On January 23, 2017, the Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint against President Donald J. Trump, arguing that he had violated Article I, Section 9, Clause 8 of the Constitution (the “Foreign Emoluments Clause”) and Article II, Section 1, Clause 7 of the Constitution (the “Domestic Emoluments Clause”).

The complaint alleged that because President Trump refused to step away from his businesses after becoming the President, he was receiving benefits from the U.S. government and foreign countries through guests and events at his hotels, leases in his buildings, and valuable real estate deals in the country and abroad. The plaintiff alleged that Trump's companies' acceptance of these benefits violated the Constitution and created doubted about whose interests he would be actually protecting while negotiating with the same countries from which his companies received money. The plaintiff requested (i) a declaratory judgment, stating the conduct mentioned by the plaintiff violated the Emoluments Clauses; and (ii) injunctive relief, to stop and prevent the cited constitutional violations.

The complaint was later amended to include as plaintiffs (i) a nonprofit organization engaged in the protection of workers in the restaurant market and in managing its own restaurant; (ii) an individual who worked in the hotel market and whose compensation was tied to a percentage of the revenue of the events she booked for foreign governments in hotels; and (iii) the owner of several hotels, restaurants, bars and event spaces in New York, which attract foreign government clients, as well as U.S. government officials.

On June 9, 2017, the defendant filed a motion to dismiss, arguing the plaintiffs had failed to establish an injury in fact. The motion also asserted that the alleged injuries did not fall within the zone of interests of the Emoluments Clauses because they served to protect against corruption and foreign influence on federal officials, ensuring the independence of the President. In other words, the Emoluments Clauses would only apply to the receipt of compensation for personal services and to the receipt of honors and gifts based on official position. Therefore, they would not prohibit any company in which the President had some financial interest from doing business with any foreign, federal, or state instrumentality. Finally, the defendant stated that an injunction against the President in his official capacity would be unconstitutional relief.

Judge George B. Daniels granted the motion to dismiss on December 21, 2017. 276 F.Supp.3d 174. Judge Daniels found that the plaintiffs had failed to properly allege that the defendant's actions caused them injury. Regarding the injury alleged by the plaintiffs with ties to the hotel and restaurant industry, the order stated the defendant was already wealthy and famous before becoming President, and that it was natural that interest in his properties would generally increase after he was elected. The court also held that these Plaintiffs' alleged injury did not fall within the zone of interests of the Emoluments Clause, which was not designed to protect businesses from competition. The order also concluded that the question of whether the defendant could continue to receive income from his business with foreign governments without the consent of the Congress was a non-justiciable political question.

On February 16, 2018, the plaintiffs filed a notice of appeal (Second Circuit, Docket 18-474). In their brief, filed on April 24, 2018, they argued that the defendant's acceptance of emoluments had tilted the marketplace and skewed the incentives of its participants, disadvantaging and, thus, injuring the Plaintiffs, who competed with Trump's hotels and restaurants for governmental business. The Plaintiffs reasoned that the Emoluments Clauses sought to achieve goals of preventing corruption, tempering foreign influence and respecting federalism, and thereby to protect individuals from the personal harms that result from a violation of these constitutional principles. Therefore, they argued that the complaint fall within the Emoluments Clauses' zone of interest because the interests asserted by the Plaintiffs would be directly tied to these concerns. The Plaintiffs also addressed the argument that the question at stake was not political. First, because the Domestic Emoluments Clause did not include any provision about a possible congressional consent. Second, under the reason that the Foreign Emoluments Clause made it clear that without congressional consent, it was illegal for certain federal officers to accept any foreign emoluments. Besides, the Plaintiffs argued that, if the Foreign Emoluments Clause could be enforced only by the Congress, as the dismissal order stated, it would make little sense - in that case, legislators would not need to “consent” to an official’s receipt of foreign emoluments in order to validate them. Hence, the Plaintiffs asserted that so long as Congress remained silent, the President was breaking the law by accepting emoluments, and injured parties must be able to seek redress in federal court.

The defendant filed his brief on May 29, 2018, emphasizing the arguments used by the order to dismiss.

Currently, the parties are waiting for the appeal to be decided.

Daniele de Oliveira Nunes - 10/05/2018


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