Southern District of New York Daniel Patrick Moynihan U.S. Courthouse at 500 Pearl Street

Lawyers for President Donald Trump and the New York County District Attorney's Office walked out of a courtroom in the Southern District of New York on Wednesday morning after a hearing that offered little resolution to their subpoena impasse, as U.S. Senior District Judge Victor Marrero urged them to work out their differences.

The parties went to the hearing after briefing their positions on the validity of a contested grand jury subpoena, with Manhattan District Attorney Cyrus Vance Jr. insisting on compliance and Trump lawyers saying there is no justification for demanding his tax documents.

Subpoenas filed by the DA's office in August sought eight years of Trump's tax returns and assorted other financial information related to the president, his businesses and his associates. Trump sued his accounting firm Mazars USA, which was the recipient of the tax return subpoena, and Vance last week, arguing that the subpoena is a politically motivated attack that runs afoul of constitutional standards as it could impair the president's ability to perform his official duties.

Lawyers from the DA's office replied that they were seeking documents as part of ordinary grand jury activities that may or may not ever lead to criminal indictments.

Late Tuesday, hours before the hearing in Marrero's courtroom, U.S. Attorney for the Southern District of New York Geoffrey Berman filed his first statement in the matter. Berman said he supported a temporary restraining order that would give his office time to consider the issues and whether to get involved.

Marrero said in court Wednesday that Berman's office should make its decision by Monday and file any documents by Oct. 2. He stayed enforcement of the Mazars subpoena until 5 p.m. Thursday, telling representatives for Vance and Trump to talk before then and see if some documents requested by the subpoena can be turned over without further adjudication.

"Go home, sober up, decompress and see if you can find a way to accommodate concerns of both sides," Marrero said.

Marrero asked them to send a joint letter by 4 p.m. Thursday, explaining whether they've agreed on how to proceed after the stay ends and before the judge issues a decision.

Carey Dunne, general counsel to the Manhattan DA's office, told Marrero he was worried Trump's lawyers would refuse to produce anything other than the most routine correspondence. He also objected to the fact that all these proceedings are taking place in federal court and not state court.

William Consovoy of Consovoy McCarthy, who is representing the president, told Marrero that the DA's Mazars subpoena was worryingly similar to a subpoena for Trump's tax returns filed by the U.S. House of Representatives.

The House subpoena was publicly available, Assistant District Attorney Solomon Shinerock replied. He said he wanted to save Mazars employees additional labor as they responded to the subpoenas, so he submitted one that was substantially similar. He emphasized that he has had no contact with the House and the two investigations are not related.

Further stays give the president and his lawyers what they want, which is a delay until statutes of limitations have run out and the president has left office, rendering questions of immunity irrelevant, Dunne said.

Marrero asked whether the grand jury is "sitting on its hands" without the subpoenaed documents, and Dunne and Shinerock acknowledged there is some other work it could do.

The Manhattan district attorney's office has argued that the subpoenaed documents should be delivered while the questions raised by Trump's legal team are adjudicated.They would be confidential to the grand jury, they argued, so the risk of harm from release is minimal.

Consovoy questioned the secrecy of the grand jury proceedings, noting that there could be leaks or New York State could change its laws to make the documents public. He said the DA's office has also not addressed whether it would comply with a Congressional subpoena for the documents.

Dunne said the idea that grand jury proceedings in New York would suddenly become public is an "extravagant claim."

"The State of New York could be annexed by Ukraine, and that could invalidate grand jury secrecy," he said. "It's all fanciful."

Consovoy noted that state legislators have made legislative moves to get Trump's tax returns before.

Mazars is taking no position on the legal issues raised by Trump and his attorneys, according to a letter filed by attorney Jerry Bernstein of Blank Rome. Bernstein and his colleagues appeared in court Wednesday but did not speak.

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