trump. Now that he has been sworn in as the 45th President of the United States, those business interests are creating countless conflicts of interest, as well as unprecedented influence by foreign governments, and have resulted and will further result in numerous violations of Article I, Section 9, Clause 8 of the United States Constitution, the "Foreign Emoluments Clause."
In the "Relevant Facts" section of the complaint, CREW alleges numerous violations of the Foreign Emoluments Clause. Here is the opening paragraph of that section:
Defendant owns and controls hundreds of businesses throughout the world, including hotels and other properties. His business empire is made up of hundreds of different corporations, limited-liability companies, limited partnerships, and other entities that he owns or controls, in whole or in part, operating in the United States and 20 or more foreign countries. Defendant's businesses are loosely organized under an umbrella known as the "Trump Organization." However, Defendant's interests include not only Trump Organization LLC d/b/a The Trump Organization and The Trump Organization, Inc., both of which are owned solely by Defendant, but also scores of other entities not directly owned by either "Trump Organization" entity but that Defendant personally owns, owns through other entities, and/or controls. Defendant also has several licensing agreements that provide streams of income that continue over time. Through these entities and agreements, Defendant personally benefits from business dealings, and Defendant is or will be enriched by any business in which they engage with foreign governments and officials.
Subsections of the "Relevant Facts" section are New York's Trump Tower; Washington, D.C.'s Trump International Hotel; Other Domestic and International Properties and Businesses; International Versions and Distribution of "The Apprentice" and Its Spinoffs; and Other Foreign Connections, Properties, and Businesses. Countries discussed in the last of the preceding subsections are China, India, United Arab Emirates, Indonesia, Turkey, Scotland, Philippines, Russia, Saudi Arabia, and Taiwan. Another subsection alleges that many of those business interests are likely to cause violations of the "Domestic Emoluments Clause," which is Article II, Section 1, Clause 7 of the Constitution.

The plaintiff seeks court declarations about the meaning of certain words and phrases in the Foreign Emoluments Clause, and an injunction barring the defendant from violating the Foreign Emoluments Clause. The plaintiff also seeks reasonable attorneys' fees and costs.

Early Developments
On January 23, Judge Abrams ordered the parties to submit a joint letter advising of contemplated motions and proposing a briefing schedule. On February 17, the parties filed the joint letter, which the judge endorsed the same day. Trump's answer and any dispositive motions are due April 21, responses are due June 2, and replies are due June 30. The joint letter includes this sentence:
Because the Defendant expects that his dispositive motion, if any, will raise only legal issues pursuant to Federal Civil Rule of Procedure 12(b), the parties have agreed to postpone discussing any discovery schedule in this action until the dispositive motion is adjudicated.
A Related Case
On February 10, William R. Weinstein filed a class action complaint against Trump on behalf of himself and the U.S. people. He filed an amended complaint on March 7. He is a citizen of the United States and of New York State, resides in the Southern District of New York, is an attorney, represents himself, and is counsel for a proposed class. The parties have agreed on initial briefing dates in May, June, and July. Judge Abrams accepted the case as related to the CREW case. (See Weinstein v. Trump, U.S. District Court, Southern District of New York, Case No. 1:17-cv-1018.)

An Amicus Brief
On February 27, Mark Richards, a U.S. citizen, filed an amicus brief in support of Trump. Richards represents himself. He describes the CREW complaint as a "distraction" and calls the claims "frivolous and vexatious."

General Observations
The complaint mentions some intriguing statements in which the defendant denies the existence of conflicts of interest. On November 22, 2016, in an interview with The New York Times, he said "the law is totally on my side, meaning, the president can't have a conflict of interest." On January 11, 2017, at a press conference, he said "I have a no-conflict situation because I'm president" and "I have a no conflict of interest provision as president." By contrast, the plaintiff says: "There is no law or constitutional provision that exempts the President from the Foreign Emoluments Clause."

Rule 12(b), which is referred to under "Early Developments" above, refers to defenses such as lack-of-subject-matter jurisdiction, lack of personal jurisdiction, improper venue, and failure to state a claim upon which relief can be granted. I think it is likely that Trump's attorneys will file a motion to dismiss CREW's complaint using one or more of the above defenses. To say that the case bears close watching is an understatement.

Available Material
I am offering a complimentary 42-page PDF consisting of CREW's complaint (39 pages), the judge's January 23 order (1 page), and the parties' February 17 joint letter endorsed by the judge (2 pages). Email and ask for the April 2017 package relating to the CREW/Trump emoluments case.