Citizens for Responsibility & Ethics in Wash. v. Trump

• Decision Date: 17 August 2020
• Docket Number: No. 18-474-cv,18-474-cv
• Citation: 971 F.3d 102 (Mem)
• Parties: CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, Restaurant Opportunities Centers United, Inc., Jill Phaneuf, Eric Goode, Plaintiffs-Appellants, v. Donald J. TRUMP, in His Official Capacity as President of the United States of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

971 F.3d 102 (Mem)

CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, Restaurant Opportunities Centers United, Inc., Jill Phaneuf, Eric Goode, Plaintiffs-Appellants,

v.Donald J. TRUMP, in His Official Capacity as President of the United States of America, Defendant-Appellee.

No. 18-474-cv

United States Court of Appeals, Second Circuit.

August 17, 2020

For Plaintiffs-Appellants: DEEPAK GUPTA (Jonathan E. Taylor, Joshua Matz, and Daniel Townsend, on the brief), Gupta Wessler PLLC, Washington, D.C. Joseph M. Sellers, Daniel A. Small, Cohen Milstein Sellers & Toll PLLC, Washington, D.C. Norman L. Eisen, Stuart C. McPhail, Adam J. Rappaport, Citizens for Responsibility and Ethics in Washington, Washington, D.C. Laurence H. Tribe, Harvard Law School, Cambridge, MA.

For Defendant-Appellee: HASHIM M. MOOPPAN (Chad A. Readler, Michael S. Raab, Megan Barbero, on the brief; Joseph H. Hunt, Mark R. Freeman, Michael S. Raab, Martin Totaro, Joshua Revesz, on the petition), Department of Justice, Washington, D.C.

PRESENT: ROBERT A. KATZMANN, Chief Judge, JOSÉ A. CABRANES, ROSEMARY S. POOLER, PETER W. HALL, DEBRA ANN LIVINGSTON, DENNY CHIN, RAYMOND J. LOHIER, JR., SUSAN L. CARNEY, RICHARD J. SULLIVAN, JOSEPH F. BIANCO, WILLIAM J. NARDINI, STEVEN J. MENASHI, Circuit Judges.

José A. Cabranes, Circuit Judge, dissents by opinion from the denial of rehearing en banc.

Steven J. Menashi, Circuit Judge, joined by Debra Ann Livingston and Richard J. Sullivan, Circuit Judges, dissents by opinion from the denial of rehearing en banc.

John M. Walker, Jr., Circuit Judge, filed a statement with respect to the denial of rehearing en banc.

Pierre N. Leval, Circuit Judge, filed a statement with respect to the denial of rehearing en banc.

Michael H. Park, Circuit Judge, took no part in the consideration or decision of this petition.

Following disposition of this appeal on September 13, 2019, a judge of the Court requested a poll on whether to rehear the case en banc . A poll having been conducted and there being no majority favoring en banc review, rehearing en banc is hereby DENIED .

José A. Cabranes, Circuit Judge, dissenting from the order denying rehearing en banc:

I respectfully dissent from the order denying rehearing of this case en banc.¹

We have missed an opportunity to address en banc a "question of exceptional importance," Fed. R. App. P. 35(a)(2), regarding the limits of the judicial power under Article III of the Constitution in addressing a constitutional claim against a President. The exceptional importance of the case is beyond dispute and its portentousness, which made rehearing en banc appropriate, is effectively captured in Judge Walker's "Statement" in response to the order denying rehearing en banc and Judge Menashi's comprehensive discussion of the principles of Article III standing.

As Justice Robert H. Jackson aptly reminded us, "because our own jurisdiction is cast in terms of ‘case or controversy,’ we cannot accept as the basis for review, nor as the basis for conclusive disposition of an issue of federal law without review, any procedure which does not constitute [a true case or controversy]." Doremus v. Bd. of Ed. of Borough of Hawthorne , 342 U.S. 429, 434, 72 S.Ct. 394, 96 L.Ed. 475 (1952) ; see also Arizona Christian Sch. Tuition Org. v. Winn , 563 U.S. 125, 135, 131 S.Ct. 1436, 179 L.Ed.2d 523 (2011) (noting that Justice Jackson's opinion in Doremus "reiterated the foundational role that Article III standing plays in our separation of powers"). We are not authorized to review a constitutional violation unless there is an adequate showing that the party bringing the lawsuit is in fact sustaining or "is immediately in danger of sustaining some direct injury," such as a "direct dollars-and-cents injury," as a result of the challenged unconstitutional conduct by the President. Doremus , 342 U.S. at 434, 72 S.Ct. 394 (internal quotation marks omitted) (quoting Commonwealth of Massachusetts v. Mellon , 262 U.S. 447, 486, 43 S.Ct. 597, 67 L.Ed. 1078 (1923) ).

It is worth underscoring that only the threshold question of plaintiffs’ constitutional standing at the pleading stage has been resolved by our Court. We are far from the finish line—the resolution of the merits of the plaintiffs’ claims lies before us. On remand, the District Court will need to determine whether the operative complaint in this case states a claim upon which relief can be granted. In conducting this inquiry, the District Court likely will need to address various issues that have yet to be resolved by the Court of Appeals, including whether: (1) the Foreign and Domestic Emoluments Clauses in the Constitution create a privately enforceable right of action against the President; and (2) the plaintiffs’ asserted interests fall within the zone of interests protected by the Emoluments Clauses. In carefully addressing these threshold issues on remand, at the motion-to-dismiss stage, the District Court will be able to determine in the first instance whether the case should be dismissed on the merits pursuant to Federal Rule of Civil Procedure 12(b)(6).

Menashi, Circuit Judge, joined by Livingston and Sullivan, Circuit Judges, dissenting from the denial of rehearing en banc:

The owner of several New York-based hotels and restaurants, along with an association of restaurants and restaurant workers, sued the President of the United States alleging violations of the Emoluments Clauses of the Constitution. These restauranteurs seek a judicial declaration that the President is acting unconstitutionally and an injunction restraining him from doing so. To invoke the judicial power against any defendant, a plaintiff must establish standing to sue—meaning that there is a concrete case or controversy between the plaintiff and the defendant. "[N]o principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies." DaimlerChrysler Corp. v. Cuno , 547 U.S. 332, 341, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006). The standing requirement "serves to prevent the judicial process from being used to usurp the powers of the political branches." Clapper v. Amnesty Int'l USA , 568 U.S. 398, 408, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013). For that reason, when a plaintiff asks a court "to decide whether an action taken by one of the other two branches of the Federal Government was unconstitutional," the standing inquiry must be "especially rigorous." Id. Yet the majority opinion not only relaxes the ordinary rules of standing; it abandons those rules altogether. Accordingly, I dissent from the denial of rehearing en banc .

To establish standing, a plaintiff must show that he or she suffered an injury traceable to the defendant's conduct that the court could redress. Here, the restauranteurs argue that the President's continued interest in the Trump Organization gives Trump-affiliated businesses an advantage in attracting customers who work for foreign or state governments—because those customers think that eating at a Trump-affiliated restaurant or staying at a Trump-affiliated hotel will enrich the President and thereby curry favor with him.

Are there plausible allegations of this? The majority opinion believes so; it cites a press report about foreign diplomats planning to patronize the Trump International Hotel in Washington D.C.¹ The majority also relies on the allegation, based on another press report, that the Embassy of Kuwait moved an event to the Trump International from the Four Seasons after the President was elected.² But the Four Seasons Hotel is not suing the President. In fact, no owner of any hotel in Washington D.C. is a plaintiff in this case, and the plaintiffs here cannot sue on behalf of parties not before the court. "Injured parties ‘usually will be the best proponents of their own rights,’ " and if " ‘the holders of those rights do not wish to assert them,’ third parties are not normally entitled to step into their shoes." Domino's Pizza, Inc. v. McDonald , 546 U.S. 470, 479, 126 S.Ct. 1246, 163 L.Ed.2d 1069 (2006) (internal citation and alteration omitted).

So why does the majority opinion discuss injuries to Washington-based hotels that are not plaintiffs in this case? Because the actual plaintiffs have no evidence of their own injury. They have only a theory of injury, which goes like this: Officials from foreign and state governments would normally eat at (for example) Amali, a Mediterranean restaurant on the Upper East Side of Manhattan that is affiliated with one of the plaintiffs. But because those officials want to curry favor with the President by enriching him with emoluments, they instead eat at (for example) Jean-Georges, a French restaurant located at the Trump International Hotel on the Upper West Side.³ Does President Trump even own Jean-Georges? The complaint does not allege that he does. No matter. The complaint alleges that the business from foreign and state government officials dining at restaurants on Trump properties is so extensive that it "affects the amount of rent that [the President] is able to charge," thereby enriching the President.⁴

Is it really the case that foreign and state government officials are abandoning the plaintiffs’ establishments in favor of restaurants located at Trump properties in the hopes of enhancing the President's rental income? It's possible , though one might justifiably be skeptical. But if the jurisdiction of the court hinges on the answer to that question, one might think the court would require the plaintiffs to identify some evidence that at least one official has actually chosen a Trump-located restaurant over one of the plaintiffs’ restaurants for an emoluments-based reason. But the plaintiffs have no such evidence, and the majority opinion does not think it is necessary. Instead, the majority opinion finds the plaintiffs’ theory of injury so clearly compelling as a matter of "economic...