Second Circuit Rejects Trump Effort To Block Tax Return Subpoena

The Second Circuit Court of Appeals handed President Trump a loss in his effort to prevent prosecutors in New York from getting copies of his tax returns.

The Second Circuit Court of Appeals has put another roadblock in the President’s efforts to prevent his tax returns from becoming public:

A federal appeals panel said on Monday that President Trump’s accounting firm must turn over eight years of his personal and corporate tax returns to Manhattan prosecutors, a setback for the president’s attempt to keep his financial records private.

Almost immediately after the ruling, one of the president’s personal lawyers, Jay Sekulow, said Mr. Trump would appeal to the Supreme Court. The president maintains that the Constitution shields him from any criminal investigation.

“The issue raised in this case goes to the heart of our republic,” Mr. Sekulow said. “The constitutional issues are significant.”

The case will almost certainly be the first one involving Mr. Trump’s personal conduct and business dealings to reach the high court. The court is not required to hear the case, but the significance of the issues involved suggests that it will. A decision on the case may come by June, as the presidential election enters its final stages.

(…)

In its ruling on Monday, the three-judge appeals panel did not take a position on the president’s biggest argument — that he was immune from all criminal investigations. A lower court had called that argument “repugnant to the nation’s governmental structure and constitutional values.”

Instead, the appeals court said the president’s accounting firm, not Mr. Trump himself, was subpoenaed for the documents, so it did not matter whether presidents had immunity.

“We emphasize again the narrowness of the issue before us,” the decision read. “This appeal does not require us to consider whether the president is immune from indictment and prosecution while in office, nor to consider whether the president may lawfully be ordered to produce documents for use in a state criminal proceeding.”

Although the panel did not rule on the question of a president’s immunity from investigation, the judges still made it clear they disagreed with Mr. Trump and thought he was unlikely to prevail on that argument.

(…)

Judge Robert A. Katzmann noted in the unanimous ruling that Mr. Trump had conceded that his immunity would last only as long as he held office and he could therefore be prosecuted after stepping down.

“There is no obvious reason why a state could not begin to investigate a president during his term and, with the information secured during that search, ultimately determine to prosecute him after he leaves office,” Judge Katzmann wrote for the panel of the United States Court of Appeals for the Second Circuit.

By keeping the ruling narrowly focused on the subpoena directed at Mr. Trump’s accounting firm, the effect may be to allow the Supreme Court to uphold the decision without having to issue a far broader ruling against the president.

As noted, this case is unrelated to ongoing Congressional efforts to obtain copies of the President’s tax returns, which are pending in the Federal Court in the District of Columbia. Instead, this is a case that was initiated by the President himself in an effort to block a subpoena issued by Manhattan District Attorney Cyrus Vance, Jr. directed to Trump’s longtime accounting firm, Mazars. For their part, Mazars has said they will comply with whatever court order may ultimately be issued in the case, meaning that it has been the President’s private attorneys who have been pushing this case forward.

The current round of legal drama began less than a month ago when the Federal District Court Judge that had been assigned the Trump lawsuit issued an opinion that essentially rejected the entirety of the President’s argument seeking to block the subpoena and directed that the accounting firm comply with the subpoena. In his initial lawsuit, Trump and his lawyers made the argument that Vance was precluded from obtaining copies of the tax returns because the same argument(s) that support the position that a sitting President cannot be criminally indicted also mean that he cannot be investigated as part of a criminal proceeding. By putting forward this argument the President’s lawyers may have bitten off more than they can chew, especially if the manner in which Judge Marrero reacted to the argument. In his more than 70 page opinion, the District Court Judge categorically rejects the idea that a President cannot be criminally investigated as adopting a view of the Presidency that, he argues, goes far beyond the powers and protections provided by Article II of Constitution.

Trump then appealed the matter to the Second Circuit Court of Appeals on an expedited basis that resulted in a hearing on October 25th in which one of the lawyers for Trump appeared to lose the entire case with an argument that made absolutely absurd arguments. Continuing with the argument made in the initial lawsuit, that lawyer asserted that the President could murder someone in cold-blood and still be immune from criminal investigation. Based on the reports, that argument seemed to take the three-judge panel aback and very well could have been the moment that Trump lost the appeal.

Instead of issuing a ruling as broad as the one that the District Court Judge did, though, the three-judge Second Circuit panel — made up of Clinton appointee Judge Richard Katzmann and Obama appointees Judge Denny Chin and Christopher Droney — issued a far narrower ruling. Bypassing the issue of Presidential immunity from prosecution entirely, the court considered the issue before it to be whether or not the President’s accounting firm, to whom the subpoena is directed, could be forced to comply with the subpoena. Generally speaking, this made the case far easier for the Court because it avoids the thorny issue of Presidential immunity altogether. As a result, the outcome in the case isn’t entirely surprising.

As noted, the President’s attorneys are already saying that they intend to appeal the matter to the Supreme Court, but as NBC News legal analyst Pete Williams notes that it is by no means likely that the Justices will agree to hear the case:

President Donald Trump will face strong headwinds in asking the Supreme Court to stop prosecutors in New York from getting his tax returns.

Past Supreme Court rulings have upheld subpoenas directed at presidents, and this time the local prosecutors are seeking documents from the Trump Organization and Trump’s accountants — not directly from the president himself.

For those reasons, among others, the Supreme Court might simply decline to hear the president’s appeal, which would leave the appeals court ruling intact and require the tax returns to be turned over.

The Manhattan district attorney, Cyrus Vance, is investigating whether any state laws were broken in the payment of hush money to two women who claimed they had a sexual relationship with Trump, allegations he has denied. The prosecutors are also looking into the claim by Michael Cohen, the former Trump lawyer and confidante, that Trump sometimes misstated his financial situation in order to pay lower taxes.

Trump’s lawyers have fought back, arguing that because a sitting president cannot be indicted, he likewise cannot be subject to any steps in a criminal investigation. In rejecting that claim, a three-judge panel of the 2nd Circuit Court of Appeals in New York said Monday that presidential immunity “does not bar the enforcement of a state grand jury subpoena directing a third party to produce nonprivileged material, even when the subject matter under investigation pertains to the president.”

No court has ever ruled that a sitting president cannot be charged with a crime, but that has been the consistent position of the Justice Department under both Republican and Democratic administrations. The logic behind that position can be summarized simply: The president can’t run the country from jail.

The Supreme Court has never ruled that sitting presidents are beyond the reach of criminal investigations, though. In 1974, the court ruled that President Richard Nixon was required to comply with a subpoena directing him to turn over tape recordings of conversations in the White House. In 1975, President Gerald Ford complied with an order to give a deposition in the trial of a woman charged with trying to shoot him. In 1996, President Bill Clinton gave videotaped testimony in two criminal trials.

And in 1807, Chief Justice John Marshall, presiding over the criminal trial of Aaron Burr, approved the issuance of a subpoena to President Thomas Jefferson.

(…)

The president’s lawyers’ best hope for getting the Supreme Court to take the case may be to argue two points. First, they will likely say that the 1974 ruling in the Nixon case doesn’t apply because that was a subpoena issued for material to be used in a criminal trial of former White House aides. A grand jury subpoena, they might say, is a lower level of need.

And second, they may say that Vance’s request is politically driven. His prosecutors admit that they lifted the wording of the subpoenas directly from subpoenas issued by two House committees controlled by Democrats. Trump’s refusal to make public his tax returns has been a consistent gripe of critics on the left.

Another factor that could influence the Court’s willingness to take the case could be the ongoing impeachment proceedings against the President. If the House of Representatives does vote to impeach, then there will be a trial in the Senate presided over by Chief Justice Roberts. This Senate trial could come in the middle of the Court’s winter sitting and it could have an impact on the court’s ability to schedule hearings around the Chief Justice’s need to be in the Senate for the balance of a trial that could last several weeks. That timing, along with the political scrutiny it could bring to the Court may mean that the Justices may just decide to let this narrowly-tailed issue of whether or not Mazars has to comply with a subpoena stand as is, meaning that Trump’s tax returns will finally end up in someone else’s hands although they likely won’t be made public any time soon, if ever.

In any case, it’s worth noting that this case has moved forward with remarkable speed. The President’s lawsuit to block the subpoena was filed in late September, and a decision issued in early October. After that it was appealed to the Second Circuit, argued in late October and a decision issued just yesterday. That’s roughly six weeks, which is very quick for civil matters in Federal Courts. If nothing else, it’s an indication that things can move quickly if done on an expedited basis, something that could prove to be important in connection with any legal action that may take place regarding subpoenas issued in the ongoing impeachment inquiry in Washington.

Here’s the opinion:

FILED UNDER: Donald Trump, Law and the Courts, Politicians, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. DrDaveT says:

    So would denying cert be even more of a thumb in the eye to Trump’s case(s) than ruling against him?

    ReplyReply
  2. @DrDaveT:

    Interesting question. It’hard to predjict what will set off the Carotene Caligula.

    ReplyReply
  3. CSK says:

    Whatever it is the Pumpkin Pustule is trying so desperately to hide, it’s either criminal or terribly embarrassing to him.

    ReplyReply
  4. Kathy says:

    I can’t conceive any court agreeing to the argument that a president, or Trump in this case, cannot be investigated at all.

    Just because I can’t conceive, doesn’t mean it won’t happen. But judges tend to have to live with their decisions, in ways most politicians don’t. With the current Supreme Court in particular, I’m nearly certain Roberts won’t want to be remembered as the man who put the presidency above the law.

    ReplyReply
  5. Michael Reynolds says:

    So far we know that Trump either lies on his taxes or lies in loan applications – claiming one valuation for the IRS and a whole different valuation when talking to lenders. But I’ve always suspected something more personal – a much lower income than assumed, perhaps. Whatever it is it’s something he filed and so not something he expected would be legally problematic (although he’s so fkin dumb…) more something in the public relations zone, something reporters and not IRS agents would uncover. All speculation, obviously.

    ReplyReply
  6. grumpy realist says:

    It really makes one wonder–what IS in there?!

    I suspect we’ll find blatant lying on tax forms.

    ReplyReply
  7. Sleeping Dog says:

    @CSK:

    Let me correct that for you, criminal and embarrassing.

    ReplyReply
  8. Jen says:

    @Michael Reynolds: That’s what I think too. He’s been audited so many times that I can’t conceive that the people who prepare his taxes would do anything that is outright illegal. Shady AF, sure, but not obvious money laundering, etc.

    I think he’s most likely just not that rich. He is SOOOOO sensitive about that, it bothered him so much when an author called him a millionaire instead of a billionaire that Trump sued him. (Spoiler alert, Trump lost that lawsuit.)

    ReplyReply
  9. gVOR08 says:

    From the Pete Williams piece,

    The logic behind that position (DOJ’s position that the prez can’t be indicted) can be summarized simply: The president can’t run the country from jail.

    Which a) is not a legal argument, and b) is what the veep, the rest of the order of succession, and the 25th amendment are for. Demonstrating once again how stupid that opinion is.

    ReplyReply
  10. Daryl and his brother Darryl says:

    I guess we will soon find out 3 things:
    Most importantly, is the SCOTUS is still a legitimate institution?
    Was Trump lying on his taxes, or his loan applications?
    And finally, how broke is Trump?

    ReplyReply
  11. CSK says:

    @Jen: Was that the suit that, when asked how much he was worth, he responded (during a deposition) that his worth depended on how he felt when he got up in the morning?

    ReplyReply
  12. CSK says:

    @Jen: Well, if he lies to his accountants, they have to accept the lies as a true representation of the financial facts.

    ReplyReply
  13. Kathy says:

    @gVOR08:

    Which a) is not a legal argument, and b) is what the veep, the rest of the order of succession, and the 25th amendment are for. Demonstrating once again how stupid that opinion is.

    That’s a really good point. Consider that the importance of the president to the country is very much alike to, say, the importance of the Chief Justice to the SCOTUS and the country, or the Chairman of the Joint Chiefs to the military and the country, or the CEO of a large corporation to the company, the stockholders, the companies it does business with, and maybe even the country.

    So if a president, or Trump, not only can be replaced in their role, but already have a chain of designated replacements in place, why can they not be indicted and prosecuted for a crime?

    Yes, a president is very important to their country. But if defending against an indictment and criminal charges proves too taxing, they can take a temporary leave of absence and let the VP run things for a few months.

    ReplyReply
  14. gVOR08 says:

    @Kathy: And perhaps someone with a history of shady dealing and questionable associates should refrain from running for President. Does tend to draw attention.

    ReplyReply
  15. Kathy says:

    @gVOR08:

    Did you ever see The Simpsons episode where they travel to Africa? At one point they witness a giraffe coming out of a hole in the ground, a rhino hatching from an egg, and other odd things. Lisa complains that this is not how things are, and then Homer, of all people, asks a very wise question: “What did you just see?”

    I bring this up because that’s how El Cheeto’s election still feels: it’s not possible, it can’t be possible. I kind of have to remind myself it did happen.

    So when I read:

    And perhaps someone with a history of shady dealing and questionable associates should refrain from running for President. Does tend to draw attention.

    I reflexively thought: Of course not. They won’t win and they’ll wind up in prison or on the lam.

    And yet, what did we all just continue to see?

    Damn.

    ReplyReply
  16. Tyrell says:

    I have written my opinions before about people’s tax returns being demanded. Under no circumstances would I give access to my tax returns to anyone but the IRS and my tax preparer. This is not right I don’t care if it is a celebrity, politician, athlete, judge, or dog catcher.
    What is next? Library records? School report card? Health records?
    There is no way I would let the buffoons in Congress get their grubby hands on my tax records, or anything I own. I might just show them my returns and see if they can figure out why I am paying so much on a income that is way south of $50,000.
    Americans have given up enough of their privacy and freedoms.
    That judge probably ain’t showing his returns to everybody.

    ReplyReply

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