The Trump International Hotel in Washington. (2016 photo by Alex Brandon/AP)

A federal judge ruled that the District of Columbia and Maryland may proceed with a lawsuit against President Trump alleging that Trump’s business dealings have violated the Constitution’s ban on receiving improper “emoluments,” or payments, from individual states and foreign governments.

The ruling, by U.S. District Judge Peter J. Messitte in Maryland, marks the first time that a lawsuit of this kind has cleared the initial legal hurdle — a finding that the plaintiffs have legal standing to sue the president.

In his opinion, Messitte gave credence to arguments by D.C. Attorney General Karl A. Racine (D) and Maryland Attorney General Brian E. Frosh (D) that Trump unfairly profits from business at downtown Washington’s Trump International Hotel, in which the president continues to hold a financial interest.

Messitte cited examples of government clients — including Kuwait and Bahrain —
patronizing the Washington hotel, possibly to the detriment of competitors and taxpayers. He wrote that Maryland and the District had sufficiently argued that Trump’s hotel “has had and almost certainly will continue to have an unlawful effect on competition.”

As part of that ruling, Messitte said he rejected an argument made by critics of the lawsuit — that, under the Constitution, only Congress may decide whether the president has violated the emoluments clauses.

“In absence of Congressional approval, this Court holds that it may review the actions of the President to determine if they comply with the law,” Messitte wrote.

If the ruling stands, it could allow Racine and Frosh to seek internal documents from the Trump Organization to determine how much money the Washington hotel has taken in from state and foreign governments.

Messitte’s ruling largely narrowed the lawsuit’s scope to the Washington hotel, saying that the District and Maryland had standing to sue because they could plausibly claim to have been injured by Trump’s receipt of payments from foreign and state governments.

For one thing, he said, the two jurisdictions have financial interests in their own convention centers — one in downtown Washington, another in Bethesda, Md. They argued that the Trump hotel had an unfair advantage in the battle for meeting business.

In addition, the court said, the District and Maryland could speak on behalf of their own businesses, which might also see clients lured away by the chance to do business with the president.

“The Court concludes that [the District and Maryland] are, quite plausibly, trying to protect a large segment of their commercial residents and hospitality industry employees from economic harm,” he wrote.

Messitte also raised examples of state governments having to make decisions related to the president’s company, which Frosh and Racine termed an “intolerable dilemma” between losing revenue or risking repercussions from the president. The judge cited a decision by District tax officials to lower the Trump hotel’s tax bill by nearly $1 million and a $6 million tax break being granted to a Trump-affiliated development by Mississippi officials.

The Justice Department, which is representing the president in this case, did not immediately say whether it would appeal. “As we argued, we believe this case should be dismissed, and we will continue to defend the president in court,” spokeswoman Kerri Kupec said.

After consulting with attorneys, Trump vowed last year to donate some profits from foreign governments to the U.S. treasury. This month the Trump Organization said it donated $151,470 but declined to explain how it came up with the amount.

Although Trump said he gave up day-to-day management of his business while he is in the White House, he still owns his businesses and can withdraw money from them at any time.

A statement from the Trump Organization said: “While the Trump Organization is not a party to the lawsuit, the Court’s decision today does significantly narrow the scope of the case. The Court has yet to rule on several additional arguments, which we believe should result in a complete dismissal.”

In an interview, Frosh said that “overall we are extremely pleased” and that he and Racine would be seeking the president’s financial documents and tax returns as the case proceeded.

“The basic principle here is Donald Trump is not above the law, and the court recognized that and said that we can enforce the nation’s original anti-corruption law — the emoluments clause,” he said.

This case was filed last year, one of a raft of lawsuits in the months after Trump’s inauguration, all of them alleging that he was violating the Constitution’s emoluments clauses.

Those clauses were dusty corners of the Constitution, rarely tested in court during 240-plus years of American history.

One bars federal officers from taking presents, or emoluments, from foreign governments. The other prohibits presidents from taking side payments from individual states.

In these lawsuits, the plaintiffs allege that Trump violated one or both of these bans, because foreign and state governments have rented hotel rooms or banquet halls at his businesses.

Trump’s attorneys have said that the term “emolument” was never meant to cover transactions such as this — not outright gifts to the president but purchases made at fair-market value.

The first step in all these cases has been an argument over what lawyers call “standing” — in essence, determining whether the plaintiff has a right to sue.

In December, for instance, a federal judge threw out one of the emoluments lawsuits, brought by the nonprofit watchdog group Citizens for Responsibility and Ethics in Washington.

U.S. District Judge George B. Daniels ruled that the watchdog group lacked standing. He stated that the Constitution gave Congress — and only Congress — the right to enforce these rules.

“As the only political branch with the power to consent to violations of the Foreign Emoluments Clause, Congress is the appropriate body to determine whether, and to what extent, Defendant’s conduct unlawfully infringes on that power,” Daniels wrote in his ruling.

The case involving the District and Maryland had a hearing earlier this year before Messitte at a federal court in Greenbelt, Md.

In that hearing, the Justice Department, arguing on Trump’s behalf, made a similar argument in an effort to throw out the attorney generals’ suit. Brett Shumate, a Justice Department lawyer, said that states such as Maryland had no right to sue Trump over these clauses.

“The states are not roving constitutional watchdogs,” Shumate said. He continued: “This is ultimately a political dispute. It should be left to the political process.”

In his ruling Wednesday, Messitte rejected that idea.

“The thrust of the President’s argument that only Congress can act is particularly concerning,” he wrote in a footnote. “Suppose a majority (simple? two-thirds?) of Congress (the House? the Senate? both?) is controlled by one party — that of the President. And suppose the Congress never undertakes to approve or disapprove the President’s receipt of such ‘emoluments.’ ”

“The President could continue to receive unlimited ‘emoluments’ from foreign and state governments without the least oversight and with absolute impunity,” Messitte wrote.