United States District Court, D. Maryland
THE DISTRICT OF COLUMBIA and THE STATE OF MARYLAND, Plaintiffs,
DONALD J. TRUMP, individually and in his official capacity as President of the United States, Defendant.
J. MESSITTE UNITED STATES DISTRICT JUDGE.
suit alleges that President Donald J. Trump has violated the
Foreign and Domestic Emoluments Clauses of the U.S.
Constitution. Plaintiffs, the District of Columbia and
the State of Maryland, submit that the President is violating
these Clauses because the Trump Organization, in which he has
an ownership interest and from which he derives financial
benefits, owns and operates a global business empire,
including hotels, restaurants, and event spaces. The
President's receipt of these benefits is said to offend
the sovereign, quasi-sovereign, proprietary, and parens
patriae interests of the State of Maryland and the
District of Columbia. Plaintiffs seek declaratory relief
establishing their rights vis-à-vis the
President's actions as well as injunctive relief
prohibiting him from further violating the Clauses.
President has filed a Motion to Dismiss, arguing, inter
alia, that Plaintiffs lack standing to pursue the
litigation, i.e., that they have shown no injury-in-fact,
fairly traceable to his acts, or likely to be redressed by
any court order. Plaintiffs reject all these propositions.
Although the parties have briefed other arguments pertaining
to the viability vel non of Plaintiffs' suit,
Court held oral argument limited to the issue of standing and
advised the parties that it would address that issue in a
stand-alone Opinion and Order. This is that Opinion and
reasons that follow, the Court
DENIES-IN-PART the Motion to Dismiss and
finds that Plaintiffs do have standing to challenge the
actions of the President with respect to the Trump
International Hotel and its appurtenances in Washington,
D.C., as well as the operations in the Trump Organization
with respect to them. It GRANTS-IN-PART WITHOUT
PREJUDICE the Motion to Dismiss as to
Plaintiffs' standing with respect to the operations of
the Trump Organization and the President's involvement in
the same outside the District of Columbia. The Court
DEFERS ruling on other arguments in the
Motion to Dismiss pending further oral
basic facts are not in dispute.
are the District of Columbia and the State of Maryland. The
District of Columbia is a municipal corporation and the local
government for the territory constituting the seat of the
Federal Government. Am. Compl. ¶ 18. The State of
Maryland is a sovereign State of the United States.
Id. ¶ 19.
J. Trump is the President of the United States, originally
sued in his official capacity, subsequently added as a
Defendant in his individual capacity. Am. Compl. ¶ 20. He is
the sole owner of both the Trump Organization LLC and The
Trump Organization, Inc. (collectively, the Trump
Organization), an umbrella organization under which many, if
not all, of his corporations, limited-liability companies,
limited partnerships, and other entities are loosely
organized. Id. ¶ 29. Through these various
business entities, the President owns and receives payments
from a number of properties, hotels, restaurants, and event
spaces in the United States and abroad. Id. Of
particular importance in the present suit is the
President's ownership, through the Trump Organization, of
the Trump International Hotel in Washington, D.C. (the
Hotel is a five-star, luxury hotel located on Pennsylvania
Avenue, N.W., in Washington, near the White House.
Id. ¶ 34. While the President does not actively
manage the Hotel, through the Trump Organization, he owns and
purportedly controls the Hotel as well as the bar and
restaurant, BLT Prime, and the event spaces located within
the establishment. Id. ¶¶ 29, 34-36.
Directly or indirectly, the President shares in the revenues
that the Hotel and its appurtenant restaurant, bar, and event
spaces generate. Id.
The Alleged Violations
January 11, 2017, shortly before his inauguration, the
President announced that he would be turning over the
“leadership and management” of the Trump
Organization to his sons, Eric Trump and Donald Trump, Jr.
Id. ¶ 30. Prior to taking office, he also
announced that all profits earned from foreign governments
would be donated to the U.S. Treasury. Id. ¶
46. The Trump Organization stated that it would not be
tracking all payments it might receive from foreign
governments and only planned to make an estimate with regard
to such payments. Id. As of the date of the filing
of this action, the President had made no such
“donations” to the U.S. Treasury.See Am.
Compl. ¶¶ 46, 138. Despite these announcements,
Plaintiffs allege that the President continues to own and
know about the activities of the Trump Organization.
Id. ¶ 31. Indeed, according to Plaintiffs, one
of the President's sons has stated that he would be
providing business updates to the President regarding the
Organization on a quarterly basis and, although the President
has formed a trust to hold his business assets, it appears
that he remains able to obtain distributions from this trust
at anytime. Id. ¶¶ 31-32.
the President's election, a number of foreign governments
have patronized or expressed a definite intention to
patronize the Hotel, some of which have indicated that they
are doing so precisely because of the President's
association with it. Id. ¶¶ 39-43. For
example, the Amended Complaint alleges that the Kingdom of
Saudi Arabia spent thousands of dollars at the Hotel between
October 1, 2016, and March 31, 2017. Id. ¶ 41.
Plaintiffs also cite a statement from a Middle Eastern
diplomat who told the Washington Post,
“Believe me, all the delegations will go there.”
Id. ¶ 39. An Asian diplomat allegedly agreed,
explaining “Isn't it rude to come to [the
President's] city and say, ‘I'm staying at your
further allege that at least some foreign governments have
withdrawn their business from other hotels in the area not
affiliated with the President and have transferred it to the
Hotel. As an example, they assert that the Embassy of Kuwait
held its National Day celebration at the Hotel on February
22, 2017, despite having made a prior “save the date
reservation with the Four Seasons hotel.” Id.
also contend that the President has been more than a passive
actor with respect to the Hotel. Since his election, the
Hotel has specifically sought to market itself to diplomats
by hiring a “director of diplomatic sales” and by
hosting an event where it pitched the Hotel to approximately
100 foreign diplomats. Id. ¶ 37. The President
himself has appeared at the Hotel on several occasions, while
a number of members of his administration continue to live
there. Id. ¶ 38. As a result, Plaintiffs allege
that goods and services at the Hotel have been marketed at a
premium level since the election. Id. ¶ 100. A
portion of benefits, particularly expenditures by foreign
governments, is said to have been passed along to the
President through the Trump Organization. Id. ¶
addition, at least one State-the State of Maine-patronized
the Hotel when its Governor, Paul LePage, visited Washington
to discuss official business with the Federal Government,
including discussions with the President. Pls.'
Opp'n. at 8, ECF No. 46. Indeed, on one of those trips,
the President and Governor LePage appeared together at a news
conference at which the President signed an executive order
to review orders of the prior administration that established
national monuments within the National Park Service, which
could apply to a park and national monument in Maine, which
President Obama had established over LePage's objections
in 2016. Id.
submit that the President's receipt of benefits from
these sources violates both the Foreign and Domestic
Plaintiffs' Alleged Injuries
District of Columbia and Maryland claim they have been harmed
by the President's alleged violations in several ways.
Maryland alleges injuries to its sovereign
interests. It claims a special interest in
“enforcing the terms on which it agreed to enter the
Union, ” Am. Compl. ¶ 104, stating that the
Emoluments Clauses were “material inducements” to
its decision to enter the Union and that it retains the power
to enforce those provisions today. Id. ¶ 106.
Maryland also claims injury to its sovereign interests in
that it receives tax revenues from comparable hotels, bars,
restaurants and event spaces within the State of Maryland
located nearby the Hotel, which it has lost and will continue
to lose because patrons choose to avail themselves of the
Hotel as opposed to comparable establishments in Maryland.
Id. ¶¶ 116-118.
both Plaintiffs submit that their quasi-sovereign
interests are harmed in that the President's
violations have placed them in an “intolerable
dilemma.” Id. ¶ 110. In particular, they
claim a governmental interest in the enforcement of their
respective laws pertaining to taxation, zoning, and land use
involving real property that the President may own or seek to
acquire. Id. ¶ 108. They allege that the
President's receipt of emoluments from other States of
the United States, in violation of the Domestic Emoluments
Clause, forces them, on the one hand, to choose between
granting requests for exemptions or waivers by the Trump
Organization for activities conducted within Maryland and the
District of Columbia and losing revenue or, on the other
hand, denying such requests by the President's
organization and risk being placed at a disadvantage
vis-à-vis other States that have agreed to
grant the Organization such concessions. Id. ¶
Plaintiffs assert injuries to their own proprietary
interests. The District of Columbia states that it
directly owns building and land interests in properties in
the District of Columbia that directly compete with the
Hotel, and which are either losing business to the Hotel or
which face the imminent prospect of losing such business by
virtue of the President's continuing involvement in the
Hotel. Am. Compl. ¶¶ 119-129. Specifically, the
District of Columbia claims it possess an ownership or
financial interest in the Walter E. Washington Convention
Center (Washington Convention Center), the Washington
Convention Center and Sports Authority (also known as Events
D.C.), and the Carnegie Library. Id. ¶¶
State of Maryland maintains that it has a direct financial
interest in the Montgomery County Conference Center, which is
part of the Bethesda North Marriott Hotel located in
Bethesda, Maryland, (approximately thirteen miles from the
Hotel) as well as in the gambling proceeds it
receives from the casino at the MGM Hotel in the National
Harbor, located approximately ten miles from the Hotel across
the Potomac River in lower Prince George's County,
Maryland. Am. Compl. ¶¶ 117, 131-32; Pls.'
Opp'n at 16, 23. Maryland argues that, like the District
of Columbia, it is harmed because these entities compete with
the Hotel for the business of both foreign and domestic
governments and that the President's violations of the
Emoluments Clauses have illegally skewed the hospitality
market in his favor. Am. Compl. ¶ 130.
the District of Columbia and the State of Maryland assert
that they are entitled to pursue this litigation on behalf of
their respective residents as parens
patriae. As parens patriae, they allege
that the President's violations cause competing companies
and their employees within the respective jurisdictions to
lose business, wages, and tips, which in turn generate a
range of market distortions that restrict and curtail
opportunity, diminish revenues and earnings, and hamper
competition. Am. Compl. ¶¶ 113-115.
President disputes all these purported injuries and seeks
dismissal of the suit, inter alia, on the ground
that Plaintiffs have not shown that they have standing to
pursue it. ECF No. 21.
Motion to Dismiss
may move for dismissal of a suit pursuant to Federal Rule of
Civil Procedure 12(b)(1) where the court lacks subject matter
jurisdiction over the claims alleged in the complaint.
Fed.R.Civ.P. 12(b)(1). “Article III gives federal
courts jurisdiction only over ‘cases and controversies,
' U.S. Const. art. III, § 2, cl. 1, and the doctrine
of standing identifies disputes appropriate for judicial
resolution.” Miller v. Brown, 462 F.3d 312,
316 (4th Cir. 2006) (citing Valley Forge Christian Coll.
v. Ams. United for Separation of Church & State,
Inc., 454 U.S. 464, 471-76 (1982)). As the party
asserting jurisdiction, the plaintiff bears the burden of
proving that the district court has subject matter
jurisdiction. See Richmond, Fredericksburg & Potomac
R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir.
1991). In considering whether to dismiss for lack of
jurisdiction, the court may consider “evidence outside
of the pleadings without converting the proceeding into one
for summary judgment.” White Tail Park, Inc. v.
Stroube, 413 F.3d 451, 459 (4th Cir. 2005) (quoting
Richmond, Fredericksburg & Potomac R.R. Co., 945
F.2d at 768).
motion to dismiss for failure to state a claim under Rule
12(b)(6) will be granted if the allegations in a complaint do
not “contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). “[T]he purpose of Rule
12(b)(6) is to test the sufficiency of a complaint and not to
resolve contests surrounding the facts, the merits of a
claim, or the applicability of defenses.” Presley
v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir.
2006) (citation and quotation marks omitted). “[I]n
evaluating a Rule 12(b)(6) motion to dismiss, a court accepts
all well-pled facts as true and construes these facts in the
light most favorable to the plaintiff in weighing the legal
sufficiency of the complaint.” Nemet Chevrolet,
Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255
(4th Cir. 2009).
Article III Standing
establish “the irreducible constitutional minimum of
standing, ” a plaintiff must “clearly . . .
allege facts demonstrating” that it has “(1)
suffered an injury in fact, (2) that is fairly traceable to
the challenged conduct of the defendant, and (3) that is
likely to be redressed by a favorable judicial
decision.” Spokeo, Inc. v. Robins, 136 S.Ct.
1540, 1547 (2016) (quoting Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560-61 (1992)). An
“injury-in-fact” has been defined as
‘“an invasion of a legally protected
interest' that is ‘concrete and particularized'
and ‘actual or imminent, not conjectural or
hypothetical.'” Id. at 1548 (quoting
Lujan, 504 U.S. at 560). The injury must be
“legally and judicially cognizable, ” and the
dispute must be one that “is traditionally thought to
be capable of resolution through the judicial process.”
Raines v. Byrd, 521 U.S. 811, 819 (1997) (quoting
Flast v. Cohen, 392 U.S. 83, 97 (1968)).
“[T]he presence of one party with standing is
sufficient to satisfy Article III's case-or-controversy
requirement.” Bostic v. Schaefer, 760 F.3d
352, 370 (4th Cir. 2014) (quoting Rumsfeld v. Forum for
Academic & Institutional Rights, Inc., 547 U.S. 47,
52 n.2 (2006)).
particular relevance to this proceeding, States are not
“normal litigants for the purposes of invoking federal
jurisdiction” and are entitled to “special
solicitude” in the standing analysis. Massachusetts
v. EPA, 549 U.S. 497, 518, 520 (2007). Indeed, the
invasion of three types of unique State interests justifying
standing were identified by the Supreme Court in Alfred
L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez,
being (a) sovereign interests; (b) nonsovereign interests;
and (c) quasi-sovereign interests. 458 U.S. at 601-02 .
States have a sovereign interest in “the power to
create and enforce a legal code, both civil and
criminal” as well as in the “demand of
recognition from other sovereigns, ” such as in the
recognition of borders. Id. at 601.
“[n]ot all that a State does . . . is based on its
sovereign character.” Id. Like private
parties, a State may “have a [nonsovereign] variety of
proprietary interests, ” which a State may pursue in
court, including its ownership of land or participation in a
business venture. Id. at 601-02.
Snapp Court recognized two distinct categories of
quasi-sovereign interests held by States. First, “a
State has a quasi-sovereign-interest in not being
discriminatorily denied its rightful status within the
federal system.” Id. at 607. Second, a State
has an interest in the “health and well-being-both
physical and economic-of its residents.” Id.
In these actions, the State is said to sue in its capacity as
parens patriae. When suing in that particular
capacity, the State must be more than a nominal party and
must allege more than an “injury to an identifiable
group of individual residents.” Id. The injury
must be of the type “that the State, if it could, would
likely attempt to address through its sovereign lawmaking
power.” Id. If so, the State likely is deemed
to have standing as parens patriae to bring the
first requirement for Article III standing is that the
plaintiff articulate an injury-in-fact, “which helps to
ensure the plaintiff has a ‘personal stake in the
outcome of the controversy.'” Susan B. Anthony
List v. Driehaus, 134 S.Ct. 2334, 2341 (2014) (quoting
Warth v. Seldin, 422 U.S. 490, 498 (1975)). While
hypothetical or conjectural injuries will not suffice, an
allegation of future injury may be sufficient if the
threatened injury is “certainly impending.”
Clapper v. Amnesty Int'l USA, 568 U.S. 398, 401,
409 (2013). “At the pleading stage, general factual
allegations of injury resulting from the defendant's
conduct may suffice, [since] on a motion to dismiss [the
court] presum[es] that general allegations embrace those
specific facts that are necessary to support the
claim.” Lujan, 504 U.S. at 561 (citation and
quotation marks omitted). At the same time, it has been said
that “[i]njury-in-fact is not Mount Everest.”
Danvers Motor Co. v. Ford Motor Co., 432 F.3d 286,
294 (3d Cir. 2005) (Alito, J.).
submit that their injuries are sufficiently concrete and
imminent to satisfy the requirement of injury-in-fact. It
should be noted, however, that, during oral argument,
Plaintiffs clarified that their alleged competitive
injuries-namely, Maryland's claimed injuries to its
sovereign interest in taxes, to both parties' proprietary
interests, and, to some extent, to both parties'
parens patriae interests-centered almost exclusively
around the District of Columbia-based Trump International
Hotel and its appurtenant restaurant, bar, and event space,
whereas the alleged injuries to their sovereign and certain
of their quasi-sovereign interests were said to have
“no boundaries.” Hr'g Tr. at 62-63.
President disputes that any of Plaintiffs' alleged
injuries, bounded or not, in fact exist much less that they
satisfy the standard for injury-in-fact.
Court finds that Maryland has suffered no injury to its
sovereign interests but that both Plaintiffs have stated
cognizable injuries to their quasi-sovereign, proprietary,
and parens patriae interests. 1) Maryland's
State of Maryland asserts two distinct sovereign interests.
Detrimental Reliance in Joining the Union.
Maryland claims a sovereign interest in enforcing the terms
upon which it entered the Union. Am. Compl. ¶¶
104-106. It argues that because its 1776 Declaration of
Rights contained a precursor to the United States
Constitution's Emoluments Clauses, the Court should infer
that Maryland felt strongly about preventing corruption when
it joined the Union and therefore has standing to enforce
these terms. Pls.' Opp'n at 14.
President counters that this injury is not judicially
cognizable because Maryland is essentially asking the Court
to adjudicate “abstract questions of political power,
” which is beyond its authority under Article III.
Def.'s Mot. Dismiss at 10, ECF No. 21-1 (citing
Massachusetts v. Mellon, 262 U.S. 447, 484-84
(1923)); Hr'g Tr. at 69. In any event, says the
President, even if Maryland's alleged detrimental
reliance were cognizable, the Amended Complaint contains no
plausible allegation to support a claim that Maryland's
present-day interpretation of “emolument” induced
it to join the Union. Def.'s Mot. Dismiss at 11-12.
Court is unaware of any legal support for the proposition
that a State may establish injuries to its sovereign
interest, by alleging reliance on the expectation that one of
its own constitutional provisions pre-dating the federal
Constitution would be carried forward to the federal
Constitution when it joined the Union, when a comparable
provision was in fact carried forward but is not at some
later time being enforced to that State's satisfaction.
As the President suggests, States may not serve as
“roving constitutional watchdog[s]” raising any
issue “no matter how generalized or quintessentially
political.” Virginia ex rel. Cuccinelli v.
Sebelius, 656 F.3d 253, 272 (4th Cir. 2011). Lack of
legal precedent aside, more fatal to Maryland's argument
is the highly doubtful historical proposition that a causal
connection existed between the inclusion of the Emoluments
Clauses in the federal Constitution and Maryland's
decision to ratify it. Even the most casual student of
American history would likely conclude that Maryland would
have ratified the federal Constitution for a myriad of
reasons with or without inclusion of the Clauses and, if
carried forward, without regard to the strictness with which
over time they would be enforced. The inclusion of a
“precursor” to the Emoluments Clauses in
Maryland's pre-Union Declaration of Rights and the
State's alleged frustration that the Clauses are not
being appropriately enforced today establishes no
injury-in-fact to Maryland's sovereign interests for