NEW YORK _ Donald Trump escaped for now a constitutional showdown over running his far-flung business empire while serving as president.
A federal judge on Thursday dismissed a lawsuit alleging that Trump has flouted limits on presidents' financial dealings with foreign governments by, for example, hosting diplomats at his Washington hotel and collecting overseas licensing fees for "The Apprentice."
Trump's refusal to divest his sprawling web of international real estate holdings and other business interests has fueled criticism that he's miring the White House in conflicts of interest. The lawsuit, brought by an ethics watchdog group, is one of several accusing Trump of violating the U.S. Constitution's Foreign Emoluments Clause, a rarely invoked provision barring federal officeholders from taking gifts and payments from other governments without the consent of Congress.
U.S. District Judge George Daniels in Manhattan, ruling for the first time in the nation's history on an emoluments complaint over a president's business dealings, concluded that the issue is one for Congress, not the courts, to decide. The dispute may ultimately go to the Supreme Court.
"If Congress wishes to confront defendant over a perceived violation of the Foreign Emoluments Clause, it can take action," Daniels said in his ruling, saying it's not the court's job to do so if Congress takes a pass. "This court will not tell Congress how it should or should not assert its power in responding to defendant's alleged violations of the Foreign Emoluments Clause."
The judge noted that Congress is "not a potted plant" and has the power to act as a body in response to the alleged violations of the clause.
"This is one for the history books," said Ian Gershengorn, a former acting U.S. solicitor general who is now a partner with Jenner & Block in Washington. "After 225 years the Emoluments Clause is having its moment in the sun. But for now, the court's decision leaves any questions about the president's businesses to Congress and ultimately to the voters."
Citizens for Responsibility and Ethics in Washington, known as CREW, sued Trump shortly after his inauguration in January. CREW had asked Daniels to order Trump to divest himself of properties that put him in violation of the emoluments provision.
The group hoped the litigation would force Trump to disclose information about his financial dealings, including his personal income tax returns. No court has ever considered whether the Constitution requires a president to surrender his business holdings.
CREW says Trump's emoluments violations include a China-owned bank renting office space at Trump Tower, diplomats throwing parties at the Trump International Hotel, just blocks from the White House, and the BBC's licensing in the U.K. of "The Apprentice," the reality TV show he hosted for 14 seasons on NBC.
Trump, represented by the U.S. Justice Department, claimed CREW and the other plaintiffs lack the legal standing to sue _ that they can't claim the kind of injury from his alleged violation that would get them past the courthouse door. He also argued that the Foreign Emoluments Clause was never intended to apply to commercial transactions such as restaurant bills, hotel charges, office rent or golf course fees.
The clause says that no one "holding any office of profit or trust" in the federal government may "accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state," without the consent of Congress.
CREW also sued Trump based on the Domestic Emoluments Clause, a separate provision that prevents presidents from taking payments from the federal or state governments outside his official salary, regardless of Congressional consent.
At a hearing in October, Daniels questioned CREW's lawyer about standing and whether the matter is one for Congress rather than the courts. The judge was also skeptical of the government's narrow definition of "emoluments." CREW considers an emolument to be any benefit from a foreign nation, while the U.S. says an emolument is a payment derived from a government position only.
In a friend-of-the-court brief, Seth Barrett Tillman, a legal scholar and lecturer at Maynooth University in Ireland, argued that the Foreign Emoluments Clause doesn't apply to presidents. In support he cited a document, written in 1793 by then-Treasury Secretary Alexander Hamilton, that excluded the president, vice president and other elected officials from a 90-page list of "every person holding any civil office or employment under the United States."
Tillman also pointed to the practice of early presidents, including George Washington and Thomas Jefferson, who received diplomatic gifts without asking Congress for permission. It's an argument that may be considered on appeal of Daniels' ruling.
Trump also faces Foreign Emoluments claims in a suit by Congressional Democrats in federal court in Washington. The Maryland and District of Columbia attorneys general also sued Trump in Maryland federal court over alleged violations of both the Foreign and Domestic Emoluments clauses.
Joining CREW as plaintiffs in the New York case are Restaurant Opportunities Centers United, an association representing 200 restaurants and 25,000 workers; Jill Phaneuf, a Washington based luxury hotel event booker; and New York hotel and restaurant owner Eric Goode. They alleged Trump is costing them money by illegally competing with them for the business of foreign officials.
Daniels was appointed in 1999 by President Bill Clinton.
The case is Citizens for Responsibility and Ethics in Washington v. Trump, U.S. District Court, Southern District of New York (Manhattan).
