NY AG James Seeks Dismissal or Transfer of Trump Lawsuit to Block Release of State Tax Returns
Attorneys for James and state Tax Commissioner Michael Schmidt wrote in a motion to dismiss the lawsuit that the federal court in Washington, D.C. doesn’t have personal jurisdiction over them and wouldn’t be the right venue to litigate Trump’s claims.
August 09, 2019 at 12:36 PM
6 minute read
New York Attorney General Letitia James wants President Donald Trump’s lawsuit against her and another state official over the disclosure of his state tax returns to Congress to be thrown out or at the very least heard in federal court in Manhattan instead of Washington, D.C., attorneys for her office said in a new court filing Friday.
Attorneys for James and state Tax Commissioner Michael Schmidt wrote in a motion to dismiss the lawsuit that the federal court in Washington, D.C., doesn’t have personal jurisdiction over them and wouldn’t be the right venue to litigate Trump’s claims.
That’s because, as the state argued, the action that would spur Trump’s claims of alleged harm would happen in New York, where the decision would be made to disclose his state tax filings to Congress.
“Here, there is another district that would clearly be appropriate to hear this matter—the Southern District of New York,” the filing said. “The New York Defendants work and reside in New York, and the Commissioner will review returns, redact information, and respond to any requests made under the TRUST Act in New York.”
As such, the state argued that Trump’s attorneys had failed to establish the minimum contacts required to assert jurisdiction over James and Schmidt, and that the long-arm statute of the District of Columbia could not be applied in the case.
It’s the latest move in the litigation, which was brought by Trump last month to stop federal lawmakers from requesting copies of his state tax returns from officials in New York. A new law in the state, dubbed the TRUST Act, allows the chairpersons of three congressional committees to request those state filings from the state Department of Taxation and Finance.
The U.S. House Ways and Means Committee is one of the three that could use the state law to obtain Trump’s state tax filings. The committee, chaired by Rep. Richard Neal, D-Massachusetts, is also a target of the lawsuit but wasn’t involved in the motion filed by James on Friday.
The preferred outcome for James and Schmidt would be the dismissal of Trump’s lawsuit against them outright, leaving the House Ways and Means Committee as the lone defendant in the case. But attorneys for New York wrote in the motion Friday that if they’re not removed from the litigation, they want it, at the very least, moved to federal court in New York.
“In this action, a New York tax return filer seeks to challenge the constitutionality of a New York statute governing the treatment of New York tax information, and to enjoin New York officials from taking action under that New York statute,” the filing said. “This lawsuit plainly belongs in a New York court.”
Attorneys for New York also argued that, if the case isn’t dismissed or transferred, it could set a precedent that would diminish the independence of states.
“If the New York Defendants must defend against Plaintiff’s constitutional challenge to a New York tax-information sharing statute in a forum outside New York, then other States’ officials may soon be haled into forums outside of their States to defend against similar challenges to the enactment or enforcement of their statutes,” the filing said.
The lawsuit, when it was filed by Trump’s attorneys last month, was aimed at stopping the potential invocation of the statute by the Ways and Means Committee. The complaint argued that the committee wouldn’t legally be able to request Trump’s state tax returns from New York, despite the TRUST Act being signed into law by Gov. Andrew Cuomo in early July.
The law, according to its text, would only allow select members of Congress to request copies of Trump’s tax returns if they’re “related to, and in furtherance of, a legitimate task of the Congress.”
The lawsuit argued that federal lawmakers have no such purpose for requesting Trump’s state tax returns. Congress can’t regulate New York’s income taxes, the suit said, and state filings wouldn’t give federal lawmakers any information about federal taxes because the TRUST Act requires federal information be redacted.
Another major argument in the lawsuit claimed that the TRUST Act violates the First Amendment of the U.S. Constitution.
The suit pointed to several public statements by New York state officials, who have said the law was proposed to give Congress access to Trump’s state tax documents. The law does not allow federal lawmakers to review or discuss the contents of those filings in public; that can only happen behind closed doors.
But the complaint argued that Democratic New York state lawmakers intended for it to be used purely for political purposes by exposing Trump’s private tax information. That violates the First Amendment, the suit argued, because the law could be used to retaliate against Trump for his political affiliation.
An order issued last week by U.S. District Judge Carl Nichols of the District of Columbia barred Neal and the committee from taking advantage of the TRUST Act, at least for the time being.
Nichols adopted an idea from New York state’s attorneys, who proposed that state tax officials would hold off on disclosing any of Trump’s tax returns to Congress until after a decision is made on their motion to either dismiss the litigation or transfer it to federal court in Manhattan.
Nichols set an expedited briefing schedule, which began with the motion from New York on Friday. A response to that filing is expected from Trump’s attorneys later this month, with a hearing scheduled for Aug. 29 in Washington, D.C.
Trump is represented by William Consovoy and Patrick Strawbridge of Consovoy McCarthy. Neither attorney immediately returned a request for comment Friday afternoon.
Read the New York Attorney General’s filing here:
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