The House panel, chaired by Rep. Richard E. Neal (D-Mass.), has not requested Trump’s state returns. Trump’s attorneys filed the lawsuit in July preemptively, arguing that without an emergency court order blocking a congressional request, his New York returns might be disclosed before the president’s opposition could be heard in court.
While the case was pending, New York state tax officials agreed not to turn over Trump’s records any sooner than seven days after Nichols ruled on whether the Trump lawsuit should be heard before him or before a federal judge in New York.
On Monday, Nichols concluded the latter, dismissing the New York state defendants and giving Trump the option of refiling his lawsuit against them in his home state, effectively setting the seven-day clock running, if the House were to ask for Trump’s returns.
“Based on the current allegations, Mr. Trump has not met his burden of establishing [the court’s] personal jurisdiction over either of the New York Defendants,” the state’s tax commissioner and attorney general, Nichols wrote in a 19-page opinion.
Nichols withheld ruling on the president’s argument but acknowledged the New York state officials’ position that Trump’s lawsuit involves a New York state law and “alleges no events or omissions” in Washington by state officials.
Nichols said the president also could refile his case in Washington against the House committee, if and when it makes a request.
“Mr. Trump may press his claims against the New York Defendants in this Court should future events support the exercise of personal jurisdiction over them, or he may opt to pursue those claims in an appropriate forum,” said Nichols, a Trump appointee who joined the bench in July.
New York’s Trust Act, signed by Gov. Andrew M. Cuomo (D) and enacted July 7, allows New York tax officials to turn over Trump’s state tax returns to three House committees, provided the New York officials receive requests “in furtherance of a legitimate task of Congress.
In a statement, New York Attorney General Letitia James (D) said she was “pleased” with the court’s conclusion, adding: “The TRUST Act is an important tool that will ensure accountability to millions of Americans who deserve to know the truth. We have never doubted that this law was legal, which is why we vigorously defended it from the start and will continue to do so.”
It was not immediately clear what the next steps by Trump’s attorneys would be, or those of lawmakers.
The House committee has expressed no interest in Trump’s New York returns but has categorically opposed any attempt by the president or the courts to preempt such a request in the future, seeking to leave its options open.
House general counsel Douglas N. Letter had urged Nichols to reject Trump’s lawsuit, saying the committee's decision whether to use the new state law is “absolutely immune” from court review under the Constitution’s grant of legislative powers to Congress.
Barring lawmakers from even requesting Trump’s state returns would appear to mark the first time any court overrode Congress’s freedom to conduct legislative work, before lawmakers have taken any action, Letter said.
Such a decision now could rest with a judge in New York if Trump’s attorneys refile their claim in federal court there. Alternatively, the president’s team could attack the legality of the New York law, or wait to bring the case again in Washington if the House committee shifts course and decides to request Trump’s state returns.
Trump attorney Patrick Strawbridge had argued that the president does not intend to bring a second suit in New York, citing resources, but instead said it would ask Nichols again to enter an emergency order to tie the House committee’s hands.
Nichols’s opinion came amid a wave of litigation over the president’s attempts to shield his personal finances from investigators, including congressional Democrats, state lawmakers and regulators.
Separately, the House Ways and Means Committee has sought six years of Trump’s federal tax returns, from 2013 to 2018, as part of an investigation of the audit program at the Internal Revenue Service.
A different federal judge in Washington, U.S. District Judge Trevor N. McFadden, is weighing a lawsuit by the committee to enforce its subpoena for Trump’s federal returns, which Trump as a candidate in 2016 initially said he would make public before eventually refusing to do so, a position since joined by Treasury Secretary Steven Mnuchin.
The president has also asked for a full panel of the U.S. Court of Appeals for the D.C. Circuit to overturn a circuit panel’s decision upholding a subpoena from the House Oversight and Reform Committee for similar Trump records dating to 2011 from Trump’s accounting firm, Mazars USA.
Separately, the New York-based U.S. Court of Appeals for the 2nd Circuit has denied Trump’s appeal of a lower court’s decision upholding subpoenas by the House Financial Services and Intelligence committees for years of financial documents from the president, his children and his companies from Deutsche Bank and Capital One.
Trump has called the pursuit of his private financial information an attempt at political gain and accused New York legislators of violating his First Amendment rights by trying to discriminate and retaliate against him “for his speech and politics.”
New York legislators presented the new law as a means of empowering congressional oversight by unearthing details of the president’s past business dealings, his income and other personal financial information that he has refused to release via his federal tax returns.