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

The U.S. Court of Appeals for the Second Circuit on Friday revived a lawsuit alleging President Donald Trump is violating the domestic and foreign emoluments clauses of the Constitution, giving the case a second shot in the Southern District of New York.

The panel ruled 2-1 to toss out a district court's ruling dismissing the lawsuit and sent it back for further proceedings.

"We conclude that the district court did not apply the law correctly in finding that it lacked jurisdiction to decide the case," the majority opinion reads.

This puts a lawsuit over the president's profits from his private businesses back in action, and offers another chance for the details of Trump's businesses to be revealed in court.

The lawsuit was filed by Citizens for Responsibility and Ethics in Washington, as well as private groups alleging harm from Trump's violation of the emoluments clause.

CREW celebrated the ruling in a tweet shortly after the opinion was released, promising "SO MUCH MORE TO COME."

Judge Pierre Leval of the Court of Appeals for the Second Circuit wrote in the majority opinion that the facts alleged in the lawsuit "together with those acknowledged by the President, support the inference that the revenues of the Trump establishments are substantially (or are convertible into) personal revenues of the President."

Trump handed control of his private businesses over to his adult sons upon taking office, conflicting with the advice of ethics experts who recommended the president fully divest from the businesses.

Justice Department attorneys argued that the claims were speculative and that the plaintiffs lacked standing to bring forward the complaint. They also argued that the clauses were "intended to guard against the corruption of and foreign influence on federal officials and to ensure the independence of the President," a topic the plaintiffs had no interests in.

U.S. District Judge George Daniels of the Southern District of New York agreed in 2017 and dismissed the case.

But on appeal, Leval wrote that the plaintiffs were able to allege injury and show that Trump may be profiting from foreign and domestic officials using his businesses. Leval said that was enough to allow the case to proceed.

"The complaint adequately pleads a competitive injury of lost patronage directly traceable to the fact that the President's allegedly illegal conduct induces government patrons of the hospitality industry in Washington, D.C. and New York City to patronize Trump establishments in preference to Plaintiffs' establishments," he wrote.

The opinion also addressed a ruling by the U.S. Court of Appeals for the Fourth Circuit that shut down another emoluments lawsuit against Trump, brought forward by the attorneys general for the state of Maryland and D.C.

In an opinion issued earlier this year, the Fourth Circuit panel suggested that the lawsuit was politically motivated, questioning why the attorneys general "came to the court for relief in the first place."

Leval wrote that while "it is certainly possible that these lawsuits are fueled in part by political motivations, we do not understand the significance of that fact."

"Whether a lawsuit has political motivations is irrelevant" to the standing issues, he added.

The circuit judges further rejected the district court's ruling that Congress is the only body that can determine whether Trump violated the emoluments clause.

"The federal courts have the responsibility to resolve 'Cases and Controversies' arising under the Constitution and laws of the United States. That responsibility entails finding the facts and interpreting the Constitution and laws," the opinion reads. "It is not affected by the Constitution's grant of authority to Congress to authorize the President to receive emoluments where Congress has not exercised that authority."

Judge Christopher Droney joined Leval on his opinion.

In a dissent, Judge John Walker wrote that he would have upheld the district court's finding that the groups lacked standing to bring forward the claims.

Writing that the plaintiffs are "invoking constitutional provisions never directly litigated in the 230‐year history of our Republic prior to the Trump presidency," Walker said there's nothing in the emoluments clauses that address competition among businesses, as charged in the complaint.

And he said that the case "is deeply political and thus finds itself in an area where federal courts ought to tread lightly."

"President Trump was democratically elected by the American people—and he was elected with his business holdings and brand prominence in full view," Walker wrote. "What's more, it is evident from the text of the Emoluments Clauses that they pertain to questions of separation of powers and, in particular, the relationship between the President and the Congress."

"Whether the courts should properly play any role pertaining to that relationship in the context of the Clauses will have to be determined in the future," he continued.

Read the ruling:

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