John Roberts' Supreme Court Just Got Its First Trump Tax Returns Case
Trump's lawyers are challenging a Second Circuit case involving a New York grand jury subpoena against the president's accounting firm Mazars USA. The case is the first of several involving Trump's financial papers that reached the U.S. Supreme Court.
November 14, 2019 at 05:41 PM
8 minute read
The original version of this story was published on National Law Journal
The U.S. Supreme Court on Thursday was asked for the first time to wade into a clash over the secrecy of President Donald Trump's financial records, as his lawyers urged the justices to stop a Manhattan grand jury from acquiring eight years of his tax returns.
The petition, filed by Jay Sekulow, a personal lawyer for Trump, is likely the beginning of a series of Trump-related cases that are expected to reach the Supreme Court in the coming months. Indeed, a new federal appeals ruling in Washington late Wednesday—saying Trump's accounting firm must comply with a congressional subpoena—could land at the high court by next week.
In the petition, Sekulow and Consovoy McCarthy partner William Consovoy ask the justice if the subpoena violates Article II and the supremacy clause of the Constitution.
"For the first time in our nation's history, a local prosecutor has issued criminal process—this grand-jury subpoena—directed at a sitting President, as part of a criminal investigation into the President himself," Sekulow wrote in the petition. "Whether the Constitution permits an assertion of this kind of authority over the chief executive raises a momentous question of first impression about the scope of presidential immunity."
If the high court agrees to hear the petition or any of the Trump-related disputes, the justices and their decisions—arriving by June next year—will be thrust into the charged environment of a presidential campaign season. The cases are arriving at the Supreme Court as House Democrats begin public impeachment proceedings confronting Trump's alleged abuse of office.
Chief Justice John Roberts Jr. has long evinced a special concern for the public's respect for the institution of the Supreme Court, and cases that squarely focus on Trump's financial records—a centerpiece of Democrats' criticisms of the president—could be anathema to Roberts. The justices more broadly say they strive to avoid 5-4 rulings that divide along the political party of the president who appointed the justice.
Although only four votes are required for the justices to hear a petition, four justices are not likely to grant review unless they are reasonably sure there is a possible fifth vote to secure any desired outcome. Each of the five conservative justices worked in the executive branch before going on the bench, and at least two of them—Roberts and Justice Samuel Alito Jr.—are strong proponents of executive power. The court's newest member, Brett Kavanaugh, has suggested the landmark case U.S. v. Nixon—a check against the president's broad executive power—was wrongly decided.
In the most recent lower court ruling, two Trump-appointed judges on the U.S. Court of Appeals for the D.C. Circuit—Neomi Rao and Gregory Katsas—had urged their colleagues to review a panel decision, issued in October, that said Trump's longtime accounting firm Mazars USA must respond to a House subpoena for Trump's financial records. The D.C. Circuit's order upholding the subpoena goes into effect by next Wednesday.
Trump's lawyers on Thursday appealed a ruling by the U.S. Court of Appeals for the Second Circuit that upheld a New York state grand jury subpoena against Mazars and spurned Trump's contention that he enjoys immunity from investigation. Manhattan District Attorney Cy Vance is investigating hush-money payments paid to two women—who have claimed sexual relationships with Trump—in the run-up to the 2016 presidential election. Mazars, represented by a team from Blank Rome, has not taken a position on the grand jury subpoena.
"We have no occasion to decide today the precise contours and limitations of presidential immunity from prosecution, and we express no opinion on the applicability of any such immunity under circumstances not presented here," Second Circuit Chief Judge Robert Katzmann wrote for the panel. "Instead, after reviewing historical and legal precedent, we conclude only that presidential immunity does not bar the enforcement of a state grand jury subpoena directing a third party to produce non‐privileged material, even when the subject matter under investigation pertains to the president."
The justices now must decide whether to freeze the grand jury subpoena and ultimately whether the court either later this year or in 2020 will take up oral argument. Until now, disputes over Trump's financial records—which he has tried to shield from public view—have played out in trial and appellate courts.
The Supreme Court has several options for dealing with the petition from Trump's lawyers.
The least risky action for the court as an institution would be to deny reviewing the petition, without comment. That move would leave in place the appellate court decision that Trump's accounting firm must comply with a state grand jury subpoena for the president's personal and corporate tax returns.
In another scenario, a summary affirmance of the Second Circuit decision would signal the correctness of that court's reasoning. The Second Circuit's decision was narrow and did not confront the broader issue of presidential immunity. The appeals panel answered only whether a state grand jury subpoena can be enforced against a third party to produce a sitting president's financial records in a grand jury investigation. Trump himself was not subpoenaed.
Because the justices generally don't agree to hear a case just to uphold a lower court, any decision to grant review could signal the court sees some value in the Trump lawyers' arguments that a sitting president has absolute presidential immunity from criminal investigation. Taking on the immunity issue would trigger major tests of the scope of executive power, Supreme Court precedents directing presidents to produce evidence in civil and criminal investigations, and the independence of the Supreme Court itself.
In the D.C. Circuit case, Trump's lawyers recently teed up their likely challenge in the Supreme Court. Consovoy and former White House lawyer Stefan Passantino of Michael Best & Friedrich said in a court filing that "there is certainly a reasonable possibility that four justices will vote to grant certiorari."
Two other cases in Washington's trial court focus on Trump's tax returns. U.S. District Judge Carl Nichols is weighing a lawsuit Trump filed to stop House Democrats from being able to ask for copies of the president's New York state returns. Separately, U.S. District Judge Trevor McFadden, is weighing a subpoena House Democrats issued to the IRS and Treasury Department for copies of Trump's tax returns. Nichols and McFadden were both appointed by Trump.
Federal law requires the IRS to furnish those returns, but the Justice Department contends the House has no legitimate legislative purpose to make its demand. Lawyers for the House argue that U.S. representatives are broadly looking at whether and how to reform laws focused on presidential candidates and their financial information.
Trump was the first president in modern history to refuse to release copies of tax returns during the campaign. Trump cited an ongoing IRS review for his unwillingness to provide would-be voters a glimpse at his financial records. Tax experts said that, despite any federal review, nothing prohibited Trump from disclosing his tax returns.
In its ruling against Trump, the Second Circuit pointed out that Trump stands alone in his defiance to disclose his tax returns.
"We note that six presidents, dating back to President Carter, all voluntarily released their tax returns to the public," Katzmann wrote. "While we do not place dispositive weight on this fact, it reinforces our conclusion that the disclosure of personal financial information, standing alone, is unlikely to impair the president in performing the duties of his office."
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Divided DC Circuit Delivers Another Loss to Trump on Keeping tax Returns Secret
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