WASHINGTON — A federal appeals court on Thursday refused to throw out a lawsuit that claims President Donald Trump's ownership of a luxury hotel in Washington, D.C., violates the Constitution's ban on receiving financial benefits from the states or foreign leaders.
By a vote of 9-6, the Fourth Circuit Court of Appeals rejected an effort by Trump's lawyers to get the case dismissed, saying that the federal court overseeing the case wrongly failed to rule on whether the president is immune from such lawsuits.
The case was brought two years ago by the attorneys general of Maryland and the District of Columbia, who claimed that Trump's hotel ownership violates the Constitution's emolument's clause. That provision bars forbids the president to receive "any present, emolument, office or title of any kind whatever from any king, prince, or foreign state" or any state in the US.
They contended he improperly benefits financially whenever foreign or state governments patronize the Trump Hotel on Pennsylvania Avenue, which the suit said competes unfairly with D.C.'s convention center and Maryland's National Harbor development, both of which earn local tax revenue and help area businesses.
A three-judge panel of the appeals court last year ordered the case dismissed, ruling that D.C. and Maryland failed to demonstrate that Trump's ownership of the hotel actually competed with local convention centers. The panel said the local governments couldn't show how any such competition, if it existed, could be legally prevented.
Thursday's ruling did not address that issue. Instead, it said Trump's lawyers wrongly tried to get the case thrown out on the grounds that he is absolutely immune from such lawsuits. The appeals court said because the trial judge hasn't yet ruled on that issue, it could not be appealed. The ruling revives the lawsuit and sends it back to the judge for further proceedings.
The Trump Organization said last fall that it was interested in selling the hotel's lease, but that effort is now on hold because of the coronavirus pandemic.