What Makes the Lawsuit against Trump’s Foundation Very Different

Last week, the New York Supreme Court set an October date to hear motions in state attorney general Barbara Underwood’s civil suit against Donald Trump, his eldest children, and the Trump Foundation. New York’s attorney general alleges that Trump ran his foundation in “persistent violation” of state and federal law. There is a key difference in this litigation compared to other ongoing civil suits against the president— a difference that has been missed by other commentators (compare, for instance, TIME’s “Two Major Lawsuits Facing President Trump Hinge on This Constitutional Question”).

To be sure, Underwood’s suit is the latest in a series of legal actions taken at the state-level against Trump, adding yet another layer to the growing debate over whether and under what circumstances a president may be sued or deposed – to say nothing of indicted. In the cases of the Stormy Daniels and Summer Zervos suits, public debate has explored the constitutionality of a private party suing a sitting president in state court. But what happens if the plaintiff is a state?

That is exactly the question uniquely posed by the New York Attorney General’s suit. While understandable, the misperception that the Attorney General’s suit is just another in the barrage of Trump litigation belies the distinct and constitutionally significant nature of this case. Some attention has been focused on the issue of suing the president in state court. Here, though, the case was brought both in state court and by a state. The Trump Foundation suit consequently raises specific “dual sovereignty” federalism concerns that do not feature prominently or at all in the other litigation against the president.

Any constitutional inquiry into the Attorney General’s suit will likely give substantial consideration to three factors in analyzing the underlying, alleged conduct: (1) the nature of the alleged conduct, (2) the time period of the alleged conduct, and (3) the state’s interests. The Trump Foundation suit alleges conduct that is private and unofficial, prior to Trump’s presidency, and subject to New York’s legitimate interest in law enforcement involving potential financial crimes. As such, the courts should find that the federal constitution allows the Attorney General’s suit to proceed during Trump’s presidency.

The relevance of the first two factors, the conduct’s nature and timing, is well-established in relevant precedent. In 1997, the Supreme Court ruled in Clinton v. Jones that there was no constitutional bar to allowing a federal civil suit against the sitting president to proceed during his term. The Court never reached the analogous state court question, but it did sketch out the relevant doctrinal issues it expected would be implicated by such a case.

Essentially, the Court framed the question as whether, accounting for federalism and comity concerns, the Take Care and Supremacy Clauses of the U.S. Constitution in combination preclude state jurisdiction over a sitting president. Given that the Constitution vests the president with primary responsibility for ensuring that federal law is faithfully executed, the Court explained that there might be a conflict between upholding the supremacy of that federal law, on the one hand, and allowing “direct control by a state court over the president” on the other hand.

In March, New York Supreme Court Justice Jennifer Schecter extended the Jones rule to the state court context. Her decision, the only one thus far on the merits of this question, denied Trump’s motion to dismiss Zervos’s suit or stay the litigation until after his presidency. Justice Schecter’s ruling presented a functional argument about federalism closely modeled on the Supreme Court’s immunity analysis in Jones. The Supreme Court has emphasized – in Jones and elsewhere – that immunity is based on the nature of the function performed, not the identity of the person who performed it. Consequently, the person holding the office of president is not entitled to absolute, unqualified immunity from judicial process under all circumstances.

Since, like Zervos, the New York Attorney General has now sued Trump for conduct prior to his inauguration and unrelated to his official responsibilities as President, Justice Schecter’s conclusions about federalism and supremacy seem applicable to the Trump Foundation suit as well. As Justice Schecter explained in Zervos, “when unofficial conduct is at issue, there is no risk that a state will improperly encroach on powers given to the federal government.” The importance of conduct being “unofficial” is rooted in another presidential immunity case, Nixon v. Fitzgerald, which established absolute immunity for conduct within the “outer perimeter” of the presidential office. However, in Jones the Court expressly refused to extend that immunity beyond that outer perimeter, keeping it confined instead to “official” conduct.

Admittedly, resolution of the absolute immunity question does not fully address the Supreme Court’s concerns over conflict between state court jurisdiction on the one hand and the Supremacy and Take Care Clauses, which could be cited as grounds for temporary immunity from state court proceedings during a president’s term. (Trump’s lawyers seized on this point in their brief.) Again the timing and nature of the conduct weigh in favor of the suit’s constitutionality. The claims asserted and relief sought are confined to private, unofficial behavior prior to the presidency that is, in ordinary course, subject to state regulation. As Justice Schecter rightly emphasized, the Supreme Court’s warning in Jones about subjecting a president to the control of a state court cited to previous cases in which the Court had struck down state action that unconstitutionally intruded on federal power. No such intrusion is apparent in the Zervos or Trump Foundation cases.

The Attorney General is undertaking state action, to be sure, but there is no indication that such state action would require or encourage Trump to abrogate any federal duty. This was precisely the Supreme Court’s assertion regarding the Jones suit: “Whatever the outcome of this case, there is no possibility that the decision will curtail the scope of the official powers of the Executive Branch.” Neither the conduct in question nor the policing thereof would impede the faithful execution of federal law, including the president’s Take Care duties. What’s more, if some conflict with official authorities is ultimately found or some potential abrogation feared, it seems more likely that such a problem could simply be mitigated by a narrow stay of particular issues rather than a broad prohibition of the entire suit. Better the scalpel than the blunderbuss.

What neither Justice Schecter nor analysts of the other state court suits have had cause to consider is the third factor of state interest. That is what truly sets the Attorney General’s case apart. Because it is being brought on behalf of New York State and not by a private person, the Trump Foundation suit raises federalism questions that are only tangential to the state court cases brought by Zervos and Stormy Daniels.

The Supreme Court has recognized that under the system of dual sovereignty, states retain certain residual and inviolable sovereign powers and that, consequently, interference with the functioning of state governments may violate the Constitution. The Attorney General’s suit seeks to enforce New York law against New York citizens. In this way, it is an exercise of traditional state police power. While that does not resolve the constitutional issue, it does suggest there are federalism arguments on both sides of the equation. Upholding state sovereignty requires accounting for legitimate interests and powers traditionally reserved to the states. As such, states should be permitted to vindicate those powers and interests in their courts unless doing so would intrude on federal power or unconstitutionally interfere with the office of the presidency.

A remaining argument – already made by Trump’s lawyers in the in Zervos case and likely to appear in the Attorney General’s case as well – is that permitting the litigation to proceed against Trump during his term would unconstitutionally burden the Office of the President. Their application of Fitzgerald is inapt in many ways. Steve Vladeck has explained several reasons why this is the case and why various aspects of the Jones ruling should apply to analogous state court proceedings, including the Court’s analysis of the burden on the president. In Jones, the Supreme Court squarely resolved this question, ruling that the incidental burdens of litigation are not unconstitutional and that courts could mitigate such burdens through case management and appropriate deference.  As Vladeck argues, the same holding should apply in state courts.

(It is worth noting here that the benefit of hindsight could alter the Court’s analysis. In Jones, the Court surmised that litigation would not pose a severe burden on the presidency. If persuaded that this estimate was wrong, the Court could abandon its prior analysis of the potential burdens and thereby upend the entire precedent.)

Of course, the question of burdening the presidency has public policy dimensions as well as constitutional ones. Even if the Court finds that the weight on the presidency is in fact severe, the Court still may not find that burden unconstitutional. The Court has pointed out, for instance, that judicial review of executive action places a severe burden on the presidency without violating the Constitution.

So what about the policy arguments concerning such a burden? There is reason to consider the possibility that suits in state court, whether brought by a private person or by the state itself, may interfere with the presidency in a manner that is undue but not unconstitutional. While concern over national security may be an attractive trump card, so to speak, it is not particularly salient here. First, these particular cases do not appear to implicate national security or foreign relations, except incidental to their reputational effects. Second, as the Court stated in Jones, the incidental national security burden posed by a lawsuit’s time and travel demands should be resolvable through case management and adherence to traditions of giving “utmost deference” to presidential responsibilities.

Nonetheless, any suit of this nature, whether in federal or state court, could be disruptive to a sitting president, particularly given the speed of today’s news cycle. Social media and the internet have arguably changed some relevant variables since Jones was decided. These novel concerns, while arguably not enough to change the constitutional determination, could justify congressional mitigation. As Richard Primus notes, federal legislation could accomplish this by providing for tolling or removal to federal court, addressing some these concerns by statutory innovation.

None of these cases are close to yielding a final answer to the constitutional question by New York’s Court of Appeals, much less the Supreme Court. A great deal more debate can be expected until then. In the meantime, Trump’s lawyers and the attuned observer will be keeping an eye on what discovery is allowed while appeals are pending along with any commentary that begins to emerge from veterans of the Clinton administration concerning just how much damaging an ongoing civil suit was to the office of the presidency. But as these machinations unfold in the courts and the media, it is important to keep in mind what makes the Trump Foundation case distinct.

Image: New York Attorney General Barbara Underwood — Photo: Office of the Attorney General 

About the Author(s)

Katherine Cheasty Kornman

Legal researcher at Just Security and student at Yale Law School. Follow her on Twitter (@kckornman).