A federal appeals court has temporarily blocked the attorneys general of Maryland and the District of Columbia from gathering evidence in their lawsuit alleging President Trump’s hotel in Washington is violating the Constitution’s ban on gifts or payments from foreign governments.
The unsigned order from the Richmond-based appeals court puts on hold dozens of subpoenas the attorneys general issued this month for records and other documents from business entities related to Trump’s hotel, pending an appeal by the Justice Department.
If ultimately obtained by the plaintiffs and made public by the court, the records would shed light on the inner-workings of the president’s private company.
The U.S. Court of Appeals for the 4th Circuit has scheduled oral argument for March on the Justice Department’s request for review of the suit, which a federal judge in Maryland ruled Nov. 30 could proceed.
In a joint statement, Maryland Attorney General Brian E. Frosh and D.C. Attorney General Karl A. Racine said the court’s order “is a procedural one and is not a ruling on the merits of our historic lawsuit against President Trump. We firmly believe that the federal district court got it right when it allowed us to move forward with this action and discovery.”
The appellate court order was welcome news for the president’s company, now run by his sons Donald Trump Jr. and Eric Trump, at a time when it is fending off legal action on multiple fronts, including a second emoluments case brought by 198 Democrats in Congress that has not yet advanced as far.
The Justice Department, which is representing the president in his official capacity, is “pleased” with the appeals court’s decision to intervene, spokeswoman Kelly Laco said Friday.
The government’s appeal to the 4th Circuit follows lower-court decisions that have allowed the case to proceed based on the previously obscure emoluments clauses in the Constitution, which bar presidents from taking improper payments from foreign governments and individual states.
Trump’s attorneys have said he is not violating the clauses, which they argue were intended to bar bribes, not regular business transactions.
At the beginning of this year, the Trump Organization donated more than $150,000 to the U.S. Treasury, which it said was the amount of profits it earned last year from foreign government spending at its properties. But it provided no details about those transactions or clients.
Rulings earlier this year by U.S. District Judge Peter J. Messitte in Maryland, which allowed the case to move forward, marked the first time a federal judge had interpreted the Constitution’s anti-corruption clauses and applied their restrictions to a sitting president, legal experts said.
The attorneys general cleared an initial legal hurdle when Messitte found that the plaintiffs have legal standing to sue the president and limited the scope of the case to Trump’s Washington hotel. The judge rejected the government’s previous requests to allow an appeal in the midst of litigation and to put the evidence-gathering process on hold.
Once Messitte allowed discovery to begin, Frosh and Racine responded by seeking a bevy of documents related to the D.C. hotel, among them marketing materials targeted to foreign embassies, credit card receipts and restaurant reservation logs.
Also receiving subpoenas were a number of federal agencies that may have spent money at the hotel, which operates in the federally owned Old Post Office Pavilion on Pennsylvania Avenue downtown, as well as the General Services Administration, which administers the hotel’s lease.
Justice Department attorneys have characterized the lawsuit as extraordinary and wrote in a filing to the 4th Circuit that the district court judge had “treated this case as a run-of-the-mill commercial dispute.”
“The complaint rests on a host of novel and fundamentally flawed constitutional premises, and litigating the claims would entail intrusive discovery into the President’s personal financial affairs and the official actions of his Administration,” Justice Department attorneys argued.
In advance of oral argument in March, the appeals court order asked the parties to specifically address whether the attorneys general have standing to sue in the first place.