Monday, March 25, 2019

Emoluments, Pragmatism, and Judicial Review

By Eric Segall

Last Wednesday, three federal judges appointed by Republican Presidents expressed great skepticism over a lawsuit brought by the State of Maryland and the District of Columbia alleging that President Trump is violating the Emoluments Clauses of the Constitution. The provision that deals with foreign countries (this post is limited to that clause) provides that "No title of nobility shall be granted by the United States: and no person holding any office of profit or trust under them, shall, without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state." This constitutional limitation has never been interpreted by the Supreme Court. In addition to the lawsuit brought by Maryland and the District of Columbia, there are similar lawsuits filed by member of Congress (disclaimer I worked on a brief in that case), and by a citizens organization called CREW in the Southern District of New York (that case has been dismissed and is now on appeal).
The three Fourth Circuit judges who held oral argument last Wednesday seemed concerned with both the standing of the states and DC to bring the suit and with the merits of the litigation. The standing issue goes largely to whether either plaintiff has been harmed by the Trump Corporation operating a luxury hotel in the shadow of the White House and the Department of Justice because that hotel competes with convention hotels owned and operated by the plaintiffs and their citizens. Their claim, that they are at a competitive disadvantage because potential customers want to curry favor with the White House and therefore the plaintiffs are losing money, should be enough for standing, as the lower court held.  Although the Fourth Circuit judges seemed skeptical, let's assume this case or one of the other suits eventually gets to the merits of the controversy.

There has been an enormous amount of ink spilled, in the law reviews, in amicus briefs, the mainstream media, and even on Twitter, over a number of interesting legal issues raised by these lawsuits. Some of the issues include: What does the word "emolument" mean? Is the President subject to the clause at all since it refers to an "officer" of the United States and perhaps the President isn't an "officer"? Is the clause violated by the President's company receiving money from foreign companies or only if the President receives payments directly for official decisions? And what limiting principles apply to the clause given that technically it could apply to apolitical and seemingly innocent profits like those from a book deal that do not seem to implicate the purposes of the clause? For simplicity's sake, the Clause's purposes are to prevent the President from being perceived as beholden to foreign countries, actually being so beholden, or making decisions based on personal profit not based on what is in the best interests of the United States.

At the oral argument last Wednesday, the plaintiffs' lawyers seemed not to be able to answer a very basic question: what relief do you want? They said they would be happy with a declaration the President is violating the Clause and an injunction prohibiting further violations. That answer, of course, leaves many questions unanswered, most notably, how is the President violating the Clause, and the Fourth Circuit judges were not at all happy with the response.

The purpose of this post is not to definitively answer any of the legal questions raised by these lawsuits. Although I think the President is clearly covered by the Clause, and that at least some of the plaintiffs have standing to bring these cases, what I want to emphasize is the proper method that judges should use to decide these cases.

It is indisputable that the President of the United States has complex business interests all over the world, that his companies are receiving revenues from those businesses, and that while the President has turned over the running of those businesses to his sons, he has not divested himself from the profits from those businesses. We don't know the extent of these businesses and how often foreign governments use them because the White House has refused most discovery requests relating to these lawsuits.

There can be no doubt that a literal reading of the Emoluments Clause could lead to great absurdities. As one of the Fourth Circuit judges noted, a broad interpretation of both the foreign and domestic Clauses could potentially require the President to give up investing in government bonds or federally insured bank accounts. On Twitter, Professor Andy Grewal has been relentlessly skeptical of the plaintiffs' legal claims throughout all the different cases, tweeting yesterday, "when a foreign diplomat buys a taco bowl at the Trump Tower Grill, the cashier’s acceptance of the payment reflects official government action. That makes no sense but it’s the plaintiffs’ position." Other academics are less cynical and have used Corpus Linguistics to argue that the original meaning of the term Emoluments is in fact very broad and likely covers the President's activities.

The mistake that judges who are hearing these cases and many scholars writing about them should avoid is the assumption that they must define the Clause with great specificity to decide these lawsuits. That is simply not how constitutional law works. The question before these judges, and the country today, is what to do, if anything, about a President whose personal company runs for-profit businesses all over the globe. The Foreign Emoluments Clause, assuming it applies to the President, at the very least captures an important value: we don't want the President's personal fortunes to affect his foreign policy decisions. The sad reality is that we cannot intelligently answer the question posed by this case without knowing much more about the President's businesses and personal finances than he has allowed us to know. I assume everyone agrees that it would be improper for the President to make foreign policy decisions for the purpose of lining his own pockets, regardless of legal technicalities. The Emoluments Clause captures that general value. Whether or nor it would technically apply in a silly way to other aspects of a future President's hypothetical finances, book deals, or taco restaurants are not issues that need to be resolved now.

The proper way for judges to balance a rich President's financial entanglements with his official duties will not be seriously aided by formalistic inquiries of the kind that have so far dominated the Emoluments literature. The Court does not decide cases that way. Rather, it identifies general values and applies them as well as possible to the known facts at hand. No amount of legal formalism can justify the current state of affirmative action law that prohibits racial quotas, no matter how small, and requires individualized review of university applications, but also allows for the goal of recruiting a critical mass of traditionally disadvantaged minorities all in the service of the goal of educational diversity, but not to make up for past discrimination. None of those "rules" comes from any reading of text and history but simply the Justices' views and compromises over the years applying a vague norm of equality to different admissions programs.

The same is true for many if not most other areas of constitutional law. The law of the Dormant Commerce Clause (a clause that doesn't even exist), is another glaring example, The Court's rules, exceptions, tests, and other formulations are often inconsistent with each other, lead to ad-hoc decision-making, and if anyone can really explain how the market-participation exception currently applies to state-run monopolies, you get a prize. The point is that the principle that we have a national economy and states are not allowed to act in a protectionist manner (too much) is simply too malleable to lead to persuasive formal across-the-board rules that will decide future cases. The Court essentially goes one case at a time by the seat of the Justices' pants/skirts.

The most compelling evidence that the Court doesn't use text, original meaning, or other formalisms to decide hard cases is its absurdly convoluted free speech doctrine. Whether we are talking about public forum analysis, the difference between content-based and viewpoint-based rules, or the government speech doctrine, the Justices act mostly one case at a time, trying their best to issue rules implementing the quite general value of free speech we all accept in theory but disagree about in application.

In all of these areas of constitutional law, and many more, the Court, whether it admits it or not, often takes a pragmatic view of how to best implement a general value, whether that value be equal protection, a free market national economy, or freedom of speech. The Court then issues sub-rules depending on particular facts and values and shapes them as time goes on. Text and history have played little if any roles in the development of these doctrines.

No doubt the judges in the Emoluments cases have difficult legal decisions to make. But that should not stop them from applying the values we think are implicated by the Clause to our current serious predicament: the President is a billionaire who owns for-profit-companies all over the globe which he refuses to divest from and which might cause real conflicts of interests or the appearance of real conflicts of interests. While the judges must decide whether the Clause applies to the President, and if so whether it only applies to direct quid-pro-quo payments (a ridiculous interpretation), the judges do not have to lay down definitive formal rules for what constitutes an emolument in other situations or deal with far-fetched hypothetical cases. A good judge will look at the world around her, see this President's global business enterprises, and allow the plaintiffs to find out more information about the relationships between the President's businesses and the activities of foreign countries. This discovery has not taken place but it should and it will not do great damage to the Presidency. If you are a billionaire with global economic interests, and you want to be President, the Emoluments Clause may well suggest that those connections at least have to be transparent. No formal legal doctrines need to be suspiciously manipulated for that conclusion to make a lot of practical sense.


Marty Lederman said...

Agreed that it ought to be based on a functional, pragmatic assessment--but courts shouldn't have to do it. Until Trump, it was always DOJ itself that employed such a functional test (which they've now abandoned in this litigation)--including in a leading OLC opinion signed by Samuel Alito. The plaintiffs have been unwise to tether themselves too strictly to their dictionary-definition "test," which does lead to absurd results.


Joe said...

DOJ is self-interested, especially here.

Anyway, the courts still have to decide this question and when does so it will be based "on a functional, pragmatic assessment." I took the article to be talking big picture here. And, the path argued is the right one. See also, the third way cited at the end of his latest book.

I think the Congress has the ultimate duty here especially to the degree the emoluments limits are not absolute (there are multiple ones) and it has the power to allow them. This includes putting disclosure limitations like involving tax returns.

It has not done its job here, a job its members swear and affirm to do per Art. VI.

David Ricardo said...

This post illustrates a major weakness in American democracy, one that if exploited by craven individuals like Trump can destroy the concept of American democracy.

The U. S. is governed by a Constitution which in part provides for a constraint on what government can do. The Emoluments clause for example prohibits a President from personally benefiting from his office. Good idea! e

But the issue, as the post describes, is enforcement. No one expects the President to be in any way constrained by the courts for a violation of the Emoluments clause, because the courts will not do anything. The first thing they will try to find is that no one, absolutely no one, has standing. And if standing somehow survives the courts will then say the suits are dismissed because plaintiff's have not shown harm, even though the suits must be allowed to go forward through discovery in order for plaintiff's to show harm. Catch 22 lives!

This week the Supreme Court will hear arguments on gerrymandering. At least some and maybe a majority will conclude that voters, that is no one, has standing and so dismiss the claims of partisan districting. Of course, this will be the Republican majority on the Court projecting the Republican majority in government such as North Carolina and protecting the Republican majority on the Court.

Bottom line, the Constitution protects its citizens from abuses by government, except of course it doesn't, at least not from Republican abuses which as we all know are done for everyone's benefit.

Shag from Brookline said...

In the past the emoluments clauses may have dissuaded wealthy businessmen from seek the presidency as they did not wish to have their businesses subject to governmental scrutiny, not being prepared to dispose of their business if elected. That didn't stop Trump in basically ignoring certain norms established over the years with blind trusts, release of tax returns, etc, all for the purpose of avoiding potential conflicts of interest and concerns of corruption. Trump's challenges require addressing, not only by the courts but also by Congress.

Shag from Brookline said...

As I have been reading more articles onTrump AG Bob Barr's handling of the Mueller Report, the expression "Katy bar the door" has come to mind. I'll be thinking of an adaptation and invite others to join in to describe Barr's efforts.

Joe said...

One summary of Shag's pun:

Shag from Brookline said...

Here's a paragraph from Michelle Goldberg's 3/25/19 NYTimes column:

Until the Mueller report is publicly released, however, it’s impossible to tell how much of Trump’s victory is substantive and how much is spin. The report, evidently, leaves open the question of whether Trump obstructed justice. In his letter to Congress about the report, Barr said that he and his deputy, Rod Rosenstein, made the determination that no obstruction of justice occurred. Of course, last year Barr wrote a memo calling Mueller’s obstruction investigation “grossly irresponsible” and “fatally misconceived,” which is surely why Trump appointed him in the first place. There is no reason for anyone to take his finding seriously.


I can imagine Trump noting on Barr's unsolicited memo "Bill, bar the Mueller Report" in deciding to nominate Barr to be Attorney General. In an attempt to make this adaptation work at least a tad, "Report" would have sort of a French pronunciation in the manner of Stephen Colbert's last name. The quote in Goldberg's column from Barr's unsolicited memo, speaks volumes.

Joe said...

Colbert last night referenced Barr's pre-interview open letter supporting Trump making Barr's post-report spin rather expected.