Antitrust Law Daily President denied interlocutory appeal in Emoluments Clauses cases
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Thursday, May 14, 2020

President denied interlocutory appeal in Emoluments Clauses cases

By Peter Reap, J.D., LL.M.

Dissent suggests that the injury the plaintiffs asserted, to be free from lawful competition, did not infringe any right based in equity, a statute, or the Constitution, and was insufficient to subject the case to the court’s jurisdiction.

In two separate cases, the U.S. Court of Appeals in Richmond, Virginia, denied President Donald J. Trump a writ of mandamus directing the federal district court in Greenbelt, Maryland, to certify an interlocutory appeal or order dismissal of the complaint against him brought by the District of Columbia and the State of Maryland for violations of the Foreign and Domestic Emoluments Clauses of the Constitution. In one of the cases, in which President Trump was sued in his official capacity and relating only to the Trump International Hotel and Washington D.C., the appellate court en banc vacated an appellate court panel’s grant of mandamus and dismissal of the case, and determined the President failed to show that: (1) he was entitled to interlocutory appeal; (2) the district court should dismiss the complaint; and (3) separation of powers concerns required the issuance of a writ of mandamus. In the other case, in which President Trump was sued in his individual capacity, the appellate court in a separate opinion dismissed, for lack of jurisdiction, President Trump’s interlocutory appeal that the district court had effectively denied immunity to the President in his individual capacity by failing to act on his motion for dismissal for seven months, concluding that the district court’s failure to rule evinced neither an unreasonable delay or a desire to needlessly prong the litigation. In a dissent to the majority opinion involving President Trump’s official capacity, Judge Wilkinson argued that the "competitive injury" claimed by the plaintiffs was not a legal injury subject to the court’s equity jurisdiction (In re Trump, May 14, 2020, Motz, D.).

In Judge Wilkinson’s dissent, joined by Judges Niemeyer, Agee, Richardson, Quattlebaum, and Rushing, he noted that the crux of the complaint was that, because of "President Trump’s alleged unlawful acceptance of emoluments, guests that otherwise would have patronized their business establishments (and those of their residents) have instead patronized President Trump’s Hotel." They claimed that the increased traffic to the President’s competing hotel created an "unfair economic playing field." Thus, they asserted a competitive injury in the form of lost profits due to increased competition.

According to Wilkinson, such an injury does not infringe any rights enforceable in equity. Federal courts have consistently refused to grant equitable relief to plaintiffs that complained only of competitive harm. "Critically, this principle applies even where, as here, plaintiffs allege that they face increased competition due to government action that benefits their competitor." A plaintiff suffers no cognizable injury in equity if the actions of the competing entity are lawful, Wilkinson said. And the "strict bounds of our equity jurisdiction under Article III render the federal courts powerless to unilaterally create and protect such a right."

Further, it was undisputed that there was no statutory provision at issue which formed the basis of the plaintiffs’ claim, Wilkinson noted. And "[n]either the plaintiffs nor the majority have offered even the thinnest rationale for why the Emoluments Clauses would" protect their asserted interest in being free from lawful competition. The plaintiffs failed to state a claim upon which relief should be granted and that should be the end of this case, Wilkinson explained.

This case is No. 18-2486.

Attorneys: Mark R. Freeman, U.S. Department of Justice, for Donald J. Trump. Loren Linn Alikhan, Office of the Attorney General, for District of Columbia. Laura C. Beckerman, Citizens For Responsibility & Ethics In Washington, for State of Maryland.

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