Constitution Daily

Smart conversation from the National Constitution Center

Trump tax returns case to reach Justices shortly

November 4, 2019 by Lyle Denniston


President Donald Trump’s lawyers plan, within the next 10 days, to go to the Supreme Court with a plea to rule – before the Justices’ current term ends this summer – that no court has power to order that his personal and business tax returns be handed over to a state criminal investigation. That appeal follows a unanimous ruling Monday by a federal appeals court in New York City, rejecting the President’s sweeping claim of total immunity to any state probe of his financial affairs.

In its 34-page decision, a three-judge panel of the U.S. Court of Appeals for the Second Circuit ruled that the accounting firm that has the Trump personal and business tax records must obey a New York state grand jury subpoena demanding the turnover of eight years of that data, going back to January 2011. The panel stressed that its ruling was narrow and did not settle wide-ranging questions on what kind of legal immunity Trump might have, if the subpoena were aimed at him directly rather than at his accounting firm. (The firm is Mazars USA; it takes no position in the legal fight over Trump’s records.)

Under an agreement reached last month, between the state prosecutor and Trump’s attorneys, a defeat for the President in the appeals court would start the running of a 10-day period for an appeal to the Supreme Court.

Vowing to pursue that appeal, one member of the Trump legal team, Washington, D.C., attorney Jay Sekulow, said in a statement that “the issue raised in this case goes to the heart of our Republic. The constitutional issues are significant.”

Under the terms of the two sides’ agreement, the state prosecutor will make no attempt to enforce the disclosure of the tax records during the ten days that an appeal is being prepared – that is, apparently, by November 14 – and for another 10 days after that while legal papers are being submitted to the Justices by both sides. Trump’s team is also required to ask the Justices to grant review, hear and reach a final decision during the Court’s current term, which is expected to run until late June. If the Justices do grant review, the subpoena will not be enforced while the Justices work on a decision.

The Justices have complete discretion to grant or deny review; Trump has no guarantee of review. The Justices also have no duty to proceed on the schedule Trump’s team will be suggesting. However, because of the importance of the constitutional dispute, review and a speedy process very likely will be allowed.

The main constitutional question the appeal is expected to raise is this: Does the President, while serving in office, have complete immunity to any investigation by a state or local government prosecutor, even if the probe seeks information of a personal or private nature and does not demand access to any documents or data directly involving the performance of official duties?

That is expected to be a question based upon the broad powers of the presidency established under the Constitution’s Article II, and upon the Constitution’s “Supremacy Clause” in Article VI, generally making the powers of the national government supreme over those of the state governments. It also may include claims that this is an issue for the federal courts, not the state courts, to decide, even though the investigation at issue is being handled by a state prosecutor’s office. There may be other possible questions, but those are not known at this point.

It is not completely clear what the New York grand jury is investigating about Trump’s personal and business affairs, but it does appear that the probe originated at least in part in response to revelations – in a federal criminal case involving former Trump private lawyer Michael Cohen – about financial payments the Trump Organization made to two women during the 2016 presidential campaign, allegedly to keep them from revealing intimate relationships they said that Trump had with them.

The federal appeals court, in its ruling on Monday, did not discuss the nature of the investigation or why it targets Trump’s financial data. The opinion repeatedly stressed, however, that nothing about the subpoena or its demands involved official duties or dealings of the presidency. Trump, it noted, it not claiming privacy for the financial records based upon any concept of “executive privilege” – a privacy concept that protects internal official White House policy or actions.

The President and his lawyers, however, have argued that the mere fact that a state criminal investigation is aimed at the personal or business affairs of the sitting President will interfere with the performance of his official duties – an argument that the appeals court flatly rejected.

There is no indication at this point, the panel wrote, that the President will be charged with any crime by the state grand jury. But, it added, “even assuming, without deciding, that a formal criminal charge against the President carries a stigma too great for the Constitution to tolerate, we cannot conclude that mere investigation is so debilitating.”

The opinion also emphasized that the grand jury has demanded nothing from the President himself, and it noted that it was not deciding whether the President would be immune to such a demand had one been made. Compliance by the accounting firm with the subpoena, the decision said, “does not require the President to do anything at all.”

The decision relied in significant part upon the Supreme Court’s 1974 decision in United States v. Nixon, upholding a subpoena directing then-President Richard M. Nixon to hand over to a federal criminal investigation documents and tape recordings involving the so-called “Watergate” scandal. After that ruling, Nixon resigned as President to head off the prospect that he would be removed from office by impeachment and conviction by Congress.

In technical legal terms, the decision denied a request by the Trump team for an order temporarily blocking the state subpoena. On one point, the new ruling did agree with a Trump argument: that the court fight over the subpoena belonged in federal, not state, court.

The appeals court decision was written by the Circuit Court’s chief judge, Robert A. Katzmann, and was joined by Circuit Judge Denny Chin and Senior Circuit Judge Christopher F. Droney. There were no concurring or dissenting opinions.

The Trump legal team is awaiting the outcome of a second major dispute over the President’s tax records, in a federal appeals court in Washington, D.C. That case involves a demand for tax records held by the Mazars accounting firm, under a subpoena from the Oversight Committee of the U.S. House of Representatives. While a divided three-judge panel of that appeals court upheld the committee’s subpoena last month, that ruling is on hold while the appeals court considers a request by the Trump legal team that the case be reconsidered by the full 11-judge bench of that court – the Court of Appeals for the District of Columbia Circuit. That case, too, may eventually reach the Supreme Court.

Lyle Denniston has been writing about the Supreme Court since 1958. His work has appeared here since mid-2011.


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