A federal appeals court Wednesday sided with President Trump, dismissing a lawsuit claiming the president is illegally profiting from foreign and state government visitors at his luxury hotel in downtown Washington.
The unanimous ruling from the U.S. Court of Appeals for the 4th Circuit is a victory for the president in a novel case brought by the attorneys general of Maryland and the District of Columbia involving anti-corruption provisions in the emoluments clauses of the U.S. Constitution.
In its ruling, the three-judge panel said the attorneys general lacked legal grounds to bring the lawsuit alleging the president is violating the Constitution when his business accepts payments from state and foreign governments. The decision — from Judges Paul V. Niemeyer, Dennis W. Shedd and A. Marvin Quattlebaum Jr. — also stops dozens of subpoenas to federal government agencies and Trump’s private business entities demanding financial records related to the D.C. hotel.
“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,” Niemeyer wrote in the 36-page opinion.
President Trump quickly took to Twitter to celebrate the ruling, referring to the lawsuit as “ridiculous” and “a big part of the Deep State and Democrat induced Witch Hunt.”
“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!),” he wrote.
The president has stepped back from day-to-day management of the Trump International Hotel and his other businesses, but he maintains ownership.
Maryland Attorney General Brian E. Frosh and D.C. Attorney General Karl A. Racine, both Democrats, said in a joint statement after the ruling that the three-judge panel “got it wrong.”
“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,” they said.
“We will continue to pursue our legal options to hold him accountable.”
The three judges on the panel that heard oral argument in March were nominated to the bench by Republican presidents — Niemeyer by President George H.W. Bush, Shedd by President George W. Bush and Quattlebaum by Trump. Frosh and Racine have said they would consider appealing for a rehearing by a full panel of the 4th Circuit and would not be surprised to see the case reach the Supreme Court.
The president faces multiple legal challenges related to his private business. A federal appeals court in Washington is considering a separate “emoluments” lawsuit brought by congressional Democrats, who this week began issuing dozens of subpoenas for financial records from the president’s private entities.
The case extends beyond the D.C. hotel and is based on a different theory of standing. The Democratic lawmakers say the president is violating the Constitution because it gives Congress the right to approve — or withhold — consent before the president accepts payments or benefits from foreign governments.
Despite the legal challenges his company faces, to this point Trump has been able to prevent the release of any private business information to the courts, leaving Democrats to wonder whether he will be affected by any of the inquiries before he faces reelection next year.
At the 4th Circuit, Trump’s attorneys were appealing a ruling from a District Court judge in Maryland who allowed the case to move forward and adopted a broad definition of the emoluments ban to include “profit, gain, or advantage” received “directly or indirectly” from foreign, federal or state governments.
The Richmond-based 4th Circuit, which reviews cases from Maryland, Virginia, West Virginia and the Carolinas, was specifically reviewing whether Maryland and the District of Columbia had legal grounds, or standing, to sue the president in the first place.
At least a half-dozen countries have booked large blocks of rooms or meeting space at Trump’s D.C. hotel, among them Saudi Arabia, Kuwait, Malaysia and the Republic of Georgia. Three years in a row, the Kuwaiti government held its National Day celebration there, and the plaintiffs allege that the 2017 event alone cost between $40,000 and $60,000.
The plaintiffs argued that these payments are violations of the foreign emoluments clause, while the Justice Department calls them market-rate deals that should not be considered emoluments.
The hotel occupies the Old Post Office Pavilion, a federal building leased to Trump’s business, in an arrangement that plaintiffs argue violates the domestic emoluments clause. The lease was signed before Trump entered office and stipulates that “no . . . elected official of the Government of the United States” shall benefit from the deal.
The General Services Administration, under Trump, ruled that the deal was in compliance.
The court’s ruling, however, centered on whether the plaintiffs had standing to bring their case against the president — not the merits of whether Trump is violating the Constitution with his business dealings. The 4th Circuit issued two rulings Wednesday — one dismissing the case against the president in his official capacity and the other in his individual capacity.
U.S. District Judge Peter J. Messitte had granted Maryland and the District of Columbia standing in part because Trump’s D.C. hotel could be taking foreign government business from convention centers and hotels in their jurisdictions as foreign leaders may be incentivized to spend money at the president’s property.
But the appeals court disagreed, writing that the attorneys general had failed to show that Trump’s conduct had harmed the financial interests of Maryland and the District and that intervening, by forcing the president to forgo his ownership, for instance, would make a difference.
“There is a distinct possibility — which was completely ignored by the District and Maryland, as well as by the district court — that certain government officials might avoid patronizing the Hotel because of the President’s association with it,” the court said.
“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. 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.”
Carol D. Leonnig contributed to this report.