Citizens for Responsibility and Ethics in Washington v. Trump, 939 F.3d 131

18-474-cv

Citizens for Responsibility and Ethics in Washington v. Trump

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, (Argued: October Decided: September 13, 2019) Docket No. ‐ _____________________________________

Citizens for Responsibility Ethics Washington, Restaurant Opportunities Centers United, Inc., Jill Phaneuf, Eric Goode, Plaintiffs ‐ Appellants Donald J. Trump, his official capacity United States America, Defendant Appellee . _____________________________________

Before:

JOHN M. WALKER, PIERRE N. LEVAL, CHRISTOPHER F. DRONEY, Circuit Judges

Plaintiffs, who own operate businesses hospitality industry, appeal dismissal their lawsuit United States District Court Southern District New York (George B. Daniels, J. ). district court dismissed Plaintiffs’ suit grounds Plaintiffs lack Article III standing, fall outside zone interests Emoluments Clauses, claims do present ripe case controversy within meaning III, case presents non justiciable “political question.” VACATED AND REMANDED.

Judge W ALKER dissents separate opinion.

DEEPAK GUPTA, Gupta Wessler PLLC, Washington, D.C. (Jonathan E. Taylor, Joshua Matz, and Daniel Townsend, Gupta Wessler PLLC, Washington, D.C.; Joseph M. Sellers, Daniel A. Small, Cohen Milstein Sellers & Toll PLLC, Washington, D.C.; Norman L. Eisen, Stuart C. McPhail, Adam J. Rappaport, Citizens for Responsibility Ethics Washington, Washington, D.C.; Laurence H. Tribe, Harvard Law School, Cambridge, MA, on brief), for Plaintiffs ‐ Appellants .

HASHIM M. MOOPPAN, Department Justice, Washington, D.C., (Chad A. Readler, Michael S. Raab, Megan Barbero, Department Justice, Washington, D.C., brief), for Defendant ‐ Appellee LEVAL, Circuit Judge:

Plaintiffs—Eric Goode, restaurateur hotelier, Restaurant Opportunities Center United (“ROC”), non partisan, member based organization restaurants restaurant workers—appeal judgment United States District Court for Southern District New York (Daniels, J.) dismissing complaint against Defendant Donald J. Trump, United States, lack subject matter jurisdiction. The complaint seeks declaratory and injunctive relief for President’s alleged violations Domestic and Foreign Emoluments Clauses United States Constitution. moved dismiss for lack subject matter jurisdiction pursuant Federal Rule Civil Procedure 12(b)(1), arguing Plaintiffs did standing sue. district court granted motion, concluding Plaintiffs lack Article III standing, fall outside zone interests Emoluments Clauses, their claims do present ripe case controversy within meaning Article III, and suit barred political question doctrine. For reasons below, we vacate judgment and remand for further proceedings.

A. BACKGROUND

Plaintiffs hospitality industry. Plaintiff Goode owns high ‐ end hotels, restaurants, event spaces New York City area. Plaintiff ROC counts among its members over establishments, including high end restaurants and event spaces New York City and Washington, D.C. The Plaintiff establishments cater foreign and domestic government clientele, and allege are direct competitors hospitality properties owned by President Washington D.C. and New York City.

The complaint alleges President Trump, operating through corporations, limited ‐ liability companies, limited partnerships, and other business structures, effectively sole owner restaurants, hotels, and event spaces, which patronized by foreign domestic clientele. President has announced that, since assuming office, he has turned over day day management his business empire his children established trust hold his business assets. However, he maintains sole ownership, receives business updates least quarterly, has ability obtain distributions trust any time. facts alleged Plaintiffs, together those acknowledged President, support inference revenues Trump establishments are substantially (or are convertible into) personal revenues President.

i. Plaintiffs’ Allegations

Stated generally, Plaintiffs allege they been and will injured foreign and domestic government entities patronize Washington, D.C. and New York hotels, restaurants, and event spaces patronize establishments (in preference Plaintiffs’ establishments) hope enriching President and earning reward from him through official Presidential action favorable governments, such enrichment foreign domestic government entities violates Foreign Domestic Emoluments Clauses. There three principal categories allegations.

First, Plaintiffs allege directly compete with President’s establishments foreign, state, federal clientele. Second Amended Complaint (the “Complaint”) ¶¶ Plaintiffs support allegation with extensive declarations hospitality industry experts. Rachel Roginsky, hospitality consultant and professor Boston University School Hospitality Administration, asserts certain Goode’s hotels and one ROC member’s hotel ‐ restaurant are “[p]rimary competitors” with Trump SoHo and Trump International New York because they “market and attract customers essentially same pool” given “similar . . location, facilities, services, amenities, class, image, price.” Roginsky Decl. ¶¶ 14 ‐ 17. Dr. Christopher Muller, former Dean Boston University School Hospitality Administration, identifies numerous Plaintiffs’ restaurants New York Washington, D.C. areas he asserts “comparable” various Trump establishments are within same market “segment” therefore directly compete with one another. Muller Decl. ¶¶ 29, ‐ 56, 67 ‐ Collectively, two declarations identify more than dozen Plaintiffs’ establishments, which, according Roginsky Muller, compete directly with roughly half dozen Trump [its] own controvert presented defendant[.]” Carter v. HealthPort Techs., LLC F.3d (2d Cir. 2016) ( citing Exch. Nat’l Bank Chi. Touche Ross & Co. F.2d 1126, (2d Cir. 1976)). President’s motion dismiss challenged only facial sufficiency complaint, but also factual assertion Plaintiffs’ restaurants directly compete establishments. Thus, we consider only allegations complaint but also expert affidavits submitted response Defendant’s fact based motion dismiss.

establishments over same customer base, including foreign and domestic government customers. Owners these establishments also submitted declarations attesting restaurants and hotels frequented foreign, state, and federal officials and compete directly establishments over customer base. Goode Decl. ¶¶ 4, ‐ 24, 34, 36, 47 ‐ 50; Colicchio Decl. ¶¶ ‐ 14, ‐ 21, ‐ 29. Plaintiffs’ declarations include evidence loss government patronage Plaintiffs’ establishments after presidential election. ROC alleges its restaurant and restaurant ‐ employee members suffered due “lost business, wages, tips.” Complaint ¶ 13. Specifically, James Mallios, managing partner ROC ‐ member restaurant Amali, testifies Amali regularly hosts dinners events government officials, including foreign leaders, Mallios Decl. ¶¶ 9, 27, its tax exempt sales declined after November 2016, reflecting decline government business. Id. ¶

Second, Complaint cites statements implicitly soliciting patronage officials apparently acknowledging that, making governmental decisions, he favors governments patronize his businesses. See, e.g. Complaint ¶ (“Trump said [of Saudis, context discussing trade negotiations], ‘. . . They spend $40 million, $50 million. Am I supposed dislike them? I like them very much.’”); id. ¶ (responding question about U.S.’s dispute with China over South China Sea, “I do deals [China] all time. [China’s largest bank] tenant mine . . .”). Complaint alleges Trump businesses began investing attracting foreign government business after election, id. ¶¶ 63, further these efforts have succeeded attracting post election patronage from foreign governments. Id. ¶¶ 64–87.

Third, Plaintiffs allege foreign governments taken note of, been influenced by, message enriching giving patronage his establishments earns his favor. Plaintiffs point statements foreign officials quoted newspaper articles, including one “Middle Eastern diplomat” who said, “Believe me, all delegations will go [to Trump establishments].” Id. ¶ ( quoting Jonathan O’Connell & Mary Jordan, For foreign diplomats, hotel place W ASH . P OST (Nov. 2016), http://wapo.st/2oPYggX). Another diplomat reportedly stated, “Why wouldn’t I stay his hotel blocks White House[?] . . Isn’t rude come his city say, ‘I am staying your competitor?’” Id. Plaintiffs also allege foreign government official patronage of Trump establishments has increased since President was elected. Id. ¶¶ 56, 60, 64, 68, 72, 79, 82. particular, Plaintiffs point one instance which, shortly after election, foreign government switched venue event from competitor establishment. Id. ¶ 74.

The Complaint asserts President’s receipt revenues he derives from patronage foreign domestic entities violates Foreign Domestic Emoluments Clauses. Id. ¶ 1. Foreign Emoluments Clause provides: “[N]o Person holding any Office Profit or Trust under [the United States], shall, without Consent Congress, accept any present, Emolument, Office, or Title, any kind whatever, any King, Prince, foreign State.” Const., Art. I, § Cl. 8. Congress has consented Defendant’s receipt emoluments issue here. Complaint ¶ Domestic Emoluments Clause provides: “The shall, stated Times, receive for his Services, Compensation, which shall neither increased nor diminished during Period which he shall been elected, he shall receive within Period any other Emolument from United States, any of them.” Const., Art. II, § Cl. 7. Complaint seeks both declaratory and injunctive relief. It seeks

declaration, inter alia that, these circumstances, patronage of foreign domestic government entities President’s establishments violates Foreign Domestic Emoluments Clauses. Complaint ¶ 20. As to injunctive relief, Complaint asks court to “enjoin[] Defendant violating both Emoluments Clauses” “requir[e] Defendant to release financial records sufficient confirm Defendant engaging any further transactions would violate either Emoluments Clause.” Id

ii. Defendant’s Motion Dismiss

President moved dismiss Complaint, arguing Plaintiffs lacked III fell outside zone interests Emoluments Clauses. As standing, argued Plaintiffs’ “allegations future injuries premised upon speculative chain possibilities, including decisions third parties [i.e., prospective customers] before Court.” Defendant’s Memorandum Law Support Motion Dismiss, With respect specific evidence of lost government patronage, President argued declarations do “show decline was attributable to” customers choosing Trump establishments, because decline could have different cause. Reply Memorandum of Law Support of Motion to Dismiss, 6. President did contest substance of Plaintiffs’ expert testimony certain Plaintiffs’ establishments compete directly establishments. As zone interests, Trump argued Clauses were “intended guard against corruption foreign influence federal officials ensure independence President,” Plaintiffs’ alleged injuries “bear no relation [Clauses’] core concerns,” thus Plaintiffs’ claims should dismissed. Defendant’s Memorandum Law Support Motion Dismiss,

iii. District Court Decision

district court granted President’s motion dismiss lack jurisdiction under Rule 12(b)(1). While recognizing Plaintiffs’ allegations, supported expert declarations, satisfied injury prong III inquiry, district court found “Plaintiffs failed properly allege Defendant’s actions caused Plaintiffs such injury is redressable Court.” CREW et al. F. Supp. 3d (S.D.N.Y. 2017) (emphasis original). district court called “wholly speculative” whether any lost business was “fairly traceable to Defendant’s ‘incentives’ or instead results officials’ independent desire patronize Defendant’s businesses.” Id. at Hypothesizing alternative explanations for Plaintiffs’ injury, district court opined “interest [Trump] properties” could “generally increased since he became President” Plaintiffs may “face tougher market overall.” Id. Given Plaintiffs failed rule out these alternative explanations injury pleading stage, district court concluded “connection between [] Plaintiffs’ alleged injury Defendant’s actions too tenuous satisfy III’s causation requirement.” Id. For same reasons, district court found was likely redressed any relief district court could offer. Id district court also found Plaintiffs lacked “prudential”

standing. Reasoning sue under Emoluments Clauses limited those parties Clauses were meant protect, district court found Plaintiffs fell outside “zone interests” Clauses. Id. 187–88. The district court reasoned “[n]othing the text the history Emoluments Clauses suggests Framers intended these provisions protect anyone competition.” Id. at 187. Rather, district court found, Emoluments Clauses are meant prevent corruption foreign influence, ensure President’s independence. Id. Contrasting suit one brought under “generous review provisions [Administrative Procedure Act],” district court stated zone interests test “is more strictly applied when plaintiff proceeding under constitutional . . provision.” Id. (emphasis original) ( quoting Wyoming Oklahoma (1992) (Scalia, J., dissenting)). Because Plaintiffs vindicating interest uncorrupted, independent government, district court reasoned, do sue under Emoluments Clauses. district court also found suit must dismissed on two

additional grounds, neither which was raised Defendant’s motion. These were case presents non justiciable political question it is not ripe for adjudication. Id. 193–95. Neither of these grounds is defended by the on this appeal.

B. DISCUSSION

A suit brought in federal court is “properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power adjudicate it.” Makarova v. United States , F.3d 110, (2d Cir. 2000). To the extent district court’s dismissal for lack of subject matter jurisdiction was based on the application of rule of law, appellate court construes allegations of the complaint light most favorable Plaintiffs reviews district court’s ruling de novo meaning our inquiry focuses on whether rules law were correctly applied. We conclude district court did apply law correctly finding lacked jurisdiction decide case.

In some instances, district court’s dismissal for lack subject matter jurisdiction under Rule 12(b)(1) is based part on factual findings. When such dismissal is appealed, we review relevant factual findings clear error. See Rent Stabilization Ass’n City New York Dinkins F.3d (2d Cir. 1993). case, although parties presented disputed factual issues district court evidentiary submissions, court did purport resolve disputed issues fact or make factual findings. Its rulings were based only on application rules law. Accordingly, our review de novo Id. (“If trial court dismissed basis complaint alone complaint supplemented undisputed facts evidenced record, our standard de novo review[.]”).

i. Article III Standing

Plaintiffs contend district court interpreted law incorrectly concluding lack standing bring action under Article III Constitution. There are three prongs standing inquiry under Article III. order successfully allege bring suit federal court, a complaint must plausibly allege following: first , plaintiff has suffered “injury fact,” which Supreme Court defines as “an invasion legally protected interest which is (a) concrete and particularized; and (b) actual or imminent, not [merely] conjectural or hypothetical,” Lujan Defenders Wildlife , (1992) (internal citations and quotation marks omitted); second there “causal connection between injury conduct complained of,” which requires injury be “fairly traceable challenged action defendant, result independent action some third party before court;” id. (internal quotation marks alterations omitted); third “likely, opposed merely speculative, will redressed favorable decision.” Id. (internal quotation marks omitted). These three components III “case controversy” requirement designed ensure “plaintiff has alleged such a personal stake outcome controversy warrant his invocation federal court jurisdiction justify [the] exercise court’s remedial powers on his behalf.” Simon v. Eastern Ky. Welfare Rights Org. , U.S. 26, (1974) (internal quotation marks omitted).

We find Plaintiffs satisfy all three prongs III standing for reasons set forth below. a. Injury requirement Plaintiffs adequately allege injury fact

“serves distinguish a person with a direct stake outcome a litigation—even though small—from person mere interest problem.” United States Students Challenging Regulatory Agency Procedures (SCRAP) 669, n.14 (1973) ( citing, inter alia, Kenneth C. Davis, Standing: Taxpayers Others U. C HI L. R EV . (1968) (“[A]n identifiable trifle enough for fight out question principle.”)). Because appeal arises pleading stage, “general factual allegations resulting defendant’s conduct may suffice, motion dismiss we presume general allegations embrace those specific facts necessary support claim.” Lujan , 504 561 (internal quotation marks omitted).

Plaintiffs’ alleged injury meets well ‐ established III threshold economic competitors who allege that, unlawful conduct, their rivals enjoy a competitive advantage marketplace. To make an adequate allegation competitive injury, must plausibly allege (1) an illegal act bestows upon competitors “some advantage,” Fulani v. League Women Voters Edu. Fund 882 F.2d 621, 626 (2d Cir. 1989); (2) “that [they] personally compete[] same arena” unlawfully benefited competitor. re United States Catholic Conference F.2d 1020, (2d Cir. 1989). For standing purposes, necessary identify specific customers who switched Plaintiffs’ competitors; rather, competitor “relies economic logic conclude plaintiff will likely suffer fact when [defendant] acts way increases competition aids plaintiff’s competitors.” Canadian Lumber Trade Alliance v. United States, F.3d 1319, (Fed. Cir. 2008); see also Cooper Tex. Alcoholic Beverage Comm’n, F.3d (5th Cir. 2016) (“It basic law economics increased competition leads actual economic injury.’’) (internal quotation marks omitted); Sherley v. Sebelius, F.3d 69, (D.C. Cir. 2010) (“[I]ncreased competition almost surely injures seller one form another[.]”); Kerm Inc. FCC F.3d (D.C. Cir. 2004) (“A party seeking establish this basis must demonstrate it direct current competitor whose bottom line may adversely affected by challenged [] action.”) (emphasis added) (internal quotation marks omitted). Complaint sufficiently alleges Plaintiffs compete directly with

Trump establishments President’s allegedly illegal acts favor Plaintiffs’ competitors. Specifically, alleges Plaintiffs’ establishments harmed competition Trump establishments because, despite being comparable other relevant respects, President’s establishments offer government patrons something Plaintiffs cannot: opportunity, enriching President, obtain favorable governmental treatment from Executive branch. It alleges marketplace thus skewed favor businesses his unlawful receipt payments patrons. Complaint, supported expert declarations, alleges unlawful market skew has caused Plaintiffs economic harm in form lost patronage from entities, such harm will continue in future. For competitor standing, sufficient. argues Plaintiffs rely on a “boundless theory

standing” Supreme Court has rejected because it would find III injury prong satisfied “ whenever a competitor benefits something allegedly unlawful . . . .” Already, LLC Nike, Inc. , U.S. (2013). He argues Plaintiffs’ theory injury over broad because would “apply presumption [of harm competitors] whenever party acts illegally thereby distorts competition defendant’s unlawful conduct confers benefit plaintiff’s competitor.” Appellee’s Br. (emphasis in original) (citing Already 99). Defendant, however, both mischaracterizes Plaintiffs’ argument misses mark analogizing theory case one Supreme Court rejected Already

Plaintiffs do argue injured merely competitor benefits; rather, Plaintiffs allege competing over exact same customer base establishments secure unlawful advantage giving patronage Trump establishments offers, addition to comparable services, potential, enriching President, securing his favor governmental decisions. This unlawful market skew directly affects Plaintiffs’ revenue profits: Every dollar patronage drawn establishments hope currying favor with lost dollar revenue that might otherwise have gone Plaintiffs.

These facts little common Already Already Supreme Court considered whether Already, LLC could challenge validity Nike’s “Air Force 1” trademark despite fact Nike had issued covenant it would refrain making any claims against Already based Air Force trademark, despite fact Already did plan sell any product “would arguably infringe Nike’s trademark yet fall outside scope covenant.” Court clarified was insufficient for purposes for Already claim any gain Nike was Already’s loss; rather, Already had show “an more particularized more concrete than mere assertion something unlawful benefited [its] competitor.” Id. Because Already did face any liability past conduct arguably infringing Air Force trademark, Already had plausibly alleged any other way which trademark’s continued validity injured Already, Already lacked an Article III injury. Here, contrast, nature injury from allegedly unlawful conduct clear concrete: Complaint plainly asserts Plaintiff establishments losing, will continue lose, business patrons based patrons’ belief can obtain official Presidential favor spending their money manner enriches President.

We conclude Plaintiffs satisfied Article III requirement alleging injury fact.

b. Causation Plaintiffs also adequately allege their injury fairly traceable challenged conduct Defendant. To satisfy “traceability” “causation” prong III test, allegations must provide more than “unadorned speculation” “connect challenged actions.” Simon 44–45. This, however, does require ruling out all possible alternative explanations plaintiff’s injury. allegations fact must plausibly support “substantial likelihood” plaintiff’s was consequence defendant’s allegedly unlawful actions (and prospective relief could mitigate harm). Id. at

The district court demanded too much at pleading stage requiring allegations dispel alternative possible explanations for Plaintiffs’ injury. district court identified various alternative theories could explain decline Plaintiffs’ business: “general[] increase[]” “interest [Trump] properties . . since he became President,” CREW F. Supp. 3d at 186; possibility establishments provide better “service, quality, location, price other factors related individual preference,” id. ; “an increase competition respective markets business all types customers[.]” Id. district court found Plaintiffs’ pleadings inadequate because failed dispel these alternative explanations. so doing, district court effectively required prove, pre discovery, facts necessary win at trial. This was error. See Lujan (explaining less required support pleading stage compared “successive stages litigation,” when burden increases). Under standard applied district court, would virtually impossible plead injury, defendant would defeat standing merely by pointing to the possibility that customers’ preference defendant’s products services was attributable something other than defendant’s illegal conduct.

Our precedents, and those of Supreme Court, make clear that Plaintiffs’ allegations are sufficient plausibly assert substantial likelihood their consequence of challenged conduct. In Fulani we upheld of fringe, third party presidential candidate challenge continued grant of tax exemption by IRS League of Women Voters ground League had engaged in impermissible partisan activities by limiting participation in its televised presidential debates members Republican Democratic parties. F.2d 625. League’s criteria for inclusion required, addition membership one two major parties, that a candidate be “significant.” Id. 625–26.

Fulani alleged that she was a “significant” candidate, who would have been included if requirement membership either Republican Democratic party. Id. assessing her Article III standing, this court did probe her allegation she was significant candidate despite its dubious merit. We ruled she had established Article III standing, notwithstanding obvious improbability she would make it into debates “significant” candidate. Id. (“For purposes determining Fulani’s standing challenge whether League’s use [the party membership] requirement was inconsistent its section 501(c)(3) status, we accept Fulani’s contention she was ‘significant’ candidate election . . .”). To satisfy Article III standing, was sufficient she had plausibly alleged she would have qualified. See also Schulz Williams F.3d (2d Cir. 1994) (finding would intervenor had III prosecute appeal, where “[t]he district court’s decision could caused [an] [to intervenor], [the] appeal could have afforded relief would have redressed injury”) (emphasis added). Supreme Court has repeatedly upheld standing of a plaintiff ‐

competitor who alleges caused defendant’s unlawful conduct skewed market another competitor’s favor, notwithstanding other possible, even likely, causes for benefit going to plaintiff’s competition. Supreme Court has explained when, among competitors, an allegedly illegal “barrier [] makes it more difficult for members of one group obtain benefit than for members of another group, member of former group seeking challenge barrier need allege he would obtained benefit but barrier order establish standing .” Northeastern Fla. Chapter Associated Gen. Contractors of Am. v. City Jacksonville, Fla. U.S. 656, (1993) (emphasis added); see also id. (explaining an economic competitor meets requirement plausibly alleging “the inability compete on equal footing” without needing allege loss any identifiable piece business); Regents Univ. Cal. Bakke n.14 (1978) (upholding standing, based loss chance compete equally, white male applicant program reserved spots minority applicants); Schulz , F.3d 53 (finding “under well established concept competitors’ standing,” “the loss opportunity compete equally” is sufficient to establish standing) (internal citation and quotation marks omitted).

Plaintiffs satisfied this standard. complaint adequately pleads injury lost patronage directly traceable fact President’s allegedly illegal conduct induces patrons hospitality industry Washington, D.C. New York City patronize Trump establishments preference Plaintiffs’ establishments. district court found, argues appeal, case is analogous Simon Eastern Ky. Welfare Rights Org. , (1974). See CREW , F. Supp. 3d 185–86 (“The Court [in Simon ] held [the] alleged lacked traceability redressability

intervening causal factors . . . [A]s Simon wholly speculative whether Hospitality Plaintiffs’ loss business fairly traceable Defendant’s ‘incentives[.]’”). Simon indigent persons organizational representatives challenged IRS revenue ruling extended favorable tax treatment non profit hospitals offered only emergency room services to indigents, rather than offering services to indigents to the extent the hospital’s financial ability, alleging “by extending tax benefits to such hospitals despite refusals fully to serve the indigent, the defendants were ‘encouraging’ hospitals to deny services.” Simon 33. This case analogous to Simon

In Simon Court questioned whether modification relevant tax rule actually influenced hospital policymaking regarding scope services provided to indigent patients, therefore held had failed establish causal connection between challenged IRS Ruling denials service. Central Court’s analysis was its skepticism previous IRS rule (or its modification) had material, non speculative effect any given hospital’s decision offer non emergency services indigents, particularly when “undetermined financial drain” arising costs supplying such services may outweighed benefits favorable tax treatment. Id. It was therefore “just plausible hospitals which respondents may apply service would elect forgo favorable tax treatment avoid” costs providing those services. Id. view countervailing cost consideration which potentially offset effects the tax rules, the plaintiff’s failure to “establish . . that [the] hospitals [categorically] dependent upon [charitable] contributions,” the Court reasoned that causal link between IRS ruling the hospitals’ decisions deny services plaintiffs was little more than “unadorned speculation.” Id. at 43–44. Accordingly, Court held that had failed establish reinstatement previous rule would result change hospital policy would cure plaintiffs’ injury. Id. at 45–46.

Here, contrast, Complaint, supported expert declarations, alleges Plaintiffs’ establishments offer services comparable those offered establishments every relevant respect, save one: Plaintiffs cannot offer patrons opportunity obtain favorable treatment Executive branch governmental decisions. It eminently plausible if two establishments provide otherwise comparable services, but one establishment offers inducement other cannot offer, then inducement will attract least some patronage might otherwise gone other establishment. Complaint contains numerous factual allegations sufficient support conclusion President’s receipt (and invitation) allegedly illegal emoluments actually influences least some customers’ purchasing decisions. And unlike Simon , there is no reason believe skew caused by those patrons’ desire gain influence by patronizing establishments is offset annulled some countervailing consideration. Simon thus sheds little light case.

c. Redressability We likewise find Plaintiffs have adequately pleaded redressability their alleged injury, issue is closely related question causation. When injury alleged is caused illegal conduct, many instances (at least where continuation illegal conduct will continue cause harm), cessation illegal conduct will likely least diminish further instance injury. Because Plaintiffs successfully alleged plausible likelihood Trump’s conduct caused their injuries, ongoing, logically follows relief would redress injury—at least some extent, which all III requires. See Larson v. Valente U.S. 228, n.15 (1982) (“[A plaintiff] need show favorable decision will relieve his every injury.”) (emphasis original); see also Massachusetts E.P.A. (2007) (finding redressability satisfied where “risk catastrophic harm” could “reduced some extent if petitioners received relief seek”) (emphasis added). Complaint seeks injunctive relief requiring that President cease conduct allegedly violates Foreign and Domestic Emoluments

Clauses. Plaintiffs plausibly pleaded President’s ownership hospitality businesses compete them will induce patrons hospitality industry favor Trump businesses over those Plaintiffs so secure favorable governmental action Executive branch. This plausibly alleges his cessation violation would eliminate inducement those patrons favor his businesses, would therefore eliminate, least diminish, Plaintiffs suffer. These plausible allegations sufficient satisfy III’s requirement redressability.

d. Fourth Circuit’s re Decision Judge Walker’s

Dissent

We recognize our colleague Judge Walker disagrees, panel Fourth Circuit has also reached opposite conclusion closely analogous case, In re Donald J. Trump , 928 F.3d 360 (4th Cir. 2019). ^[9] Judge Walker relies on substantially same arguments as Fourth Circuit panel in In re Trump . Respectfully, we do find these arguments persuasive.

As preliminary note, both opinions seem influenced by their perception that these lawsuits are politically motivated. Judge Walker asserts this case “deeply political” and emphasizes that “President Trump was democratically elected American people . . . with his business holdings and brand prominence full view.“ See infra Fourth Circuit expressed skepticism as “why [the plaintiffs] came court relief first place,” implying their motivation was political and this cast doubt on federal court’s jurisdiction. In re Trump , F.3d at 377; see also infra (quoting In re Trump ). While certainly possible these lawsuits are fueled in part political motivations, we do understand significance fact. It is true a political motivation for a lawsuit, standing alone, is insufficient confer Article III standing. Cf. Flast v. Cohen , U.S. 83, (1968) (noting “federal court[s] [cannot used] a forum which air [] generalized grievances about conduct government”). But while existence a political motivation a lawsuit does supply standing, nor does defeat standing. “Standing under III . . [depends on] an injury [that is] concrete, particularized, actual or imminent; fairly traceable challenged action; redressable favorable ruling.” Monsanto Co. Geertson Seed Farms U.S. 139, (2010) (citing Horne v. Flores (2009)). Whether lawsuit has political motivations irrelevant these determinative issues. Injury ‐ ‐ Fact

With respect “injury fact” requirement, Judge Walker correctly states establish an through competitor doctrine, plaintiff must show she “direct competitor” defendant “actual imminent increase competition.” See infra (citations omitted). As we conclude above, Plaintiffs clearly met these standards. Judge Walker relies Supreme Court’s decision Already as demonstrating “competing businesses [do not] have challenge [] unlawful action simply by virtue their status as direct competitor.” See infra (citing In re Trump F.3d 377).

We readily acknowledge proposition, but we do agree controls here. their allegations, Plaintiffs go further than simply alleging directly compete establishments; they plausibly allege precisely how President’s allegedly unlawful conduct harms their ability attract patrons their establishments. See, e.g., Complaint ¶ (“As competitor restaurants located Defendant’s hotels and other properties . . ROC United has been injured these payments due lost business . . . .”) (emphasis added); id. ¶ (“Officials foreign states and United States various state local governments purchased will use government’s funds purchase food services from one more restaurants owned Defendant, instead competing restaurants members ROC United.”). And we point out above, Already involved very different circumstances; case were unable plausibly allege Nike’s trademark harmed—or threatened harm—their business prospects. See U.S. at 99. ^[10]

Judge Walker also “question[s] expansive scope” competitor standing doctrine, and worries our approach would confer standing, for example, on restaurant whose competitor illegally obtained a bank loan or a large tax refund and used its ill ‐ gotten proceeds hire better chef lower its prices, thereby exposing plaintiff–restaurant increased competition. See infra. Those hypotheticals are far beyond scope our ruling. A plaintiff who establishes an injury fact alleging direct competition an “inability compete [with defendant] on an equal footing,” City Jacksonville , U.S. 666, must also establish such “fairly traceable defendant’s allegedly unlawful conduct” “likely redressed requested relief.” Allen Wright (1984). Here connection between alleged violations law Plaintiffs’ harm is far more direct than Judge Walker’s hypothetical: It is precisely President’s receipt allegedly illegal emoluments that constitutes Plaintiffs’ competitive injury.

Lastly, Judge Walker seems draw rule competitor standing doctrine is limited “three broad categories cases”—agency cases, election cases, unfair competition cases—and this case “fits into none [them].” See infra . He cites no authority proposition doctrine limited these three categories, we see no reason why it should be. Even if were, we note Plaintiffs’ theory case structurally identical economic reasoning often supports standing unfair competition context. Id. (noting that, unfair competition cases, standing exists when parties are “direct competitors” based presumption “[s]ales gained one thus likely come other’s expense”) (quoting TrafficSchool.com, Inc. Edriver, Inc. F.3d (9th Cir. 2011)). Traceability

With respect traceability, we agree Judge Walker “[u]nder competitor doctrine, . . traceability flows readily competitive injury” “if violation would necessarily harm plaintiff’s competitive opportunities, then unlawful edge to a competitor logically connects violation.” See infra (citations omitted). But we do understand Judge Walker’s conclusion traceability lacking here there are “simply too many variables play . . . allow plaintiffs rest solely bare assertion President’s acceptance emoluments has caused them competitive injury.” See infra fact there ”many different factors [that] influence [government officials’] decision making” does foreclose Plaintiffs’ plausible theory—supported clear factual allegations—that President’s prior statements his receipt allegedly illegal emoluments unduly influences some officials patronize his establishments, thereby causing competitive harm Plaintiffs. Id. Judge Walker’s suggestion existence alternate explanations Plaintiffs’ defeats traceability would deny III alleging antitrust, unfair competition, trademark infringement claims who seek enjoin conduct unduly influences buyers marketplace. each these categories cases, there exist “myriad reasons” why consumer might favor defendant’s product, including, example, “service, quality, location, price other factors related individual preference.” CREW F. Supp. 3d. at 186. But these bona fide competitive reasons do not bar plaintiff from demanding court enjoin illegal conduct skews marketplace inserting additional unlawful advantage.

Similarly, Fourth Circuit panel found re had failed establish traceability because “conclusion customers are patronizing [Trump International] Hotel Hotel distributes profits dividends President . . . requires speculation into subjective motives independent actors who before court.” F.3d Such speculation, court held, “undermin[es] finding causation.” Id We respectfully disagree. That Plaintiffs’ theory harm results decisions third parties does preclude finding cognizable link between challenged action alleged harm III requires. Block Meese F.2d (D.C. Cir. 1986) (Scalia, J.) (“It impossible maintain, of course, there no standing sue regarding action of defendant which harms plaintiff only through reaction third parties.”); see also Dep’t of Commerce v. New York, 139 S.Ct. 2551, 2566 (2019) (holding had Article III standing where “theory . . relies [] on predictable effect Government action decisions third parties”) (citing, inter alia , Block, 793 F.2d 1309)); Bennett v. Spear , 520 154, 168–69 (1997) (warning against “wrongly equat[ing] injury ‘fairly traceable’ defendant injury which defendant’s actions very last step chain causation”). Virtually every suit trademark infringement, unfair competition, violation antitrust laws involves harm results decisions third party customers. See TrafficSchool , F.3d (noting “[i]n false advertising suit, plaintiff establishes III injury if ‘some consumers who bought defendant[’s] product under [a] mistaken belief’ fostered defendant ‘would otherwise bought plaintiff[’s] product,” such may proven “probable market behavior” independent third parties) (quoting Joint Stock Soc’y v. UDV N. Am., Inc. F.3d (3d Cir. 2001); Adams Watson F.3d 915, (1st Cir. 1993)).

When “injury hinges on reactions [] third parties [to challenged conduct],” plaintiff “need prove a cause ‐ effect relationship with absolute certainty; substantial likelihood alleged causality meets test.” Nat. Res. Def. Council Nat’l Highway Traffic Safety Admin. F.3d 95, (2d Cir. 2018). For example, “common sense basic economics,” along with admissions third parties question challenged action would “affect [their] business decisions,” generally enough establish requisite third party causation. Id. (internal quotation marks citations omitted).

Accordingly, establish traceability, Plaintiffs need only establish substantial likelihood President’s receipt emoluments—and his statements actions impliedly soliciting such emoluments, see, e.g., Complaint ¶¶ 96—has some favorable effect on government officials’ demand for Trump establishments (and, extension, some unfavorable effect demand Plaintiffs’ competing properties). Plaintiffs need prove every government official who chooses Trump establishment does so curry favor enriching him, nor need Plaintiffs prove particular official chose will choose establishment for sole or even primary reason earning President’s favor. Dep’t Commerce S.Ct. at (holding that “traceability satisfied” when established that third party action leading alleged harm was “likely attributable least part ” to challenged action, noting that “Article III requires no more than de facto causality”) (emphasis added) (internal quotation marks omitted). Plaintiffs need only plausibly allege President’s receipt emoluments generates unlawful advantage Trump establishments allegations Complaint sufficient meet burden. Plaintiffs point statements foreign diplomats others position been or will motivated choose Trump establishments earn President’s favor, avoid his disfavor. See, e.g., Complaint ¶¶ Moreover, President’s statements effect he favors governments spend money his establishments increase likelihood patrons will choose establishments hopes winning influence. See, e.g., id. ¶ (alleging publicly stated he “very much” likes “get[s] along great with” foreign officials who do business with him). Without benefit discovery, Plaintiffs need go further establish causation purposes III.

3. Redressability Both Judge Walker’s dissent Fourth Circuit’s In re Trump opinion deny that any injunctive relief can be fashioned that would help Plaintiffs’ predicament. See In re Trump F.3d at 376; infra (“[T]here no allegation [the requested relief] would cause diplomatic patrons book other establishments.”). Fourth Circuit expressed view “even if government officials were patronizing [the President’s] Hotel curry [his] favor, there no reason conclude would cease doing so were enjoined receiving income from Hotel . . . [given that] Hotel would still publicly associated President, would still bear his name, would still financially benefit members his family.” re F.3d Accordingly, Fourth Circuit found “the likelihood injunction . . would cause officials cease patronizing Hotel demonstrates lack redressability.” Id.

Again, we disagree. Where customers favor defendant’s product service over plaintiff defendant’s violation law, which often case trademark infringement, unfair competition, or antitrust cases, mere possibility customers might continue to favor defendant’s product service after court enjoins violation does defeat Article III standing. If did, such claims could never heard before III courts.

Plaintiffs’ requested remedy need only remove from equation improper competitive advantage arising from possibility that, patronizing Trump establishments, government officials can earn favor President. “[C]ommon sense basic economics” indicate elimination any illegal advantage motivated government officials give more business Trump establishments will cause at least some cease give preference those businesses, thereby redressing claimed injury. Nat. Res. Def. Council F.3d 104.

Moreover, Fourth Circuit’s suggestion that, notwithstanding court’s grant requested relief, some officials would likely continue patronize Trump establishments curry President’s favor besides point. re F.3d Supreme Court made clear Mass. EPA remedy “will itself reverse” alleged would still satisfy redressability requirement if “reduced [that injury] to some extent.” 549 U.S. 525–26 (emphasis omitted); see also Larson , U.S. n.15 (“[A plaintiff] need show favorable decision will relieve his every injury.”).

We see no justification for assertion of Judge Walker Fourth Circuit no injunction can be fashioned would diminish plaintiffs’ injury. See re Trump F.3d 376–77; infra Injunctive relief could fashioned along many different lines would adequately reduce incentive government officials to patronize Trump establishments hope currying favor with President. Relevance Purpose Emoluments Clauses

For example, court could bar Trump establishments from selling services foreign domestic governments during President’s tenure office, which would fully redress Plaintiffs’ injury. A court could require establish blind trust otherwise prevent him receiving information about government patronage his establishments, which could indicate government officials patronizing those establishments no longer effective way earn Presidential favor. A court could require public disclosure President’s private business dealings officials through establishments, which may discourage Presidential action appears improperly reward such patronage. Cf. Buckley Valeo (1976) (noting tendency disclosure requirements “avoid appearance corruption exposing [information] light publicity”).

Judge Walker also concludes the “Emoluments Clauses . . were never designed to, nor do they, directly regulate the marketplace or the market player functions marketplace,” draws inference a plaintiff who seeks enjoin a violation Emoluments Clauses cannot establish standing sue if plaintiff’s injury is competitive nature. See infra. This appears confuse question whether Complaint sufficiently states a cause action question Article III standing. Lexmark Intern., Inc. Static Control Components, Inc. 125–28 (2014), Justice Scalia’s majority opinion clarified question “whether [a plaintiff] has a cause action” is separate distinct issue whether case “presents case or controversy properly within federal courts’ Article III jurisdiction.” Neither court, nor Supreme Court (nor any other) has ruled fact, fairly traceable challenged action likely redressable requested relief, fails confer III unless claims based law specifically designed regulate competition. Consideration purposes clauses may relevant whether Complaint states actionable claim, whether particular plaintiff within law’s “zone interests,” see infra , but are relevant whether the Plaintiffs have met the three elements that form the “irreducible constitutional minimum of standing.” Lujan

We therefore conclude Plaintiffs satisfied the Article III requirements of traceability redressability.

ii. Zone of Interests

district court also erred dismissing Complaint theory Plaintiffs’ injuries fall outside “zone of interests” of Emoluments Clauses. This is two reasons. First, zone interests test does not, as district court believed, implicate court’s subject matter jurisdiction. Further, Supreme Court’s precedents make clear Plaintiffs’ injuries outside zone interests Emoluments Clauses.

Turning first question whether zone interests is test III standing, Supreme Court has recently clarified not. Lexmark Int’l Inc. Static Control Components Supreme Court, while acknowledging past decisions had characterized zone interests test part “‘prudential’ branch standing,” reconsidered question clarified both “prudential” label misnomer test does not implicate Article III standing. 126–27 (2014). Rather, the Court explained the test asks whether the plaintiff “has cause of action under [law]” the basis of the facts alleged. Id. at 128. The Court emphasized test not “jurisdictional” “the absence of valid . . cause of action does implicate subject matter jurisdiction.” Id. n.4 (internal quotation marks omitted). Bank America City of Miami S.Ct. (2017), Court reaffirmed zone interests test asks whether complaint states actionable claim under statute (and whether plaintiff has standing court has subject matter jurisdiction). City Miami majority reiterated III standing requirements injury, causation, redressability, reinforced Lexmark ’s essential point zone interests question “whether statute grants plaintiff cause action he asserts.” Id.

Accordingly, while had previously been appropriate consider whether fall within zone interests deciding whether plaintiff has court has subject matter jurisdiction, Supreme Court has unambiguously rejected approach. district court thus misconstrued nature zone interests doctrine. district court’s analysis erred merits as well. Every Supreme

Court decision construing zone interests test as pertains competitors’ suits supports view that Plaintiffs satisfy zone interests test. Without exception, Court has held that a plaintiff who sues enforce law that limits activity a competitor satisfies zone interests test even though limiting law was motivated intention protect entities such as plaintiffs competition. See Nat’l Credit Union Admin. v. First Nat. Bank & Tr. Co. , U.S. 479, 495–96 (1998) ( NCUA ) (“[Defendants argue] there is no evidence Congress . . . was all concerned with interests commercial banks [such plaintiffs], indeed all concerned with competition . . . difficulty with argument similar arguments were made unsuccessfully [every case construing zone interests statute vis à vis plaintiff competitor].”). After Lexmark consistent longstanding view test “not meant especially demanding,” Clarke Sec. Indus. Ass’n (1987), Court reaffirmed who allege secondary economic injuries due conduct violates limiting law can satisfy zone interests test, notwithstanding statute violated was intended protect against type of injury suffered by plaintiffs. City of Miami , S.Ct. at 1304–05 (finding municipality fell within zone of interests of Fair Housing Act where alleges an injury due to discriminatory lending causing increase foreclosures, which allegedly cause decreased tax revenues increased expenditures remedy blight).

The line of cases supporting Plaintiffs’ satisfaction of zone of interests test stretches back Ass’n of Data Processing Orgs., Inc. Camp (1970) ( Data Processing ). Data Processing plaintiffs were sellers data processing services. Id. at They sued set aside ruling Comptroller Currency, which allowed national banks offer data ‐ processing services other banks bank customers. Id. complaint, alleging violation Administrative Procedure Act, asserted Comptroller’s rule inflicted allowing banks exceed “legitimate scope [bank] activities,” dictated National Bank Act § Bank Service Corporation Act. Id. 157; see also id. (“No bank service corporation may engage any activity other than performance bank services banks.”). Court did even consider whether purpose statutory restriction was protect competitors. Despite noting statutes did not “in terms protect a specified group” competition, Court found zone of interests test satisfied because “§ arguably brings a competitor within zone interests protected it.” Id. at 156–57. The Court reasoned “general policy [of statute]” limiting banks’ activities “is apparent” permitted claim proceed because plaintiffs’ “[financial] interests are directly affected a broad narrow interpretation Acts.” Id. Court concluded were within zone interests because party alleging financial “reliable private attorney general litigate issues public interest . . . .” Id. 154; see also Arnold Tours, Inc. v. Camp U.S. (1971) (clarifying “ Data Processing . . . did rely any legislative history showing Congress desired protect data processors” finding plaintiff travel agencies who competed banks “arguably . . within zone interests” limiting law despite fact Congress had contemplated protecting interests) (internal quotation marks omitted). Court’s next major zone interests case, Investment Company

Institute Camp (1971) ( ICI ), especially pertinent purpose of the statute involved there was similar in relevant respects to of Emoluments Clauses. were investment companies sought to enjoin regulation promulgated Comptroller of Currency which permitted banks operate mutual funds. Id. at 618–19. Plaintiffs argued ruling violated § 21 of Glass Steagall Act, which made unlawful “[f]or any person, firm, [or] corporation . . . engaged business of issuing . . . securities, engage at same time any extent whatever business receiving deposits.“ 12 U.S.C. § 378(a) . Discussing purpose Glass Steagall, Court concluded “Congress [] had mind . . . [the] hazards arise when commercial bank goes beyond business acting as fiduciary managing agent enters investment banking business . . establishing affiliate hold sell particular investments.” ICI at (emphasis added). Court found Congress’s purpose enacting § was prevent corruption banking function impairment ability banks function impartially. Id. 630–34; cf. CREW F. Supp. 3d (describing purpose Emoluments Clauses protecting uncorrupted, impartial, independent governance). Notwithstanding intention § was protect systemic integrity was even arguably intended benefit competitors, Court nonetheless found investment company plaintiffs were within its zone of interests. ICI U.S. at 621 (“There can be no real question . . . [plaintiff investment companies’] light of Data Processing case.”). The dissent argued plaintiffs fell outside zone interests “the Glass–Steagall Act [did not] evidence any congressional concern . . freedom competition .” Id. at (Harlan, J., dissenting) (emphasis added). majority Court rejected argument without discussion. See also Clarke U.S. 399–400 (1987) (“[T]here need be no indication congressional purpose benefit would plaintiff.”) (emphasis added).

NCUA also recognized competitor within zone interests law was allegedly violated, notwithstanding law was intended protect plaintiffs competitor role. 479. were banks challenged revision interpretation § Federal Credit Union Act (“FCUA”) its administering agency, National Credit Union Administration (“NCUA”). Id. Section restricted federal credit union membership “groups” had “common bond occupation association.” U.S.C. § 1759(b). The revision that the plaintiffs challenged extended membership eligibility groups lacked single common bond between all members, if credit union comprised multiple distinct employer sub groups within which all members had common bond. NCUA at 484. The contended NCUA’s revised interpretation was contrary requirements Act. Id. at 483. defendants sought dismissal suit ground alleged by plaintiff banks was outside zone interests sought protected Congress enacting FCUA. Supreme Court rejected defendants’ argument, explaining “[a]s competitors federal credit unions, [the plaintiff banks] certainly interest limiting markets federal credit unions can serve, NCUA’s interpretation has affected interest allowing federal credit unions increase customer base.” Id. 493–94. response defendants’ argument plaintiffs’ injuries were outside FCUA’s zone interests “banks were simply picture” when relevant statute was drafted, Court dismissed “irrelevant.” Id.

As stated above, the Supreme Court recently reaffirmed substantially same position post Lexmark . City Miami the Court found that plaintiff alleging an economic injury due allegedly unlawful conduct was within zone interests law regulated conduct question. S.Ct. at 1304–05. The City had brought action against housing lenders, alleging had violated Fair Housing Act (“FHA”) issuing risky mortgages on unfavorable terms minority customers. Id. at 1301. The City claimed suffered economic lost tax revenue increased municipal expenses due higher incidence mortgage foreclosure increased demand for services remedy resulting urban blight. Id. 1302. The district court had dismissed suit under Rule 12(b)(6) failure state claim ground “the harms alleged, being economic discriminatory, fell outside zone interests FHA protects.” Id Supreme Court rejected position. It ruled City’s “financial injuries fall within zone interests FHA protects.” Id. Supreme Court reasoned that, notwithstanding absence any indication FHA was intended protect municipal budgets, was “highly relevant” lenders’ conduct allegedly “diminish[ed] City’s property tax revenue increas[ed] demand municipal services.” Id . Thus, consistent the longstanding view plaintiff’s economic injury usually makes her “reliable private attorney general litigate the issues of the public interest,” Data Processing , U.S. 154, the Supreme Court found City’s economic injuries be within zone of interests of the FHA. See also Bennett , (finding plaintiff ranchers who asserted economic injury new water management plan adopted Secretary Interior fell within zone of interests of Endangered Species Act “notwithstanding interests seek vindicate are economic rather than environmental ”) (emphasis added); Mova Pharm. Corp. Shalala , F.3d (D.C. Cir. 1998) (“[The zone interests] analysis focuses . . those who practice can be expected police interests [law] protects.”) (emphasis added).

While most cases addressing whether plaintiff’s outside zone interests law alleged violated concerned zone interests statute suit alleges violations Constitution we can see no reason why reasoning precedents reviewed above equally applicable here. one instance which Supreme Court has ruled on argument resembling a zone of interests challenge a Constitutional provision consistent above precedents suggests our Plaintiffs satisfy test. Wyoming Oklahoma (1992), Wyoming brought suit against Oklahoma within original jurisdiction of Supreme Court, alleging Oklahoma violated Dormant Commerce Clause by passing statute requiring 10% coal used by coal fired Oklahoma producers electric power mined Oklahoma. Wyoming did mine sell coal. Id. at 442. The only Wyoming claimed as result Oklahoma statue was diminution its tax revenues Wyoming coal producers, which paid taxes Wyoming, suffered diminution volume coal sold Oklahoma producers electric power. Id. at 447–48. Oklahoma sought case dismissed ground tax loss alleged Wyoming was too remote Dormant Commerce Clause’s purposes well as too insignificant. See id. 455. Court rejected Oklahoma’s arguments granted summary judgment favor Wyoming. Id. Supreme Court ruled Wyoming’s loss tax revenue caused Oklahoma’s alleged violation Dormant Commerce Clause was proper basis Wyoming’s suit, notwithstanding its loss of tax revenue was remote from the purposes of the Dormant Commerce Clause. See id. at 448–50. majority did explicitly discuss the zone of interests test, but in upholding Wyoming’s standing, it rejected the argument in Justice Scalia’s dissent Wyoming fell outside zone interests. To the extent it considered whether alleged injury was too remote from activity proscribed Dormant Commerce Clause, it did so as part its analysis injury causation requirements III. Id. at 448–49 (concluding alleged diminution in revenues was “directly linked” allegedly unlawful tax); see also Bond United States U.S. (2011) (explaining, in holding individual prosecuted under federal law has bring a Tenth Amendment claim, “[i]f . . . person alleging injury is remote from zone interests a [law] protects, whether there is legal all whether particular litigant is one who may assert it can involve similar inquiries”); INS Chadha, 919, 935–36 (1983) (holding individual may challenge “legislative veto” on separation powers grounds).

Thus, while district court may be correct “[n]othing text history Emoluments Clauses suggests Framers intended these provisions protect anyone competition[,]” CREW F. Supp. 3d these precedents make clear zone interests test does not require plaintiff intended beneficiary law question. Plaintiffs who are injured defendant’s alleged violation limiting law may sue enforce limitation under longstanding zone interests test Court has articulated.

iii. “Prudential Considerations”—Political Question Ripeness Plaintiffs also challenge district court’s dismissal Foreign Emoluments Clause claim two further grounds: (i) it presents non ‐ justiciable political question, (ii) issues raises ripe for adjudication. district court described these “prudential reasons” dismissing claim. CREW F. Supp. 3d 193–95. These grounds were argued his motion dismiss, Department Justice, acting as counsel to the President, does defend them appeal. We do find the district court’s reasoning persuasive.

For both rulings, district court relied on fact the Foreign Emoluments Clause bars receipt emoluments “without Consent Congress[.]” Const, art. I, § 9, cl. 8. For its non justiciability ruling, court reasoned that, Congress “the only political branch power consent to violations Foreign Emoluments Clause, Congress appropriate body determine whether, what extent, [the President’s] conduct unlawfully infringes power.” CREW F. Supp. 3d According district court’s reasoning, courts can never adjudicate whether Clause has been violated because suit alleging such violation will always present non justiciable political question. We respectfully disagree find Plaintiffs’ arguments rebuttal more persuasive. prohibition stated constitutional text renders President’s receipt “emoluments” unlawful, unless Congress consents it. undisputed absence Congressional consent, the President has violated this provision the Constitution, if, as charged the Complaint, he has accepted what Constitution describes as “emoluments.” The federal courts have responsibility to resolve “Cases Controversies” arising under Constitution laws United States. That responsibility entails finding facts interpreting Constitution laws. It not affected Constitution’s grant authority Congress authorize President receive emoluments where Congress has not exercised authority. mere possibility Congress might grant consent does render dispute non justiciable. district court’s reasoning treated Clause’s authorization Congress if said, “Congress alone shall have authority determine whether acts violation Clause.” It says nothing like that.

Furthermore, while challenges complaints alleging unconstitutionality conduct Constitution gives Congress power authorize relatively infrequent, are unprecedented. When such challenges arisen, federal courts, including Supreme Court, have adjudicated them. See, e.g. C&A Carbone, Inc. Town Clarkstown, N.Y. U.S. (1994) (Dormant Commerce Clause); Cuyler v. Adams , U.S. 433 (1981) (Compact Clause). district court also concluded dispute was ripe

review. It reached conclusion in reliance on prospect of future Congressional action reasoning of Justice Powell’s concurrence Supreme Court’s order of dismissal Goldwater v. Carter U.S. (1979).

Goldwater was dispute over Constitution’s allocation of governmental power between two branches of our federal government. President Carter, exercise his constitutional authority conduct foreign relations United States, coincident with his recognition People’s Republic China “sole government China,” announced intention abrogate mutual defense treaty made previous administration Taiwanese “Republic China.” Goldwater Carter F.2d 700–01 (D.C. Cir. 1979), vacated Constitution empowers make treaties requires Senatorial consent before treaties become effective; however, says nothing about whether Senatorial consent required abrogate treaty. Individual Members Congress, who disagreed with President Carter’s decision to abrogate the treaty, brought suit for declaratory injunctive relief, contending President lacked authority to abrogate the treaty unilaterally without congressional consent.

Four Justices, through Justice Rehnquist’s concurrence accompanying an order granting certiorari, vacating judgment below, remanding, voted dismiss suit ground it raised non justiciable political question. Goldwater, (Rehnquist, J., concurring). Justice Rehnquist explained his view suit was non justiciable “because it involves authority conduct our country’s foreign relations extent which Senate Congress authorized negate action President.” Id main thrust Justice Powell’s concurrence was disagree with

Justice Rehnquist’s conclusion such dispute over Constitution’s allocation governmental power nonjusticiable. Id. (Powell, J., concurring). Justice Powell pointed need Supreme Court decision break otherwise paralyzing governmental stalemate. Id. Nonetheless, Justice Powell agreed decision dismiss action—not was nonjusticiable, but rather was unripe, disputing branches had not yet reached “impasse” would justify resorting courts to interpret Constitution break stalemate. He emphasized importance of “encourag[ing] small groups or even individual Members of Congress seek judicial resolution of issues before normal political process has opportunity resolve conflict.” Id

The differences between this case Goldwater are such Goldwater does provide useful guidance for resolving this dispute. The Goldwater litigation arose a dispute over allocation of Constitutional powers two competing branches government. Congressional took position that, unilaterally abrogating a treaty, which had become effective virtue Senate’s exercise consent, was acting illegally so doing, was undermining Constitutional authority Senate. This interbranch clash claims governmental authority seemed Justice Powell offer likelihood ripening into either political resolution need adjudication break governmental impasse. circumstances case very different. There no interbranch clash claims Constitutional authority in this case. Presidential conduct is challenged by this suit is the President’s private conduct. There is no claim part of Congress, or any of its members, President’s private conduct of his business affairs usurps power allocated Congress Constitution. While Constitution empowers Congress legitimize a President’s otherwise unlawful conduct, President’s conduct absent Congressional authorization does not usurp or challenge Congressional prerogative. fact, it is not members Congress who complaining. In circumstance, which Congress’s defense its Constitutional power is issue, there is no reason expect await either impasse or political resolution Justice Powell saw as justification waiting Goldwater If challenged conduct falls within what Constitution describes as receipt “emoluments,” conduct is prohibited Constitution absence congressional consent—and unlike Goldwater likely simply continue occur without court ruling. This would result “political resolution,” but simply absence adjudicator tell whether his conduct is, is not, permitted Constitution he serves.

We therefore think district court misconstrued Justice Powell’s Goldwater concurrence believing provided “particularly instructive” guidelines for resolution this case. CREW F. Supp. 3d Justice Powell’s reasoning does justify deferring adjudication await ripening will happen.

C. CONCLUSION

For foregoing reasons, judgment district court VACATED case REMANDED further proceedings consistent opinion.

J OHN M. W ALKER J R ., Circuit Judge dissenting: I would affirm the district court. remaining plaintiffs in this case have failed specify any actual injury was caused by the President’s alleged violation of the Emoluments Clauses, or how this Court could redress such injury. None of this matters, say, because the competitor standing doctrine allows us ignore these pleading failures and find anyway. I disagree and would hold the complaint fails sufficiently allege III standing. Invoking constitutional provisions never directly litigated in the ‐ year history of our Republic prior the Trump presidency, plaintiffs in case claim the President has inflicted their businesses maintaining ownership over Organization’s high end hotels and restaurants and accepting business of foreign and state official clientele contravention of both Foreign Emoluments Clause and Domestic Emoluments Clause. plaintiffs, who owners other high end hotels and restaurants New York City and Washington, D.C., allege businesses have suffered No. ‐ foreign and state officials want what only the Trump ‐ owned establishments can offer: “access to, influence on, and the good will of the President of the United States.” As case comes us now, it about constitutional standing, the precise meaning of the Emoluments Clauses. The meaning of the Clauses may be addressed elsewhere in due course, but even in their unresolved state, few (largely uncontroversial) observations about the Clauses are order. First, nothing in the plain text of either Emoluments Clause addresses competition the marketplace or the conduct of business competitors generally. And neither can the Clauses considered sweeping anti ‐ corruption provisions. Facially, Foreign Emoluments Clause concerns only receipt “emoluments” from foreign governments or officials by those “holding any Office Profit or Trust” behalf United States and Domestic Emoluments Clause only prohibits President from receiving “emoluments” beyond salary office from “the United States, or any or them.” Neither Clause addresses receipt benefits (whether or “emoluments”) from members public, private businesses, private working conditions restaurant workers; made up restaurant members and restaurant employee members. [A66] complaint alleges several ROC United’s restaurant members compete directly with Trump International Hotel & Tower New York, Trump International Hotel Washington, D.C., restaurants inside Trump Tower Trump World Tower located New York City. [A67] A declaration industry expert submitted names several restaurants associated with ROC United compete directly owned properties. In New York City, these establishments include: Modern, Gramercy Tavern, Craft, Riverpark. [A312–15] Washington, D.C., ROC United competitor restaurants are: Riggsby, Minibar, Jaleo, Casolare Ristorante, Zaytinya. [A319–22] Compl. ¶ 3 No. 18 ‐ 474 parties who seek favors. ^[5] Thus neither competition nor ordinary corruption targeted by the Clauses or lie anywhere near the heart of case.

What meant by term “emolument” in the Emoluments Clauses has yet be determined any federal court. Regardless whether Emoluments Clauses encompass, urged, anything value, ^[6] or whether Clauses capture a narrower range exchanges, ^[7] text historical meaning plainly do evidence concern protecting fair competition in marketplace. Of course, none these observations foreclose possibility (however slim) parties may pursue private right action (should such right be recognized) remedy commercial harms No. 474 wrought by violations of the Emoluments Clauses or exclude the prospect the Clauses applied to particular case could somehow affect market competition. Neither clause its face, however, gives any indication it is concerned with maintaining competition, or it protects right enforceable in manner plaintiffs have chosen to pursue.

Finally, this case is deeply political and thus finds itself in an area where federal courts ought tread lightly. President was democratically elected American people—and he was elected his business holdings and brand prominence full view. What’s more, is evident text Emoluments Clauses pertain questions separation powers and, particular, relationship between Congress. Whether courts should properly play any role pertaining relationship context Clauses will have be determined future.

I.

Whatever resolution these various background questions, only one issue is before us now: sufficiently alleged constitutional standing challenge President’s alleged violations Emoluments Clauses? tripartite test standing under III is well known: “an must concrete, particularized, actual imminent; fairly traceable challenged action; redressable favorable ruling.” A plaintiff’s obligation meet test immovable feature our constitutional structure; constitutional “bedrock requirement” “an irreducible minimum” without 5 No. 18 474 which there is no case controversy under Article III of the Constitution. ^[9] And, the standing inquiry is “especially rigorous” when dispute implicates, as does here, separation of powers. ^[10] plaintiffs, as party invoking federal jurisdiction, bear burden establishing constitutional standing. ^[11] At pleading

stage, “the plaintiff must ‘clearly . . . allege facts demonstrating’ each element.” ^[12] “reviewing court[] must accept as true all material allegations complaint, and must construe complaint favor complaining party.” ^[13] Here pleadings do particularize any direct injury actually caused violations Emoluments Clauses, much less how such injury might actually redressed courts. Rather, (and majority) rely entirely a shortcut known as competitor doctrine. This doctrine allows a competitor ‐ plaintiff presumption injury fact, traceability, and redressability when plaintiff is almost sure suffer matter “economic logic.” ^[14] 6 No. 18 474 The question whether the competitor standing doctrine finds any traction in private suits brought under the Emoluments Clauses was recently addressed in In re Donald J. Trump Fourth Circuit, first circuit to do so. ^[15] In case, District Columbia State Maryland sued alleging he violated Emoluments Clauses that, among other injuries, those violations harmed proprietary interests businesses competing Trump Organization. ^[16] The Fourth Circuit held, correctly in my view, plaintiffs could invoke competitor standing doctrine achieve Article III standing. ^[17] Injury in fact. competitor standing doctrine “relies economic logic conclude a plaintiff will likely suffer an injury ‐ fact when government acts way increases competition or aids plaintiff ʹ s competitors.” ^[18] doctrine allows proceed if economically logical cause effect between action increased competition is strong enough support an inference injury fact competitor, “even though empirical analysis might conceivably provided higher level certainty.” ^[19] Of course, doctrinal exception does excuse plaintiff from satisfying all three III requirements; all does exempt plaintiff showing actual imminent injury when alleged harm arises market context where actual may difficult demonstrate but almost sure 7 No. 18 ‐ 474 occur. ^[20] It bears repeating plaintiffs here rely on competitor standing doctrine they cannot show (and have alleged) they have suffered any particularized injury caused violations allege. Well ‐ established precedent gives a competitor standing plaintiff latitude allege injury, but competitive injury pleading exception, based as is on economic logic, cannot be universally applied every competitor. “[T]o establish an injury as a competitor a plaintiff must show he personally competes in same arena party whom has bestowed assertedly illegal benefit.” ^[21] Other courts have correctly indicated plaintiff must be “direct competitor[].” ^[22] plaintiff must also show “an actual imminent increase in competition, which increase [the court] recognize[s] will almost certainly cause injury in fact.” ^[23] Taken isolation, phrase Second Circuit precedent— injury shown if plaintiff “competes same arena” ^[24] —can read suggest minimal allegation direct competition sufficient. In light this seemingly low fact bar, majority opinion maintains met See, e.g. , El Paso Nat. Gas Co. v. F.E.R.C , 50 F.3d 23, 27 (D.C. Cir. 1995); TrafficSchool.com, Inc. v. Edriver Inc ., 653 F.3d 820, 825–26 (9th Cir. 2011). ^[21] re Catholic Conference (USCC) , 885 F.2d 1020, 1029 (2d Cir. 1989); [JON (diss.), ALK, RJC ] see also Ctr. Reproductive Law & Policy v. Bush , 304 F.3d 183, 197 (2d Cir. 2002). [JMcL, PNL, SS ]

[22] TrafficSchool , 653 F.3d 826; see also Adams v. Watson , 10 F.3d 915, 922 (1st Cir. 1993) (noting Supreme Court’s competitor standing cases “are all premised plaintiff’s status direct competitor ” (emphasis original)). Sherley Sebelius F.3d 69, (D.C. Cir. 2010); see also Inv. Co. Inst. v. F.D.I.C ., F.2d (D.C. Cir. 1987) (competitor satisfied when increased competition “‘plainly threatens’ economic injury”). USCC F.2d

8 No. 18 ‐ 474 standard. ^[25] I agree with majority our prior cases capable of this broad reading, but after Supreme Court’s decision Already, LLC v. Nike, Inc. ^[26] upon close examination kinds cases have applied competitor standing doctrine, it more than evident me doctrine does not, should not, reach case. Already plaintiff, a shoe company, sought challenge one Nike’s trademarks even after Nike issued a broad covenant promising pursue trademark claims against potentially infringing Already products any future similar products manufactured Already. ^[27] Court rejected theory Already had challenge validity Nike’s trademark simply was Nike’s competitor: “Taken its logical conclusion, theory seems a market participant injured for III purposes whenever a competitor benefits something allegedly unlawful—whether a trademark, awarding contract, a landlord tenant arrangement, so on. We never accepted such boundless theory standing.” ^[28] Already’s theory competitive was continued existence Nike’s allegedly unlawful mark, notwithstanding Nike’s covenant Already, deterred investment its company, thereby placing Already at disadvantage. ^[29] Already argued large company like Nike used its allegedly invalid trademark 9 No. 18 474 “bully small innovators” Nike’s broad covenant not sue could not “eradicate” market effect a “registered but invalid mark.” ^[30] Thus Already’s theory competitor standing did not turn on whether Already planned create a shoe compete a particular Nike shoe covered covenant sue, ^[31] but was instead a broader claim about competitive injury. Already’s allegations Nike’s intimidation tactics, if true, would have had negative competitive impact on Already’s business. Nike’s allegedly unlawful conduct, in other words, would placed Already unlevel playing field.

In rejecting Already’s claim this type competitive was sufficient establish Article III standing, Supreme Court was quite clear such “boundless theory” competitor standing unacceptable under III. ^[32] Not every competitive injury—even though competitor’s allegedly unlawful actions may in fact skew competitive field plaintiff’s disadvantage—gives competitor standing challenge action. plaintiffs’ claim in this case very much like

competitor standing claim in Already Already Nike were competitors (albeit mismatched size) athletic shoe market. Already’s theory was Nike’s allegedly invalid trademark deterred investment Already thus improperly chilled competition market. case, claim similarly President’s alleged constitutional 10 No. 18 ‐ 474 violations are unlawfully skewing the competitive environment to his advantage. majority distinguishes Already on the basis the here compete the Trump ‐ owned properties for

identical consumers. ^[34] But is the wrong inquiry, any case does distinguish case from Already Already Nike competed for at least some identical consumers, “in same arena”; ^[35] otherwise, there would have been no competitor issue case. Competitors, by definition, are always seeking attract buyers who want same goods or services. It is necessary rather ask whether competition such harm will likely occur, as a matter of economic logic, violation law alleged. Here, there no logical connection between President’s alleged receipt emoluments success Trump owned businesses. With without President’s receipt “emoluments,” there are myriad reasons why a non Trump establishment would face same competition. Moreover, cannot case that, every time a competitor achieves some benefit through allegedly unlawful conduct has no direct relationship competition, competing businesses standing challenge unlawful action simply virtue status as a direct competitor. Any number potential illegal actions business could cause its rivals face stiffer competition without giving rise Article III standing. Take example an owner No. 18 ‐ 474 high ‐ end restaurant in a competitive marketplace who fraudulently applies for and receives a bank loan from an FDIC ‐ insured bank, fraudulently applies for receives a large tax refund. The restaurant’s illegally obtained funds might allow to achieve a market benefit available to no other competitor: restaurant is able hire a superior chef undercut competitors on menu pricing. As a result, restaurant’s law abiding competitors find themselves facing increased competition. But do restaurant’s competitors have competitor standing hold restaurant liable for its unlawful action simply because “compete[] in same arena”? As Supreme Court made clear in Already , answer is no. economic logic necessary competitor standing is measured between violation competitive harm, in hiring chef economic logic is non existent. Such is situation here. mere fact competition insufficient. Otherwise, courts would have entertain every claim a competitor in which defendant received some unlawful benefit—a benefit unrelated competition—simply benefit could effect competition. All this leads me question expansive scope our circuit’s earlier precedent. To say all a competitive injury requires showing plaintiff “competes same arena” conflicts Already ’s admonition market participant has suffered constitutionally significant injury “whenever competitor benefits something allegedly unlawful.” Our formulation theory needs construed light Supreme Court’s limitations Already At any rate, even if our precedents required us conclude sufficiently alleged 12 No. 18 ‐ 474 fact, I have little doubt fail satisfy remaining, indispensable Article III requirements traceability and redressability.

Traceability For there be III standing, must plausibly allege their injury is “ fairly traceable challenged action defendant.” ^[39] Under competitor standing doctrine, courts typically found traceability flows readily a competitive injury. ^[40] these cases causation logically follows given nature violation: if violation would necessarily harm plaintiff’s opportunities, then unlawful edge a competitor logically connects violation. ^[41] But, again, case is no ordinary competitor standing case. Emoluments Clauses do regulate business or market activity business or market activity, nor would violation as general matter expected affect competition. ^[42] Conventional competitor standing cases do present difficult traceability questions precisely allegedly unlawful action is directed at markets or market behavior, thus connection between market affecting action market effect tight. Emoluments Clauses were never 13 No. 18 ‐ 474 intended to regulate market behavior, and thus economic logic is absent.

The recognition that traffic increased at Trump ‐ owned establishments following President Trump’s election is not enough to show traceability. The plaintiffs must allege, beyond pure speculation, that the unlawful acceptance emoluments from foreign state government officials—not just the popularity Trump ‐ owned establishments for myriad reasons—is causing the plaintiffs’ lost opportunity to compete on equal footing. ^[43] plaintiffs have not plausibly alleged the desire to confer relatively modest ^[44] financial benefit on is driving force behind increased competition. ^[45] And this must plausibly 14 No. 18 ‐ 474 alleged it stands to reason diplomats who patronize high ‐ end hotels and restaurants do not make choices solely based on profit distribution, but people with wide ‐ ranging tastes and varying interests. plaintiffs’ and the President’s establishments exist in a virtual sea luxury hotels and restaurants ^[46] in which many different factors influence decision making and freely affect competition. There are simply too many variables at play (name recognition, boasting rights, better food, better service, more comfortable beds, reputation for quality, location close to seats power, name a few) ^[47] allow to rest solely Presiden t, rather than due any Hotel’s other characteristics. Such conclusion, however, requires speculation into subjective motives independent actors who are not before court, undermining finding causation.” (emphasis in original) (citing Clapper , 568 413)).

[46] plaintiffs’ establishments, should be noted, represent only few many upscale restaurants and hotels located in New York City and Washington, D.C. By rough count, there are approximately 115 five ‐ star hotels in New York City 47 in Washington D.C.. See Five Star Alliance, https://www.fivestaralliance.com. And when this lawsuit was filed there were Michelin star restaurants New York City Washington D.C. See Michelin Guide 2017: New York’s Best Restaurants , Michelin Travel, https://travelguide.michelin.com/reportage/michelin ‐ guide ‐ ‐ new ‐ yorks ‐ best ‐ restaurants; Michelin Guide Washington 2017: Restaurants Earn Stars Michelin Travel, https://travelguide.michelin.com/north ‐ america/united ‐ states/district ‐ columbia/washington ‐ dc/reportage/michelin ‐ guide ‐ washington ‐ This count does include numerous high end restaurants—like ROC United restaurants Craft, Riverpark, Casolare Ristorante, Zaytinya—that Michelin starred. None these other establishments joined lawsuit account any possible deprivation. See In re Donald J. F.3d (“And, even if government officials

were patronizing [Trump International] Hotel curry President’s favor, there no reason conclude would cease doing so were enjoined receiving income from Hotel. After all, Hotel would still publicly associated President, would still bear his name, would still financially benefit members his family. short, link between 15 No. 18 474 bare assertion that the President’s acceptance emoluments has caused them injury.

On this point, the majority criticizes the district court for error did not make: requiring the plaintiffs “dispel alternative possible explanations” for asserted injury. ^[48] Of course, majority is correct that a plaintiff need not disprove alternative causal routes, but district court required plaintiffs no such thing. district court instead listed factors may influence whether diplomatic patron will or will not frequent Trump owned property—“service, quality, location, price, other factors related individual preference” ^[49] —to illustrate why causal chain case is speculative.

That are required disprove alternative causation does cure failed plausibly allege any causal chain. I agree majority “allegations fact must plausibly support ‘substantial likelihood’ plaintiff’s was consequence defendant’s allegedly unlawful actions.” ^[50] A review complaint, however, reveals few (if any) specific allegations diplomatic patrons motivated desire confer emoluments President. ^[51] most is plausibly officials’ patronage Hotel Hotel’s payment profits dividends himself simply too attenuated.”). ^[48] Maj. Op. 22–23. Citizens Responsibility & Ethics Washington v. F. Supp. 3d 174,

185–86 (S.D.N.Y. 2017). Maj. Op. (quoting Simon Eastern Ky. Welfare Rights Org. (1974)). And, Fourth Circuit points out, “there distinct possibility . .

certain officials might avoid patronizing [Trump International] 16 No. 18 ‐ 474 alleged is that Trump ‐ owned properties attract diplomatic clientele, President has publicly sought encouraged such patronage. ^[52] But these allegations fall short plausibly alleging (or permitting a reasonably plausible inference) increased competition is caused President’s acceptance emoluments. plaintiffs rely on a Washington Post article which diplomats quoted stating their colleagues will favor Trump owned properties. ^[53] None these statements reveal a specific motivation confer a financial benefit President Trump. They indicate nothing more than primary motivator is Trump ‐ brand loyalty. plaintiffs’ strongest argument cites line from same article: “In interviews with dozen diplomats . . some said spending money at Trump’s hotel is easy, friendly gesture new president.” ^[54] This allegation is too scant satisfy plaintiffs’ burden affirmatively plead is traceable President’s acceptance emoluments. ^[55] Even if official were actually motivated “enrich[]” ^[56] staying at Trump owned hotel, must plausibly allege is acceptance emoluments Hotel President’s association it.” In re Donald J. Trump 2019 928 F.3d 376. Compl. ¶¶ 56, 58–87, 109, 196–97, 199–203, 206–11, 230–33. Appellants’ Br. (“Believe me, all delegations will go there.”) (“Why

wouldn’t I stay his hotel blocks White House, so I can tell new president, ‘I love your new hotel!’”). Appellants’ Reply Br. (quoting Jonathan O’Connell & Mary Jordan, For

foreign diplomats, hotel place Wash. Post, Nov. 18, 2016). my view, case even after we accept plaintiffs’ (highly

debatable) broad definition emoluments. Maj. Op. 17 No. 18 ‐ 474 that is unlawfully distorting competition. The plaintiffs must affirmatively allege that conferring a direct benefit on the makes a material difference when placed alongside all the other reasons for patronizing properties. Without allegations that effect, the causal chain remains too speculative. To be sure, the plaintiffs need not disprove all alternative causal routes, but the plaintiffs still remain obligated plead a casual chain rises above speculation. ^[57] This done.

Redressability. Finally, the plaintiffs must show it is “likely . . . injury will be redressed favorable decision.” ^[58] Like traceability, redressability frequently follows closely heels competitive fact, but still distinct component III and must be plausibly alleged.

Wholly absent from complaint any plausible, non ‐ conclusory allegations sought ‐ after remedy will lessen plaintiffs’ competitive injury. ^[59] At point complaint at which reader might expect be told how remedy sought would redress injury, reader left empty handed. plaintiffs simply request court issue declaratory judgment broadly defines Emoluments Clauses plaintiffs would like, ^[60] ask “[i]njunctive relief, enjoining [the President] 18 No. 18 ‐ 474 violating the Foreign and Domestic Emoluments Clauses, as construed by this Court, requiring [the President] to release financial records sufficient to confirm that [he] is engaging any further transactions that would violate the Emoluments Clauses.” ^[61] As for how this relief will remedy the plaintiffs’ injury, the complaint only asserts conclusory fashion that “the declaratory injunctive relief . . . would provide remedy for the many injuries described above.”

It comes as no surprise the pleadings insufficient as redressability do connect the relief requested any effect on competition. The amicus brief by former national ‐ security officials, relied upon plaintiffs, cuts the opposite direction argument plaintiffs use support. brief highlights plaintiffs’ redressability problem, pointing out obvious: “our adversaries even our allies seek every advantage available international stage.” various articles statements cited demonstrate diplomats choose patronize owned properties for variety reasons—and most likely several reasons same time. None them single out conferral emoluments. But, more point, there no allegation removing any one many possible incentives would cause diplomatic patrons book other establishments. To contrary, former national security officials point out, cost . . .” They ask court declare President’s conduct violates both provisions. See Compl. VI(a). Compl. VI(b). One suspects obtaining President’s financial records

may true reason lawsuit. Compl. ¶¶ 239; 243; see also Compl. ¶ 242. See Appellants’ Reply Br. 12–13 (citing Br. Former Nat’l Sec. Officials 21). Br. Former Nat’l Sec. Officials No. ‐ 474 officials likely to continue to seek “every advantage”—and continue to book Trump owned properties.

It is evident the complaint fails to adequately plead redressability is virtually impossible to plausibly connect the purported cause the plaintiffs’ alleged harm to the remedy they claim to seek (but have not specified in the complaint)—an improved environment. Even if “the mere possibility customers might continue to favor the defendant’s product service after court enjoins the violation does not defeat Article III standing,” plaintiffs here have not particularized any causal connection between alleged violation the Emoluments Clauses their market disadvantage. When plaintiffs come before court unable specify how relief they seek will redress injury, “one must wonder why came court for relief in first place.” In any event, fact plaintiffs plainly fail do so in complaint telling is itself sufficient defeat standing.

II.

As I already noted, application competitor standing doctrine this case will satisfy requirements III surprising given absence economic logic between violation alleged (the transgression Emoluments Clauses) harm plaintiffs (competitive disadvantage). nature cases area merits further elaboration. Only certain categories has economic logic been tight enough courts permit competitor shortcut usual requirement pleading fact, traceability, 20 No. 18 ‐ 474 redressability with particularity. These cases fall generally into three categories: agency cases, election cases, unfair competition cases. It is only within these three categories cases relied upon (and majority) to support their competitive standing theory can found. In each of these three categories, challenged governmental action non ‐ action directed parties capacity market player. This emoluments case, contrast, fits into none these three categories, analogous to any them.

Agency cases. competitor standing doctrine originated agency cases. first these cases before Supreme Court, Investment Company Institute v. Camp , involved banking regulations allowed new institutions to enter certain financial sectors. ^[67] Following decision, competitor standing cases premised challenge to agency action have become common. ^[68] In Adams v. Watson , First Circuit held out state milk producers had standing challenge state dairy regulations. ^[69] Canadian Lumber Trade Alliance v. United States , Federal Circuit determined Canadian wheat producers could employ competitor standing challenge United States customs regulations designed 21 No. 18 ‐ 474 aid American wheat producers. ^[70] D.C. Circuit, in Sherley v. Sebelius, held that adult stem cell researchers had competitive standing challenge new regulations authorizing the National Institutes Health fund embryonic stem cell research. ^[71] I could go on.

In agency context, where the government regulators effectively choosing winners losers in marketplaces regulate, affording plaintiff presumption injury, traceability, redressability makes sense. There no doubt, example, when government allows a commercial bank operate in a sector previously occupied only investment firms, investment firms will suffer negative effects more actors occupy field. In these cases, challenged action directed at a particular marketplace aim regulating one or more players in market in some way. government’s decision act a way gives a boost some players market allows new player enter it, will, a matter economic logic , detriment others.

Election cases. Competitor cases Second Circuit arisen election context. Fulani League Women Voters Education Fund , plaintiff, presidential candidate, alleged League Women Voters violated its tax exempt status hosting primary debate imposed certain admission requirements debate candidates, thereby causing plaintiff candidate 22 No. 18 ‐ 474 competitive injury when she was excluded from debate. ^[73] We held she had competitor standing challenge League’s tax ‐ exempt status. ^[74] The plaintiff Fulani alleged law (aimed at preventing political abuse an organization’s tax ‐ exempt status political marketplace) caused competitive injury her political candidacy which plainly would redressed if she were permitted debate. Her its causation redressability were self ‐ evident matter logic.

Likewise , Schulz v. Williams involved an action Libertarian Party enjoin operation New York election law had blocked its candidates from getting on state ballot. ^[75] district judge granted Libertarian Party an injunction. competitor ‐ intervenor Conservative Party appealed on basis district court’s injunction improperly placed Libertarian candidates on ballot thereby siphoned votes away it. ^[76] We held intervenor ‐ Conservative Party had standing challenge election law ruling had allegedly caused electoral injury. ^[77]

Finally, re Catholic Conference , pro ‐ choice advocates had challenge tax exempt status Catholic Church grounds Catholic Church had unlawfully engaged partisan activities campaigning pro life 23 No. 18 ‐ 474 causes. ^[78] By logic parallel agency cases, in each election case competitor ‐ plaintiff sought challenge election ‐ related action that allegedly had obvious and direct negative impact on plaintiffs’ own political activities.

Unfair competition cases. The third context in which competitor standing doctrine has arisen in unfair competition claims. ^[79] Courts routinely recognize constitutional standing for competitors seeking redress antitrust injury. ^[80] Suits by competitors brought under Lanham Act are also commonly allowed based competitor standing. TrafficSchool.com, Inc. v. Edriver, Inc. , both parties ran online traffic school courses in same market. The plaintiff alleged defendant had engaged in false advertising in violation Lanham Act state unfair competition laws—a violation, unlike here, directly relates competition. ^[81] The Ninth Circuit determined competitor plaintiff had standing were direct competitors “[s]ales gained one thus likely come at other’s expense.” ^[82] This case exemplifies those cases which, matter economic logic, a competitor had No. ‐ standing challenge a rival’s noncompliance with laws plainly designed regulate their competition in the common marketplace.

* * *

These the three broad categories cases in which courts have extended plaintiffs a presumption competitive injury based common ‐ sense market logic. The cases in each these three categories deal with challenged regulations, laws, actions were directed market players in role as market players which is key determinant may warrant utilization competitor standing exception. These cases stand proposition competitive injury in fact, together with causation redressability, can presumed when plaintiff can point some action or inaction directly regulates conduct market player operating same market. other words, in these cases were afforded competitor standing when asserted as result unlawful activity was itself directly related to, intended regulate, commercial or political marketplace. case before us markedly different. The competitor standing suit against has little common these three categories cases. Even accepting plaintiffs’ broad construction Emoluments Clauses, Clauses were never designed to, nor do they, directly regulate marketplace market player as functions marketplace. Emoluments Clauses never been characterized as market oriented, no case has ever stretched competitor standing exception far, and, evident Supreme Court’s decision Already such stretch goes further than competitor pleading exception can bear. No. sum, lack standing challenge

1 President’s alleged acceptance emoluments under either 2 traditional principles competitor standing doctrine, I 3 respectfully dissent. 4

Notes

[1] In proceedings before district court, included Jill Phaneuf, who worked hospitality industry, Citizens for Responsibility Ethics Washington (CREW), non profit watchdog. Plaintiffs’ appellate briefing, CREW notified court “no longer appealing district court’s judgment” CREW lacks standing. Additionally, Phaneuf left job wherein she allegedly competed Defendant’s businesses diplomatic clientele, Plaintiffs acknowledge she “no longer has III pursue her claims, which sought only prospective relief.”

[2] Donald Trump’s News Conference: Full Transcript Video , N.Y. Times (Jan. 11, 2017), http://nyti.ms/2jG86w8.

[3] Jennifer Calfas, Eric Trump Says He’ll Give President Quarterly Updates Business Empire Fortune (March 24, 2017), http://for.tn/2n2MRXa.

[4] Derek Kravitz & Al Shaw, Lawyer Confirms Can Pull Money From His Businesses Whenever He Wants ProPublica (April 2017, 5:53 PM), http://bit.ly/2o1OM1C.

[5] Where, here, defendant makes “fact based” 12(b)(1) motion dismiss “proffering evidence beyond Pleading,” plaintiff may “need come forward evidence

[6] district court appeared mistakenly rely Justice Scalia’s dissent Wyoming if were statement majority about proper application zone interests test. See infra n.13.

[8] We also note there no logic district court’s proposition that, some government patrons might be drawn Trump establishments by curiosity, means none them patronize his establishments in hope currying President’s favor enriching him. course year, there are thousands instances in which government representatives patronize hotels restaurants in New York Washington. Undoubtedly there many factors will influence their selections. likelihood some choices government representatives will influenced other factors such general curiosity in no way undermines Plaintiffs’ altogether plausible allegation substantial likelihood that, some significant number instances, officials will choose hotels restaurants hope spending their dollars Trump establishments will influence favor governmental decisions.

[9] In case, District Columbia State Maryland brought similar claims against President, alleging violations Foreign Domestic Emoluments Clauses based on factual allegations almost identical allegations case. Compare In re Trump , F.3d 365–66 with CREW , F. Supp. 3d at 182–83. there argued had III based, inter alia on their “interests protecting economic well being their residents, who, as competitors President, injured decreased business, wages, tips resulting economic commercial activity diverted President’s businesses,” well as based “interests as proprietors businesses compete President’s businesses.” re F.3d (internal quotation marks omitted).

[10] Fourth Circuit also criticized for “rest[ing] on theory so long as plaintiff competes same market defendant defendant enjoys unlawful advantage, requirements III met.” re F.3d Fourth Circuit rejected “boundless theory standing” based Supreme Court’s holding Already . See id . For reasons expressed above, we do believe Already precludes Plaintiffs’ theory standing. See supra

[11] makes same argument on appeal case. See Appellee’s Br. 15–17 (“[P]laintiffs cannot establish traceability redressability where alleged fact depends decisions independent third parties whose actions court can neither predict nor control.”).

[13] Puzzlingly, district court cited passage Justice Scalia’s dissenting opinion Wyoming seemingly though it were holding case without recognizing Court’s majority opinion implicitly rejected Justice Scalia’s argument. Justice Scalia wrote his dissent test “ more strictly applied when plaintiff proceeding under constitutional . . provision instead generous review provisions APA.” Wyoming (Scalia, J., dissenting) (emphasis original). majority did explicitly discuss argument, but upholding Wyoming’s standing, evidently rejected Justice Scalia’s contention.

[14] Notwithstanding neither sought nor defends these aspects district court’s ruling, we discuss them obligation federal courts consider whether subject matter jurisdiction adjudicate dispute. Thompson County Franklin F.3d (2d Cir. 1994)

[15] Members Congress brought separate action against Trump, alleging violations Foreign Emoluments Clause, which currently pending. Blumenthal F. Supp. 3d (D.D.C. 2019).

[1] “No Title Nobility shall be granted United States: And no Person holding any Office Profit or Trust under them, shall, without Consent Congress, accept any present, Emolument, Office, or Title, any kind whatever, from any King, Prince, or foreign State.” U.S. Const. art. 1, § 9, cl. 8.

[2] “The shall, stated Times, receive for his Services, Compensation, which shall neither encreased nor diminished during Period for which he shall been elected, and he shall receive within Period any other Emolument United States, any them.” Const. art. II, § cl. 7.

[3] Only two remain appeal: Eric Goode and ROC United. Goode owner “several celebrated hotels, restaurants, bars, event spaces New York,” which include Maritime Hotel, Bowery Hotel, Ludlow Hotel, Jane Hotel, Park, Waverly Inn, Gemma restaurants. Compl. ¶ ROC United nonprofit organization advocates wages

[5] See Const. art. I, § 9, cl. 8; art. II, § 1, cl.

[6] See Appellants’ Br. 6–7; see also Norman L. Eisen, Richard Painter & Laurence H. Tribe, Brookings, The Emoluments Clause: Its Text, Meaning, Application Donald J. (Dec. 16, 2016), https://www.brookings.edu/wp ‐ content/uploads/2016/12/gs_121616_emoluments ‐ clause1.pdf (arguing Emoluments Clause warrants “broadest possible construction payments encompasses” thus “unquestionably reaches any situation which federal officeholder receives money, items value, services foreign state”); Zephyr Teachout, Opinion, Trump’s Foreign Business Ties May Violate Constitution , N.Y. Times, Nov. 17, 2016, https://www.nytimes.com/ roomfordebate/2016/11/17/would ‐ trumps ‐ foreign ‐ business ‐ ties ‐ ‐ constitutional /trumps ‐ foreign ‐ business ‐ ties ‐ may ‐ violate ‐ ‐ constitution.

[7] See Amandeep S. Grewel, Foreign Emoluments Clause Chief Executive , Minn. L. Rev. 639, 641–42 (2017) (arguing Foreign Emoluments Clause covers only “office ‐ related compensation”); see also Robert G. Natelson, Original Meaning “Emoluments” Constitution Ga. L. Rev. (2017) (arguing “emolument[s] Constitution meant compensation financial value, received reason public office”); Eugene Kontorovich, Opinion, Did George Washington Take ‘Emoluments’? Wall St. J., Apr. 2017, http://www.wsj.com/articles/did george washington ‐ take ‐ emoluments ‐ (arguing George’s Washington’s private business dealings while office cast doubt whether Trump’s business holdings violate Foreign Emoluments Clause).

[8] Clapper v. Amnesty Int’l USA U.S. 398, (2013) (internal quotation marks omitted) (citing Lujan Defenders Wildlife 560–61 (1992)).

[9] Valley Forge Christian Coll. v. Americans United Separation Church State, Inc. , 454 U.S. 464, 471, 472 (1982); see also Summers v. Earth Island Inst. , 555 U.S. 488, 492–93 (2009) (articulating III’s “Cases” “Controversies” requirement “fundamental limitation” “founded concern about proper—and properly limited—role courts democratic society” (internal quotation marks citations omitted)).

[10] Clapper , 568 U.S. 408 (internal quotation marks omitted).

[11] Spokeo, Inc. v. Robbins , 136 S. Ct. 1540, 1547 (2016).

[12] Id (quoting Warth v. Seldin , U.S. 490, 518 (1975)).

[13] Warth

[14] Canadian Lumber Trade All. United States F.3d (Fed. Cir. 2008).

[15] re Donald J. , 928 F.3d 360, 363, 366 (4th Cir. 2019).

[16] Id. at 363.

[17] Id. at 377.

[18] Canadian Lumber F.3d (citing Clinton City New York , (1998)).

[19] Canadian Lumber F.3d

[25] See Maj. Op. 18.

[26] 568 U.S. 85 (2013).

[27] Id. at 88–89.

[28] Id. at

[29] Id. 97–99; see also Br. Petitioner, Already, LLC Nike, Inc ., (2013) (No. 982), WL *33–34.

[30] Already U.S. at 98.

[31] See Maj. Op. 20–21.

[32] Already 99.

[33] Id.

[34] Maj. Op. 20–21.

[35] USCC F.2d

[36] See re Donald J. F.3d (“At bottom, [plaintiffs’] are left rest theory so long plaintiff competes same market as defendant defendant enjoys unlawful advantage, requirements III met.”).

[37] USCC F.2d 1029.

[38] Already

[39] Lujan , 504 U.S. 560 (emphasis added) (internal quotation marks omitted).

[40] See Int’l Bhd. Teamsters v. Dep’t Transp. , 724 F.3d 206, 212 (D.C. Cir. 2013) (finding causation redressability “easily satisfied” competitor standing case); New World Radio, Inc. F.C.C. F.3d (D.C. Cir. 2002) (noting that, “garden variety competitor cases” “chain causation” “firmly rooted basic law economics” (internal quotation marks omitted)).

[41] See Sherley F.3d (competitive caused when “agencies lift regulatory restriction [the plaintiff’s] competitors otherwise allow increased competition against them” (internal citation quotation marks omitted)).

[42] See infra Part II.

[43] In Schulz Williams , we held traceability was satisfied as long as challenged action (a district court injunction, in case) “could have caused [the plaintiffs’] injury.” 44 F.3d 48, 53 (2d Cir. 1994). But bar not as low, see Maj. Op. 24, this isolated language suggests. In Schulz , there was no speculation district court’s injunction caused plaintiffs’ alleged electoral injury because there was no other action which asserted injury could been traced. Schulz does stand proposition any action theoretically “could have” caused plaintiffs’ will suffice. At stage, must allege plausible causal route, merely possible one.

[44] Trump Organization claims donated approximately $150,000 in profit from foreign ‐ government business Treasury approximately $191,000 offset financial gains President. Rebecca Ballhaus, Trump Organization Details Level Profits from Foreign Governments , Wall St. J., Feb. 25, 2019, https://www.wsj.com/articles/trump ‐ organization ‐ details ‐ level ‐ ‐ profits ‐ ‐ foreign ‐ governments ‐ 11551116974. This infinitesimal amount relation President’s reported net worth $3 billion Shahien Nasiripour & Caleb Melby, Trump’s Net Worth Rises $3 Billion Despite Business Setbacks Bloomberg, June 2019, https://www.bloomberg.com/news/ articles/2019 12/trump ‐ s ‐ net ‐ worth ‐ rises ‐ ‐ ‐ billion ‐ despite ‐ business ‐ setbacks. Of course, these specific amounts remain untested unconfirmed.

[45] See re Donald J. F.3d (“To begin, District Maryland’s theory proprietary harm hinges conclusion customers patronizing Hotel Hotel distributes profits dividends

[57] Simon E. Ky. Welfare Rights Org. , 426 U.S. 44 (1976) (“[U]nadorned speculation will suffice invoke federal judicial power.”).

[58] Lujan U.S. (internal quotation marks omitted).

[59] Iqbal

[60] request, among other things, “Emolument . . any kind whatever” under Foreign Emoluments Clause be defined “cover anything value,” “any other Emolument” Domestic Emoluments Clause defined encompass “monetary non monetary payments transactions, transactions granting special treatment, transactions above marginal

[65] Maj. Op. 42.

[66] re Donald J. F.3d

[67] See Inv. Co. Inst. v. Camp , 401 U.S. 617, 620 (1970) (investment companies had standing challenge regulation national banks); Clarke v. Secs. Indus. Ass’n , U.S. 388, 403 (1987) (competitor brokerage trade association had standing sue over banking regulations); Nat. Credit Union Admin. v. First Nat. Bank & Trust Co ., U.S. 479, (1998) (banks bankers association had standing sue over credit union regulations).

[68] Some cases category could fall under broader heading “governmental action.” See Clinton City New York 417, 432–33 (1998) (farmers’ cooperative had competitor challenge President’s line item veto bill provision would benefitted cooperative).

[69] Adams F.3d

[70] Canadian Lumber , F.3d at 1332.

[71] Sherley , F.3d 73.

[72] See, e.g. Camp

[73] Fulani League Women Voters Educ. Fund F.2d 624 (2d Cir. 1989). [EVG, RJC, LWP ]

[74] Id. at 626.

[75] Schulz F.3d at 51–52.

[76] Id 52–53.

[77] Id.

[78] USCC , 885 F.2d at 1022.

[79] See TrafficSchool , F.3d at 825–26.

[80] See, e.g. NicSand, Inc. 3M Co. F.3d (6th Cir. 2007) (en banc) (recognizing Article III standing for plaintiff allegedly injured competitor’s antitrust violations). plaintiffs suggest standing competitors these cases supports broad proposition “courts upheld III standing when illegal acts private parties increase distorted competition against plaintiff” evinces doctrine’s application “many other contexts.” Appellants’ Br. 28–29. But miss thread ties all three categories cases together: economic logic. same economic logic connects agency, election, unfair competition competitor cases absent case.

[81] Id. 824.

[82] Id.

Case Details

Case Name: Citizens for Responsibility and Ethics in Washington v. Trump

Court Name: Court of Appeals for the Second Circuit

Date Published: Sep 13, 2019

Citations: 939 F.3d 131; 953 F.3d 178; 18-474-cv

Docket Number: 18-474-cv

Court Abbreviation: 2d Cir.