Foreign Emoluments Clause Lawsuit Against Trump Unlikely To Find Traction In Court

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Michael Boos Executive Vice President, Citizens United
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President Trump’s detractors are bent on forcing him into a fire sale of his vast business empire, arguing his ownership of various assets violates the Foreign Emoluments Clause of the U.S. Constitution.  That clause prohibits federal officials from accepting “any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or Foreign State.”  The Framers considered an “emolument” as something similar to a perk associated with the performance of official duties.  An automobile given by a head of state to the ambassador from the U.S. would be a classic example of an emolument prohibited by the clause.

Just three days after President Trump was sworn into office, the liberal activist group Citizens for Responsibility and Ethics in Washington (“CREW”) filed a lawsuit demanding the courts force him to divest the bulk of his business holdings.  The complaint alleges Mr. Trump’s ownership of real estate assets such as The Trump Tower in New York and Trump International Hotel in Washington, DC, and his receipt of royalties from the Television program “The Apprentice” qualify as emoluments that create conflicts of interests making him beholden to foreign governments.

The unprecedented legal theory of the case is that President Trump’s properties generate at least some receipts from foreign officials and governments, meaning some of those receipts will eventually find their way into Mr. Trump’s pocket as profits.  Consequently, according to the lawsuit, the Emoluments Clause bars him from owning those assets because his judgment as President may be compromised by the profits he receives from foreign payments to his companies.

While the lawsuit drew major media coverage when it was filed, the case is unlikely to find traction in the courts.

First, it is highly doubtful that CREW has standing to bring a claim against the President based on the Emoluments Clause.  The Supreme Court has made clear that standing to prosecute a lawsuit requires a personal stake in the outcome of the case beyond that of the public at large. But CREW’s interest in the matter seems to be no different than that of any member of the general public.  The group’s main contention in trying to separate itself from the general public is that it has incurred costs in preparing for, filing and prosecuting its lawsuit.  That’s not going to hold water; every would-be litigant sustains similar costs.  Such costs have never been considered a factor in meeting the constitutional requirements for standing.

Second, even of a court were to find that CREW has standing, the group has virtually no chance of winning on the merits.  Their action seeks to redefine an emolument far beyond its traditional meaning, to include returns on capital resulting from fair market business transactions.  That’s a huge jump with far reaching ramifications for much of the federal workforce.

The Emoluments Clause applies to all federal office holders, not just high ranking officials such as the President.  Indeed, two of the frequently cited Department of Justice legal opinions addressing its application involve government scientists receiving awards from foreign entities.  If, as CREW’s action claims, the clause prohibits President Trump from owning any assets that generate receipts from foreign governments or officials, it similarly prohibits all federal officials from owning any such assets.  That means, absent Congressional consent, thousands of lower level government employees would be banned from owning a business, such as a flower shop or restaurant, unless the business was able to effectively bar sales to foreign officials and simultaneously comply with our nation’s anti-discrimination laws, including those banning discrimination based on national origin.  CREW’s theory might also make it unlawful for federal employees to own stock in numerous publicly traded corporations such as Boeing, which sells aircraft to foreign nations, or Marriot International Inc., which rents hotel rooms to foreign governments and officials.  Given these far reaching consequences, it’s difficult to image a federal judge, much less an appellate court, adopting CREW’s eccentric interpretation of the Foreign Emoluments Clause.

My bet is that CREW’s lawsuit against President Trump will be promptly tossed out of court.  Dismissal for lack of standing would be an easy call for a judge to make.  However, even if the case is decided on its merits, it will likely be thrown out quickly as an utterly baseless legal claim.  But unlike the media hoopla associated with the lawsuit’s filing, the dismissal of the case will probably generate little in the way of interest from the mainstream media.

Mr. Boos is the Executive Vice President and General Counsel for Citizens United.  He has been a licensed attorney practicing constitutional law since the mid-1990s.