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Blumenthal v. Trump
Citation: 373 F. Supp. 3d 191Docket: Civil Action No. 17-1154 (EGS)
Court: Court of Appeals for the D.C. Circuit; April 30, 2019; Federal Appellate Court
Plaintiffs, consisting of approximately 201 members of Congress, have standing to sue President Donald J. Trump for alleged violations of the Foreign Emoluments Clause, as established in a prior ruling (Blumenthal I). The President's motion to dismiss the Amended Complaint is based on his narrow interpretation of "Emolument," which the Court finds inconsistent with historical definitions and the Clause’s intended purpose. Under the Clause, federal officials, including the President, cannot accept emoluments from foreign entities without Congressional consent. The plaintiffs are seeking declaratory relief to affirm the President's violation of this Clause and injunctive relief to prevent him from accepting any foreign emoluments without such consent. The Court, having reviewed the President's motion, the plaintiffs' opposition, and relevant arguments, concludes that the plaintiffs have adequately stated a claim, possess a valid cause of action for injunctive relief, and that the requested relief is constitutional. Consequently, the Court denies the portions of the President's motion to dismiss that were previously deferred. Plaintiffs assert that the President possesses significant financial interests in over 500 global business entities, including hotels, golf courses, media properties, and numerous shell companies. Since his election, he has not divested these holdings, which has led to allegations that he has accepted Emoluments from foreign states, in violation of the Foreign Emoluments Clause. The President has acknowledged that his businesses profit from foreign government payments, which findings are supported by public reporting. Plaintiffs claim these benefits include payments, loans, regulatory advantages, and intellectual property rights from foreign governments, all received without Congressional consent. Specific allegations include accepting intellectual property rights from China, payments from foreign diplomats, and licensing fees for "The Apprentice." The standard of review for a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) requires that a complaint contains a clear statement of claims to provide fair notice to the defendant. While detailed facts are not mandatory, sufficient facts must be presented to elevate the claim above mere speculation. The court may consider the complaint's factual allegations, attached documents, and judicially noticeable matters, and must interpret these favorably toward the plaintiffs while disregarding unsupported inferences or legal conclusions presented as facts. A complaint must state a plausible claim for relief to survive dismissal. Constitutional interpretation requires the Court to ascertain the natural meaning of constitutional text as understood at the time of its ratification. This principle mandates that the language be interpreted in its normal and ordinary sense, avoiding technical or obscure meanings unknown to the founding generation. To determine this ordinary meaning, the Court should reference founding-era dictionaries and contemporaneous sources. In cases of ambiguity, the Court should consider the purpose of the clause and its historical interpretations, with historical context strongly reinforcing the text's meaning. Additionally, government practices, regardless of their origins or duration, serve as significant interpretive factors in understanding constitutional provisions. The Foreign Emoluments Clause of the U.S. Constitution prohibits individuals holding office from accepting any presents, emoluments, offices, or titles from foreign entities without Congressional consent. The term "Emolument" is argued to be broadly defined as any profit, gain, or advantage. The President contends that this clause does not prohibit commercial transactions with foreign governments by businesses in which an official has a financial interest but only applies to compensation received in an official capacity or honors and gifts from foreign governments. He asserts that at the nation's founding, "Emolument" referred to all forms of compensation or financial gain derived from fulfilling official duties, as most federal officials were compensated through fees rather than salaries. The President provides examples illustrating his interpretation: receiving payment for official actions taken on behalf of a foreign government or entering an employment-like relationship with a foreign state. He argues that this understanding aligns with the other categories prohibited by the clause, which involve personal conferral on U.S. officials. Plaintiffs argue that the term "Emolument," at the time the Constitution was drafted, commonly referred to profit or gain, as supported by various contemporaneous dictionaries, writings, state constitutions, and legal rulings. They cite sources such as The Oxford English Dictionary and Samuel Johnson's dictionary, noting that over 92% of dictionaries from the seventeenth and eighteenth centuries defined "Emolument" as profit, advantage, or benefit, while the President's preferred narrower definition appeared in less than 8%. Plaintiffs highlight that the term often referred to profits from private financial transactions and assert that interpreting "Emolument" to necessitate an employment-like relationship is a misinterpretation of historical dictionaries. They contend that even under the President's narrower definition, the profits arising from his business empire qualify as "gain arising from station, office, or employment." They argue that benefits granted to him due to his presidential position, such as lucrative trademarks or hotel selections by foreign governments, fit within this definition. In contrast, the President claims that the meaning of "Emolument" is context-dependent, rooted in the Constitution's historical context and founding practices. He challenges the relevance of the number of sources supporting each definition and criticizes the plaintiffs' reliance on Professor Mikhail's article, which he argues has been discredited. The President maintains that Mikhail’s findings actually support his interpretation, linking his definition to the term's etymological origins, and notes that the Oxford English Dictionary lists his definition before the broader one, suggesting precedence. Amici Legal Historians contest the President's limited interpretation of "Emolument," deeming it incorrect and unrepresentative. They note a lack of evidence that the two sources cited by the President—Barclay (1774) and Trusler (1766)—were known or utilized by the framers of the Constitution, as neither source appears in the extensive Founders Online database or other relevant historical records. In contrast, dictionaries available to the founding generation consistently define "Emolument" in a broad sense, encompassing meanings such as profit, advantage, or benefit. A review of dictionaries from 1604 to 1806 reveals that all definitions align with the plaintiffs' broader interpretation, which the President's argument overlooks. The President's use of Trusler, a thesaurus rather than a standard dictionary, further undermines his position, as it conflates "gain," "profit," and "Emolument" as synonyms without providing a reliable English context. While both broad and narrow definitions existed at the time of the Constitution's ratification, evidence indicates that the broader interpretation was more widely accepted and intended for the Clause. The Court finds that historical sources support the plaintiffs' broad interpretation and recognizes some ambiguity in the term "Emolument." To resolve this ambiguity, the Court will examine the Clause's context, structure, historical interpretations, and Executive Branch practices. The President contends that "Emolument" should be interpreted with a narrower definition, referring specifically to profits related to services rendered in an official capacity, as supported by the context of its usage within the Constitution. He argues that a broader interpretation, as suggested by the plaintiffs, would contradict the specific wording of the Emoluments Clause and render the term "present" redundant, as the plaintiffs interchangeably use "Emolument" and "present." The President emphasizes that constitutional language must maintain the significance of each word, pointing to two other constitutional instances of "Emolument" that emphasize compensation tied to office-holding. In contrast, plaintiffs argue that the phrase "of any kind whatever" indicates a broader interpretation of "Emoluments," aimed at prohibiting various types of emoluments without exception. They assert that the Incompatibility Clause outlines a narrower scope regarding emoluments bestowed by the federal government, while the Foreign Emoluments Clause should encompass a wider range of benefits. The President refutes plaintiffs' claims, stating that the phrase enhances the Clause's reach rather than limits it and that the use of "any" is not redundant but clarifies that no prohibited emoluments can be accepted without Congressional consent. He also argues that the absence of an office reference in the Foreign Emoluments Clause reflects its broader applicability, which includes any employment-like relationship with foreign entities. The President concludes that since "Emolument" is consistently tied to office-related conduct in all relevant constitutional clauses, it should not be construed with varying meanings. The Court supports the plaintiffs' interpretation of "Emolument" as defined broadly in the Constitution, rejecting the President's narrow definition. The Clause prohibits any foreign Emolument, Office, or Title without congressional approval, emphasizing the phrase "of any kind whatever." The President's argument that this phrase should narrowly modify "Emoluments" is deemed unconvincing and inconsistent with his own interpretation principles. Historical context reveals both broad and narrow meanings of "Emolument" existed at the Constitution's ratification, and the use of "any" twice in the Clause indicates an expansive scope. The President's reliance on the Incompatibility Clause and the Domestic Emoluments Clause to argue for a narrow definition fails, as those clauses specify different contexts for the term. The Court concludes that the broader meaning of "Emolument" is appropriately modified based on the purpose of each Clause. Additionally, defining "Emolument" as "profit, gain, or advantage" does not render "present" redundant, as it encompasses various financial transactions, countering the President's claims of redundancy within the Constitution. A federal official receiving payment from a foreign government for official actions exemplifies an "Emolument," which parallels federal bribery laws prohibiting the acceptance of anything of value to influence official acts (18 U.S.C. § 201(b)(2)). Judge Messitte argues that since Article II, Section 4 of the Constitution addresses bribery as an impeachable offense, the inclusion of the Emoluments Clauses suggests a distinct prohibition against accepting payments from foreign or state governments for official services. It is unlikely the Framers intended for bribery, an impeachable act, to be permissible with Congressional consent involving foreign contributions. The President's narrow definition of "Emolument" fails to address this inconsistency. While the receipt of Emoluments is related to the presidential office, it does not necessitate a limited interpretation of the term. The President argues that the historical context and interpretation of the Clause support a narrow, office- and employment-specific definition of "Emolument," asserting that the Clause's adoption did not reflect concerns about officials' private commercial activities. He claims that early Presidents engaged in private business without it being a conduit for foreign influence, supported by examples of their agricultural exports. Plaintiffs counter that these examples do not involve direct commercial transactions with foreign governments and highlight that the agrarian economy of the eighteenth century made such commerce unlikely. The President also references George Washington's land purchase as a potential violation of the Domestic Emoluments Clause, suggesting that if plaintiffs' definition were applied, it would implicate Washington. However, he acknowledges the lack of concrete evidence for his claims about early Presidents' business dealings with foreign entities. The Court finds the historical interpretation of the Clause aligns more with the plaintiffs' broader definition, noting the Framers' limited discussion of the Clause due to its noncontroversial nature. The Court declines to accept the President's inferences regarding early Presidents' transactions and views his reliance on a proposed, unratified constitutional amendment as lacking persuasive weight, particularly without supporting legislative debates. Overall, the Court leans towards the plaintiffs' interpretation of "Emolument." The President contends that the interpretation of "Emolument" should not extend to a broad prohibition on receiving any monetary or nonmonetary benefits, arguing that the Clause's purpose—combating corruption and foreign influence—does not support such an expansive reading. He asserts that requiring officeholders to divest their private businesses would lead to "absurd consequences," potentially categorizing royalties from foreign book sales and stock holdings as prohibited benefits. Conversely, plaintiffs argue that any ambiguity in the definition of "Emolument" should be interpreted against the President, claiming that his definition undermines the Clause’s purpose by allowing for potential corruption among wealthy officeholders. They reference historical documents underscoring the Clause's intent to prevent foreign influence. Amici, including former government ethics officials, support the plaintiffs' position, asserting that a broad interpretation does not lead to absurd results and maintain that the government considers the totality of circumstances in Emoluments cases. They argue that only specific scenarios would trigger the Clause, such as direct attempts at influence. The Court finds that a broad definition of "Emolument" aligns with historical understanding and the Clause's anti-corruption purpose, advocating for a comprehensive interpretation to fulfill its intended safeguards against foreign influence. The Court finds the arguments from amici unconvincing regarding potential "absurd consequences" from a broad definition of the Clause, noting that the Executive Branch consistently employs a totality-of-the-circumstances approach. Adopting the plaintiffs' definition would not lead to a "blanket prohibition" ignoring context. Historically, Presidents have complied with the Clause by obtaining congressional consent or seeking advisory opinions on its applicability. Modern Presidents, except for President Trump, have consulted the Office of Legal Counsel (OLC) prior to accepting potentially covered Emoluments. The Comptroller General also interprets the Clause's application. The President supports his definition of "Emolument" by referencing interpretations from the OLC and Comptroller General, which have typically involved employment relationships with foreign governments. Plaintiffs argue that these interpretations arise from requests primarily made by federal officers, who are generally not wealthy individuals but earn their income through labor or expertise. Former Government Ethics Officers clarify that the OLC, Comptroller General, and Department of Defense apply broad principles when assessing the Clause's applicability. They emphasize that the expansive language of the Clause warrants a broad interpretation, starting with the presumption that it applies, as public officeholders must prioritize unclouded judgment and uncompromised loyalty to the government. The totality-of-the-circumstances approach has been consistently utilized, with varied conclusions about payments from foreign states based on the level of foreign government control. Notably, the government has never allowed a public official to maintain a business interest that could benefit from their public office, underscoring the attention paid to preventing potential foreign government influence on public trust. The government has determined that arrangements presenting even a low probability of foreign influence violate the Foreign Emoluments Clause. With limited judicial interpretation available, the Court relies on opinions from the Office of Legal Counsel (OLC) and the Comptroller General to define "Emolument" and understand the Clause's application. Historical practices inform legal interpretation, emphasizing the Clause's broad purpose to prevent foreign government influence. OLC opinions advocate for an expansive interpretation of "Emolument," highlighting the Clause's sweeping language. Adopting a narrow definition, as suggested by the President, contradicts established Executive Branch practices. The President has not referenced any OLC or Comptroller General opinion supporting his narrow stance. Notably, a 1993 OLC opinion clarified that non-governmental lawyers affiliated with the Administrative Conference of the United States could not accept partnership distributions tied to fees from foreign government clients, as this would constitute an improper emolument due to indirect acceptance of foreign government funds. The language in the legal document contradicts the President's assertion that receiving benefits in a private capacity does not constitute a violation of the Foreign Emoluments Clause. The court agrees with amici that even indirect economic interests in transactions can violate this clause if they create potential undue influence over public officials. The Comptroller General's opinion regarding President Reagan's pension benefits, which concluded that such benefits do not fall under the Domestic Emoluments Clause because they were earned prior to his presidency, does not support the President's narrow interpretation of "Emolument." In contrast, the current situation involves foreign diplomats staying at the President's hotel to gain favor due to his office, highlighting a significant distinction from Reagan's case. The court finds that profits from foreign government patronage at Trump International Hotel starkly differ from vested retirement benefits. The President's arguments based on unpassed statutory provisions regarding the Emoluments Clause are not convincing, as consistent executive branch practices support a broader definition of "Emolument." Consequently, the term is defined broadly to encompass any profit, gain, or advantage received from foreign governments, not limited to direct compensation for services. Plaintiffs have sufficiently alleged a claim under the Foreign Emoluments Clause, arguing that the President has accepted various emoluments from foreign governments—such as payments for hotel stays, intellectual property rights, and licensing fees—without congressional consent. This claim is considered plausible given the acceptance of allegations in the Amended Complaint as true, allowing the case to proceed past the President's motion to dismiss. Regarding injunctive relief, the President contends that the Foreign Emoluments Clause does not provide a basis for a federal cause of action, emphasizing that equitable relief is only appropriate in certain cases. He claims that this is not a proper case for such relief because: (1) the plaintiffs are not preemptively defending against government enforcement actions; (2) equity cannot create new rights, and the Clause does not confer enforceable rights; and (3) any relief would necessitate suing the President directly, which raises significant equitable restraint concerns. The President maintains that remedies should be sought through Congress, not the courts. In contrast, the plaintiffs assert an implied cause of action for injunctive relief based on established Supreme Court precedent that allows individuals to challenge unconstitutional actions by government officials. They argue that their claim, rooted in a constitutional violation, should not be treated differently from other constitutional claims and reject the President's analogy to the Supremacy Clause. Plaintiffs argue against the President's assertion that the "zone-of-interests" test applies to constitutional claims, specifically referencing Lexmark Int'l, Inc. v. Static Control Components, Inc. They assert that their interests align with the Foreign Emoluments Clause's purpose of using separation of powers to prevent foreign corruption. Notably, the President concedes that Congress as a whole meets the zone-of-interests requirement but fails to justify why individual Members of Congress would not. The Court finds no basis to dismiss the possibility of an implied cause of action under the Foreign Emoluments Clause, contrasting it with the Supremacy Clause, which does not create such a right. The Court emphasizes its authority to issue injunctions against unconstitutional actions by the President, noting that this is consistent with established legal practices and does not violate the separation of powers doctrine. Accepting the allegations in the Amended Complaint as true, the Court highlights that the President is accepting foreign emoluments without congressional consent, undermining the Clause's intent to prevent corruption and foreign influence. The exercise of equitable discretion by the Court is deemed necessary to maintain the balance of powers. The plaintiffs' complaint must fall within the "zone of interests" protected by the relevant constitutional provision. The text discusses the applicability of the zone-of-interests test to statutory and constitutional claims, particularly regarding the Foreign Emoluments Clause. It argues that individual Members of Congress meet this test, despite the President's assertion that their claims are only marginally related to the Clause's purpose. The court contends that the essence of the Clause is for the President to obtain Congressional consent before accepting foreign emoluments, making the alleged injury of the plaintiffs—being deprived of their voting rights on such matters—directly related to the Clause's intent. The court rejects the President's claim for "extreme equitable restraint," emphasizing that the need for judicial review is heightened when the relief sought directly involves the President. It cites previous cases to support the notion that when no other legal remedy exists, lawsuits against the President can proceed. Furthermore, the court highlights the principle of separation of powers, noting that one branch must not impair another's constitutional duties. Overall, the court maintains that the plaintiffs have a valid claim, warranting judicial scrutiny despite the President's arguments against it. The amici Separation of Powers Scholars argue that there is no risk of impairing presidential duties in this case, as the President has not specified which duties would be affected, contrasting it with Mississippi v. Johnson, where the relief sought would have directly interfered with presidential responsibilities. They assert that responding to a case regarding the Foreign Emoluments Clause is part of the President's official duties. The court acknowledges that while there is a dispute over the definition of "Emolument," it is agreed that the Clause applies to the President, and adjudicating the case supports the President's obligation to uphold the law and his oath. The President contends that the injunction sought by the plaintiffs is unconstitutional, claiming it imposes conditions on his ability to perform his elected duties and involves core executive functions. In response, plaintiffs argue that compliance with the Foreign Emoluments Clause is akin to a ministerial duty, which does not bar injunctive relief. The President counters that compliance requires significant judgment and planning, suggesting that even if it were characterized as ministerial, the court should exercise restraint in issuing an injunction against a sitting President. The court agrees that restraint is warranted, but acknowledges that precedents do not categorically preclude injunctive relief against the President under certain conditions. The text highlights that while injunctive relief against the President is extraordinary and should be approached with caution, the Supreme Court has left open the possibility of such relief for purely ministerial duties—defined as those requiring no discretion in performance, even when the interpretation of the relevant statute may be unclear. The statute creates a mandatory obligation for the President to act in accordance with the Emoluments Clause, which prohibits the acceptance of foreign emoluments unless Congress allows exceptions. The President lacks discretion to determine compliance; any required congressional consent is a ministerial duty. The President's concerns about the burdens of complying with an injunction are irrelevant to whether the injunction would interfere with his execution of laws. The court concludes that the plaintiffs have adequately alleged a claim against the President for violating the Foreign Emoluments Clause and that they have standing to seek injunctive relief, which is deemed constitutional. Consequently, the court denies parts of the motion to dismiss. The applicability of the Emoluments Clause to the President is acknowledged without further dispute, as both parties agree on this point. The court also notes distinctions in definitions of "emolument" and clarifies that prior analyses regarding private plaintiffs' standing do not affect the current case.