Carl Nichols testifies before the Senate Judiciary Committee during his confirmation hearing to be U.S. district judge for the District of Columbia, on Aug. 22, 2018. Credit: Diego M. Radzinschi / ALM

A federal judge on Thursday temporarily barred New York officials from any effort to release President Donald Trump’s state tax returns to U.S. House Democrats while the state and lawyers for the president fight over whether the Washington trial court is the proper venue for the dispute.

U.S. District Judge Carl Nichols of the District of Columbia said this week that Trump’s lawsuit against New York and the House Ways and Means Committee presented a “conundrum.” House Democrats have not yet made the request that Trump is suing to block. Still, Nichols sympathized with the president’s concern that House Democrats could ask for the tax returns at any moment and New York could turn them over without any notice.

Nichols largely adopted a proposal that New York floated to him earlier in the week.

Lawyers for New York plan to argue that the Washington court lacks jurisdiction over it, requiring the case to be dismissed or at least moved to a federal court in New York. Under the court order issued Thursday, the prohibition on New York delivering Trump’s tax returns to the House will end a week after Nichols’ decision on the state’s motion to dismiss the president’s case. Nichols set a hearing for Aug. 29.

Nichols’ order late Thursday said New York must notify the court if the state does receive a request from the Ways and Means Committee for Trump’s tax returns.

Andrew Amer, a lawyer for New York, raised concerns this week that an order requiring notice could be perceived as a “waiver” of the state’s jurisdiction arguments. In his order Thursday, Nichols said New York must “promptly notify” him of any request from the House but he emphasized the state has “expressly preserved” its jurisdiction defense.

Douglas Letter, the House general counsel, had taken no position on New York’s proposal for handling the early stages of the case. In a joint filing with New York and Trump’s personal lawyer, William Consovoy, Letter argued that the House enjoys broad immunity that should shield it from the president’s lawsuit.

“We are pleased that the court has accepted our reasonable proposal for how to move forward in this premature lawsuit filed by President Trump. We look forward to continuing to make our case in court. This law is constitutional, and we will vigorously defend it,” Attorney General Letitia James said in a statement.

Trump sued the House Ways and Means Committee last month to prevent the panel from seeking his tax returns under the Trust Act, a New York law that allows the state finance department to provide those records to Congress. Consovoy has argued that the House lacks a valid legislative purpose for seeking Trump’s tax returns. He has also said the New York Legislature “enacted it to discriminate and retaliate against President Trump for his speech and politics,” in violation of his First Amendment rights.

A co-sponsor of the Trust Act, state Sen. Brad Hoylman, said in May that the bill was intended to give the U.S. Congress an additional oversight tool. “This is an important juncture in our history where we have a White House stonewalling Congress and preventing it from undertaking its oversight responsibility,” the Manhattan Democrat said.

Trump’s lawsuit is playing out against the backdrop of two other cases confronting the secrecy of his financial records. A pair of federal appeals courts are reviewing rulings, issued in trial courts, that upheld the ability of congressional committees to obtain records from Trump’s longtime lender, Deutsche Bank, and his accounting firm, Mazars USA. The House has also sued the Treasury Department over the administration’s refusal to turn over six years’ worth of Trump’s tax returns.

“I did not pick this fight, but I will not shirk it because it’s about something much bigger than tax forms,” Rep. Richard Neal, the Ways and Means Committee chairman, said in a Washington Post op-ed Wednesday. “This is not an exercise in political retribution: I am not willing to trade the reputation of the Ways and Means Committee for cheap political gains.”

Neal said his committee is considering legislation addressing how the IRS conducts mandatory audits of sitting presidents and vice presidents. “As part of our deliberations, we must review his tax information to better understand the audit program and propose any needed changes.”

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