Judge sides with NY officials in Trump tax return lawsuit

A federal judge on Monday dismissed two New York officials from President Trump’s lawsuit over his state tax returns.

Judge Carl Nichols, a Trump appointee in federal district court in Washington, D.C., ruled that the D.C.-based court doesn’t have jurisdiction over the New York officials: Attorney General Letitia James and state tax official Michael Schmidt.

“Mr. Trump bears the burden of establishing personal jurisdiction, but his allegations do not establish that the District of Columbia’s long-arm statute is satisfied here with respect to either Defendant,” Nichols wrote.

{mosads}He added that Trump could renew his claims against the New York officials if future events trigger the D.C. statute, or he can sue the New York officials in their home state.

New York enacted a law in July that allows Congress’s tax committees to request public officials’ state tax returns from the state’s department of taxation and finance.

House Ways and Means Committee Chairman Richard Neal (D-Mass.) hasn’t made any request under the New York law and hasn’t determined if he will do so.

Shortly after the New York law was enacted, Trump filed a lawsuit in his personal capacity in an effort to prevent House Democrats from obtaining his state returns. The amended version of the lawsuit named as defendants the New York officials, the Ways and Means Committee, Neal and a Ways and Means Committee aide.

The New York officials filed a motion to dismiss the case in August, arguing that the federal court in D.C. doesn’t have jurisdiction over them. Trump urged Nichols to reject the motion, arguing that the court has jurisdiction over the New York officials under D.C.’s “long-arm statute.” 

In his 19-page opinion, Nichols said that Trump has failed to prove that jurisdiction is applicable. He said that “the acts of corresponding with the Committee and transmitting Mr. Trump’s state tax returns would not constitute transacting business” under the long-arm statute.

“Mr. Trump has not pointed to any decision holding that corresponding with a congressional committee and sending it information (or any similar act) would constitute a commercial or business activity,” Nichols wrote.

In July, Trump had filed an application for emergency relief, asking Nichols to block Neal from requesting his tax returns until his case can be heard in court. Nichols then issued an order that blocked the New York officials from providing Neal with any requested state tax returns of Trump until one week after he ruled on the officials’ motion to dismiss.

In an order on Monday, Nichols directed Trump and the congressional defendants to file a joint status report by Wednesday outlining how they’d propose to proceed on Trump’s emergency relief application, which is still pending for the court.

The congressional defendants last month filed their own motion to dismiss Trump’s lawsuit, arguing that they are immune from it under the Constitution’s speech of debate clause.

James, a Democrat, said in a tweet about Monday’s ruling that New York’s tax return law “is an important tool that will ensure accountability & transparency.”

BREAKING: A judge has dismissed President Trump’s lawsuit against me over the TRUST Act.

The TRUST Act, a law allowing Congress to request access to financial documents from NY, is an important tool that will ensure accountability & transparency.

No one is above the law.

— NY AG James (@NewYorkStateAG) November 11, 2019

“We are pleased with the court’s conclusion,” James said in a statement.

“The TRUST Act is an important tool that will ensure accountability to millions of Americans who deserve to know the truth,” she said. “We have never doubted that this law was legal, which is why we vigorously defended it from the start and will continue to do so.” 

New York State Assemblyman David Buchwald (D), one of the authors of the law, praised Nichols’s ruling, saying it “moves us closer to finding what it is [Trump] has fought so hard to hide from the public.” 

“Now I hope the courts move quickly  to dismiss the other claims in Mr. Trump’s lawsuit against the House Ways and Means Committee. New York State will stand ready to provide the Committee with the President’s New York State tax returns,” he added.

Jay Sekulow, one of Trump’s attorneys, told reporters Monday that the president’s legal team is reviewing the opinion.

The lawsuit over the New York tax-return law is one of several legal cases involving Trump’s tax returns. 

The Ways and Means Committee has filed a lawsuit in an effort to get a judge to order that the Trump administration comply with Neal’s requests and subpoenas for six years of Trump’s federal tax returns. And a federal appeals court in New York last week ruled that Trump can’t block a grand-jury subpoena that the Manhattan district attorney’s office issued to his accounting firm for his tax returns and financial records. Trump’s lawyers plan to appeal that ruling to the Supreme Court this week.

—Updated at 3:18 p.m.