Cohen Milstein played a key role working alongside the Attorneys General of Maryland and the District of Columbia, Citizens for Responsibility and Ethics in Washington (CREW), and restaurant and hotel plaintiffs in two high-profile lawsuits against President Donald J. Trump, alleging that the President is violating the U.S. Constitution’s Emoluments Clauses, which prohibit a sitting President of the United States from accepting payments and other things of value from foreign and domestic governments, including payments from government officials patronizing his hotels and restaurants.
In both lawsuits, Cohen Milstein developed arguments and expert evidence on the key issue of competitor standing. Working with industry experts, the team led the effort to analyze and present evidence of competition between hotels and restaurants owned by President Trump and hotels, event spaces, and restaurants owned by the plaintiffs.
District of Columbia et al. v. Trump, Case No. 8:17-cv-01596 (D. Md.)
On July 25, 2018, the district court denied the the U.S. Justice Department’s motion to dismiss the lawsuit, stating that Attorneys General Brian E. Frosh of Maryland and Karl A. Racine of the District of Columbia had “convincingly argued” that the term “emolument” as specified in the Constitution means any “profit, gain or advantage,” and therefore had plausibly claimed President Trump violated the two emoluments clauses. This is the first time in history a court has considered the definition of the term “emolument.” In addition, the court found that Maryland and D.C. had standing to sue based on their proprietary, quasi-sovereign, and parens patriae interests arising from the President’s ownership interest in the Trump International Hotel in Washington, D.C.
When the district court denied President Trump’s motion for immediate appellate review, he filed a petition for mandamus in the Fourth Circuit to compel the district court to grant such review. A panel of the Fourth Circuit granted the petition and, purporting to exercise jurisdiction under 28 USC § 1292(b), found that plaintiffs lacked standing and instructed the district court to dismiss the case. However, the en banc Fourth Circuit agreed to rehear the appeal and, voting 9-6, vacated the panel opinion on May 14, 2020, finding that plaintiffs had established standing. In an order dated July 9, 2020, the en banc court stayed the case pending possible proceedings in the United States Supreme Court. The case will become moot when President Trump leaves office on January 20, 2021.
Citizens for Responsibility and Ethics in Washington v. Trump, Case No. 1:17-cv-00458 (S.D.N.Y.)
On December 21, 2017, U.S. District Judge George B. Daniels dismissed this lawsuit, holding, among other things, that plaintiffs lacked standing. On April 24, 2018, CREW and the other plaintiffs appealed Judge Daniels’ ruling.
On September 13, 2019 the United States Court of Appeals for the Second Circuit, in a split decision, vacated the district court’s decision and remanded for further proceedings. Based on the complaint’s allegation that “the President’s establishments offer government patrons something that Plaintiffs cannot: the opportunity, by enriching the President, to obtain favorable governmental treatment from the President and the Executive branch,” the Second Circuit held that plaintiffs had established competitor standing. The appeals court also ruled that the district court erred in concluding that plaintiffs’ injuries fell outside the “zone of interests” of the Emoluments Clauses and that plaintiffs’ Foreign Emoluments Clause claim presented a non-justiciable political question and was not ripe for adjudication.
After President Trump’s petition to the Second Circuit to rehear the appeal en banc was denied, the President filed a petition for certiorari with the United States Supreme Court on September 9, 2020. The petition remains pending but will become moot on January 20, 2021 when President Trump leaves office.