Trump Claims Immunity From Lawsuit Against Hotel

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By Kenneth P. Doyle

Forcing President Donald Trump to give up his ownership interest in the Trump International Hotel in Washington would result in an “enormous personal financial loss for the President,” Trump’s lawyers said in a new court motion arguing that a lawsuit against the president and his hotel should be dismissed ( K&D LLC v. Trump Old Post Office LLC, D.D.C., Civil No. 17-731, motion filed 5/10/17).

The lawsuit in the federal district court in Washington was filed by a business in the city that competes with the Trump hotel. The plaintiff, Cork Wine Bar, and its owner, Khalid Pitts, allege unfair competition because they say the Trump hotel has diverted hospitality business from the Cork’s bar and restaurant.

Trump’s lawyers told Judge Richard Leon of the U.S. District Court for the District of Columbia in a May 10 motion that the case against Trump and his company operating the hotel, Trump Old Post Office LLC, should be dismissed because Trump, as president, is immune from such litigation.

“Supreme Court precedent establishes that the President is immune from claims based on the President’s Office,” said the motion filed by former White House Counsel Fred F. Fielding and other lawyers with the firm Morgan, Lewis & Bockius. The immunity doctrine applies because it is Trump’s position as president that allegedly gives Trump’s hotel an unfair advantage, the motion said.

Suit: Patrons Curry Favor With President

The lawsuit alleges that customers are being attracted to dine, drink and hold events at the Trump hotel in order to curry favor with the president and seek favorable treatment by his administration. It also charges Trump’s ownership violates a lease the hotel has with the federal government allowing it to operate in the government-owned Old Post Office Building on Pennsylvania Avenue. The suit calls for the court to order that the hotel be sold or closed or that Trump resign as president if he continues to have a stake in the hotel.

The lawsuit was moved last month to the federal court from D.C. Superior Court. Alan Morrison, a lawyer for the Cork Wine Bar and Pitts who is a law professor at The George Washington University in Washington, has said his side would seek to bring the case back to D.C. Superior Court. He said the case was improperly moved to federal court, and this could lead to procedural problems at the appellate stage.

The lawsuit alleges that the Cork Wine Bar is losing business because more Washington customers are patronizing Trump’s hotel. Diplomats, business leaders and lobbyists are being drawn to the Trump hotel, hurting other establishments in the city, according to the suit.

The suit also challenges the contract by which the General Services Administration leases the Old Post Office Building to the Trump hotel. A GSA contracting officer has ruled that Trump’s interest in the hotel didn’t violate the contract, which bars a lease benefiting a government official. The hotel company is primarily owned by a trust that benefits Trump, but the GSA contracting officer said the lease still was valid because the trust said it wouldn’t pay Trump any proceeds from the hotel while he is president.

Emoluments Lawsuit

A separate lawsuit in federal court in New York alleges that Trump’s ownership of numerous properties and businesses violates the emoluments clauses of the U.S. Constitution ( Citizens for Responsibility and Ethics in Washington v. Trump, S.D.N.Y., Civil No 17-458, motion filed 05/10/17). The suit, filed by the liberal nonprofit watchdog group Citizens for Responsibility and Ethics in Washington (CREW) argues that Trump is prohibited by the Constitution from accepting outside payments from foreign and domestic sources beyond his government salary.

CREW announced May 10 that New York hotel and restaurant owner Eric Goode had joined its emoluments lawsuit against Trump. Goode is an owner of the Maritime Hotel, the Bowery Hotel, the Ludlow Hotel and the Jane Hotel, as well as restaurants including the Park, Waverly Inn and Gemma.

Goode’s hotels and restaurants have attracted multiple foreign government clients and events, and have also hosted U.S. government officials and state officials traveling on official business, thus paying with government funds, CREW said in a statement. The watchdog group said Goode’s hotels and restaurants compete with Trump’s hotels and restaurants, even though Trump is prohibited from this business by the Constitution’s emoluments clauses.

Goode joins Restaurant Opportunities Centers (ROC) United, which consists of more than 25,000 restaurant workers and restaurants, and Washington-based events booker Jill Phaneuf as additional plaintiffs on CREW’s emoluments lawsuit in the U.S. District Court for the Southern District of New York.

Lawyers for Trump have until June 9 to respond to the CREW lawsuit. Trump is represented in that case by government lawyers for the Justice Department’s Civil Division, in contrast to the Washington case where Trump and the hotel are represented by Morgan, Lewis & Bockius.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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