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Blumenthal v. Trump

United States District Court, District of Columbia

April 30, 2019

Senator RICHARD BLUMENTHAL, et al., Plaintiffs,
DONALD J. TRUMP, in his official capacity as President of the United States, Defendant.


          Emmet G. Sullivan United States District Judge.

         I. Introduction

         In its previous Opinion, the Court held that plaintiffs, approximately 201 Members of the 535 Members of the United States Senate and House of Representatives, had standing to sue defendant Donald J. Trump in his official capacity as President of the United States (“the President”) for alleged violations of the Foreign Emoluments Clause (“the Clause”). See Blumenthal v. Trump, 335 F.Supp.3d 45, 72 (D.D.C. 2018) (“Blumenthal I”). The President has moved to dismiss the Amended Complaint for failure to state a claim because, inter alia, he contends that “Emolument” should be narrowly construed to mean “profit arising from an official's services rendered pursuant to an office or employ.” Def.'s Mot. to Dismiss (“Mot. to Dismiss”), ECF No. 15- 1 at 38.[1] The President's definition, however, disregards the ordinary meaning of the term as set forth in the vast majority of Founding-era dictionaries; is inconsistent with the text, structure, historical interpretation, adoption, and purpose of the Clause; and is contrary to Executive Branch practice over the course of many years.

         Pursuant to the Clause, certain federal officials, including the President, shall not “accept” an “Emolument” from “any King, Prince, or foreign State” without “the Consent of the Congress.” U.S Const. art. I, § 9, cl. 8. In Count I, plaintiffs seek declaratory relief pursuant to 28 U.S.C. § 2201 in the form of a declaratory judgment stating that the President is violating the Clause when he accepts Emoluments from foreign states without first seeking the consent of Congress. Am. Compl., ECF No. 14 ¶¶ 85-86. In Count II, plaintiffs seek injunctive relief pursuant to the Court's inherent authority to grant equitable relief and pursuant to 28 U.S.C. § 1331 in the form of a Court order enjoining the President from accepting “any present, Emolument, Office, or Title, of any kind whatever” from a foreign state without obtaining “the Consent of the Congress.” Id. ¶ 92.

         In holding that plaintiffs had standing to sue the President in Blumenthal I, the Court deferred ruling on the remaining arguments in the President's motion to dismiss:

(1) failure to state a claim upon which relief can be granted;
(2) lack of a cause of action to seek the relief requested; and
(3) the injunctive relief sought is unconstitutional. Mot. to Dismiss, ECF No. 15-1 at 17-18.

         Upon careful consideration of the President's motion to dismiss, the opposition and reply thereto, the relevant arguments of amici, [2] and for the reasons explained below, the Court finds that: (1) plaintiffs have stated a claim against the President for allegedly violating the Foreign Emoluments Clause; (2) plaintiffs have a cause of action to seek injunctive relief against the President; and (3) the injunctive relief sought is constitutional. The Court therefore DENIES the portions of the motion to dismiss that were deferred in the Court's prior Order.

         II. Factual Background

         Plaintiffs allege that the President “has a financial interest in vast business holdings around the world that engage in dealings with foreign governments and receive benefits from those governments.” Am. Compl., ECF No. 14 ¶ 2. In particular, the President owns “more than 500 separate entities-hotels, golf courses, media properties, books, management companies, residential and commercial buildings, . . . airplanes and a profusion of shell companies set up to capitalize on licensing deals.” Id. ¶ 34 (internal quotation mark omitted). Since being elected President, he has “not divested or otherwise given up his ownership interest in his worldwide business holdings.” Id. ¶ 36.

         As a result of his financial interests, plaintiffs allege the President has accepted, and will accept in the future, Emoluments from foreign states. Id. ¶ 37. Indeed, the President has acknowledged “that his businesses receive funds and make a profit from payments by foreign governments, and that they will continue to do so while he is President.” Id. Public reporting has also confirmed this to be the case. Id.

         Plaintiffs allege that “[t]hese various benefits from foreign governments-payments, loans, permits, exemptions, policy changes, and intellectual property rights-constitute prohibited ‘Emolument[s]' and/or ‘present[s]' under the Foreign Emoluments Clause . . . .” Id. ¶ 38 (citation omitted). Specifically, the President has allegedly accepted valuable intellectual property rights from the Chinese government without seeking and obtaining the consent of Congress. Id. ¶¶ 44-50. The President has also allegedly accepted payments for hotel rooms and events from foreign diplomats and from foreign lobbying groups paid for by foreign governments without seeking and obtaining the consent of Congress. Id. ¶¶ 52-57. The President has allegedly accepted payments from foreign governments derived from real estate holdings, id. ¶¶ 58-62, as well as licensing fees paid by foreign governments for “The Apprentice, ” id. ¶¶ 63-65, all without seeking and obtaining the consent of Congress, id. ¶¶ 59, 62, 65. Finally, the President has allegedly accepted regulatory benefits from foreign governments without seeking and obtaining the consent of Congress. Id. ¶¶ 66-67.

         III. Standard of Review

          “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) “tests the legal sufficiency of a complaint.” Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). A complaint must contain “‘a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). While detailed factual allegations are not necessary, a plaintiff must plead enough facts “to raise a right to relief above the speculative level.” Id.

         When ruling on a Rule 12(b)(6) motion, the Court may consider “the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters about which the Court may take judicial notice.” Gustave-Schmidt v. Chao, 226 F.Supp.2d 191, 196 (D.D.C. 2002). The Court must construe the complaint liberally in plaintiffs' favor and grant plaintiff the benefit of all reasonable inferences deriving from the complaint. Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). The Court need not accept inferences that are “unsupported by the facts set out in the complaint.” Id. “Nor must the [C]ourt accept legal conclusions cast in the form of factual allegations.” Id. “[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).

         IV. Analysis

         A. Constitutional Interpretation

         “When interpreting a constitutional provision, [the Court] must look to the natural meaning of the text as it would have been understood at the time of the ratification of the Constitution.” Canning v. N.L.R.B., 705 F.3d 490, 500 (D.C. Cir. 2013) (citing District of Columbia v. Heller, 554 U.S. 570 (2008)). “In interpreting the text [the Court is] guided by the principle that ‘[t]he Constitution was written to be understood by the voters; its words and phrases were used in their normal and ordinary as distinguished from technical meaning.'” Heller, 554 U.S. at 576 (quoting United States v. Sprague, 282 U.S. 716, 731 (1931)). “Normal meaning may of course include an idiomatic meaning, but it excludes secret or technical meanings that would not have been known to ordinary citizens in the founding generation.” Id. at 576-77. In determining the normal and ordinary meaning, the Court is to consider founding-era dictionaries and other contemporaneous sources. See, e.g., N.L.R.B. v. Canning, 573 U.S. 513, 527 (2014); Heller, 554 U.S. at 581-86. When the text is ambiguous, the Court is to consider the purpose of the clause and the historical interpretations and applications of the clause. Canning, 573 U.S. at 528-29; see also Heller, 554 U.S. at 592 (“This meaning is strongly confirmed by the historical background of the [provision].”). The Court is also to “treat[] [government] practice as an important interpretive factor even when the nature or longevity of that practice is subject to dispute, and even when that practice began after the founding era.” Canning, 573 U.S. at 525, 530-32 (considering opinions of the Office of Legal Counsel (“OLC”) and the Comptroller General in determining the meaning of the Recess Appointments Clause).

         B. “Emolument” Is Broadly Defined as Any Profit, Gain, or Advantage[3]

         The Foreign Emoluments Clause provides:

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.

U.S. Const. art. I, § 9, cl. 8.

         1. The Ordinary Meaning, Text, Structure, Adoption, and Historical Interpretation of the Clause; Constitutional Purpose; and Consistent Executive Branch Practice Support a Broad Interpretation of “Emolument”

          a. Ordinary Meaning of “Emolument”

         The parties dispute whether the profits that the President's business interests earn from foreign governments are “Emoluments” covered by the Clause. The President contends that the Clause “is not a blanket prohibition on commercial transactions with foreign governments by businesses in which the official has a financial interest, ” but rather “applies only to the receipt of compensation for services rendered by an official in an official capacity or in an employment (or equivalent) relationship with a foreign government, and to the receipt of honor and gifts by an office-holder from a foreign government.” Mot. to Dismiss, ECF No. 15-1 at 33-34. In support of his position, the President explains that at the time of the Nation's founding, an “‘[E]molument' was a common characteristic of a federal office . . . comprehensively describ[ing] ‘every species of compensation or pecuniary profit derived from a discharge of the duties of the office.'” Id. at 34 (alteration in original) (first citing United States v. Hartwell, 73 U.S. 385, 393 (1867); and then quoting Hoyt v. United States, 51 U.S. 109, 135 (1850).[4] According to the President, this was because most federal officials did not receive salaries as is the case today, but rather, were compensated by fees in exchange for their services. Id. Therefore, he argues, this “common usage” of the word at the time of the founding compels interpreting the term to mean “profit arising from an office or employ.” Id. at 35 (quoting James Barclay, A Complete & Universal English Dictionary on a New Plan (1774)(“Barclay's Dictionary”)).[5] To illustrate, the President provides two examples of what would constitute Emoluments under his definition: (1) “a federal official would receive an Emolument if he or she was paid by a foreign government to take certain official actions”; and (2) “an Emolument would [] be received if an official became an employee or entered an employment-like relationship with the foreign government, such as if a federal government lawyer provided legal advice and services to a paying foreign power.” Id. According to the President, “[t]his interpretation is consistent with the nature of the other prohibited categories in the Foreign Emoluments Clause: present, office, and title, which are all things personally conferred or bestowed on a U.S. official holding an ‘Office of Profit or Trust.'” Id.

         Plaintiffs rely on contemporaneous dictionaries, general-purpose writings, contemporaneous state constitutions, and legal decisions to support their argument that at the time the Constitution was written, “‘[E]molument' was a commonly used term that often referred to profit or gain in general.” Pls.' Opp'n, ECF No. 17 at 39 (citing The Oxford English Dictionary (2d ed. 1989) (referring to eighteenth century texts); Samuel Johnson, A Dictionary of the English Language (1755); John Mikhail, The Definition of “Emolument” in English Language & Legal Dictionaries, 15-23-1806, at 8 (July 9, 2017) (working paper), (explaining that [E]molument was defined as “‘profit,' ‘advantage,' ‘gain,' or ‘benefit' . . . in every known English language dictionary” published in the seventeenth and eighteenth centuries, that this was the exclusive definition provided in over 92% of these dictionaries, and that the President's preferred definition appears in less than 8% of these dictionaries, but that the broader definition also appears in these latter dictionaries)). Plaintiffs also emphasize, again relying on contemporaneous documents, that the term “was frequently used to mean the profits accruing from private financial transactions.” Id. at 40.

         Plaintiffs maintain that interpreting the term to “requir[e] an employment-like relationship[] is based on a flawed reading of Founding-era dictionaries . . . [and] requiring the provision of specific services in an official capacity” lacks legal support. Id. at 41. Moreover, they argue that even if the Court were to adopt the narrow definition that appears in the Oxford English Dictionary-“[p]rofit or gain arising from station, office, or employment; dues, reward; remuneration, salary”-“the gain arising from President Trump's status as the head of a worldwide business empire” falls within this definition. Id. Furthermore, according to plaintiffs, “[t]he narrower definition the President cites also embraces profit or gain ‘arising from [his] office,' as when foreign governments seek his favor by granting him lucrative trademarks or selecting his ...

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