A federal judge denied the Justice Department’s efforts to halt legal proceedings in a case accusing President Donald Trump of violating the U.S. Constitution – opening the door for Trump’s critics to soon gain access to financial records related to his Washington, D.C., hotel.
Trump has been fighting multiple lawsuits that argue that foreign representatives’ spending money at the Trump International Hotel is a violation of the Constitution’s emoluments clause, which bans federal officials from accepting benefits from foreign or state governments without congressional approval.
In a sally to prevent the case moving on to legal discovery — which would potentially unearth financial records such as Trump’s income tax returns — Justice Department lawyers had asked Maryland-based U.S. District Judge Peter J. Messitte to put the case on hold while they appeal his decision to a higher court in Richmond, Virginia.
That effort failed.
“This is another major win for us in this historic case,” said District of Columbia Attorney General Karl A. Racine in a statement. “Our next step is to proceed with discovery. We will soon provide the court a new schedule to begin the process of getting information about how President Trump is profiting from the presidency.”
Messitte wrote in a sometimes blistering 31-page opinion released Friday that the president did not sufficiently meet the requirements for an appeal midway through the ongoing case.
“It is clear that the president, unhappy with the court’s reasoning and conclusion, merely reargues that his interpretation of the emoluments clauses should apply instead of the one the court gave,” he wrote. “The court sees no point in stating again why it concluded as it did.”
But, Messitte said, merely disagreeing with the court doesn’t constitute a required “substantial” reason for such an appeal.
Justice Department spokeswoman Kelly Laco told The Associated Press that the department “disagrees with and is disappointed” by Messitte’s ruling. She added: “This case, which should have been dismissed, presents important questions that warrant immediate appellate review.”
Justice lawyers had objected to any discovery on a sitting president in his official capacity because of separation of powers concerns, in order to avoid a “constitutional confrontation” between two branches of government. They argued that the “public interest is decidedly in favor of a stay because any discovery would necessarily be a distraction to the President’s performance of his constitutional duties.”
The president could try to seek a writ of mandamus to have the appeal heard by a higher court. That would be an “extraordinary remedy,” according to the Justice Department’s website, that “should only be used in exceptional circumstances of peculiar emergency or public importance.”
It’s also a move with a demanding standard for petitioners that would partly rest on showing Messitte’s decisions to be clearly wrong.
The plaintiffs, Maryland and the District of Columbia, have said they plan to move forward quickly with discovery, seeking information and financial records that would primarily come from third parties rather than the government.
A clue as to what they may request can be found in the preservation subpoenas they filed more than a year ago with 23 Trump-related entities, including The Donald J. Trump Revocable Trust, The Trump Organization, the Mar-a-Lago Club, Inc., and entities related to his D.C. hotel and its management, among others.
The subpoena requires the majority of documents to be preserved from Jan. 1, 2015 on an ongoing basis. The court filings cite document categories for preservation, including those from Nov. 8, 2016 onward concerning “marketing to foreign or domestic governments, including members of the diplomatic community.” Other noted categories for preservation include documents that would identify guests of the hotel and those who have rented event space, details on all finances, “operating leases, permits, licenses, tax payments or credits to or from foreign or domestic governments.”
A schedule of legal discovery is due in 20 days and it could begin quickly thereafter, depending on what is agreed to by all parties.
Though the case has been narrowed to focus on Trump’s Washington, D.C., hotel, “that hotel is a nexus for a far-flung web of foreign and domestic emoluments,” said Norman Eisen, chairman of the nonprofit Citizens for Responsibility and Ethics in Washington, which is co-counsel with the two jurisdictions.
The emoluments clause has never been fully tested in an American courtroom. Two other lawsuits accusing the president of violating the emoluments clause are also being heard in other federal courts. Neither has reached the discovery stage.
The plaintiffs have argued that Trump — who has declined to divest from his assets as president — is capitalizing on the presidency and causing harm to businesses trying to compete with his Washington hotel, which is just steps from the White House.
The Justice Department has said earnings from business activities, including hotel room stays, don’t qualify as emoluments. Its attorneys have argued that under Maryland and D.C.’s interpretation, no federal official would even be able to own stock from a foreign company that provides profits or collects royalties.
Messitte pushed back in his opinion against any delaying tactics by the president and his Justice Department lawyers.
“There is genuine concern on the part of plaintiffs, indeed the court shares it, that if the president is permitted to appeal the court’s decisions in piecemeal fashion, ultimate resolution of the case could be delayed significantly, perhaps for years” especially because it’s likely the president would appeal any negative decisions up to the U.S. Supreme Court.
“That, as a matter of justice, cannot be countenanced.”