The Corner

Law & the Courts

Re: Federal Appeals Court Rejects President’s Challenge to Manhattan DA’s Subpoena for His Private Financial Records

President Trump stands on the Truman Balcony as he returns to the White House in Washington, D.C., October 5, 2020. (Erin Scott/Reuters)

As Andy McCarthy discusses, the United States Court of Appeals for the Second Circuit this morning, in Trump v. Vance, allowed a state grand-jury subpoena issued by the New York district attorney to go forward against Donald Trump. The news urgency of this case has deteriorated somewhat since it went to the Supreme Court in July, now that the New York Times has published information from Trump’s tax returns, and gotten whatever little political mileage there was to be had from them. The subpoena, however, seeks much more extensive financial information from Trump’s accountants than just his tax returns, extending deep into the finances of various Trump-related organizations, including the heart of his business empire. I defer to Andy’s analysis of where this points as far as the investigation is concerned — apparently, much further into the tax and finances of the Trump Organization than just hush-money payments made through Michael Cohen — but let me offer a few thoughts on the decision, what it permits, and why the Supreme Court is unlikely to step in again.

The legal problem Trump faced in challenging the subpoena was that he had to explain to the court why the materials subpoenaed were not relevant to the subject of the grand-jury investigation — but because grand juries work in secret, he may not entirely know, and certainly cannot prove, what it is that the grand jury is investigating. This may seem a Catch-22 that is unfair to Trump, but it is no more unfair than the situation faced by any citizen under grand-jury investigation. Grand juries are not designed to be fair, they are designed to investigate; fairness has to await your day in court.

The Second Circuit did not say what is under investigation, because it was ruling on the sufficiency of Trump’s federal complaint, and that complaint “never actually alleges that the Michael Cohen payments are the sole object of the investigation.” You may draw your own conclusions as to whether that is because Trump and his lawyers do not know, or because they know full well that more is being investigated. They may know quite a bit by now (in a parallel investigation by the New York attorney general, Eric Trump just sat for a civil deposition). As the court observed: “We reject the President’s argument that the scope of the investigation is largely defined by the scope of the Trump Organization subpoena, which was issued a month before the Mazars subpoena and which explicitly focused on the Michael Cohen payments. It is far from reasonable to infer that a single subpoena would define the entire scope of a grand jury’s investigation, particularly in complex financial investigations.”

The Supreme Court’s dilemma was that allowing presidents to face state-court subpoenas could subject them to harassment by political foes, but immunizing them from subpoenas would potentially allow a president to be above the law even for ordinary crimes committed before taking office. The Second Circuit’s disposition of the complaint illustrates the difficulty of gathering enough facts in a grand-jury proceeding to show that a partisan district attorney is driven by partisanship:

To be sure, if the SAC plausibly alleged that the District Attorney sought to obtain the President’s tax returns for partisan political purposes, that would undoubtedly state a claim of bad faith. But as counsel to the President acknowledged at oral argument, the SAC nowhere alleges that the District Attorney was himself motivated by partisan considerations. The motivations of unspecified “Democrats” cannot be imputed to the District Attorney without specific factual allegations.

On the other hand, the court found that complying with the subpoena will not distract Trump unduly from his job — a conclusion that could be quite different if he was subpoenaed to testify (as could happen in a civil investigation, or if he was a grand jury witness; grand-jury targets cannot be compelled to testify against themselves):

The direction of the subpoena to the President’s accountant, rather than to the President himself, does not prevent the President from objecting to the subpoena. On the other hand, it relieves the President of the burden of supervising and being responsible for compliance, thus freeing the President from obligations that might otherwise interfere with his duties of office.

The Supreme Court famously ruled in Clinton v. Jones, in 1997, that sitting for a deposition in the Paula Jones case was “highly unlikely to occupy any substantial amount of [Bill Clinton’s] time.” Because Clinton lied under oath in that deposition, it ended up consuming over a year of his presidency and leading to his impeachment. Courts will, and should, be more circumspect about that in the future.

The Supreme Court took the Vance case and the Mazars case (involving a similar subpoena by a House committee) to answer the major legal questions about the standards to apply in these cases. By contrast, the Second Circuit’s decision is merely an application of the decision to the facts, the sort of thing the Supreme Court is typically less interested in doing (it could have ruled on the Vance facts without remanding, had it believed that the importance of a subpoena to the president demanded it). Moreover, at this point, if Trump petitions for the Supreme Court to review this decision, the court would likely not even rule on that request until after the election. If Trump loses, there will be far less national significance to an investigation that will mostly be resolved after he has left office. So, even leaving aside the institutional and political reasons why the justices may not want to get involved in another Trump-investigation case, it seems doubtful that we will see anything else from the Supreme Court on this subpoena.

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