Thursday, May 4, 2017

No. 216: Donald Trump and the Two Emoluments Clauses of the U.S. Constitution—An Update

In No. 213 (posted April 14, 2017), I wrote about a complaint that Citizens for Responsibility and Ethics in Washington (CREW) filed on January 23 against President Donald J. Trump. CREW alleged that Trump had committed numerous violations of the two emoluments clauses of the U.S. Constitution. The case was assigned to U.S. District Judge Ronnie Abrams. The parties agreed, and the judge ordered, that dispositive motions were due by April 21, that responses were due by June 2, and that replies to the responses were due by June 30. (See CREW v. Trump, U.S. District Court, Southern District of New York, Case No. 1:17-cv-458.)

The Amended Complaint
On April 18, three days before the anticipated filing of Trump's motion to dismiss the complaint, CREW filed a significantly amended complaint. It added two new plaintiffs and many new allegations.

On April 19, the parties, in a joint letter to Judge Abrams, said the Federal Rules of Civil Procedure require a response from the defendant by May 2. However, the parties briefly described the significantly amended complaint and asked for a longer briefing schedule. They requested that the defendant's dispositive motion be due by June 2, that the plaintiffs' response to any dispositive motion be due by July 14, and that the defendant's reply be due by August 11. The judge immediately granted the parties' joint request.

The New Plaintiffs
One new plaintiff is Restaurant Opportunities Centers United, Inc. (ROC United), a nonprofit, nonpartisan organization founded in 2008. It has over 200 restaurant members, nearly 25,000 restaurant-employee members, and about 3,000 diner members. It engages employers, workers, and consumers "to improve wage and working conditions in the restaurant industry, including by providing job training, placement, leadership development, civil engagement, legal support, and policy advocacy." It also owns and operates a restaurant in New York City, and will soon open another restaurant in Washington, D.C.

The other new plaintiff is Jill Phaneuf, a resident of Washington, D.C. She works with a hospitality company to book events for two hotels in Washington, D.C. She seeks to book embassy functions, political functions involving foreign governments, and other events in the Washington, D.C. area. Her compensation is tied directly to a percentage of the gross receipts of the events she books for the hotels.

The Plaintiffs' Injuries
In No. 213, I did not discuss the comments in the original complaint about the injuries CREW suffers as a result of Trump's alleged violations of the two emoluments clauses. The amended complaint provides a similar list of injuries, which includes diversion of communications resources, diversion of legal resources, diversion of research resources, and impairment of programmatic functions and fundamental services.

The amended complaint discusses the injuries to ROC United. They include injuries to ROC United's restaurant members, worker members, and restaurants as a result of Trump's alleged violations of the two emoluments clauses. The amended complaint also alleges that ROC United's restaurants have been and will be injured by competition with Trump's restaurants.

The amended complaint discusses the injuries to Phaneuf as a result of Trump's alleged violations of the two emoluments clauses. It alleges that she has been and will be injured due to a loss of commission-based income.

The Presidential Emoluments Clause
The original complaint focused primarily on alleged violations of the Foreign Emoluments Clause of the Constitution. The amended complaint expands on alleged violations of the Domestic Emoluments Clause, which is also referred to as the "Presidential Emoluments Clause." It is Article II, Section 1, Clause 6 of the Constitution, which reads:
The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.
The amended complaint discusses Trump's alleged violations of the Presidential Emoluments Clause, especially his personal financial interest in the "Old Post Office" building in Washington, D.C. That building is now the Trump International Hotel. It operates under a 60-year lease executed in 2013 with the General Services Administration, a U.S. agency. The amended complaint alleges that Trump has been in breach of the lease since the moment he was inaugurated on January 20.

The amended complaint also discusses Trump's alleged violations of the Presidential Emoluments Clause through the "premium" he receives for goods and services sold by his various businesses. For example, the starting rate for guest rooms at the Trump International Hotel increased to $500 on most nights, up hundreds of dollars from when the hotel opened shortly before the election. As another example, the annual rate for membership in Trump's Mar-a-Lago resort doubled from $100,000 to $200,000 shortly after the election.

General Observations
I think the amended complaint is significantly stronger than the original complaint. I have nothing to add to my general observations in No. 213. I plan to report further on the case after Judge Abrams issues a ruling on Trump's anticipated motion to dismiss the amended complaint.

Available Material
I am offering a complimentary 68-page PDF consisting of the amended complaint (66 pages) and the parties' April 19 joint letter request granted by Judge Abrams (2 pages). Send an email to and ask for the May 2017 package relating to the CREW/Trump emoluments case.