Constitutional law

2nd Circuit resurrects lawsuit against Trump hotel, properties

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A federal appeals court has revived the first lawsuit President Donald Trump faced over claims that his business interests violate the U.S. Constitution.

A three-judge panel of the 2nd U.S. Circuit Court of Appeals at New York held in a 2-1 ruling on Wednesday that the district court erred in 2017 when it said the plaintiffs—who own and operate businesses in the hospitality industry—did not have legal standing to bring the lawsuit.

CNN, Politico, Reuters, the Washington Post and the Washington Examiner have coverage.

The plaintiffs alleged that the profits Trump receives from foreign and domestic entities visiting his Washington, D.C., luxury hotel and other Trump-branded properties violate the emoluments clause of the Constitution, which bars the president and other federal officials from accepting payments from foreign governments.

In its decision, the 2nd Circuit said the plaintiffs’ complaint “alleges that plaintiffs’ establishments are harmed in their competition with Trump establishments because, despite being comparable in other relevant respects, 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.”

“It alleges that the marketplace is thus skewed in favor of Trump businesses because of his unlawful receipt of payments from government patrons,” the panel continued in its opinion. “The complaint, supported by expert declarations, alleges that this unlawful market skew has caused plaintiffs economic harm in the form of lost patronage from government entities, and that such harm will continue in the future.

“For competitor standing, that is sufficient.”

The 4th U.S. Circuit Court of Appeals at Richmond, Virginia, decided against the plaintiffs in a similar emoluments case in July. CNN reports that the panel said in its opinion in the lawsuit brought by the attorneys general of Maryland and District of Columbia that the states’ business interests could be helped by Trump’s hotel branding if officials chose to avoid the hotel and his association.

While the 2nd Circuit decision opens the possibility that Trump’s business dealings with foreign governments will be further explored, Politico explains that Trump could also seek Supreme Court review of the disagreement between the 2nd and 4th circuits.

There is also a pending request for full 4th Circuit review of the earlier decision.

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