977 F.3d 198
2d Cir.2020Background
- The Manhattan District Attorney opened a grand-jury investigation into Trump Organization business transactions in 2018.
- On Aug. 1, 2019 a grand-jury subpoena to the Trump Organization sought documents relating to certain payments and Michael Cohen’s work; the Trump Organization produced documents but resisted producing tax returns.
- On Aug. 29, 2019 the grand jury subpoenaed Mazars USA (Trump’s accounting firm) for broad financial records, including tax returns dating back to 2011.
- President Trump filed a federal §1983 suit (after the Supreme Court rejected absolute presidential immunity) alleging the Mazars subpoena was overbroad and issued in bad faith.
- The district court dismissed the second amended complaint (SAC) under Rule 12(b)(6) for failure to state a plausible claim; the Second Circuit affirmed.
- The court provisionally stayed enforcement of the Mazars subpoena pending any interim Supreme Court relief under the parties’ agreed briefing schedule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Overbreadth of subpoena | Subpoena reaches many entities, many document types, and a nine-year period that exceed the grand jury’s purported focus on 2016 Michael Cohen payments | Grand juries have broad investigatory reach; categories and timeframe are reasonably related to the investigation | Dismissed — Plaintiff failed to plausibly allege the investigation was limited to the Cohen payments or that requested categories had no conceivable relevance |
| Bad faith / retaliatory motive | Subpoena issued shortly after dispute over tax returns and mirrors political/ congressional interests; issued to third party to circumvent President | Presumed validity of grand-jury subpoenas; obvious alternative explanations (e.g., clarify scope, efficiency) defeat inference of malice | Dismissed — allegations do not plausibly show malice or intent to harass |
| Similarity to Congressional subpoena | Near-identity to House Oversight subpoena shows improper motive or irrelevant purpose | Overlap in documents can be coincidental or legitimately useful to different investigations; copying for efficiency not evidence of bad faith | Dismissed — similarity alone does not render the subpoena overbroad or malicious |
| Pleading standard & presumption of validity | President argues he need not overcome presumption at pleading stage | Court requires plausible factual allegations under Twombly/Iqbal; grand-jury subpoenas carry a presumption of validity that informs plausibility | Dismissed — SAC lacked nonconclusory facts that would overcome the presumption; Iqbal/Twombly standard applied |
Key Cases Cited
- R. Enter. v. United States, 498 U.S. 292 (1991) (grand jury has broad investigatory reach; subpoenas presumed valid)
- Trump v. Vance, 140 S. Ct. 2412 (2020) (no absolute presidential immunity from state grand-jury subpoenas; presidents may raise ordinary defenses such as bad faith and overbreadth)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility required at motion to dismiss)
- Virag v. Hynes, 430 N.E.2d 1249 (N.Y. 1981) (grand-jury subpoena overbroad only where materials have no relation to the investigation)
- In re Grand Jury Proceeding, 971 F.3d 40 (2d Cir. 2020) (grand-jury subpoena unreasonable only if category has no reasonable possibility of yielding relevant information)
- United States v. Nixon, 418 U.S. 683 (1974) (heightened scrutiny for subpoena challenges involving high executive office)
- JK-15 v. United States (In re Grand Jury Subpoena), 828 F.3d 1083 (9th Cir. 2016) (acknowledged as a case quashing an overbroad subpoena; distinguished on facts)
- United States v. Morton Salt Co., 338 U.S. 632 (1950) (grand jury may investigate on mere suspicion)