A federal appeals court on Wednesday dismissed a lawsuit that challenged the legality of payments to President Donald Trump’s hotels by foreigners during his tenure in the White House.
A three-judge panel in the U.S. Circuit Court of Appeals for the Fourth Circuit ruled that Maryland and the District of Columbia do not have legal standing to claim that Trump violated the so-called emoluments clause of the U.S. Constitution.
That clause bars government office holders from accepting gifts from foreign officials.
The appeals panel said Washington and Maryland’s interest in enforcing that clause “is so attenuated and abstract” that it raises the question of whether their lawsuit is an appropriate use of the courts.
The panel noted that never before had a president been sued for allegedly violating the emoluments clause, contained in Article I of the Constitution.
The panel ordered a federal district court judge in Maryland to dismiss the suit against Trump with prejudice, which would bar them from relaunching the action.
On Monday, the Justice Department urged the D.C. Circuit Court of Appeals to dismiss that other suit.
Trump’s lawyer, Jay Sekulow, called the ruling “a complete victory.”
CNBC has reached out for comment from the lawyers for Maryland and Washington. The plaintiffs will have the option of asking the entire Fourth Circuit to review the appeals panel’s decision.
Maryland and Washington allege in their lawsuit that the president’s refusal to give up his interest in the Trump Organization’s hotels and other properties enabled him to benefit from spending by foreign and domestic government officials.
Specifically, they cited the president’s majority interest in the Trump International Hotel in Washington and two Trump buildings in New York City, including Trump Tower and Trump World Tower.
In February 2017, for instance, they alleged that the Embassy of Kuwait spent tens of thousands of dollars at the Washington property. That same month, Saudi Arabia spent thousands on rooms and food, they said.
Those benefits, they argued, harmed Washington and Maryland by giving Trump’s properties a competitive economic advantage over other properties.
The appeals court did not accept those claims.
The three-judge panel noted the extraordinary nature of the case and the “difficult constitutional questions, for which there is no precedent.”
In response to the claims about the president receiving an unfair economic advantage, the judges said that Washington and Maryland “have manifested substantial difficulty articulating how they are harmed by the President’s alleged receipts of emoluments and the nature of the relief that could redress any harm so conceived.”
Earlier this year, the Trump Organization said that it had donated almost $200,000 to the U.S. Treasury to comply with its promise to turn over profits from foreign governments who patronized the company’s businesses. That amount was nearly $50,000 more than the prior year.
The ruling Wednesday represents a significant legal victory for the president at a time when his administration is besieged by lawsuits.
And it comes one day after the federal appeals court in the Second Circuit, based in Manhattan, ruled that he cannot block critics from following him on Twitter.
The Justice Department, meanwhile, is still fighting to add a citizenship question to the 2020 census despite an adverse Supreme Court ruling last month.
A federal judge in New York on Tuesday temporarily barred the Justice Department from swapping out its legal team handling the case.
Trump has sought to turn the court battles into election fodder.
In a Twitter post Tuesday, the president wrote that the Supreme Court’s decision on the census question “shows how incredibly important our upcoming 2020 Election is.”