State Attorneys General Can Enforce the Emoluments Clause with Quo Warranto vs. Trump’s Hotels

The Foreign Emoluments clause of the U.S. Constitution states, “no person holding any office of profit or trust under them, shall, without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.” Article I, Section 9, Cl. 8.  The Compensation (or Domestic Emoluments) clause prohibits the president from receiving, on top of his salary, “any other Emolument from the United States, or any of them.” Article II, Section 1, Cl. 7. An emolument is a kind of payment or benefit. Others have argued persuasively that President Trump has been violating this clause, because foreign states and officials are paying “emoluments” to Trump through the hotels as business conduits. New documents this week show that even though Trump has put his businesses in a trust, he is the exclusive beneficiary of the trust, and he can revoke the trust at any time.

My purpose in this post is to address a procedural question:

  1. If there are procedural problems (such as standing) in suing the President directly, is there any other way to enforce the Emoluments clause?

In a follow-up post, I will address a substantive question:

  1. If “emoluments” might not be any kind of payment, but only an office-related payment, would foreign payments (or state or federal payments) to Trump hotels be a violation of the Emoluments clause?

My answers are yes and yes. The bottom line is that state attorneys general in states with a Trump corporation (and perhaps a Trump LLC, a statutory limited liability company) can bring a quo warranto proceeding to access information about whether the entities are conduits for illegal emoluments, to enjoin those activities, to force President Trump to divest, and/or to dissolve those entities. The Trump Organization is incorporated in both Delaware and New York, and it has business entities (LLCs) that could be conduits for emoluments in Florida, Illinois, New Jersey, California, Hawaii, and an increasing number of states as Trump expands his Trump and Scion brand hotel chains. “Emoluments” arguably might not be a payment of any kind, and indeed they may need to be office related. However, if a foreign official (or federal or state official) seeks to do business with a Trump entity because of Trump’s status as president or pays above market value as an effect of Trump’s office, then the payment is related to the office and it would be an emolument. The possibility of such intent or overpayment — by the foreign or state official, regardless of Trump’s specific awareness of the deal — would be enough of a factual claim to survive a motion to dismiss. Arguably, the rent payments from the Secret Service and Defense Department, forced to stay in Trump buildings in New York City become an office-related emolument. The remedy is total divestment or dissolution of the corporation.

A lot of ink and pixels have been spilled recently on Emoluments. If you want to read more about the Emoluments clause, I recommend: Zephyr Teachout’s book Corruption in America, the suit by the non-profit Center for Responsibility and Ethics in Washington, their Atlantic article, “A Note on the Original Meaning of Emolument,” by Georgetown law professor John Mikhail; and a post by Joshua Matz and Lawrence Tribe. As a particularly thoughtful counterpoint, please read Andy Grewal’s thorough paper, which I will address in a future post.

Let’s return to the first question:

  1. Procedure: If there are procedural problems (such as standing) in suing the President directly, is there any other way to enforce the Emoluments clause?

Yes. Let me first explain the challenge of trying to enforce this clause or other officials’ other legal duties. For an individual to sue, that person must have a “case or controversy,” which means they must have “standing,” some particular claim, rather than a general or abstract complaint. A plaintiff must have some “concrete and particular” injury, which is “actual or imminent,” not “conjectural or hypothetical.” The problem is that government officials often impact the general public and create diffuse problems, so that the harm is broad, not particular to a smaller set of people. Over the past three decades, conservatives on the Supreme Court have built up obstacles for private citizens trying to sue the government by increasing the requirement for injury, causation, and “zone of interests.” Counterintuitively, when a government official harms the public more widely, it is often harder for any individual citizen to have particular standing. And counterintuitively, when the government official is more powerful, the harms are more diffuse, and there are a mix of rules making it harder to see him or her (e.g., qui tam rules; Congress exempting the president from conflict of interest laws). The valid concern is too much litigation against public officials, by too many people with less compelling claims. A good pro-plaintiff argument for standing is that challengers to government misconduct are best served when courts must choose the plaintiff with the most compelling, most sympathetic case. But standing rules go too far when they completely insulate government officials from the citizens and the courts. The CREW emolument law suit and other suits by private parties against President Trump will have to overcome these excessive standing rules.

I suggest a solution: Instead of private parties suing the public official (Trump), public officials can sue the private parties (the Trump hotels and other business entities). The  public officials in the Department of Justice – the U.S. Attorney General or the U.S. Attorneys – could theoretically open an investigation, but it’s not a realistic hope. However, the state attorneys have the power through state courts. Could the state attorneys sue President Trump directly for violating the U.S. Constitution? That is a different Fed Courts questions for a different day. But corporations are a creature of state law, not federal law, and state attorneys general have a special role in making sure that corporations adhere to federal and state law.

Quo Warranto in England

The longstanding procedure for state attorneys general to stop corporate violations of the law is “quo warranto,” an old English writ meaning “what authority,” i.e., by what authority do you exercise power? Quo Warranto was one of many prerogative writs created in medieval and early modern England to check the abuse of government powers (see also Habeas Corpus, Mandamus, Prohibition, Certiorari, Declarations and Applications, cf. Qui Tam). Quo Warranto was first created by statute in 1189 (Baker, p. 125), but then faded until a revival in the sixteenth century. The writ was often used by the royals to assert their power over corporate entities. Charles II used quo warranto to “remodel municipal corporations by forcing new charters on them.” Id. The City of London fought against these reforms and lost in 1683. A year later, the English government used a similar procedure to rescind the charter of colonial Massachusetts (a kind of corporation) to protect the royal prerogative over Harvard College. But individuals also made more and more use of the writ against government officials in the eighteenth century. (Edward Jenks, “The Prerogative Writs in English Law,” 32 Yale L.J. 523 (1923). Quo warranto was then limited in some ways, but “its scope was at the same time extended to cover all usurpations of public functions of importance, though not judicial.” (Baker, An Introduction to English Legal History, p. 126)  In England, the writ was abolished in 1938, but it lives on in American state statutes as a check on both public and corporate abuses of power.

Quo Warranto and Corporations in America

You might recall the lawsuits by private citizens against President Obama for being illegitimate as not naturally born a citizen (Orly Taitz and the birthers).  Those suits were quo warranto claims in the U.S. District Court for the District of Columbia. Taitz v. Obama, 707 F. Supp. 2d 1 (D.D.C. 2010). The District of Columbia Code provides that the U.S. Attorney General or the U.S. Attorney may bring such an action, and if they decline, a litigant must seek the discretionary leave of a court and must have standing. Sibley v. Obama, 866 F. Supp. 2d 17, 19 (D.D.C. 2012), aff’d, 12-5198, 2012 WL 6603088 (D.C. Cir. Dec. 6, 2012); See also Andrade v. Lauer, 729 F.2d 1475, 1498 (D.C.Cir.1984). It would be difficult for a private citizen to use quo warranto against President Trump for his receipt of emoluments.

Instead, states have statutes allowing a state official (or a shareholder and sometimes a member of the general public) to sue a corporation through quo warranto for acting “ultra vires” (beyond legal authority). A group of people create a legal corporation through state law, to create legal privileges and gain legal rights as legally fictional person. In order to retain these rights and privileges, a corporation must act only within the bounds of its charter and within the bounds of the law. The “ultra vires” doctrine originated with the English quo warranto writ. Helen Cam, Quo Warranto Proceedings in the Reign of King Edward I, 1278-1294 (1964); Comment, “The Use of Quo Warranto,” 18 Yale L.J. 58 (1908); Comment, “Quo Warranto and Private Corporations,” 37 Yale L.J. 237 (1927); Valeria Hendricks, “Which Writ is Which? A Trial Attorney’s Guide to Florida’s Extraordinary Writs,” Fla. B. J. Apr. 2007, at 46; Adam Sulkowski, “Ultra Vires Statutes,” 24 J. Envtl. Law and Litigation 74 (2009). The state laws of incorporation in the United States set various rules for application, renewal, the authorized scope of their powers, and the duration of the incorporation. The state legislatures added language allowing state attorneys general and shareholders to sue to enjoin any activities beyond the corporate charter or to dissolve the corporation if it has violated those terms. Kent Greenfield, “Ultra Vires Lives!,” 87 Va. L. Rev. 1279, 1319 (2001). Courts interpreted “ultra vires” broadly, so that regular transactions beyond the scope of a contract were valid for quo warranto challenges. Adam Sulkowski, “Ultra Vires Statutes,” 24 J. Envtl. Law and Litigation 74, 98 (2009). When corporations engaged in monopolistic behavior (trusts, in the sense of “anti-trust”), four state courts dissolved the corporations in the 1890s. People v. N. River Sugar Refining Co., 24 N.E. 834, 841 (N.Y. 1890); Russell Mokhiber, “The Death Penalty for Corporations Comes of Age,” Bus. Ethics, Nov. 1, 1998.

Over time, legislators observed that some shareholders or third parties were bringing quo warranto claims strategically if a deal had gone wrong or became a loss, so that they could dissolve their own company or have the contract judicially cancelled in order to avoid those losses. At the same time, shareholders gained other legal rights and processes to sue for mismanagement, so the private parties have used quo warranto (or its statutory variation) much less frequently. Sulkowski at 99.  Nevertheless, the statutes of almost all of the states still empower state attorneys general to intervene against illegal corporate acts.  All states have corporation statutes that require a corporation to obey the law. Sulkowski, p. 101. Many states have codified quo warranto or a similar proceeding for an attorney general to bring an action against a corporation for acting ultra vires.

Generally, state quo warranto statutes are always at least as broad as the common law writ, and they often expand the plaintiffs’ rights beyond the writ. Some states have adopted the involuntary judical dissolution provisions provided in the American Bar Associations Model Business Corporation Act. Many state statutes only allow the state attorney general to commence the action against the corporation, but some allow private citizens to initiate these actions.  There are three statutory variations on who can bring a quo warranto proceeding:

  1. Some states permit only the state attorney general to bring a quo warranto action.
  2. Some states permit an “interested” member of the public to bring a quo warranto action only after the attorney general officially declines.
  3. Other states permit a member of the public to bring a quo warranto suit only if he or she is particularly affected.

The remedies for a quo warranto proceeding for ultra vires (illegal) activities are:

  1. Revoking or dissolving the corporate charter
  2. Enjoining it from exercising the illegal activity.
  3. Imposing a financial penalty on the corporation
  4. Or a combination of remedies

(74 C.J.S. Quo Warranto § 26); see also Comment, Quo Warranto and Private Corporations, 37 Yale L.J. 237, 242 (1927); 12 Colum. L.R. at 549)

In most proceedings in American law, the plaintiff bears the burden of proof, but generally, in quo warranto claims, the burden is on the corporation to prove that it acted within its authority. Quo warranto proceedings also focus on the protection of public interests broadly. The attorneys general have broad discretion to bring a claim, and courts have discretion to weigh the gravity of the violation and the effect on public welfare. Comment, “Quo Warranto and Private Corporations,” 37 Yale L.J. at 242; Herbert Hovenkamp, Enterprise and American Law, 64).

Corporations or LLCs?

All of the precedents of quo warranto/ultra vires suits that I have read are against corporations. Most of Trump’s business entities are LLCs, limited liability companies authorized by state statutes. They are similar to corporations, but they are not treated the same legally. Can a state attorney general bring a quo warranto proceeding against an LLC? It may be possible for a state attorney general to bring a claim against an entity incorporated in another state, but only to revoke a certificate of authority to engage in business within the attorney general’s jurisdiction. Thus, even if quo warranto is limited strictly to corporations and not LLCs, an attorney general potentially could bring an action against a Trump hotel — even if it is incorporated in another state — to enjoin it from doing business in that state.   Cf. Bissell v. Michigan S. R. Co., 22 N.Y. 258, 258 (1860) (a New York tort claim against two corporations chartered in Michigan and Indiana. Dicta suggests that an innocent party to an illegal/ultra vires contract can nullify the obligations of that contract. It is unclear if an attorney general could nullify ultra vires contracts).

Most courts treat LLCs similar to corporations in the area of veil-piercing theories. Under federal civil procedure, LLCs are not considered corporations, but state law may regard them the same for the purposes of quo warranto, because both are legal entities needing legal “warrant” for special privileges. Most states passed statutes to create the LLC form in the late 1980s and early 1990s, and they may include similar language as the incorporation statutes, requiring the company to “follow the law” generally. Keatinge, et al.,”The Limited Liability Company: A Study of the Emerging Entity,” 47 Business Lawyer 375, 383-384 (Feb. 1992).

New York

The Trump Organization is incorporated in Delaware, but it also has an active entity called “The Trump Organization” formally incorporated in New York State, filed in 1981. (DOS ID 694908, filed April 23, 1981, search https://www.dos.ny.gov/corps/bus_entity_search.html).  New York, like many states, has codified the doctrine of quo warranto.  New York Business Corporation Law section 1101 grants the attorney general the authority “to bring an action for the dissolution of a corporation” if:

the corporation has exceeded the authority conferred upon it by law, or has violated any provision of law whereby it has forfeited its charter, or carried on, conducted or transacted its business in a persistently fraudulent or illegal manner, or by the abuse of its powers contrary to the public policy of the state has become liable to be dissolved.

N.Y. Bus. Corp. Law § 1101(a)(2) (McKinney 2016). In New York, section 1101 actions against a corporation have historically involved either a corporation’s “misuse” or “nonuse” of a franchise.  The State must provide a threshold showing that a corporation exceeded or abused its powers.  The State must also show the corporation’s “misuse” threatens to harm the public at large. See People v. N. River Sugar Ref. Co., 121 N.Y. 582, 609 (1890) (“But where the transgression has a wider scope and threatens the welfare of the people, [the State] may summon the offender to answer for the abuse of its franchise or the violation of its corporate duty.”); see also People v. Volunteer Rescue Army, 28 N.Y.S.2d 994, 997 (App. Div. 1941).  If the New York corporation’s illegal conduct harms the public at large, the state may commence an action under the parens patriae doctrine. See People v. Abbott Maint. Corp., 200 N.Y.S.2d 210 (Sup. Ct.), aff’d as modified, 201 N.Y.S.2d 895 (App. Div. 1960), aff’d, 9 N.Y.2d 810 (1961).

Others have argued that New York attorneys general may pursue “misuse” suits against New York corporations violating federal environmental laws. See Thomas Linzey, Awakening A Sleeping Giant: Creating A Quasi-Private Cause of Action for Revoking Corporate Charters in Response to Environmental Violations, 13 Pace Envtl. L. Rev. 219, 256 (1995).

Does 1101(a) include violations of federal law as grounds for dissolution?  New York precedents offer similar examples of dissolution on the basis of federal law. “Federal law is as much a law of the State as any specific law enacted by the State Legislature.” In re People (Int’l Workers Order, Inc.), 199 Misc. 941, 976, 106 N.Y.S.2d 953 (N.Y. Sup. Ct. 1951) (dissolving union insurance fund for “wilfully violat[ing] its charter,” and rejecting their argument that violation of federal law was improper basis for revocation), aff’d, 113 N.Y.S.2d 755 (N.Y. App. Div. 1952), aff’d, 305 N.Y. 258 (1953)

New York Limited Liability Company Law does not address actions against LLCs. See generally N.Y. Ltd. Liab. Co. Law (McKinney 2016). Although LLCs do not receive charters from the State, they similarly would not exist but for the State approving their articles of organization.  In addition, there are many areas of the law in which courts have applied corporate law to LLCs, effectively treating them as corporations. See N.Y. Ltd. Liab. Co. Law Ch. 34, Refs & Annos (McKinney 2016).  Considering that LLCs must adhere to the law and the scope of their articles, there must be some mechanism for public enforcement, and courts should recognize the statutory equivalent of quo warranto for this purpose.

Additional Sources: 6A N.Y. Jur. 2d Article 78 § 412

N.Y. Bus. Corp. Law § 109(a)(1) (McKinney) (empowering the attorney general “to annul the corporate existence or dissolve a corporation that has acted beyond its capacity or power or to restrain it from the doing of unauthorized business”)

N.Y. C.P.L.R. 1301-1303

People v. Bleecker St. & F.F.R. Co., 125 N.Y.S. 1045, 1049 (N.Y. App. Div. 1st Dept. 1910), aff’d, 95 N.E. 1136 (N.Y. 1911):

People v. Bank of Hudson, 1826 WL 2094 (N.Y. Sup. Ct. 1826):

In re Heim’s Est., 3 N.Y.S.2d 134 (N.Y. Sur. 1938), decree aff’d, 8 N.Y.S.2d 574 (N.Y. App. Div. 2d Dept. 1938):

Delaware

In Delaware (where the Trump Organization and a majority of publicly traded corporations are legally incorporated), “[a] corporation may be incorporated or organized under this chapter to conduct or promote any lawful business or purposes, except as may otherwise be provided by the Constitution or other law of this State.” Del. C. § 101(b); see also Section 102.  The Delaware Code empowers – even instructs – the attorney general to seek the revocation of a corporate charter if it has abused its power:
(a) The Court of Chancery shall have jurisdiction to revoke or forfeit the charter of any corporation for abuse, misuse or nonuse of its corporate powers, privileges or franchises. The Attorney General shall, upon the Attorney General’s own motion or upon the relation of a proper party, proceed for this purpose by complaint in the county in which the registered office of the corporation is located. Del. Code. Ann. tit. 8, Section 101(b).

Sources:

5A Fletcher Cyc. Corp. § 2326

Brooks v. State, 3 Boyce (26 Del) 1, 79 A. 790 (1911) (Remedy by information in the nature of a writ of quo warranto).

State v. Hancock, 45 A. 851, 854 (Del. Super. 1899):

Morford v. Trustees of Middletown Acad., 13 A.2d 168, 171 (Del. Ch. 1940)

Washington, D.C.

The attorney general for the District of Columbia may seek dissolution of a corporation if it continues “to exceed or abuse the authority conferred upon it by law.” D.C. Code § 29–312.20. This provision is relevant for both the Trump Hotel’s emoluments problem and its conflict with the GSA contract which states that “no elected official of the government … shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom.”

California:

California statutes appear to provide a very broad power to a quo warranto claim. Quo warranto is appropriate “against any person who usurps, intrudes into, or unlawfully holds or exercises any public office, civil or military, or any franchise, or against any corporation, either de jure or de facto, which usurps, intrudes into, or unlawfully holds or exercises any franchise, within this state.”  (Cal. Civ. Proc. Code § 803.). The applicability to “any franchise” may extend quo warranto beyond corporations to LLCs, depending on California law.  The California Department of Justice provides a useful guide on their website: https://oag.ca.gov/opinions/quo-warranto  Under the statutory system, the attorney general must bring the suit.  (See Oakland Municipal Improvement League v. City of Oakland (1972) 23 Cal.App.3d 165, 170; Cooper v. Leslie Salt Co. (1969) 70 Cal.2d 627, 633.)  However, Cal. Civ. Proc. Code §811 provides for an exception. “The action provided for in this chapter may be maintained by the board of supervisors of any county or city and county or the legislative body of any municipal corporation, respectively, in the name of such county, city and county or municipal corporation against any person who usurps, intrudes into or unlawfully holds or exercises any franchise, or portion thereof, within the respective territorial limits of such county, city and county or municipal corporation and which is of a kind that is within the jurisdiction of such board or body to grant or withhold.” (Id.; San Ysidro Irrigation Dist. v. Super. Ct. (1961) 56 Cal.2d 708, 716-17 (noting that while the statute only refers to a “person” usurping a franchise, corporations and governmental bodies are also to be included.))  A corporation arguably usurps or unlawfully holds a franchise if they are violating the statutory requirement of lawful conduct.

Future posts:

  1. If “emoluments” might not be any kind of payment, but only an office-related payment, would foreign payments to Trump hotels be a violation of the Emoluments clause?

“Emoluments” may not be any kind of payment, and indeed they may need to be office related. However, if a foreign official (or federal or state official) seeks to do business with a Trump entity because of Trump’s status as president, then the payment is related to the office and it would be an emolument.

     2. Other states on quo warranto

Thanks to Jonathan Hermann, Andrea Rodriguez, Katherine Wright, Paul Thompson, Sara Norstrand, and Stephanie Zuniga for your help.

 

Gorsuch, “Fascism Forever,” and his troubling Kissinger quote

Last night, I posted that Gorsuch wrote brilliantly for the rule of law and deserves our open minds. This morning, I am feeling naive and nauseous. Overnight, the Daily Mail published photographs of Neil Gorsuch’s Georgetown Prep yearbook showing that he founded and was president of the “Fascism Forever Club” for three years (10th through 12th grades). [Update 8pm: There are plausible explanations and denials, that it was not a real club but just an entry in his yearbook and a joke article about it. But as I had written below, I was initially more troubled by the 21-year-old’s embrace of the Kissinger quote anyway.]

But wait, that’s not even the worst revelation. Gorsuch also added a quote to the high school yearbook from Henry Kissinger: “The illegal we do immediately. The unconstitutional takes a little longer.” He loved this quote so much that he used it again in his Columbia yearbook in 1988.

Let me first say that I want to allow some time for confirmation of these stories and some kind of response. But we should focus even more on the Kissinger quote because its content has been confirmed by other sources, it is more obvious and relevant, the source (Kissinger) is troubling in precisely the ways we should be troubled in 2017, and Gorsuch quoted it repeatedly, at an age when we all expect more maturity. Snopes confirmed the Columbia yearbook already. The quote may come from Gary Allen’s book Kissinger in 1976. Someone excerpted quotes from Gary Allen’s book online for a little more context: “He was the man who said ‘power is the ultimate aphrodisiac,’ and who was quoted in New York Times magazine as joking, “The illegal we do immediately. the unconstitutional takes a little longer.” The Washington Post published this quote in 1973. Kissinger has been quoted elsewhere saying, “Before the Freedom of Information Act, I used to say at meetings, ‘The illegal we do immediately. The unconstitutional takes a little longer.’ … But since the Freedom of Information Act, I’m afraid to say things like that.”

Frankly, I’m astonished he would advertise these views so openly. It’s as if a 21-year-old were intentionally trying to sabotage his own nomination to the Supreme Court thirty years later, like he couldn’t help but confess, “I have a long-term plan to undermine the U.S. Constitution just like Nixon and Kissinger.” (Didn’t Nixon and Kissinger love “secret plans”?) On the one hand, there is something frankly refreshing that he was not plotting his ambitious political career so carefully as a teen and 20-something (maybe we need to worry more about those types). I suppose I should be relieved that he isn’t a totally stealth fascist. But decent people don’t behave like this, especially not as 20-somethings. As college students, we knew who Kissinger was. Even if you admired his hawkish successes, you surely knew about his bombing campaign in Cambodia and the allegations of war crimes, and you probably knew of his interventions for dictators in Latin America. Decent people don’t celebrate Kissinger’s bragging about lawlessness on the pages of everyone’s yearbook.

Given that we have a president who threatens illegal and unconstitutional actions similar to Nixon and Kissinger (or worse), we all should worry that the 49-year-old Gorsuch might be same person as the 21-year-old Gorsuch. I believe we ordinarily need to keep an open mind about stupid, offensive things people did when they were teens. However, these are not ordinary times, and this is not a nomination for an ordinary position. It’s a lifetime appointment for a relatively young nominee to the Supreme Court of the United States. This is a thirty or forty year commitment to someone who would have enormous power and no accountability. Did we all do stupid things when we were 16 or 18? Of course. Did we tell offensive jokes? Of course. But that’s a reason to give people a second chance. This isn’t a second chance. This is locking him into extraordinary power for the rest of our lives with no second chance for the rest of us.

Update: A Georgetown Prep teacher says there was no club, it was just an inside joke. http://www.thedailybeast.com/cheats/2017/02/02/scotus-pick-s-teacher-no-fascist-club.html?via=mobile&source=copyurl

Gorsuch on Chevron: Brilliant.

Today I read and taught Judge Gorsuch’s anti-Chevron opinion, Gutierrez-Brizuela v. Lynch (2016). It is a brilliant, deep, powerful opinion. My students, left and right, agreed, even if they weren’t necessarily persuaded by it. First, let me note that Gorsuch ruled in favor of an undocumented immigrant against the Board of Immigration Appeals, but that’s not the important point. The legal issue is that Gorsuch believes judges, not executive branch agencies, should interpret statutes. That may seem esoteric, but it is one of the biggest questions in American law because it addresses the deeper questions of judicial independence. Gorsuch’s opinion reflects a thoughtful judge who cares deeply about the separation of powers, checks on the abuse of executive power, and the rule of law. He warns of how “political majorities” threaten the Bill of Rights, due process, and equal protection. He worries that the executive branch “swallow[s] huge amounts of core judicial and legislative power.” I agree. I admit I’ve always been skeptical of Chevron, but the events of the past few months plus this tour-de-force opinion have persuaded me. His vision of the law is Chief Justice Marshall’s in Marbury: “It is emphatically the province and duty of the judicial department to say what the law is.” Keep in mind that Gorsuch published this opinion in August 2016, and I think he may have been observing the same threats that we all were.

The worries that keep me up at night are about Trump/Bannon attacks on our basic democratic values and our Constitution. As a liberal, I may disagree with Gorsuch on 100 other questions, but I am now more open to seeing Gorsuch as a judge who may get our most urgent and desperate questions right. Some friends have told me that Gorsuch was “our best case scenario” and that “we dodged a bullet.” I also note that he is on the opposite side of Scalia on this issue (Scalia was famously and zealously pro-Chevron, despite its obvious problems in terms of Scalia’s own originalism… I’m shocked, shocked!) If I look backward, I want vengeance for how the Senate Republicans stole this seat. If I look forward, I think maybe we owe it not to them, not to Gorsuch, but to ourselves, to keep an open mind. Maybe we got lucky. I link to his opinion here (the key part is p. 15-23).

Update: If this story is real, I’m not feeling so open-minded anymore. I’m just feeling nauseous: http://www.dailymail.co.uk/~/article-4182852/index.html

 

Update on the Kulturkampf: Scalia edition

I’ve been using the term Kulturkampf (German for “culture war”), because Trump and Bannon are waging a culture war on the left and on the “establishment” (right and left). The term “Kulturkampf” comes from 1870s Germany, in Bismarck’s “culture battle” leading the Protestants and German nationalism against the Catholic Church. It was a predecessor to Hitler’s similar goal of nationalism against the Catholic Church, and the term Kulturkampf came back into use in the Nazi era. When I use the term Kulturkampf, I’m not trying to be overly inflammatory. I’m thinking that we are in the middle of a nationalist culture war more like 1870s Germany, but I worry that it could get much worse. So I use the term Kulturkampf because of that ambiguous, and because the word “kampf” hints at Bannon’s agenda and the real “alt-right” racist/white nationalist forces that are behind Trump.

In the midst of all this fawning praise of Scalia the Giant tonight, over the next month or so, and every four years, I want to note that first, I assign Scalia’s Matter of Interpretation when I teach Constitutional Law or Constitutional History, and I try to present his arguments faithfully and with balance. But he introduced the word “Kulturkampf” in an inappropriate context. If we’re being generous, it was thoughtless, but if we’re being less generous, it was deliberately provocative and imprudent (im-juris-prudent).  In 1996, the Supreme Court overturned an anti-gay Colorado law in Romer v. Evans.  Scalia dissented, and used the word “Kulturkampf” favorably, as if a kulturkampf was obviously a good thing for voters to wage against gays, as if it would be peachy to hint at the glories of German nationalism in the same context as anti-gay discrimination:

“The Court has mistaken a Kulturkampf for a fit of spite. The constitutional amendment before us here is not the manifestation of a ‘bare … desire to harm’ homosexuals … but is rather a modest attempt by seemingly tolerant Coloradans to preserve traditional sexual mores against the efforts of a politically powerful minority to revise those mores through use of the laws.

“In holding that homosexuality cannot be singled out for disfavorable treatment, the Court contradicts a decision, unchallenged here, pronounced only 10 years ago … and places the prestige of this institution behind the proposition that opposition to homosexuality is as reprehensible as racial or religious bias. … This Court has no business imposing upon all Americans the resolution favored by the elite class from which the Members of this institution are selected, pronouncing that ‘animosity’ toward homosexuality … is evil. I vigorously dissent.”

I think Scalia deserves credit as one of the “great” Justices in terms of influence and jurisprudence, but I would not call him a good judge in terms of human prudence. In the second half of his career on the Court, starting around the time of his “Kulturkampf” dissent in 1996, he became a caricature of himself, playing to his Federalist Society/Fox News fans with bombast, hyperbole, esoteric phrases, insults, and more partisanship than principle. I’m trying to keep an open mind about Neil Gorsuch, but all of the Scalia worship from him and his supporters isn’t helping.

Update on the Kulturkampf: the Trump family’s war on Muslims and the Courts

Donald Jr. retweeted the following yesterday: “When it’s revealed that the #QuebecShooting terrorists are Muslims, Trump will have a tremendous spike in political capital. #MuslimBan.” This is nakedly instrumental propaganda of bigotry (in case you’ve been watching Fox News, it turns out that the shooter was a white racist and a Trump fan, while the Muslim man in reports was actually a witness, not a suspect). It is a preview of how the Trumps and Bannon will exploit every terrorist incident over the next four years, and how they will lie and mislead to fan hatred of Muslims. Note the repeated use of #MuslimBan: Donald Jr. also personally tweeted, “If @JustinTrudeau cared about the safety of Canadians he’d follow @realDonaldTrump’s lead with a #MuslimBan #QuebecShooting” The Bannon/Trump team know exactly what they are doing. The Trump base wants a Muslim ban as an explicit message against Islam. Again and again, they are telling the base that it is a ban against Muslims. But as Giuliani admitted, they changed the wording just enough to make a formal argument that it is about specific countries, not religion. Here is the win-win for their culture war: they want the base to understand that it is the Muslim ban they demand, they want to give the cowering elite GOP a flimsy excuse that it’s not formally a Muslim ban, and they also want the courts to strike it down so the Trumpers can go to war against the judiciary. This is why we have to vigilantly defend immigrants and the judiciary for the next four years.

Non-profits and religious institutions can oppose Trump

I’ve received lots of questions about how tax-exempt non-profits  can legally oppose the Trump administration. The bottom line is that the free speech rights are broad under the IRS rules. Note: I’m a law professor, not a practicing lawyer, just to be clear. Here is what I researched for religious institutions, but it generally applies to all non-profits. It is long established that tax-exempt religious institutions can advocate for issues, but cannot officially endorse or oppose candidates for elected office. Clergy under some circumstances can endorse or oppose such candidates, although the lines aren’t clear. Are cabinet or judicial nominees considered “candidates” for public office? In line with a reasonable interpretation of IRS documents, the clear consensus is that they are not, so a non-profit can officially oppose any of Trump’s nominees and Trump’s actions and policies, even if he has filed for re-election.

RULES AND ANALYSIS:

Federal law prohibits political campaign activity by charities and churches by defining a 501(c)(3) organization as one “which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” The IRS clarifies that religious institutions “can engage in a limited amount of lobbying (including ballot measures) and advocate for or against issues that are in the political arena.”
https://www.irs.gov/uac/charities-churches-and-politics

1. That means that a congregation (or non-profit) in its official capacity and its clergy can advocate in many ways.

2. Members of congregations and non-profits are not the same as the institution or its clergy. Members can speak on list-serves and organize their own activities for or against candidates, as long as they don’t claim to speak for the organization officially. If a non-profit leader ever wants to get close to the line in opposing Trump’s re-election campaign, the leader (or member) should be clear that he/she does not represent the organization officially. To be careful on this issue, I think one would want to discuss and organize as individual members against a candidate, but one should not act as an official entity on any specific candidate for elective office.

3. As I read these documents, I had a question: can a non-profit officially oppose NOMINEES for office, e.g., Bannon, Sessions, or a Supreme Court nominee. The IRS is clear that the prohibition applies to “candidates for elective public office.” See the document below, re-issued this past September 2016. This sentence is the heading of the document, and the rest are details, so a fair legal reading is that there is no restriction on speaking for or against nominees.
To be careful, I kept researching, and I found the following establishment political sites that clarified that religious institutions CAN officially oppose political and judicial nominees:

1. The official GOP site (attached below).
https://www.gop.com/what-churches-can-and-cannot-do-in-politics/

2. Center for Arizona Policy
http://www.azpolicypages.com/religious-liberty/what-churches-and-pastors-can-and-cannot-do/

3. Forbes Magazine: clergy can endorse or oppose candidates for elective office outside their institution:
“Can Your Preacher Tell Who To Vote For?”
“Actually she can. It just depends on where, when and how. Here is the example in the ruling.
Minister C is the minister of Church L, a section 501(c)(3) organization and Minister C is well known in the community. Three weeks before the election, he attends a press conference at Candidate V’s campaign headquarters and states that Candidate V should be reelected. Minister C does not say he is speaking on behalf of Church L. His endorsement is reported on the front page of the local newspaper and he is identified in the article as the minister of Church L. Because Minister C did not make the endorsement at an official church function, in an official church publication or otherwise use the church’s assets, and did not state that he was speaking as a representative of Church L, his actions do not constitute campaign intervention by Church L.

http://www.forbes.com/sites/peterjreilly/2015/09/20/tax-rules-forbid-churches-endorsing-candidates/#47cff42a412f

4. Liberty Counsel: clergy under some circumstances can endorse, and religious institutions can endorse or oppose judicial and cabinet nominees:
https://www.lc.org/Uploads/files/pdf/pastors_churches_politics_trifold_2008.pdf

The IRS rule is copied in full below.

IRS Rule: The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations
Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.
Certain activities or expenditures may not be prohibited depending on the facts and circumstances. For example, certain voter education activities (including presenting public forums and publishing voter education guides) conducted in a non-partisan manner do not constitute prohibited political campaign activity. In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not be prohibited political campaign activity if conducted in a non-partisan manner.
On the other hand, voter education or registration activities with evidence of bias that (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention.
https://www.irs.gov/charities-non-profits/charitable-organizations/the-restriction-of-political-campaign-intervention-by-section-501-c-3-tax-exempt-organizations

2. GOP summary:
A Church Can:

Conduct non-partisan voter registration drives
Conduct non-partisan voter identification drives
Conduct “get-out-the-vote” drives, encouraging members to vote
Conduct petition drives regarding legislation or other issues
Distribute non-partisan voter education information
Educate church members on legislative and political matters
Discuss doctrine as it applies to politics, legislative matters or candidate positions
Introduce political candidates and allow them to address the congregation in their capacity as candidates as long as all candidates seeking the same office are given an equal opportunity to participate, and the church does not express support or opposition for any particular candidate(s).
Host candidate forums where all candidates are invited and allowed to speak
Lobby on behalf of specific legislation
Support or oppose political appointments (such as judges or cabinet officials)
Make expenditures on behalf of referendums
Rent church member contact lists to favored lobbying groups
Pastors may endorse candidates as individuals, but not on behalf of a church, (if title and church name are used, include a “title and affiliation for identification purposes only” disclaimer)
A Church Cannot:

Endorse or campaign for candidates for elected office in the name of the church
Contribute money or make “in kind” contributions, (such as resources or services), to a candidate, political party or political action committee
Distribute materials that endorse a particular candidate or political party
Allow candidates to solicit funds from the congregation (from the pulpit)
Create a church political committee that would do any of the above

Obama Can Appoint a Special Prosecutor on Russian Contacts (and even on conflicts of interest and “Emoluments” violations)

Questions are swirling about potentially illegal contacts between the Trump campaign and Russian officials. There is credible evidence that former campaign manager Paul Manafort was on the payroll of the pro-Putin Ukrainian government and did not register as a foreign agent in the U.S. The leaked 35-page report mentions specific allegations about Manafort and Trump advisor Carter Page coordinating with Russian officials, and suggests some Russian “engaging” with Trump nominee Michael Flynn, as well as Jill Stein. The 35-page report contains some erroneous details and some allegations that seem dubious (especially about Trump lawyer Michael Cohen). Trump has alleged that the leak was politically motivated and perhaps illegal. There is a plausible question of whether some intelligence officials are illegally smearing or leaking about Trump.

In yesterday’s press conference, Trump was asked, “Can you stand here today once and for all and say that no one connected to you or your campaign had any contact with Russia leading up to or during the presidential campaign?” He evaded this question and then abruptly ended the press conference. Trump also did not present a plan that remotely addresses his unprecedented degree of financial conflicts of interest, which overlap with the problem of Russian influence and kompromat. Some have claimed that President Trump will be in violation of the Constitution’s Emoluments clause (see below).

So what are the next steps?

  1. We can hope that the Republican Congress will investigate. I am optimistic that Senators John McCain, Lindsey Graham, and Marco Rubio will take steps in that direction. It is unclear how far they would be willing to go.
  2. We can hope that FBI Director Jim Comey might investigate fully, but he serves under the Attorney General, and we should have no faith in Sessions as an independent, unconflicted law enforcement official.
  3. There is one more move to consider carefully: Obama’s Attorney General Loretta Lynch can appoint a special prosecutor with jurisdiction over the illegal contacts or conspiracy with Russian officials. A special prosecutor’s term does not end with an administration. It is open-ended, so the special prosecutor would continue to serve during the Trump administration… unless the new Attorney General fired him or her, only for “good cause.”

I am not necessarily endorsing this unprecedented path. There is a good argument to be made that it is too soon to move so swiftly, that the intelligence materials are too questionable and too unsubstantiated. Lynch, a Democrat, appointing a special prosecutor could backfire as an overreach, perceived as partisan. Even if Lynch appoints a Republican-affiliated lawyer, maybe anything an “Obama” prosecutor finds will not be viewed as legitimate or reliable. Perhaps we should let the intelligence community and journalists do more of their jobs first, and then we should rely on options 1 (Congress) and 2 (Comey). But I am nevertheless going to explain how this process would work as a legal matter, because there are only eight days left to consider it.

First, keep in mind that we no longer have the statute that created the Office of the Independent Counsel, which had given us Kenneth Starr. Congress passed the Ethics in Government Act in 1978 after Watergate, and the act included the process for appointing an independent counsel or independent prosecutor. Under the statute, Congress or the Attorney General could refer a legal investigation to a special panel of the D.C. Court of Appeals, which could then appoint its own choice of lawyer with no fixed term and with an unlimited budget. The Attorney General could fire this independent prosecutor only for “good cause.” The statute was reauthorized twice (1987 and 1994), but after the Clinton impeachment, Congress let the statute lapse in 1999.

The replacement is the “special prosecutor,” most prominently seen with Patrick Fitzgerald’s investigation of the leaks during George W. Bush’s administration about CIA operative Valerie Plame, leading to scrutiny of Karl Rove and the conviction of Scooter Libby. The office of special prosecutor is governed by federal regulations, based on statutes found in 28 U.S.C. Sections 509-519. I’ll go step by step through the relevant regulations:

600.1 Grounds for appointing a Special Counsel.

The Attorney General, or in cases in which the Attorney General is recused, the Acting Attorney General, will appoint a Special Counsel when he or she determines that criminal investigation of a person or matter is warranted and –

(a) That investigation or prosecution of that person or matter by a United States Attorney’s Office or litigating Division of the Department of Justice would present a conflict of interest for the Department or other extraordinary circumstances; and

(b) That under the circumstances, it would be in the public interest to appoint an outside Special Counsel to assume responsibility for the matter.

Let’s start with Paul Manafort, the clearest case so far. He was Trump’s campaign manager. There is an obvious conflict of interest, particularly because the allegations spill over into the rest of the Trump campaign and the administration. Manafort’s actions overlap with the allegations about Carter Page and Trump himself.

600.3 Qualifications of the Special Counsel. An individual named as Special Counsel shall be a lawyer with a reputation for integrity and impartial decisionmaking, and with appropriate experience to ensure both that the investigation will be conducted ably, expeditiously and thoroughly, and that investigative and prosecutorial decisions will be supported by an informed understanding of the criminal law and Department of Justice policies. The Special Counsel shall be selected from outside the United States Government. Special Counsels shall agree that their responsibilities as Special Counsel shall take first precedence in their professional lives, and that it may be necessary to devote their full time to the investigation, depending on its complexity and the stage of the investigation.

I’m not sure if these same regulations applied to Patrick Fitzgerald in 2003, because he was a U.S. Attorney at the same time of his appointment. Perhaps he had to leave that office to accept the special prosecutor role formally. In any event, if Attorney General Lynch were to appoint a special prosecutor, he or she would have to come from outside the federal government to adhere to the strict letter of the regulation.

Now things get ever more interesting. I mentioned that President Trump would be in violation of the Constitution’s Emoluments clause on Day 1 because his hotel empire would be a vehicle for foreign payments over market value. Article I, Section 9 states: “No title of nobility shall be granted by the United States: and no person holding any office of profit or trust under them, shall, without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.” The word emolument is used elsewhere in the Constitution, and it clearly means “payment,” not a redundant synonym for present or gift. The problem is that it is still not clear how to enforce this clause, other than by impeachment Some argue that a competitor hotel could bring a civil claim for a constitutional violation, like a constitutional tort based on the unfair or corrupt business practice. It turns out that a special prosecutor can also have civil jurisdiction over this civil matter, and could seek an injunction to make sure the federal constitution is followed:

600.4 Jurisdiction.

(a) Original jurisdiction. The jurisdiction of a Special Counsel shall be established by the Attorney General. The Special Counsel will be provided with a specific factual statement of the matter to be investigated. The jurisdiction of a Special Counsel shall also include the authority to investigate and prosecute federal crimes committed in the course of, and with intent to interfere with, the Special Counsel’s investigation, such as perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses; and to conduct appeals arising out of the matter being investigated and/or prosecuted.

(b) Additional jurisdiction. If in the course of his or her investigation the Special Counsel concludes that additional jurisdiction beyond that specified in his or her original jurisdiction is necessary in order to fully investigate and resolve the matters assigned, or to investigate new matters that come to light in the course of his or her investigation, he or she shall consult with the Attorney General, who will determine whether to include the additional matters within the Special Counsel’s jurisdiction or assign them elsewhere.

(c) Civil and administrative jurisdiction. If in the course of his or her investigation the Special Counsel determines that administrative remedies, civil sanctions or other governmental action outside the criminal justice system might be appropriate, he or she shall consult with the Attorney General with respect to the appropriate component to take any necessary action. A Special Counsel shall not have civil or administrative authority unless specifically granted such jurisdiction by the Attorney General.

Attorney General Lynch would have to explicitly grant jurisdiction over the Emoluments Clause. After Trump’s disregard of the conflicts of interest over his business dealings and foreign influence, Lynch would be within reason to grant such jurisdiction from the beginning. It is also conceivable that violations of the emoluments clause could constitute criminal bribes — if involving quid pro quo arrangements — and could raise questions about illegal conduct by American or foreign officials.

Two other regulations are relevant: § 600.5 gives the special counsel the power to request staff, and § 600.6 equates the special prosecutor’s “powers and authority” to that of a U.S. Attorney.

The special counsel does not have a fixed term. Instead, the special counsel serves with a certain degree of job security. He or she does not serve at the pleasure of the President or the Attorney General. The Attorney General can fire the special prosecutor only for “good cause”:

600.10(d) The Special Counsel may be disciplined or removed from office only by the personal action of the Attorney General. The Attorney General may remove a Special Counsel for misconduct, dereliction of duty, incapacity, conflict of interest, or for other good cause, including violation of Departmental policies. The Attorney General shall inform the Special Counsel in writing of the specific reason for his or her removal.

         There is a separate question as to whether the terms of DOJ officials generally end when the President’s term ends. The answer is no. 28 U.S.C. Section 515 and the regulations at 600.1 through 600.10 are silent on the special prosecutor’s length of term, making it an indefinite term. Given that the special counsel is equated with a U.S. Attorney as the regulations indicate in CFR 600.6, perhaps the term is implicitly four years. But a U.S. Attorney’s office extends four years, regardless of changes in administration. There is a tradition for U.S. Attorneys to submit letters of resignation at the end of an administration, but there is no legal rule for them to do so. The fact that U.S. Attorneys retain their jobs as a formal matter across administrations was the origin of the controversy for George W. Bush firing U.S. Attorneys in 2005. This document from the Bush White House in 2001 confirms that U.S. Attorneys continue to hold office after the change of administrations.

Thus, if Attorney General Lynch appointed a special prosecutor with a directive to investigate the Russian hacks, the Trump campaign’s contacts with Russian officials and possible implication in hacking, extortion, and quid pro quo deals, and/or the Emoluments clause, the only way to get rid of this special prosecutor would be if the new Attorney General can establish a case of “good cause,” a limited list of unprofessional behavior, not merely a difference of opinion or priority. But if Lynch appoints an independent, trustworthy lawyer, perhaps Trump would understand the benefit of having an independent investigation into his administration and also of the intelligence agencies (which he believes are maligning him) for signs of their illegal leaking or even manufacturing claims.

Should President Obama and Attorney General Lynch go down this unprecedented road? I am honestly not sure. But I suggest that it is worth discussing for the last eight days it would be possible. Whether or not it is wise, such a move seems to be legally permissible and would be a way to navigate the uncharted legal territory we are confronting in these very unusual times.