Among legal scholars, there isn’t much debate: President Trump is violating the Constitution.
Since Trump decided to retain full ownership of his business empire, he has been receiving a stream of payments from foreign governments, which is prohibited by Article 1, Section 9 of the Constitution.
The trickier question is how to hold Trump accountable.
The most straightforward way is impeachment. Virginia Governor Edmund Jennings Randolph, in a debate over the provision, known as the Emoluments Clause, in 1788 put it bluntly: “If discovered he may be impeached.”
Impeachment, however, is an unlikely remedy while Republicans maintain an iron grip on Congress and show little interest in holding Trump accountable for anything.
An obscure legal tactic could be used to hold Trump accountable for illegal acts without involving Congress, Jed Shugerman, a professor at Fordham University Law School, tells ThinkProgress.
To sue Trump, you need standing
Absent impeachment, the clearest way to hold Trump accountable for violating the Emoluments Clause is through the court system.
While the case that Trump is violating the Constitution is relatively straightforward, the tricky issue is who has the authority to sue Trump over the issue. Someone with the right to sue, in legal terms, has “standing.”
To have standing, a private party must show it has a specific injury and not just a “generalized grievance.”
Citizens for Responsibility and Ethics in Washington (CREW), a government watchdog group, has sued Trump over the foreign Emoluments Clause. But CREW’s argument for standing is the weakest part of their case.
CREW argues that it has been injured by Trump’s conduct because it has “to divert resources from other work to monitor and respond to Mr. Trump’s activities.” There are talented lawyers involved in CREW’s lawsuit and it is possible CREW could prevail. But if CREW fails, it will almost certainly be a result of the standing issue.
In general, standing is most difficult when a private party (CREW) sues a government official (Trump).
“The more widespread a problem that a higher official creates for the entire public, the harder it is to challenge it because its hard to find an individual that stands out as more injured than anybody else by the highest officials hurting the American public broadly,” Shugerman told ThinkProgress.
Shugerman solves for this problem by turning the standing problem on its head.
The Quo Warranto solution
Shugerman’s approach stems from one important legal concept: Incorporation is a privilege afforded by the state, but to maintain corporate status, one must conduct business legally.
State attorneys general have the power to bring actions against corporations, something known as a “Quo Warranto” proceeding, to determine whether the corporations are a conduit for illegal activity. This is known as a corporation acting “ultra vires” or beyond its legal authority. In this case, the proceeding would determine whether Trump’s corporate entities are being used as a conduit for illegal emoluments to Trump.
Importantly, the case would involve a public official (a state attorney general) suing a private entity (the Trump Organization). This means standing would be on much firmer ground.
In many states, Quo Warranto authority has been explicitly provided to the state attorney general by statute. In New York, for example, the attorney general has the authority to bring such an action against a corporation under New York Business Corporation Law § 1101:
(a) The attorney-general may bring an action for the dissolution of a corporation upon one or more of the following grounds:
(1) That the corporation procured its formation through fraudulent misrepresentation or concealment of a material fact.
(2) That the corporation has exceeded the authority conferred upon it by law, or has violated any provision of law whereby it has forfeited its charter, or carried on, conducted or transacted its business in a persistently fraudulent or illegal manner, or by the abuse of its powers contrary to the public policy of the state has become liable to be dissolved.
(b) An action under this section is triable by jury as a matter of right.
If successful, the remedies in such a proceeding are “revoking or dissolving the corporate charter, enjoining it from exercising the illegal activity, and/or imposing a financial penalty on the corporation.”
In the case of Trump, that could mean enjoining the Trump organization from doing business with foreign governments, requiring that Trump divest from certain assets, or completely dissolving the Trump corporation.
The proceeding could involve discovery and significant disclosures by Trump, including his tax returns and how much business he does with foreign governments.
Since 1950, it has been rare for a state attorney general to bring a Quo Warranto lawsuit against a corporation, Shugerman said. This is because as “the rights of shareholders expanded, there have been ample opportunities for private individuals to raise claims of corporations going beyond their authority.” But Trump’s conduct is unique and may require a unique legal remedy.
The special case of Trump’s D.C. hotel
A Quo Warranto proceeding can be used to challenge the use of a corporation to funnel illegal emoluments, but also any other illegal activity. In Washington, D.C., Trump appears to have violated his lease with the federal government regarding his new hotel—the GSA lease prohibits federal officials from controlling the hotel.
The attorney general for Washington, D.C., Karl A. Racine, could potentially bring a Quo Warranto proceeding against the Trump organization for violating its government lease. That proceeding could force Trump to divest from the hotel or take other remedial steps.
The ideal venue: New York
New York would be an ideal venue to bring such a proceeding because the Trump Organization is officially incorporated there. (It may be possible to bring a Quo Warranto proceeding in a state where the Trump Organization does business but is not incorporated, but it would be more complex.)
There are actually two emoluments clauses in the Constitution. Article 1, Section 9 deals with payments from foreign governments. This would apply if, for example, the state-owned Bank of China rents office space in one Trump’s New York buildings. (They do.)
The other emoluments clause in the Constitution in Article II, Section 1. It states that the salary for the president won’t be adjusted during his term and “he shall not receive within that Period any other Emolument from the United States, or any of them.” This clause is likely implicated by the Department of Defense’s decision to rent space in Trump Tower.
Bringing such a proceeding in New York also does not involve the cooperation of Republican officials seeking to shield Trump from accountability. Instead, bringing the proceeding would be the decision of New York Attorney General Eric Schneiderman, a Democrat.
The possibility for such a proceeding exists in many states. Florida, for example, is a hub for business operations for the Trump Organization. But the Attorney General in Florida, Pam Bondi, is unlikely to initiate such an action. She has close ties to Trump and has received money from the Trump Organization.
Another possibility is Delaware, where the Trump Organization is also incorporated. Shugerman said that a proceeding could be brought in virtually any state where the Trump Organization does business, if only to enjoin them from doing business in that state.
One intriguing option is California, which grants the ability to “any county or city” to bring a Quo Warranto action against a corporation acting outside the law.