Trump tax fight before Second Circuit Wednesday

When Donald Trump learned that Manhattan District Attorney Cyrus R. Vance, Jr.  subpoenaed his financial records he did not challenge the subpoena in the New York courts.  He filed a federal civil rights action under 42 U.S.C. 1983 - the post Civil War law under which Brown v, Board of Education and suits to enjoin or compensate for civil rights violations are brought.  On Wednesday, October 23 the U.S. Court of Appeals in New York will hear oral argument on Trump’s effort to stay the decision issued by Victor Marrero, a federal District Judge allowing the state subpoena to be enforced against the Mazars accounting firm which prepares Trump’s tax returns.

Trump complains that he is the victim of a bad faith grand jury proceeding intended to obtain his financial records for political purposes - not to enforce any law.  He sued personally, describing himself as  both President and as the sole beneficiary and ultimate owner of a string of Trump trusts and companies. His private lawyers' brief argues his rights are not merely personal but also that the subpoena interferes with his presidential duties.  The case therefore belongs in federal court.  The traditional factors which lead federal courts not to interfere with state criminal proceedings are inapplicable the Trump lawyers assert because a federal officer’s rights should be determined by a federal court, not risked at the hands of a state court. 

Trump must overcome the holding by the Supreme Court  in Clinton v. Jones (1997).  In a civil action by Paula Jones who alleged sexual misconduct by Bill Clinton before he took office, Justice John Paul Stevens  explained that the President, like other officials, is subject to the same laws that apply to all citizens.  No case had been found in which an official was granted immunity from suit for his unofficial acts, Justice Stevens noted.  The rationale for official immunity is inapplicable, he explained, where only personal, private conduct by a President is at issue. The Court also rejected the argument that, unless immunity is available, the threat of judicial interference with the Executive Branch would violate separation of powers.

Vance, the New York  District Attorney has submitted a sealed declaration describing the scope and basis for the investigatory subpoena to Mazars - the Trump accountants (which itself takes no position).  Vance writes “The records relate to business and financial matters unrelated to any official acts of the President of the United States, and are primarily from the time-period before Appellant [Trump] assumed that office”.

 The Mahattan prosecutor  argues that because “[i]n the ordinary course, ‘a state proceeding provides an adequate forum for the vindication of federal constitutional rights.’..  The burden rests with Appellant [Trump]  to show “that state procedural law barred presentation of [its] claims.” Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 14 (1987)... “Under Younger [v. Harris (1972)] . . . [we] need not establish that state law definitively permits the interposition of constitutional claims.”   

Article VI of the U.S. Constitution declares that federal law is supreme and that  “The Judges in every State shall be bound thereby”.  Federal courts therefore  must presume that state judges will protect constitutional rights with the same vigor as would any federal judge.  The Supreme Court so found when in the 1967 case Walker v. Birmingham it upheld the jailing of Martin Luther King for defying an ex parte Alabama court order not to march on Good Friday 1963 in Birmingham, Alabama.  The civil rights leaders should have appealed to the Alabama courts rather than march on Good Friday defying a court order issued without notice to them, according to the decision written by the conservative  Justice Potter Stewart.

Vance therefore soundly relies on District Judge Victor Marrero’s conclusion that the 1982 Supreme Court decision in  Middlesex County Ethics Committee v. Garden State Bar directs federal courts to allow state court proceedings to move forward when "( 1) there is a pending state proceeding , ( 2 ) that implicates an important state interest, and ( 3 ) the state proceeding affords the federal plaintiff an adequate opportunity for judicial review of his or her federal constitutional claims."  All three conditions prevail here.  Enforcement of tax laws and punishing financial crimes are surely important matters, and the New York Courts surely can cope with a federal constitutional challenge.

William Barr’s  Department of Justice has intervened as amicus curiae on Trump’s behalf.  The DOJ relies on  the supremacy of the President as a federal officer.  That argument  would be compelling if the New York investigation  involved offenses touching on the Office for which the House of Representatives has “sole  Power of impeachment” under Article 1 of the Constitution.  But it does not.  It is Trump’s pre-Presidential conduct that is at issue.  Trump and the Department of Justice can expect to be hard pressed to persuade the Circuit panel that Vance’s criminal investigation is in bad faith - that the federal interest preempts the State’s in enforcing its general criminal law against a man whose refusal to disclose his tax returns and  already public financial record provides many reasons to suspect that he has been a dishonest actor.

- GWC