President Donald Trump must face a lawsuit accusing him of illegally profiting from his Washington hotel, a federal appeals court ruled, reviving a case that was dismissed last year.
The decision on Thursday by the U.S. Court of Appeals in Richmond, Virginia, sets up a fresh fight over the president’s finances and is a victory for the attorneys general of Maryland and Washington. They accused Trump of improperly benefiting from the business of at least one state, and from foreign governments, in violation of the U.S. Constitution’s two emoluments clauses.
The ruling, by an enlarged “en banc” panel of appellate judges, reversed a July win from the same court in which a three-judge panel, all appointed by Republican presidents, threw the case out. The larger panel on Thursday held that allowing the executive to define what constitutes an emolument would be a “faulty premise.”
“The Framers, concerned about the corrosive effect of power and animated by fears of unduly blending government powers, dispersed the authority to enforce the law and the authority to interpret it,” the judges said. “To hold otherwise would mean that the President alone has the ultimate authority to interpret what the Constitution means.”
The decision comes as the U.S. Supreme Court is weighing two pivotal cases that could delve into Trump’s finances, in suits by House Democrats seeking access to his financial records and another tied to a probe by the Manhattan district attorney.
Two sets of judges from the fuller panel issued dissenting opinions on Thursday.
“Make no mistake about what has really happened here,” five of them wrote. “By discarding centuries of settled practice and precedent that kept true to the genius of the Constitution and its separation of powers, the majority has only confirmed one of the Founders’ worst fears: that, while no man may be above the law, a group of judges, so emboldened, may consider themselves beyond it.”
Trump handed day-to-day control of his business empire to his two adult sons and a chief financial officer before taking office but refused to shed any of his holdings, including the Trump International Hotel just blocks from the White House. He even hired a director of diplomatic sales.
U.S. District Judge Peter Messitte in Maryland twice refused to dismiss the suit by the AGs, leading to Trump’s first appeal. By then, the AGs had started to collect evidence, serving subpoenas on Trump’s businesses and the Donald J. Trump revocable trust.
Maryland and D.C. claimed taxpayers they represent were being harmed because the Trump International Hotel has become a magnet for foreign dignitaries, state government officials and lobbyists, drawing business away from Maryland and D.C. competitors. They sought a court order compelling Trump to abide by constitutional restrictions.
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