President Donald Trump. Courtesy photo

The U.S. Court of Appeals for the D.C. Circuit has ruled in favor of Democrats seeking President Donald Trump's private financial records, handing another legal blow to the president and fueling the U.S. House's impeachment inquiry.

In a 2-1 ruling, the three-judge panel upheld the Democratic subpoena for Trump's records from his private accounting firm Mazars. Judges David Tatel and Patricia Millett ruled to uphold the subpoena, while Judge Neomi Rao issued a dissenting opinion.

The ruling tees up a potential appeal from the president's attorneys at Consovoy McCarthy to the Supreme Court, which would force the justices to weigh in for the first time on the subpoena battles between House Democrats and the president. The attorneys may also seek an en banc ruling from the D.C. Circuit, further delaying the case.

In the majority opinion, Tatel dismissed Trump's arguments that allowing the president's finances to be disclosed to Congress would create an undue burden on the president, and prevent him from fulfilling his duties.

"To accept the Trump Plaintiffs' suggestion that Congress may impose no disclosure requirements whatsoever on the President—or, put another way, that the challenged subpoena could result in no valid legislation—would be to return to an 'archaic view of the separation of powers' that 'requir[es] three airtight departments of government,'" the opinion states. "That is not the law."

"In the end, laws requiring disclosure exclude precisely zero individuals from running for or serving as President; regardless of their financial holdings, all constitutionally eligible candidates may apply," Tatel continued.

In her dissenting opinion, Rao wrote that upholding the subpoena "for legislative purposes would turn Congress into a roving inquisition over a co-equal branch of government." She argued that because impeachment wasn't invoked in issuing the subpoena, the committee should not be allowed to investigate the president for impeachable offenses.

But Tatel took a swipe at the dissenting opinion, writing that it "would reorder the very structure of the Constitution."

"Throughout history, the Constitution has left to Congress the judgment whether to commence the impeachment process. But the dissent's approach would not even allow Congress to make the quintessentially legislative judgment that some concerns about potential misconduct or illegality are better addressed through oversight and legislation than impeachment," Tatel argued.

"Worse still, the dissent's novel approach would now impose upon the courts the job of ordering the cessation of the legislative function and putting Congress to the Hobson's Choice of impeachment or nothing."

The decision was handed down as House Democrats swiftly carry out their impeachment inquiry. While the investigation currently focuses on whether Trump improperly withheld military aid from Ukraine as he pressured the country to investigate former Vice President Joe Biden and his family, Speaker Nancy Pelosi said all potentially impeachable offenses will be considered.

House Oversight and Reform Committee Chairman Elijah Cummings, D-Maryland, first issued the subpoena for financial records earlier this year, spurring the lawsuit from Trump—in his capacity as a private citizen—to stop Mazars from handing them over to Congress.

D.C. District Judge Amit Mehta quickly ruled in favor of upholding the subpoena, a decision that was appealed by the president's attorneys to the D.C. Circuit.

Trump attorney William Consovoy argued before the panel in July that the subpoena would create an additional burden for the president, and raised separation-of-power issues. He also claimed that the request served as a form of law enforcement.

House general counsel Douglas Letter dismissed those claims, arguing that the House has a long-standing right to investigate the president, as affirmed by the U.S. Supreme Court. He said that the subpoena also wasn't a matter of separation of powers, as it's directed to Trump's accounting firm and not the president himself.

The panel signaled that they were leaning toward adopting Letter's arguments during the oral arguments held on July 12.

The Justice Department also weighed in on the legal battles for the president's records for the first time in the Mazars case, albeit not until the judges asked the government for its stance.

In a brief filed in early August, DOJ attorneys said that the court should rule against the subpoena. Siding with Trump, they argued that it could be a form of "harassment," and that the House had to specifically state the purpose for the requested information.

Letter hit back in a fiery filing days later, claiming that the Justice Department's arguments were "fabricated out of whole cloth."

House Democrats have pointed to the ongoing court cases as crucial as they decide whether to formally launch impeachment proceedings against Trump.

A panel on the U.S. Court of Appeals for the Second Circuit also heard arguments in August over a congressional subpoena for Trump's records from Deutsche Bank and Capital One. U.S. District Judge Edgardo Ramos for the Southern District of New York ruled in favor of the subpoena earlier this year.

Read the ruling:

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