First test for emoluments clauses of the Constitution

President Donald Trump's legal problems grow on a daily basis, and the federal district court in Maryland just added to the list in late July.

In the first time that a federal court has applied the "emoluments" clauses of the Constitution to a president, the court held that a lawsuit by the District of Columbia and the state of Maryland against Trump may proceed. District of Columbia et al. v. Trump, 17-1596 (D. Md. July 25, 2018).This means that the case will continue to move forward, including with discovery. Although the litigation is at an early stage, the plaintiffs' goal is to have the court enjoin the president from violating the Constitution.

The president's connection to the Trump Organization's ownership of the Trump International Hotel in downtown Washington, D.C. is at the center of the Maryland case. The hotel generates revenues from foreign, federal and state governments, which use the hotel "with the express intention to cater to the good graces of the President." Foreign governments have said that they patronize the hotel precisely because of its connection to the president.

In order to pursue a lawsuit, a plaintiff must have standing, which means a personal stake in the stated claim. The plaintiffs argue that they are harmed because this arrangement gives the president an unfair economic advantage because of his position as president. Their convention centers compete for business with the hotel. They also claim a legitimate interest in preventing other potential clients within their jurisdictions from being unfairly lured away by the chance to do business with the president.

The tie between the Trump Organization and the president arguably benefits the president. The plaintiffs claim that "although the President may have formed a trust to hold his business assets, it appears that he remains able to obtain distributions from this trust at anytime." One of the trustees is Allen Weisselberg, the Trump Organization chief financial officer, who was recently subpoenaed in the Michael Cohen hush-money case pending in the Southern District of New York. He is likely to be a key witness as the Maryland case moves forward.

The Maryland court found the plaintiffs' allegations sufficient to grant them standing to sue the president. Last week, another significant legal shoe dropped in the case.

The court found that the plaintiffs plausibly argued that the president has been receiving or is potentially able to receive "emoluments" from foreign, federal, and state governments in violation of the Constitution's foreign and domestic emoluments clauses. The court rejected the President's motion to dismiss for failing to state a valid claim.

The landmark legal question decided by the court last week involves the meaning of "emoluments." Although the text of the Constitution is clear, its meaning is not.

The domestic emolument clause (Article II) states that "the President ... shall not receive within that Period any Emolument from the United States, or any of them (States)." The foreign emolument clause (Article I) provides that "no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument ... of any kind whatever, from any King, Prince, or Foreign State." The court had no difficulty in finding the Foreign Emolument Clause applied. The president occupies an office of trust, and Congress has not consented.

The court construed the term "emolument" broadly to mean "profit," "gain" or "advantage." It reasoned that both clauses contain the expansive modifier "any." This broad modifier undermined the more restrictive interpretation advanced by the president that the term only prohibits payment for official services tied to an employer-employee relationship.

The court also found that the clear weight of historical evidence supports the view that the term "emolument" was intended to encompass a broad meaning well beyond payments tied to official duties. The Framers' principal purpose was to assure that the president acts in the national interest, while also restricting the chance for self-dealing. In essence, the emoluments clauses were intended to effectively operate as anti-corruption limitations.

The restrictive or narrow construction of the term advanced by the president was far less convincing as a historical matter. The claim that the term "emolument" was "not inconsistent" with existing precedent was easily dismissed. In the court's view, "that sort of argument clearly does not make the grade."

The court's thoughtful and well-reasoned interpretation of the emoluments clauses, as well as its position on standing, is the first time a plaintiff has cleared these procedural hurdles in suing a president. Unless successfully challenged on appeal, the plaintiffs will seek to unravel the specific financial details between the president and the Trump Organization as the case moves forward. In doing so, the public is apt to get a glimpse into the president's vast, complicated, and secret ownership, control, and financial interests in the Trump Organization.