Take Care is privileged to publish this analysis by Matthew Stephenson, Professor of Law at Harvard Law School.  It is cross-posted from the Global Anti-Corruption Blog. 

Can anything be done about the serious corruption risks posed by Donald Trump’s dual role as President of the United States and patriarch of a vast business empire? Do any of these apparent conflicts of interest break the law? If so, is it reasonable to hope that the courts will step in?

As readers of this blog are likely aware, a group of activists, lawyers, and legal scholars have asserted that the answers to the above questions are Yes, Yes, and Yes. The fact that President Trump’s companies do business with foreign governments, the argument goes, means that the President is in violation of the U.S. Constitution’s Foreign Emoluments Clause, which prohibits any person “holding any office of profit or trust under [the United States]” from accepting, without congressional consent, “any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.” Shortly after the inauguration, Citizens for Responsibility and Ethics in Washington (CREW), a nonprofit advocacy group, filed a lawsuit seeking a declaration that President Trump was in violation of the Foreign Emoluments Clause and a court order enjoining the President from further violations of that clause.

Before CREW filed its suit, I was skeptical about the prospects of a judicial remedy for this alleged Emoluments Clause violation—not because I didn’t think that President Trump was in violation of the clause (quite the opposite), but because I didn’t think it was realistic to expect that a court would be willing to order the sitting President to rearrange his financial affairs (or hold him in contempt if he didn’t). My prediction was that the court would find a way to dismiss the suit on jurisdictional grounds, or deem it a non-justiciable “political question.” And my skepticism only deepened after CREW filed its original complaint. Like many other legal analysts, I thought that CREW’s claimed basis for “standing” (which requires a direct, concrete, non-ideological injury to the plaintiff) was flimsy and would likely be rejected, and I worried that the whole enterprise would prove counterproductive, because a dismissal on jurisdictional grounds would be widely misinterpreted as a judicial rejection of the substantive claim that Donald Trump is violating the Constitution.

Two days ago, CREW filed an amended complaint, which has caused me to rethink (though not entirely abandon) my earlier skepticism. The new complaint includes a number of changes, but by far the two most important are these:

1. The amended complaint adds two new plaintiffs to the suit—an association of restaurants and a Washington, D.C. event planner—whose claims to have standing are much stronger than CREW’s.
2. The amended complaint also adds new substantive allegations that President Trump is not only violating the Foreign Emoluments Clause, but is also violating a separate provision of the Constitution, the so-called “Domestic Emoluments Clause,” which states that the President shall receive a fixed salary, which cannot be changed during his term, and that the President “shall not receive within that period any other emolument from the United States, or any [state].”

In a future post I may have something to say about the Domestic Emoluments Clause issue, but for now I want to focus on how much difference the addition of the two new plaintiffs makes to the likelihood that the lawsuit will survive a motion to dismiss on jurisdictional grounds. My initial take is that it makes a big difference—the case for standing, under current doctrine, is now much stronger than it was before—but some problems still remain.

The explanation for why the addition of these plaintiffs substantially strengthens the case for standing is fairly straightforward, though a full explanation as to why would require an excursion into questions of legal doctrine that are likely both dull and opaque to most non-lawyers (and many lawyers as well). The short version is that the U.S. Supreme Court has interpreted Article III of the Constitution to limit the jurisdiction of the federal courts to cases brought by plaintiffs who have suffered a concrete, particularized injury that is traceable to the defendant’s allegedly unlawful conduct and could be redressed by a favorable court order; the constitutionally-required injury can’t be a general, abstract, or ideological interest in the issue. That’s why environmental organizations like the Sierra Club don’t have standing simply by virtue of their organizational interest in a clean environment to sue over alleged violations of environmental laws. Rather, when an organization like the Sierra Club wants to bring such a suit, it needs to find at least one member who can claim that he or she would be personally and directly affected by the alleged violation (for example, a member who likes to go camping in the woods that would be destroyed by a new and allegedly unlawful strip-mining operation). Lots of people don’t think this restrictive standing doctrine makes much sense. In many other countries, organizations with a specific ideological interest have standing to bring suit—and these legal systems seem to function just fine. But that’s not the way things are in the United States: no individualized injury, no standing.

That was a big problem for CREW’s original lawsuit. At the end of the day, CREW is suing because the organization and its membership care deeply about ethics and integrity in government, but it’s really hard to show that they’ve suffered some specific, concrete injury that goes beyond this admirable ideological commitment. CREW has very smart lawyers and they spun out a range of theories for why President Trump’s Emoluments Clause violations particularly injured CREW, but these all boiled down to some version of, “We care about this issue, so we’ve had to devote resources to addressing his violations.” But any public interest advocacy organization could make similar arguments—the Sierra Club, for example, could say, “The government’s decision to illegally authorize this strip-mining operation has forced us to devote resources to criticizing this decision.”

The new plaintiffs, by contrast, compete directly with Trump Hotels and restaurants. In general, courts have usually recognized that market participants have constitutional standing to challenge allegedly unlawful government decisions that advantage their competitors. The D.C. event planner plaintiff has an especially strong claim to Article III standing, because her job is specifically to book diplomatic/embassy business in D.C. hotels that compete with Trump hotels, and her compensation is directly tied to the amount of business she secures. I’m not an expert in the details of standing law, but everything I know about this area, and my reading of the key cases, indicates to me that these new plaintiffs clearly have standing to challenge Donald Trump’s allegedly unlawful receipt of foreign emoluments in the form of bookings by foreign governments at his hotels and restaurants.

That does not mean, however, that the addition of these new plaintiffs entirely eliminates the jurisdictional problems that many people—including many like me who are sympathetic to CREW’s goals—saw with the suit. Let me highlight some of the problems that remain:

First, the amended complaint includes a number of alleged Foreign Emoluments Clause violations that have essentially nothing to do with bookings at Trump hotels and restaurants. In perhaps the most worrying example, the complaint highlights the extremely suspicious sequence of events surrounding the Trump Organization’s application for Chinese trademark protection. The Trump Organization had been seeking trademark protection since 2006, but had been repeatedly denied both by Chinese government agencies and courts. After Trump’s election, one would have thought that his case for a Chinese trademark got even harder because of a Chinese law that prohibits trademarks that are “the same as or similar to” the names of national leaders. After the election, President Trump suggested that the U.S. might abandon the so-called “One China” policy and recognize Taiwan. On February 9th, President Trump spoke with Chinese President Xi Jinping, and shortly afterwards announced that the U.S. would continue to honor the One China policy. Five days later, China granted Trump his long-sought trademarks. The CREW complaint alleges, quite plausibly, that the grant of this trademark – along with other instances in which foreign governments confer discretionary benefits such as permits or tax breaks on Trump businesses – qualify as “foreign emoluments.” Indeed, these seem much worse, in terms of the potential corrupting impact on U.S. policy, than do increased bookings by foreign diplomats in Trump hotels. Alas, however, it’s hard to see how competitor restaurants or the D.C. event planner have suffered a constitutionally sufficient injury from the grant of Chinese trademark protection, or similar foreign regulatory action. This could be a problem, as the court might conceivably limit the lawsuit to claims involving the U.S. hotel and restaurant bookings. One wonders if CREW might be able to find yet more plaintiffs to add to the lawsuit – perhaps a U.S. business that competes with Trump in China – who could plausibly claim to have been injured by Trump’s receipt of the Chinese trademark.

Second, as I emphasized in my earlier post, even if the plaintiffs have standing, a court that doesn’t want to rule on the merits would have other ways to dismiss the suit. One would be to invoke the so-called “political question doctrine.” Another would be to assert that even though the plaintiffs have standing, there is not an implied cause of action under the Constitution for plaintiffs who are not the intended beneficiaries of the constitutional protection at issue. (Very closely related to that latter idea is the so-called “zone of interests” test, according to which a court may decline to hear a constitutional claim if the plaintiff’s interests are—as one court of appeals put it—only “marginally related to … the purposes implicit in the [relevant constitutional provision.]” (See also here and here.) The CREW legal team has offered a spirited and generally persuasive rebuttal of the legal objections here, but the worry (or I should say my worry) is not so much legal as pragmatic: A court that doesn’t want to hear the case has plausible grounds for dismissing it. So some of my concerns about the strategic wisdom of bringing the suit remain. But I certainly think that the suit is now on considerably firmer footing with the addition of these new plaintiffs, and for that reason I’m not as confident as I was initially in my view that filing this suit at this point was a mistake. CREW’s legal team is certainly doing an excellent job, and I very much hope they succeed.

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