D.C. Wine Bar Links Unfair Competition, Trump in Court

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By Liz Crampton

A Washington D.C. wine bar is making creative use of a common law to argue that President Donald Trump and the Trump International Hotel have an unfair advantage in attracting business from foreign dignitaries, political leaders and other organizations. ( K&D LLC t/a Cork v. Trump Old Post Office LLC and Donald J. Trump, D.C. Superior Court, docket number unavailable, 3/9/17).

The March 9 lawsuit makes arguments about unfair trade practices and the presidency that could explore new questions about the competitive business value of an elected office.

The plaintiff, Cork Wine Bar, said that executives or advocates looking to build a rapport with the new administration will frequent the Trump bar as part of their efforts to build a business relationship. Trump’s hotel is located less than a mile from the White House.

Cork Wine Bar isn’t seeking monetary damages. Instead, the plaintiffs, represented by four D.C. attorneys, want Trump to resolve the alleged competition problem by divesting from or closing the business.

One of the attorneys representing the plaintiffs co-founded Public Citizen Litigation Group with consumer advocate Ralph Nader in 1972. He is currently the Associate Dean for Public Interest and Public Service at George Washington University Law School.

Alan Garten, executive vice president and chief legal officer for the Trump Organization, said in statement provided to Bloomberg BNA that the suit is “a wild publicity stunt completely lacking in legal merit.”

‘Exploitation’ of Trump Presidency

In its lawsuit, the plaintiff also claims that the hotel’s “exploitation” of Trump’s presidency violates terms of its lease with the U.S. General Services Administration, which owns the underlying property. The suit was filed in the Superior Court of the District of Columbia.

“There’s not a ton of precedent in this type of situation, but that’s because we’ve never had a case like this,” Mark Zaid, co-counsel for the wine bar, told Bloomberg BNA. Zaid has his own firm. Typically, cases concerning unfair competition in common law involve two businesses where one is disparaging another, he said.

The lawsuit also suggests that Trump could resign as president to resolve the complaint. “The president has to make a decision,” Zaid said. “Does he want to be President of the United States or does he want to be a local D.C. restaurant owner?”

Questions About Conflicts

Asked about the lawsuit in his daily briefing with reporters, White House Press Secretary Sean Spicer said Trump has “made it very clear he doesn’t have conflicts,” even if “your name is on certain things.”

Before Trump took office, he held a press conference at Trump Tower in New York and declared he would continue ownership of his business but would transfer control to his two oldest sons. Trump said he would resign from all positions and move his assets into a trust to ensure that as president he would not make decisions that would benefit him personally.

Zaid believes that promise fell short because Trump is still profiting from the trust. He just doesn’t know what decisions are being made. “It’s unlike any trust that’s ever been ethically acceptable before,” he added.

Since the property’s opening last September, the lawsuit says foreign dignitaries have “flocked” to the hotel. It cites as an example an incident when nearly 100 diplomats partied at one of the hotel’s ballrooms one week after the election.

The lawsuit uses comments from an Asian diplomat as evidence, who told the Washington Post in November, “Why wouldn’t I stay at his hotel blocks from the White House, so I can tell the new president, ‘I love your new hotel!’ Isn’t it rude to come to his city and say, ‘I am staying at your competitor?’”

An unrelated consequence of the legal action could be that Trump would have to release his tax returns, Zaid said.

“It’s not a goal, but it is a prospect,” Zaid said. “If they seek to challenge us on some of the facts, that could absolutely lead to discovery of his tax returns and we would welcome it.”

To contact the reporter on this story: Liz Crampton in Washington at lcrampton@bna.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bna.com

For More Information

A copy of the lawsuit can be found here.

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