//  8/5/17  //  Latest Developments

On President Trump's first working day in office, Citizens for Responsibility & Ethics in Washington (CREW) sued him for violating the Foreign and Domestic Emoluments Clauses. Represented by the Department of Justice, President Trump moved to dismiss the case on technical grounds and for failure to state a claim. Late last night, the plaintiffs in CREW v. Trump filed their brief opposing President Trump's motion to dismiss.

CREW's filing explains how the President is violating both of the Emoluments Clauses, and why the plaintiffs' claims against him must be decided on the merits.

So, if you're in the market for some light weekend reading ... 

And here is the introduction to the brief:

The President of the United States asks this Court to embrace an extreme view of the law that would allow him to accept all manner of payments and benefits from foreign and domestic governments—exactly what the Emoluments Clauses are designed to prevent. He urges the Court to read the Constitution’s ban on emoluments and presents to permit all profits from his private transactions, and to reach only payments overtly “based on official position” or framed as “compensation” for “services” that he has personally rendered. See Def. Br. 27.

This gerrymandered reading contradicts the text of the Clauses. It ignores the original public meaning of “emolument” (defined in every Founding-era dictionary to mean “profit” or “gain”) and fails to grapple with the parallel ban on foreign “presents.” It is also at odds with two centuries of history and a robust body of precedent—from the Office of Legal Counsel and the Comptroller General—administered by government ethics lawyers every day. The defendant’s novel reading would gut a rule aimed at “every kind of influence by foreign governments,” 24 Op. Att’y Gen. 116–17 (1902), allowing those very governments to send massive payments to the president in his “private” capacity, or launder them through his businesses. That is untenable.

The facts alleged here fall squarely within the settled, and more natural, understanding of these Clauses. The Foreign Emoluments Clause prohibits federal officeholders from accepting profits or gains from a foreign state unless Congress consents. And the Domestic Emoluments Clause bars the president from accepting profits or gains, beyond his fixed compensation, from states or the federal government. Both rules apply when the president accepts profits directly and when he does so through an entity he owns, which “would in effect be a conduit.” 17 Op. O.L.C. 114, 119 (1993). Of course, there are limits—pensions, mutual funds, publicly traded stock—but this case is at the heart of the Clauses, not at their margins. So the case does not present the Court with a choice between the defendant’s cramped reading and a broad, unbounded one.

In any event, dismissal would be unfounded even on the defendant’s narrow view. Our complaint alleges, for example, that diplomats openly claim that they patronize the president’s hotels to curry favor with him as president—a blatant violation on any reading. But the full extent of his violations cannot be ascertained because he has gone to great lengths to keep his finances secret. They are hidden not only from the public and Congress but even from his own Justice Department lawyers, who are thus in no position to assure the Court that he is not currently violating the Emoluments Clauses. And, in fact, they offer no such assurances.

Instead, the lead argument in the defendant’s brief attacks the plaintiffs’ standing to sue. To be sure, the defendant’s constitutional violations affect all Americans because they create a risk of corruption and foreign influence that threatens our democracy. But, under settled Supreme Court and Second Circuit precedent, those violations also give rise to Article III standing because they injure the plaintiffs in distinct and concrete ways that are specific to them:

First, the defendant’s conduct causes direct economic injury to Eric Goode, Jill Phaneuf, and Restaurant Opportunities Center (ROC) United, who “personally compete[] in the same arena” with Mr. Trump’s hotels and restaurants. In re U.S. Catholic Conference, 885 F.2d 1020, 1029 (2d Cir. 1989). These plaintiffs are able to offer their customers meals and rooms on a competitive basis, but they can’t offer the opportunity to gain favor with the president.

Second, Citizens for Responsibility for Ethics in Washington (CREW) has organizational standing because the defendant’s conduct makes it more difficult and costly for CREW to carry out its activities. Under Second Circuit precedent, “only a perceptible impairment of an organization’s activities is necessary for there to be an injury in fact satisfying the requirements of standing.” N.Y. Civil Liberties Union v. N.Y. City Transit Auth., 684 F.3d 286, 294 (2d Cir. 2012).

Because all four plaintiffs have standing, and have stated claims under the Emoluments Clauses, dismissal at this early stage of the case is unwarranted.

Disclosure: I am among counsel to the plaintiffs in CREW v. Trump

Follow me on Twitter: @JoshuaMatz8 

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I did not expect that a federal district judge would simply fail to apply the law that currently binds him. Yet that's more or less what Judge Daniels did in dismissing the CREW emoluments case.

Michael C. Dorf

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