Trump hotel Trump International Hotel in Washington, D.C. Photo by Michael A. Scarcella/NLJ

Lawyers representing President Donald Trump's hotel in downtown Washington this week lost their bid to dismiss claims from a group of District of Columbia residents, including a retired federal judge, that Trump's alleged poor character and fitness should bar the renewal of the venue's city liquor license.

The hotel's lawyers had argued the D.C. residents should not be allowed to question the character of Trump as only one of the names appearing on the alcohol license on his hotel just blocks from the White House. Five members of the Alcoholic Beverage Control Board rejected the argument in an order dated June 12.

“The board has consistently held that 'the mere creation of a corporate entity does not shield the individuals holding an interest in a corporation or limited liability company from having their records as owners scrutinized by the board,'” the panel said in its order, quoting from an earlier board decision.

Character and fitness is one of the requirements a liquor-license holder must show before the board grants any renewal. The D.C. residents, including Henry Kennedy, who retired from the federal bench in 2011 after 14 years of service there, contend Trump lacks good character. They base their allegations on various Trump statements and his behavior, which they argue negatively affects peace, order and pedestrian safety.

“The ruling is a victory for the rule of law. The board correctly rejected Trump's attempt to silence the public and to be held above the law,” Joshua Levy, a lawyer for the license protesters, said in a statement Friday. “In the District, no one is above the law.”

Levy, a partner at Washington's Cunningham Levy Muse, formerly was a counsel to the U.S. Senate Committee on Homeland Security and Government Affairs. He practiced for more than a decade in the litigation and white-collar groups at Arnold & Porter and Stein Mitchell Beato & Missner, the firm from which Pat Cipollone departed last year to serve as Trump's White House counsel.

Stephen O'Brien, a commercial litigator and partner at Washington's Mallios & O'Brien who represented the Trump hotel, was not reached for comment Friday. O'Brien is also of counsel at Odin Feldman Pittleman in Fairfax, Virginia.

In his motion to dismiss, O'Brien had argued the “general public is not empowered to participate in litigation before the board on the character issue. If it were otherwise, every license application, new or renewal, easily could disintegrate into a popularity contest.”

Alan Garten, general counsel to the Trump Organization, told ABC News last year that the challenge to the hotel's liquor license “is not about the neighborhood, not about the common good and certainly not about the law. This is politics at its worst and an obvious effort to misuse the power of government to advance a political agenda.”

The Alcohol Beverage Control Board stressed that its decision was procedural and not a determination on the merits of the dispute. Lawyers for the hotel will still be allowed to contest whether the residents have standing to press their opposition to the renewal of the liquor license.

Trump's hotel in Washington, where administration officials occasionally dine, and where foreign leaders sometimes rent rooms, is the centerpiece of ongoing litigation about conflicts of interest lodged against the president. Several cases contend Trump is violating the Constitution's ban on accepting gifts or payments from foreign states. One of Kennedy's former colleagues on the trial bench, Emmet Sullivan, last month refused to dismiss a suit brought by 200 Democratic lawmakers.

 

The D.C. alcohol board's order is posted below:

 

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