SCOTUS May Get Another Trump Finances Case as 4th Circuit Allows Emoluments Lawsuit to Proceed

SCOTUS May Get Another Trump Finances Case as 4th Circuit Allows Emoluments Lawsuit to Proceed

Last week the Supreme Court heard oral argument in President Trump’s bid to quash subpoenas served upon his accountants by House committees and the Manhattan D.A. Convention wisdom says that he will lose. Lucky for him, he is faced with so much litigation that there is a case he is very likely to win, and that case is poised to reach SCOTUS before the 2020 election.

On Thursday the Fourth Circuit revived a novel lawsuit brought by Maryland and the District of Columbia that alleges President Trump is violating the Emoluments Clauses through his ownership in the Trump International Hotel in Washington, D.C. The Fourth Circuit, which sits in Richmond, VA, has 15 seats. Nine of the judges were appointed by Democratic presidents, (see note at bottom) six by Republican presidents.

The vote was 9-to-6.

It’s not on its own remarkable that every Democratic appointee voted against Trump’s position and every Republican appointee voted for it. Political cases typically divide along political lines. What’s not typical, though, is for the judges themselves to explain these unseemly divisions as the product of politics.

But in Thursday’s emoluments decision, Judge J. Harvie Wilkinson, a fairly prominent conservative, was joined by every Republican appointee in suggesting that the majority had enlisted “as partisan warriors in contradiction to the rule of law that is and should be our first devotion.” The majority, by contrast, claimed to focus on a modest procedural question: whether Trump was entitled to an early appeal of the trial court’s decision to allow the case. (Ordinarily, you can only appeal a final order: appealing an intermediate order, like a finding of standing, requires the trial judge’s approval. Not surprisingly, the trial judge refused to certify an appeal. Without certification, the only recourse is mandamus, which sets a much more demanding standard for relief.)

The court’s majority and dissenting opinions mostly talk past each other, with Wilkinson expounding upon every defect in the case and the threat to judicial neutrality, and the majority insisting that the high bar for relief was simply not met.

In response to the ruling, Jennifer Rubin of the Washington Post, a NeverTrump opponent of the president, declared that “the walls are closing in on Trump’s lawless presidency” (amazing she actually used the meme unironically), but more knowledgeable pundits, both left and right, cautioned that the decision was mostly about procedure.

The 9-6 opinion by the 4th Circuit has been misrepresented or misunderstood by some. It is not a ruling on the merits but rather the technical standard for an interlocutory appeal. It essentially blocks a Hail Mary play to shutdown the lawsuit. https://t.co/bZ2A7FH507

— Jonathan Turley (@JonathanTurley) May 14, 2020

Today’s 4th Cir. emoluments ruling is part of a growing pattern of ideological discord over mandamus as a means to appeal—with conservative judges embracing it even for novel claims/ordinary errors, and progressives insisting on clearly egregious errors as a predicate for relief.

— Steve Vladeck (@steve_vladeck) May 14, 2020

A writ of mandamus is, roughly, a direct order from a court to another party to do something very specific. In the DC/MD emoluments case, Trump wanted the Court of Appeals to command the trial court to dismiss the case. 5/

— Heidi Li Feldman (@HeidiLiFeldman) May 14, 2020

I am going to say something crazy: Jennifer Rubin is not entirely wrong. I mean, she is wrong that this decision is going to bring down Trump, but she is not entirely wrong to characterize it as a ruling against the president rather than a fight about procedure.

The reason is that procedure and the merits are not separable in this case. The primary question is procedural, but it is informed by the merits. The majority writes: “To obtain…relief, the President must establish that it is not merely likely, but ‘clear and indisputable,’ that the entire action cannot lie. He has not done so. We recognize that Respondents press novel legal claims. But reasonable jurists can disagree in good faith on the merits of these claims.”  In other words, in ruling against Trump, the majority necessarily concluded that the plaintiffs’ case potentially has some merit.

Judge Wilkinson says that the matter is so clear-cut that there is no room for hedging:

It is clear and indisputable that this action should never be in federal court. The legal foundations for this lawsuit are non-existent. It is a fanciful construct that invites the courts to create rights and duties from thin air. It allows an action to proceed that seeks to enjoin the President directly for official actions while in office. It opens the door to litigation as a tool of harassment of a coordinate branch with notions of competitor standing so wide and injury-in-fact so loose that litigants can virtually haul the Presidency into court at their pleasure.

Judge Wilkinson goes further, suggesting that Trump has something to do with the majority’s willingness to tolerate the suit:

No federal court has ever allowed a party to sue the President under the Domestic Emoluments Clause. Until this President. No federal court has ever permitted the same with respect to the Foreign Emoluments Clause. Until this President. No federal court has used its powers in equity to remedy a standalone competitive harm, unsupported by positive law. Until this President. And no federal court has ever entertained the prospect of an injunction against a President in connection with the performance of his official duties. Until this President.

So yes, while the procedural posture is important, it feels like an oversimplification to claim that this decision does not say something about the majority’s view of the merits. If the decision really were so modest, then it makes no sense for the conservative bloc to be outraged. Judge Wilkinson encouraged the Supreme Court to uphold Obamacare in the pages of the NYT. Recently he joined his court’s liberal bloc in a contentious religious liberty case. It does not make sense that he would write something so bold unless he felt that the court was violating important principles.

Indeed, if the majority felt constrained to deny mandamus but nevertheless was concerned about the case, then it could have taken the path paved by other courts in similar situations. For example, in a different emoluments case brought by Democratic members of Congress, the federal court in D.C. (Judge Sullivan, as it happens) reached a dubious (and since reversed) conclusion that the members had standing, and then declined to certify an appeal before opening discovery. The D.C. Circuit denied mandamus, but ordered Judge Sullivan to reconsider, with the suggestion that he allow an appeal. He obliged.

In the kids’ climate case, a federal judge cited Marbury v. Madison for the proposition that courts had authority to devise a national program for reducing carbon emissions. She declined to certify an appeal. The Supreme Court and Ninth Circuit denied mandamus, but encouraged the judge to allow an appeal, which she did.

There is no such hint in the majority opinion—not even a gentle admonition to proceed with caution. In fact, the majority practically encourages the district court to authorize broad discovery:

In contrast, the discovery here — business records as to hotel stays and restaurant expenses, sought from private third parties and low-level government employees — implicates no Executive power. The President has not explained, nor do we see, how requests pertaining to spending at a private restaurant and hotel threaten any Executive Branch prerogative.

The district court will probably heed this passage quickly. It had already authorized subpoenas when the Fourth Circuit stayed the case a year ago. Trump can appeal the discovery orders, but unless he gets lucky on the panel draw he will lose, teeing up a trip to the Supreme Court before the November election.

Given how weak this whole family of Emoluments Clause lawsuits is on the merits, SCOTUS will very likely stop or slow discovery, and the vote to do so may well not even be 5-to-4. When that happens, rather than the walls crushing Trump, it’ll look more like that garbage compactor scene in Star Wars where the gang is saved at the last minute.

(Note: Chief Judge Roger Gregory is a generally liberal jurist who received a recess appointment from Bill Clinton after the 2000 election. Presumably as a gesture of good will, George W. Bush renominated him to the permanent position.)

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