941 F.3d 631 (2nd Cir. 2019), 19-3204, Trump v. Vance

Docket Nº:19-3204
Citation:941 F.3d 631
Party Name:Donald J. TRUMP, Plaintiff-Appellant, v. Cyrus R. VANCE, Jr., in his official capacity as District Attorney of the County of New York, Mazars USA, LLP, Defendants-Appellees.[1]
Case Date:November 04, 2019
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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941 F.3d 631 (2nd Cir. 2019)

Donald J. TRUMP, Plaintiff-Appellant,

v.

Cyrus R. VANCE, Jr., in his official capacity as District Attorney of the County of New York, Mazars USA, LLP, Defendants-Appellees.1

No. 19-3204

United States Court of Appeals, Second Circuit

November 4, 2019

Argued: October 23, 2019

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Appeal from the United States District Court for the Southern District of New York (Marrero, J. )

William S. Consovoy, Consovoy McCarthy PLLC, Arlington, VA (Cameron T. Norris, Consovoy McCarthy PLLC, Arlington, VA; Patrick Strawbridge, Consovoy McCarthy PLLC, Boston, MA; Marc L. Mukasey, Mukasey Frenchman & Sklaroff, New York, NY; Alan S. Futerfas, Law Offices of Alan S. Futerfas, New York, NY, on the brief), for Plaintiff-Appellant.

Carey R. Dunne, General Counsel (Christopher Conroy, Solomon Shinerock, James H. Graham, Sarah Walsh, Allen J. Vickey, Assistant District Attorneys, on the brief), for Defendant-Appellee.

Joseph H. Hunt, Assistant Attorney General (Hashim M. Mooppan, Deputy Assistant Attorney General; Mark R. Freeman, Scott R. McIntosh, Gerard Sinzdak, Attorneys, on the brief), United States Department of Justice, Washington, DC, for Amicus Curiae United States of America, in support of Plaintiff-Appellant.

Before: Katzmann, Chief Judge, Chin and Droney, Circuit Judges.

OPINION

Katzmann, Chief Judge

This case presents the question of when, if ever, a county prosecutor can subpoena a third-party custodian for the financial and tax records of a sitting President, over which the President has no claim of executive privilege.2 The District Attorney of New York County has issued a grand jury subpoena to an accounting firm that possesses a variety of such records because it performed accounting services for President Donald J. Trump and his organization. When the President sought injunctive relief in federal court to restrain enforcement of that subpoena, the district court (Marrero, J. ) declined to exercise jurisdiction and dismissed the case under the doctrine of Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). The district court also explained in an alternative holding why, in its view, there was no constitutional basis to temporarily restrain or preliminarily enjoin the subpoena at issue. On appeal, we conclude that Younger abstention does not extend to the circumstances of this case, but we hold that the President has not shown a likelihood of success on the merits of his claims sufficient to warrant injunctive relief. Construing the district court’s discussion of the immunity question as an order denying a preliminary injunction, we AFFIRM that

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order, VACATE the judgment dismissing the complaint on the ground of Younger abstention, and REMAND for further proceedings consistent with this opinion.

BACKGROUND

The relevant facts are straightforward. The District Attorney of the County of New York has initiated a grand jury investigation that " targets New York conduct and has yet to conclude as to specific charges or defendants." 3 Joint App’x 46. The parties agree for purposes of this case that the grand jury is investigating whether several individuals and entities have committed criminal violations of New York law.

On August 1, 2019, the District Attorney served a subpoena duces tecum on behalf of the grand jury on the Trump Organization.4 The subpoena sought " documents and communications" from the period between June 1, 2015 and September 20, 2018 relating to suspected " hush money" payments made to two women. Joint App’x 39, 48. At first, the Trump Organization cooperated with the subpoena and produced responsive documents. However, when " the President’s attorneys" — private counsel retained by the President and apparently then acting on behalf of the Trump Organization— learned that the District Attorney interpreted the subpoena to require production of the President’s personal tax returns, they " resisted" that interpretation. Joint App’x 21. Although the Trump Organization has apparently continued to produce limited tranches of documents in response to the August 1, 2019 subpoena, it has not produced any tax records.

On August 29, 2019, the District Attorney served another subpoena duces tecum on behalf of the grand jury on Defendant-Appellee Mazars USA LLP (the " Mazars subpoena" ). Mazars is an accounting firm that possesses various financial records relating to the President’s personal and business dealings, and the Mazars subpoena seeks a wide variety of financial records dating from January 1, 2011 to the present and relating to the President, the Trump Organization, and several related entities. Among the records sought in the August 29, 2019 subpoena are any " [t]ax returns and related schedules, in draft, as-filed, and amended form" within Mazars’s possession.[5] Joint App’x 34. The subpoena set

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a return date of September 19, 2019. Only the Mazars subpoena is the subject of this action and appeal.6

On September 19, 2019, the President filed this action in the United States District Court for the Southern District of New York. The President’s complaint asserted a broad presidential immunity from state criminal process and sought " [a] declaratory judgment that the [Mazars] subpoena is invalid and unenforceable while the President is in office; " " [a] permanent injunction staying the subpoena while the President is in office; " " [a] permanent injunction prohibiting the District Attorney’s office from taking any action to enforce the subpoena, from imposing sanctions for noncompliance with the subpoena, and from inspecting, using, maintaining, or disclosing any information obtained as a result of the subpoena, until the President is no longer in office; " " [a] permanent injunction prohibiting Mazars from disclosing, revealing, delivering, or producing the requested information, or otherwise complying with the subpoena, until the President is no longer in office; " and temporary restraining orders and preliminary injunctions to the same effect during the pendency of the federal litigation. Joint App’x 26.

After a compressed briefing schedule, the able district court issued a thorough and thoughtful decision and order on October 7, 2019. See Trump v. Vance, 395 F.Supp.3d 283 (S.D.N.Y. 2019). The court held that it was required to abstain from exercising jurisdiction under the Supreme Court’s decision in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), and it dismissed the President’s complaint on that ground. Trump, 395 F.Supp.3d at 316. The court also articulated an alternative holding— to govern " in the event on appeal abstention were found unwarranted under the circumstances presented here" — in which it denied the President’s motion for injunctive relief. Id. at 290. This appeal followed immediately on an expedited briefing schedule.

DISCUSSION

I. Standard of Review

" We review de novo the essentially legal determination of whether the requirements for abstention have been met." Disability Rights N.Y. v. New York, 916 F.3d 129, 133 (2d Cir. 2019).7 Likewise, although the denial of a preliminary injunction

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is generally reviewable only for abuse of discretion, " [q]uestions of law decided in connection with requests for preliminary injunctions ... receive the same de novo review that is appropriate for issues of law generally." Am. Express Fin. Advisors Inc. v. Thorley, 147 F.3d 229, 231 (2d Cir. 1998).

II.

Younger Abstention

The district court dismissed the President’s complaint on the basis that abstention was required under Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). On appeal, the President and the United States argue that Younger abstention is unwarranted in the circumstances of this case. We agree.

" In the main, federal courts are obliged to decide cases within the scope of federal jurisdiction." Sprint Commc’ns, Inc. v. Jacobs, 571 U.S. 69, 72, 134 S.Ct. 584, 187 L.Ed.2d 505 (2013). " [O]nly exceptional circumstances justify a federal court’s refusal to decide a case in deference to the States." New Orleans Pub. Serv., Inc. v. Council of New Orleans, 491 U.S. 350, 368, 109 S.Ct. 2506, 105 L.Ed.2d 298 (1989) (" NOPSI " ). Under Younger and its progeny, however, federal courts must decline to exercise jurisdiction in three such exceptional categories of cases: " First, Younger preclude[s] federal intrusion into ongoing state criminal prosecutions. Second, certain civil enforcement proceedings warrant[ ] abstention. Finally, federal courts [must] refrain[ ] from interfering with pending civil proceedings involving certain orders uniquely in furtherance of the state courts ability to perform their...

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