A federal appeals court in New York on Friday revived a lawsuit alleging that President Trump is illegally profiting from his hotels and restaurants in New York and Washington in violation of the Constitution’s anti-corruption, or emoluments, clauses.
In a two-to-one decision, a panel of judges for the United States Court of Appeals for the Second Circuit found that a lower court had wrongly dismissed the lawsuit accusing Mr. Trump of violating the Constitution’s bans on accepting financial benefits from foreign or state governments. The appeals court judge sent the lawsuit back to the lower court, ordering it be allowed to proceed.
The decision comes nearly two years after the lower court judge dismissed the lawsuit. The case is one of three that have been ping-ponging back and forth between district and appeals courts as judges struggle with the novel legal questions raised by Mr. Trump’s decision not to divorce himself from his business empire while in office.
Although Mr. Trump promised never to mix his personal financial interests with official business, he has repeatedly touted his properties since becoming president. He suggested recently that he should host the next summit of the Group of 7 world leaders at his luxury golf resort in southern Florida, describing the property as a “great place.”
In some ways, interactions between Mr. Trump’s political role and his businesses have become routine, with foreign leaders, lobbyists, Republican candidates, members of Congress, cabinet members and others with ties to the president routinely visiting his properties. In the past week, new details have emerged of stays by United States military personnel at Mr. Trump’s golf resort in Scotland.
The appeals court judges in New York noted that a different appellate panel for Court of Appeals for the Fourth Circuit had ruled the opposite way, dismissing a similar lawsuit brought by the state of Maryland and the District of Columbia. The plaintiffs in that case are seeking to appeal that dismissal to the full appeals court, based in Virginia.
Yet another case, brought by congressional Democrats, is headed to Court of Appeals for the District of Columbia Circuit.
In the New York case, the appellate judges ruled that the lower court judge, George B. Daniels, had dismissed the case too precipitously. By his standard, the judges said, no plaintiff would ever have the legal standing to sue the president for accepting financial benefits or emoluments from foreign governments without congressional approval.
They said Judge Daniels’s ruling was the equivalent of saying that “Congress alone shall have the authority to determine whether the president acts in violation of this clause” when in fact, the Constitution “says nothing like that.”
The judges also said Judge Daniels wrongly rejected as “wholly speculative” the plaintiffs’ complaint that they were losing business because state and foreign officials were switching to Trump-owned properties in hopes of winning the president’s favor.
“The district court demanded too much at the pleading stage,” the decision states. It was written by Pierre N. Leval, who was appointed by President Bill Clinton, and Christopher F. Droney, who was appointed by President Barack Obama.
John M. Walker Jr., who was appointed by President George Bush, dissented.
It was not immediately clear whether the Justice Department would appeal the panel’s ruling to the full appeals court.