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In re Trump

United States Court of Appeals, Fourth Circuit

July 10, 2019

In re DONALD J. TRUMP, President of the United States of America, in his official capacity, Petitioner. PROFESSOR CLARK D. CUNNINGHAM; PROFESSOR JESSE EGBERT, Amici Curiae, SCHOLAR SETH BARRETT TILLMAN; JUDICIAL EDUCATION PROJECT, Amici Supporting Petitioner, FORMER NATIONAL SECURITY OFFICIALS; COMMONWEALTH OF VIRGINIA; THE NISKANEN CENTER; REPUBLICAN WOMEN FOR PROGRESS; CHERI JACOBUS; TOM COLEMAN; EMIL H. FRANKEL; JOEL SEARBY; ADMINISTRATIVE LAW, CONSTITUTIONAL LAW, AND FEDERAL COURTS SCHOLARS; CERTAIN LEGAL HISTORIANS, Amici Supporting Respondents.

          Argued: March 19, 2019

          On Petition for Writ of Mandamus from the United States District Court for the District of Maryland, at Greenbelt. Peter J. Messitte, Senior District Judge. (8:17-cv-01596-PJM)

         ARGUED:

          Hashim M. Mooppan, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Petitioner.

          Loren L. AliKhan, OFFICE OF THE ATTORNEY GENERAL FOR THE DISTRICT OF COLUMBIA, Washington, D.C., for Respondents.

         ON BRIEF:

          Joseph H. Hunt, Assistant Attorney General, Mark R. Freeman, Michael S. Raab, Megan Barbero, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Petitioner.

          Brian E. Frosh, Attorney General, Steven M. Sullivan, Solicitor General, Leah J. Tulin, Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland; Karl A. Racine, Attorney General, Stephanie E. Litos, Assistant Deputy Attorney General, Civil Litigation Division, OFFICE OF THE ATTORNEY GENERAL OF THE DISTRICT OF COLUMBIA, Washington, D.C.; Norman Eisen, Laura C. Beckerman, Stuart C. McPhail, CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, Washington, D.C.; Deepak Gupta, Joshua Matz, Daniel Townsend, GUPTA WESSLER PLLC, Washington, D.C.; Joseph M. Sellers, Christine E. Webber, COHEN MILSTEIN SELLERS & TOLL PLLC, Washington, D.C., for Respondents.

          Craig Thomas Merritt, CHRISTIAN & BARTON, L.L.P., Richmond, Virginia, for Amici Professor Clark C. Cunningham and Professor Jesse Egbert.

          Carrie Severino, JUDICIAL EDUCATION PROJECT, Washington, D.C., for Amicus Judicial Education Project.

          Robert W. Ray, THOMPSON & KNIGHT LLP, New York, New York; Josh Blackman, Houston, Texas, for Amicus Scholar Seth Barrett Tillman.

          Jan I. Berlage, GOHN HANKEY & BERLAGE LLP, Baltimore, Maryland, for Amici Scholar Seth Barrett Tillman and The Judicial Education Project. Harold Hongju Koh, Rule Of Law Clinic, YALE LAW SCHOOL, New Haven, Connecticut; Phillip Spector, MESSING & SPECTOR LLP, Baltimore, Maryland, for Amici National Security Officials. Mark R. Herring, Attorney General, Toby J. Heytens, Solicitor General, Matthew R. McGuire, Principal Deputy Solicitor General, Michelle S. Kallen, Deputy Solicitor General, Brittany M. Jones, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Amicus Commonwealth of Virginia.

          Colin E. Wrabley, Devin M. Misour, Brian T. Phelps, Pittsburgh, Pennsylvania, M. Patrick Yingling, REED SMITH LLP, Chicago, Illinois, for Amici The Niskanen Center, Republican Women for Progress, Cheri Jacobus, Tom Coleman, Emil H. Frankel, and Joel Searby.

          Regina Kline, Jean M. Zachariasiewicz, Anthony J. May, BROWN, GOLDSTEIN & LEVY, LLP, Baltimore, Maryland, for Amici Administrative Law, Constitutional Law, and Federal Courts Scholars.

          H. Laddie Montague, Jr., Eric J. Cramer, Candace J. Enders, BERGER & MONTAGUE, P.C., Philadelphia, Pennsylvania; Erica C. Lai, Melissa H. Maxman, COHEN & GRESSER LLP, Washington, D.C., for Amici Certain Legal Historians.

          Before NIEMEYER and QUATTLEBAUM, Circuit Judges, and SHEDD, Senior Circuit Judge.

          NIEMEYER, CIRCUIT JUDGE:

         The District of Columbia and the State of Maryland commenced this action against Donald J. Trump in his official capacity as President of the United States and in his individual capacity, alleging that he violated the Foreign and Domestic Emoluments Clauses of the U.S. Constitution. The Foreign Emoluments Clause provides that no officer of the United States shall "accept" any "present, Emolument, Office, or Title . . . from any King, Prince, or foreign State." U.S. Const. art. I, § 9, cl. 8. And the Domestic Emoluments Clause provides that the President shall receive "Compensation" "for his Services" but not "any other Emolument" from the United States or any State. U.S. Const. art. II, § 1, cl. 7. The District and Maryland contend that the President's "continued ownership interest in a global business empire" provides him with "millions of dollars in payments, benefits, and other valuable consideration from foreign governments and persons acting on their behalf, as well as federal agencies and state governments," and that the President is therefore receiving "emoluments" that are prohibited by the Clauses.

         In their complaint, the District and Maryland allege that the President's ongoing constitutional violations harm their sovereign, quasi-sovereign, and proprietary interests, particularly (1) Maryland's interest as a separate sovereign State in securing adherence to the terms on which it agreed to enter the Union; (2) the District and Maryland's interests in not being pressured to grant, or being perceived as granting, "special treatment to the [President] and his extensive affiliated enterprises"; (3) the District and Maryland's interests in protecting the economic well-being of their residents, who, as competitors of the President, are injured by "decreased business, wages, and tips resulting from economic and commercial activity diverted" to the President's businesses; (4) Maryland's interest in avoiding a "reduction in tax revenue that flows from [the alleged] violations"; and (5) the District and Maryland's interests as proprietors of businesses that compete with the President's businesses. For relief, the District and Maryland seek a declaratory judgment that the President has violated the Emoluments Clauses and injunctive relief prohibiting future violations.

         The President, in his official capacity, filed a motion to dismiss the complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), contending, among other things, that the District and Maryland lack standing to bring their action; that they do not have equitable causes of action to enforce the Emoluments Clauses; and that he has not received "emoluments" as prohibited by the Clauses. The President also filed a separate motion to dismiss in his individual capacity under Rules 12(b)(1) and 12(b)(6), contending additionally that he has absolute immunity.

         The district court treated the President's motions piecemeal. First, by an opinion and order dated March 28, 2018, the court denied the President's motion filed in his official capacity "insofar as it dispute[d] Plaintiffs' standing to challenge the involvement of the President with respect to the Trump International Hotel in Washington, D.C. and its appurtenances and any and all operations of the Trump Organization with respect to the same"; it granted the motion with respect to the "operations of the Trump Organization and the President's involvement in the same outside the District of Columbia," concluding that the District and Maryland lacked standing to pursue any claims premised on such operations; and it deferred ruling on the other questions raised by the motion. The court also deferred ruling on the motion filed by the President in his individual capacity. Then, by an opinion and order dated July 25, 2018, the court concluded that the District and Maryland's complaint stated valid claims under the Emoluments Clauses and accordingly denied the President's motion to dismiss filed in his official capacity insofar as the claims were made against him with respect to the Trump International Hotel and all its appurtenances in Washington, D.C. The court again deferred ruling on the President's motion to dismiss filed in his individual capacity, which included the President's assertion of absolute immunity. Also with the July 25 order, the court directed the parties to submit a joint recommendation with respect to the next steps to be taken in the litigation, including an outline of proposed discovery.

         The President, contending that the district court's rulings in both orders involved "controlling question[s] of law as to which there [was] substantial ground for a difference of opinion and that an immediate appeal from the order[s] [would] materially advance the ultimate termination of the litigation," filed a motion with the district court requesting that the court certify its orders for appeal under 28 U.S.C. § 1292(b). By order dated November 2, 2018, the court denied the motion, concluding that "the President has failed to identify a controlling question of law decided by this court as to which there is a substantial ground for difference of opinion justifying appellate review that would materially advance the ultimate termination of the case or even the material narrowing of issues." This ruling left the action to proceed forward in the district court, including discovery against the President.

         Seeking to avoid "intrusive discovery into [his] personal financial affairs and the official actions of his Administration," the President in his official capacity then filed a petition for a writ of mandamus in this court seeking an order (1) directing the district court to certify its orders for appeal under § 1292(b), or (2) directing the court to dismiss the District and Maryland's complaint outright. He also filed a motion for a stay of the district court proceedings. While acknowledging that "a district court normally has wide discretion to determine whether the criteria for certification under § 1292(b) are satisfied," the President contends that mandamus "is a necessary safety valve in the extraordinary situation here, where a district court has insisted in retaining jurisdiction over what all reasonable jurists would recognize is a paradigmatic case for certification of [an] interlocutory appeal under § 1292(b)." The President also filed an appeal with respect to the court's failure to address his assertion of absolute immunity on the claims made against him in his individual capacity, contending that by opening discovery against him, the court effectively denied him immunity.

         By order dated December 20, 2018, we granted the President's motion for a stay of the proceedings in the district court pending our rulings on his petition for a writ of mandamus and his appeal. We also determined to consider separately the mandamus petition and the appeal, ordering oral arguments on them seriatim.

         We now grant the President's petition for a writ of mandamus and, exercising jurisdiction through operation of § 1292(b), reverse the district court's orders, concluding that the District and Maryland lack standing under Article III. And in the separate appeal, No. 18-2488, that we also decide today, we likewise reverse due to the District and Maryland's lack of standing. Based on the decisions in this appeal and in appeal No. 18-2488, we remand with instructions to dismiss the complaint with prejudice.

         I

         The District and Maryland's complaint alleges that the President's continued interest in the Trump Organization - specifically in hotels and related properties - results in him receiving "emoluments" from various government entities and officials, both foreign and domestic, and that such receipts violate the Foreign and Domestic Emoluments Clauses of the U.S. Constitution.

         With regard to the Foreign Emoluments Clause, the complaint alleges that the President is benefiting and will continue to benefit from the business conducted by the Trump Organization with foreign governments, instrumentalities, and officials. Focusing on the Trump International Hotel in Washington, D.C., in which the President has a 76% interest, the complaint alleges that the Hotel markets itself to the diplomatic community and that, as a result, (1) the Embassy of Kuwait held its National Day celebration at the Hotel on February 22, 2017, spending an estimated $40, 000 to $60, 000; (2) the Kingdom of Saudi Arabia "spent thousands of dollars on rooms, catering, and parking" at the Hotel in January and February 2017; and (3) Georgia's Ambassador and Permanent Representative to the United Nations stayed at the Hotel at the Georgian government's expense. Beyond benefits received from the Hotel, the complaint also alleges that the President has violated the Foreign Emoluments Clause by receiving (1) income from various foreign states and foreign officials patronizing Trump Tower and Trump World Tower in New York City; (2) a favorable trademark decision from the Chinese government; (3) income from the international distribution of "The Apprentice" and its spinoffs; and (4) income from real estate projects in which the Trump Organization is engaged in the United Arab Emirates and Indonesia.

         With regard to the Domestic Emoluments Clause, the complaint, again focusing on the Trump International Hotel, alleges that the Hotel, which leases the Old Post Office Building from the General Services Administration ("GSA"), a federal agency, received a benefit from the GSA in March 2017, after the President was inaugurated. While the Hotel's lease agreement provided that "no . . . elected official of the Government of the United States . . . shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom," the GSA amended the lease agreement and issued a letter stating that the Hotel "is in full compliance with [the Lease] and, accordingly, the Lease is valid and in full force and effect." The complaint claims that this "forbearing from enforcing" the terms of the original lease agreement amounted to an "emolument" in violation of the Domestic Emoluments Clause.

         The complaint also alleges that the President, "through entities he owns," is seeking a $32 million historic-preservation tax credit for the Hotel and that, if the National Park Service approves the credit, it "may constitute an emolument, in violation of the Domestic Emoluments Clause."

         Finally, the complaint alleges that the State Department and U.S. Embassies have promoted the Mar-a-Lago Club - a business owned by the President in Palm Beach, Florida - and that "federal, state, and local governments, or their instrumentalities have made and will continue to make payments for the use of the facilities owned or operated by [the President] for a variety of functions."

         To support their standing to sue the President, the District and Maryland allege that because of the President's constitutional violations, they suffer "harm to their sovereign and/or quasi-sovereign interests," as well as "proprietary and other financial harms." Regarding sovereign interests in particular, Maryland alleges that it has a "sovereign interest in enforcing the terms on which it agreed to enter the Union," and the District and Maryland allege that each has an interest in the enforcement of its laws relating to property that the President or his business organizations own or might seek to acquire.

         With respect to the District and Maryland's quasi-sovereign interests, the complaint alleges that:

The [President's] acceptance or receipt of presents and emoluments in violation of the Constitution presents the District and Maryland with an intolerable dilemma: either (1) grant the [Trump] Organization's requests for concessions, exemptions, waivers, variances, and the like and suffer the consequences, potentially including lost revenue and compromised enforcement of environmental protection, zoning, and land use regulations, or (2) deny such requests and be placed at a ...

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