Thursday, October 8, 2020

Second Circuit upholds Trump tax return subpoena

These are the most famous tax returns in history. The President doesn't want to release them, and the District Attorney wants them. Trump has been fighting this for over a year. Earlier this year, the Supreme Court said there is no "absolute" presidential immunity from compliance with a grand jury subpoena, but it allowed Trump to make additional arguments on remand against producing them. The Second Circuit has rejected those arguments, and assuming the Supreme Court does not intervene a second time, Trump will now have to turn them over.

The case is Trump v. Vance, issued on October 8. Some presidents are known for the landmark Supreme Court rulings that bear their name. In United States v. Nixon, the Supreme Court ruled in 1974 that Richard Milhous Nixon must turn over the tape recordings that he made in the Oval Office so the congressional committee investigating Watergate could see what Nixon said behind closed doors about the Watergate break-in. That ruling led to Nixon's resignation a few weeks later. In Clinton v. Jones, the Supreme Court ruled in 1997 that the President has no immunity from civil law litigation for acts done before taking office and unrelated to the office. That ruling forced William Jefferson Clinton to give sworn deposition testimony, during which he lied about Monica Lewinsky, resulting in Clinton's impeachment. You see where I am going with this. Who knows where the Trump tax returns case will lead us?

Trump says the subpoena is illegal because it is overbroad and it was issued in bad faith. These arguments can repel a grand jury subpoena if the objecting party has a legitimate basis to assert them. Not this case. The Court of Appeals (Leval, Lohier and Katzmann) notes that Trump challenges the subpoenas not through a motion in criminal court to quash but through a civil lawsuit in which he must satisfy the heightened pleading requirements the Supreme Court set forth in Ashcroft v. Iqbal (2009), requiring the plaintiff to advance non-conclusory and plausible allegations. "A bare allegation of improper motive will not suffice if there is an obvious alternative explanation for the conduct alleged," the Court of Appeals says, quoting from Iqbal

First, the Court says, the subpoena is not overbroad. Settled law tells us that a grand jury investigation is broad in scope "and may expand easily over time." Trump only speculates that the grand jury is only examining the Michael Cohen issues (you know what they are), and, in any event, "Grand juries routinely issue multiple subpoenas seeking different information from different recipients during the course of their investigations, because, after all, they have a duty to follow every available clue wherever it may lead."

What about the bad faith argument? That fails also. Trump does not plausibly argue that the subpoenas were issued out of malice or intent to harass. While Trump says the subpoenas were issued in retaliation for his refusal to produce tax returns in response to a prior subpoena, like the overbroad argument, this is speculative and therefore fails the plausibility test under Iqbal. Nor does Trump argue that the DA issued the subpoena out of partisanship. 

For now, the Second Circuit's order to produce the tax returns is stayed while the Trump legal team seeks relief in the Supreme Court, which is not required to hear the case.

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