Trump International Hotel in Washington, D.C./Photo by Diego M. Radzinschi/ALM

The U.S. Court of Appeals for the D.C. Circuit has rejected a lawsuit from a restaurant challenging President Donald Trump's ownership of his Washington, D.C., hotel under a local competition rule.

Cork Wine Bar initially sued Trump in D.C. Superior Court, arguing the president's ownership of his hotel while he was in office violated the city's fair competition rule because consumers may go to the property to try and curry favor with the Trump administration.

Trump's lawyers with Morgan, Lewis & Bockius had the case moved to D.C. federal court, citing Trump's status as a federal officer. U.S. District Judge Richard Leon dismissed the case in November 2018, finding the restaurant failed to state a claim against the president.

In Friday's ruling, the three-judge panel for the D.C. Circuit—Judges Merrick Garland, Thomas Griffith and Stephen Williams—backed Leon's opinion, finding the restaurant "makes no meaningful attempt to square its unfair-competition claim with District law."

But in doing so, the judges avoided making concrete rulings on Trump's claims of presidential immunity, or what kinds of local regulations he should be subject to while holding office.

"Given Cork's failure to cite any contrary precedent, we see no reason to conclude that District common law recognizes anything like Cork's unfair-competition claim," Griffith wrote in the court's opinion. He pointed to Cork attorney Alan Morrison's concession during oral arguments that there are no other cases that rely on a similar claim of unfair competition.

"The gravamen of Cork's complaint is that so long as the President retains a stake in the Hotel, Cork cannot fairly compete, because of the 'perception' that Hotel patrons will receive favorable treatment from the Trump Administration," Griffith wrote. "Although Cork suggests in passing that President Trump and the Hotel are 'impair[ing]' competition and 'interfer[ing] with access' to its business, its claim bears little resemblance to the examples listed in Ray and B & W Management, and Cork cites no case showing that the allegations here fall into those categories of unfair competition."

Cork Wine Bar was represented by a team of attorneys, including national security lawyers Bradley Moss and Mark Zaid. Morrison, a George Washington University law professor, argued the case before the D.C. Circuit in November.

The restaurant's legal team also argued the case was improperly moved to federal court in the first place, asking it be remanded to the local court instead. 

But the judges sided with Trump's argument that the Constitution's Supremacy Clause means the District "may not impose legal conditions on the lawful performance of his presidential duties," finding that if a state court embraced Cork's argument, it "might impede federal officers."

"The Supremacy Clause might bar a state-law tort claim that applies only to federal officers or holds that ordinarily acceptable behavior—here, running a business—triggers liability when undertaken by a federal officer," Griffith wrote.

However, the panel notably declined to rule on the "merits" of Trump's argument, only finding it "colorable." And it entirely avoided ruling on Trump's claim of presidential immunity from such legal challenges.

In a statement, the wine bar's attorneys acknowledged that its "legal challenge may be concluded," but maintained that "the operation of a for-profit hotel by an elected leader is plainly the type of corruption that the rule of law should prevent."

"President Trump has intentionally financially profited from serving as the elected leader of our country for his own self interests. This decision does not negate that such actions are ethically unacceptable," the statement reads.

Friday's ruling is the latest blow to those seeking to use the courts to hold Trump to account for profiting from private properties while holding office. The D.C. Circuit earlier this month also rejected Democrats' lawsuit alleging Trump was violating the Constitution's Emoluments Clause through his D.C. hotel.

A similar lawsuit brought forward by the attorneys general for D.C. and Maryland is currently awaiting an en banc ruling from the U.S. Court of Appeals for the Fourth Circuit.

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