Court to Test President's Immunity from Grand Jury Subpoena for Financial Records

Steven D. Schwinn, UIC John Marshall Law School

The Supreme Court will hear oral argument tomorrow in Trump v. Vance, the case testing whether the President is immune from a state grand jury subpoena for his records that have nothing to do with his official duties. Here's my Preview, from the ABA Preview of United States Supreme Court Cases, with permission:

FACTS

In the summer of 2018, the New York County District Attorney’s Office (the Office) opened an investigation into possible criminal misconduct in activities connected to the Trump Organization. The Office obtained information about transactions and tax strategies by individuals and organizations that raised the prospect that a continuing pattern of criminal activity might have occurred within the Office’s jurisdiction and within the statute of limitations. Importantly, the Office has not eliminated President Trump himself as a potential target.

These transactions include the now-familiar “hush money” payments during the 2016 presidential campaign that President Trump’s attorney, Michael Cohen, paid to two women with whom President Trump had extra-marital affairs. Cohen admitted that he violated campaign finance laws in coordination with, and at the direction of, a person later identified as President Trump. Cohen pleaded guilty to the charges and is now serving a prison sentence.

Around the time of Cohen’s guilty plea, at the request of federal prosecutors and in order to avoid disruption of the ongoing federal investigation, the Office deferred its own investigation. After the Office learned in July 2019 that the federal investigation had concluded without any further charges, the Office then resumed its investigation.

On August 1, 2019, the Office served the Trump Organization with a grand jury subpoena for records and communications concerning certain financial transactions. The Office later informed the Trump Organization’s attorney that the subpoena also required production of certain tax returns. Over the next several months, the Trump Organization produced responsive documents, but not the tax returns.

On August 29, 2019, the Office served a grand jury subpoena on Mazars USA, LLP, President Trump’s accounting firm, for financial and tax records from January 1, 2011, to the date of the subpoena, including records for President Trump himself and entities he owned before becoming President. The Office largely patterned the Mazars subpoena on a similar subpoena to Mazars issued by the House Committee on Oversight and Reform. The Office’s Mazars subpoena does not seek any official government communications or involve any official presidential conduct.

Soon after the Office issued the Mazars subpoena, the Trump Organization informed the Office that they believed that the request for tax records implicated constitutional considerations. The Office agreed to temporarily suspend the tax portion of the subpoena to allow the Trump Organziation to challenge it.

President Trump then sued the Office and Mazars, seeking preliminary injunctive relief to stop Mazars from complying with the subpoena. (The “Vance” in the case name refers to Cyrus R. Vance, Jr., District Attorney of the County of New York.) President Trump argued that as sitting President he enjoyed absolute immunity from any form of “criminal process” or “investigation,” including a subpoena issued to a third party like Mazars.

The district court dismissed the case, ruling that it belonged in state court, not federal court. Alternatively, the district court denied injunctive relief, holding that the President’s claim of absolute immunity from criminal process “finds no support in the Constitution’s text or history” or in the Court’s precedents. The Second Circuit vacated the district court’s ruling that the case belonged in state court, but affirmed its alternative ruling on the merits. This appeal followed.

CASE ANALYSIS

The Supreme Court has ruled in a series of cases that the President enjoys certain privileges and immunities from various judicial processes. For example, the Court held in United States v. Nixon, 418 U.S. 683 (1974), that the President had an “executive privilege” against disclosure of confidential presidential communications. At the same time, however, the Court ruled that a sufficiently important countervailing need for the information (like a federal court’s need for evidence in a criminal trial, as in that case) could outweigh the President’s interest in confidential communications.

As to immunities, the Court held in Nixon v. Fitzgerald, 457 U.S. 731 (1982), that the President is absolutely immune from civil liability for official acts taken while in office. But the Court held in Clinton v. Jones, 520 U.S. 681 (1997), that the President is not immune from civil suits for unofficial actions taken before he came to office.

The Department of Justice has long held the position that the President is immune from criminal prosecution while in office. But the Supreme Court has never addressed that question, or the related question whether the President is immune from any criminal process that might lead up to a prosecution. That last question is what this case is all about.

President Trump argues that as sitting President he is absolutely immune from any criminal process that targets him, including the Office’s subpoena to a third party like Mazars. President Trump claims that subjecting him to any criminal process at all would interfere with the President’s “unparalleled responsibilities to defend the nation, manage foreign and domestic affairs, and execute federal law.” Moreover, he contends that subjecting the President to any criminal process would “stigmatize the President in ways that will frustrate his ability to effectively represent the United States in both domestic and foreign affairs.” President Trump says that Congress can hold the President to account through impeachment, and that state and federal prosecutors can hold the President to account through criminal processes after he leaves office, but that the President is absolutely immune from criminal process while in office. President Trump asserts that this is consistent with the text, structure, and history of the Constitution and with the longstanding position of the Justice Department.

President Trump argues that the need for absolute immunity from criminal processes is particularly acute when it comes to state and local prosecutors. He says that these processes (unlike federal criminal processes, from which the President also claims absolute immunity) threaten federal supremacy under the Constitution’s Supremacy Clause. In particular, President Trump contends that without absolute immunity, state and local prosecutors, motivated only by their own parochial and political interests, could impede the work of the President and the President’s duties to the entire, undivided nation.

President Trump argues that the Mazars subpoena violates all of these principles. He says that there is “no dispute” that the Mazars subpoena targets him, given that it specifically seeks his records. And he says that it doesn’t matter that his compliance with this subpoena would not burden his official duties (because it is directed as Mazars, not him); instead, he claims that the President’s absolute immunity is based on the mere threat of a like subpoena (or other criminal process) by every state and local prosecutor.

President Trump argues that the Court’s precedents support his position. He points to Nixon v. Fitzgerald, where the Court held that a former President was immune from a suit for civil damages based on the President’s official acts. He says that subjecting the President to criminal processes would be even more burdensome. President Trump distinguishes Clinton and United States v. Nixon, arguing that both cases arose from federal, not state, proceedings, and that they involved different kinds of behavior or processes. Finally, President Trump argues that at the very least United States v. Nixon requires that a prosecutor show a “demonstrated, specific need” for material sought in a subpoena directed at the President, and that the Office failed to show this.

The government weighs in to support President Trump and echoes many of these themes. The government, however, stops short of arguing for absolute immunity from all criminal processes and instead argues only that President Trump is immune from “any process that would risk impairing the independence of his office or interfering with the performance of its functions.” In evaluating any particular process, the government contends that the Court should apply, at a minimum, the “heightened standard of need” in United States v. Nixon. It says that the Mazars subpoena does not meet this standard.

The Office argues in response that the President has no absolute immunity from a state grand jury subpoena for documents unrelated to the President’s official duties. The Office claims that the Court’s precedents extend immunity only to official acts (not private acts), and that the “mere risk of interference” with the President’s official functions cannot support immunity from this kind of subpoena. The Office contends that the Mazars subpoena only seeks information related to President Trump’s private acts, and only raises, at most, a “risk of interference” with the President’s official functions (because it’s directed at Mazars, not President Trump), and so the President is not immune from it.

The Office argues that this result is not altered by the President’s arguments in support of absolute immunity from all criminal processes. It says that responding to a subpoena is far less burdensome than facing indictment or prosecution, and does not stigmatize the President the way an official accusation of wrongdoing might. By way of comparison, it claims that the burdens on the President in United States v. Nixon were far greater, yet the Court still ruled against the President’s claim of privilege.

As to President Trump’s federalism claims, the Office argues that these lack merit. It says that state and local prosecutors are on the front lines of criminal law enforcement in the country, and that they are “cloaked with a presumption of regularity that makes federal interference particularly inappropriate.” Moreover, it asserts that there are other procedural safeguards—including a prohibition on state investigation of official presidential conduct—that protect the President from abusive state and local criminal processes. In any event, the Office contends that the Court already considered and dismissed President Trump’s worry that state and local prosecutors could hassle the President for political reasons when it rejected a similar argument for immunity from a private civil suit against the President in Clinton.

The Office argues further that there are good policy reasons not to provide absolute immunity to the President. For one, such immunity could effectively immunize the President from any post-office indictment and prosecution, because evidence may go stale and statutes of limitations may run. For another, immunity may impede other, related criminal investigations and prosecutions.

In short, the Office argues that there is no basis for absolute presidential immunity from all criminal processes, that there are good reasons not to provide such sweeping immunity, and that in any event the President has plenty of opportunities to claim immunities on a case-specific (and not absolute, categorical) basis.

The Office argues that the alternative test for immunity, the government’s “heightened standard of need,” derives from the Court’s test in evaluating claims of executive privilege, and has no application here. According to the Office, that’s because the subpoena here does not seek privileged material or material related to official conduct. Moreover, it says that the mere risk of the subpoena’s burden on the President is insufficient to justify a heightened standard. And it claims that such a standard would impede state and local law enforcement.

Finally, the Office argues that President Trump has failed to demonstrate that the Mazars subpoena suffers from any of the problems that may immunize the President from it. In particular, the Office says that President Trump has failed to show that it was issued in bad faith, or that it would be overly burdensome. (The Office notes that the district court already ruled on this last point, and that President Trump hasn’t produced any new evidence.)

SIGNIFICANCE

This case has obvious and much-rehearsed (maybe too much rehearsed) political significance. In short, President Trump’s refusal to release his tax returns has been a central issue of political debate since at least the 2016 primaries. A ruling for President Trump would close this particular channel that could eventually lead to public release. A ruling against him, on the other hand, would require Mazars to turn over President Trump’s taxes to the Office, and thus leave open this channel which could lead to public release. It’s not entirely clear how much this matters, however, given that so many voters are stuck in their support of or opposition to President Trump, whatever his taxes might reveal. In any event, the ruling (which will likely come down this summer) will fast become political fodder for both sides and will certainly play some role in the presidential election.

The case and its companions, Trump v. Mazars USA, LLP, and Trump v. Deutsche Bank AG, raise the specter of a secondary political effect, which is likely far more significant. That is: these cases, as much as any other this Term (given the high-profile role that President Trump’s taxes and finances continue to play in our politics), will put the Court front and center in the ongoing political debates and the 2020 presidential election. Whatever the Court says, polls on one side or the other will claim that our Supreme Court justices are really only politicians masquerading in robes. That inevitable claim could have extra resonance here, in this explosive political environment and on this uniquely red-hot political issue, and could do serious and lasting damage to our collective faith in the judiciary and to the separation of powers.

And speaking of the separation of powers, this case could fundamentally reshape our structural constitution. The Court has never come close to endorsing the President’s claimed sweeping and absolute privilege against all criminal processes. If it creates such a privilege here, the ruling will mark a dramatic shift of power away from Congress, the judiciary, and even the states—and to the Executive Branch. This is big enough that we’ll almost feel the shift in our constitutional tectonic plates.

One final point. This case, of course, is linked with Trump v. Mazars and Trump v. Deutsche Bank AG, the two cases testing congressional authority to get President Trump’s taxes. While those cases raise the same practical bottom-line question—Can anybody get at President Trump’s taxes and financial records?—they involve very different constitutional issues, and therefore have their own (also quite weighty) constitutional significance.