Case Summary and Outcome

The US Supreme Court held that a congressional subpoena to obtain the President’s personal, non-official information is valid only if it is related to a legitimate task of the Congress and takes onto consideration the special separation of powers issues raised by such actions. Congressional subpoenas were issued to two major financial institutions (Deutsche Bank and Capital One) and Trump’s personal accounting firm, Mazars LLP. President Trump sued to prevent Mazars and the financial institutions from complying with the Committee’s subpoena, alleging that the House Committee on Oversight and Reform’s investigation into his financial records served no legitimate purpose and raised crucial separation of power concerns. The Court laid down a four-point guiding test to assess whether a subpoena directed at procuring the President’s personal information was related to or in furtherance of ‘valid legislative purposes’. By a majority of 7-2, the Supreme Court vacated the judgment of the lower courts and remanded the matter for further proceedings.

Facts

On April 15, 2019, the Oversight Committee of the House of Representatives issued a subpoena to Mazars USA LLP (Defendants), the long-time accountant for President Trump and several Trump entities. The subpoena required Mazars to produce eight years (2011-18) of information from four broad categories, which included financial statements, reports, engagement agreements and underlying documents prepared, compiled, reviewed or audited by Mazars USA LLP as well as communications related to them.

Four days earlier, three other subpoenas were issued by the House Financial Services Committee and Intelligence Committees to Capital One and Deutsche Bank, enquiring into personal and corporate finances of President Trump over possible concerns relating to foreign interference in the US political process, money laundering, corruption, terrorism and other financial crimes. Specifically, they sought information relating to account activity, foreign transactions, business statements, debt schedules, statements of net worth, tax returns and suspicious activities.

The Oversight Committee subpoena emerged from a Committee hearing on February 27, 2019, featuring the testimony of Michael Cohen. Among other things, Cohen had alleged that the President had inflated and deflated his assets on personal financial statements from 2011, 2012, and 2013 to obtain a bank loan for a (never materialized) deal to buy the Buffalo Bills, to reduce his New York real estate taxes and to reduce his insurance premiums. The financial statements in question were prepared by Mazars.

In effect, Mr. Cohen’s testimony raised ‘grave questions about the legality of President Donald Trump’s conduct’. Before issuing the Mazar’s subpoena, Chairman Elijah Cummings explained the basis for the subpoena through two documents – first, a March 20 letter issued to Mazars explaining that the Committee wanted to verify Cohen’s testimony including certain inconsistencies between 2011, 2012 and 2013 statements produced by Cohen; and second, an April 12 memorandum to the Oversight Committee offering four potential legislative reasons for issue of subpoena. These purposes included:

1. whether the President may have engaged in illegal conduct before and during his tenure in office,
2. whether he has undisclosed conflicts of interest that may impair his ability to make impartial policy decisions,
3. whether he is complying with the Emoluments Clauses of the Constitution, and
4. whether he has accurately reported his finances to the Office of Government Ethics and other federal entities [p. 10].

In response, President Trump in his personal capacity, along with his children and affiliated businesses filed two suits challenging the subpoenas. The Oversight Committee subpoena was contested by an application dated April 22, 2019 in District Court of Columbia and the subpoenas issued by the Financial Services and Intelligence Committees by an application dated April 29, 2019 in the Southern District of New York. Insofar as the Oversight Committee subpoena was concerned, the Appellants sued Mazars, the Committee Chairman and the Committee lawyer who served the subpoena, alleging lack of statutory authority to seek Appellants’ private information without a ‘legitimate legislative purpose’ as well as violation of the separation of powers doctrine. Summarily, the Appellants requested a declaratory judgment and an injunction restricting Mazars from complying with the subpoenas. A few days later, the House Committees intervened and agreed to stay enforcement of the subpoena until the district court ruled on Appellants’ preliminary injunction motion.

By an order dated May 20, 2019, the District Court of Columbia denied a stay pending appeal, upholding the subpoena issued by the Oversight Committee to Mazars and directing the accounting firm to disclose Appellants’ private information to the Committee. On October 11, 2019, the D.C. Circuit affirmed the District Court’s judgment. It held that the requested information was relevant to reforming financial disclosure requirements for Presidents and presidential candidates, and to that extent served a ‘valid legitimate purpose’. The D.C. Circuit also denied a hearing en banc over dissents in the case. A similar conclusion was also reached in the Deutsche Bank case (concerning subpoenas issued by Financial Services and Intelligence Committees). In that case, the Court reaffirmed that the issue of subpoenas was essential ‘to inform legislation to combat foreign meddling and strengthen national security’ [p. 11] and adequately related to potential legislation on money laundering and terrorist financing.

The Appellants’ appealed. On November 25, 2019, the Court stayed the mandate pending the disposition of a petition for writ of certiorari. On December 13, 2019, the Court granted the Appellants’ application to stay the mandate, treated the application as a petition for writ of certiorari, and granted the petition.

Decision Overview

Chief Justice Roberts delivered the opinion of the United States Supreme Court. The question facing the Court was whether the U.S. House of Representatives exceeded its authority to issue subpoenas to obtain the private financial records of the President and his businesses.

The Court in a ruling issued earlier in the day in Trump v. Vance had extended the principle in United States v. Burr (that Presidents may be subpoenaed during federal criminal proceedings) to state proceedings. However, the Court distinguished this case from Vance due to the fact that unlike Vance where the President’s information was sought by prosecutors in connection with an impending investigation, in this case the subpoena was issued by committees of Congress.

The Supreme Court underwent an elaborate historical analysis on the practice of congressional demands for presidential documents before concluding that the Congress does not possess any ‘enumerated constitutional powers to conduct investigations or issue subpoenas’ [p.16]. However, it held that each House holds the crucial power to enquire for purposes of legislation. Such authority to obtain information was considered to be ‘broad’ and ‘indispensable’ by the Court, encompassing inquiries into administration of existing laws, study of proposed laws and like surveys of defects in system. Given that the authority to issue congressional subpoenas inquiring into the alleged defects is adjunct to legislative process, the Court sought to limit its application to ‘valid legislative purposes’ only. Notably, the Court excluded subpoenas issued for purposes of ‘law enforcement’ out of this ambit, holding that ‘investigations conducted solely for personal aggrandisement of investigators or to punish those investigated’ were indefensible [p. 17].

Before the Court, Trump had contended that there was a ‘demonstrated specific need’ required to be established by the House to obtain financial information (relying in large part on the cases involving Nixon tapes). Nevertheless, the Court disregarded this claim on the ground that it failed to take into account significant interests of the Congress as a representative body whose duty was to ‘look diligently into every affair of the government’. Unlike Nixon and Senate Select Committee cases which involved official communications over which the President could exert executive privilege, the arguments put forth by Appellants were not applicable in the present case where subpoenas demanded non-privileged private information. The Court warned that a categorical approach in applying ‘demonstrated specific need’ standard outside the context of privileged information would seriously hamper Congressional interests.

Trump had also raised separation of power concerns resulting from subpoenas issued by the Committees, classifying them as ‘law-enforcement investigations masquerading as legislative enquiries’. On this point, D.C. Circuit and the Second Circuit were fairly unanimous in declaring that the cases did not raise serious separation-of-power problems as the President was sued in personal capacity over personal documents. Both the lower courts rejected application of a narrowing construction to avoid the separation-of powers concerns raised by authorizing every House committee to subpoena the President.

Interestingly, the Supreme Court viewed it differently. Rejecting the findings of the lower courts, it held that the approach of the House ‘aggravated’ separation of power concerns by leaving essentially no limit on the exercise of congressional power to subpoena the President’s personal records. Since the President and Congress were ‘rival’ political branches established by the Constitution, congressional subpoenas had an effect of unavoidably ‘pitting’ the branches against one another. A limitless subpoena power would therefore, according to the Court, transform established practice by allowing the Congress an ‘imperious control’ over Executive branch and an ability to aggrandise itself at the expense of the President [p. 21].

The Supreme Court was vigilant to distinguish the congressional subpoenas in the case from the criminal subpoenas issued to the President under Vance. According to the Court, the two bore little resemblance and unlike congressional demands, a failure to ensure full disclosure of facts in criminal proceedings had the potential to undermine the integrity of the judicial system. The Court was also quick to note that it was often difficult to demarcate a clear line between the personal and official affairs of the President, being the only person who alone composes a branch of government. As a result, the ‘interests of the man’ were invariably connected with ‘the constitutional rights of the place’ and the congressional demands had a capacity to implicate the branches irrespective of the documents sought being personal or official [p. 22]. In view of the Court, the Congress’s interests in obtaining personal information were simply not sufficient to justify access.

On the claim of the Committee that the subpoenas were issued to third parties, that made no difference either. A President’s information was his irrespective of where the information was held, and legitimising the claim against third parties would allow the Congress to side-step constitutional requirements any time a President’s information was entrusted to third parties.

Finally, in the absence of a balanced approach to address significant concerns raised in the case, the Court established guiding standards to assess whether a subpoena directed at procuring President’s personal information was related to/in furtherance of ‘valid legislative purposes’. Apart from performing a careful analysis of separation of powers principles at stake, the Court enacted several special considerations. These include:

1. Assessing whether the asserted legislative purpose warrants the involvement of President and his papers (i.e. not looking at the President as a ‘case study’ for general legislation);
2. Specificity of subpoena requests in claiming information no broader than reasonably necessary to narrow the scope of possible conflict between branches;
3. Requirement of a detailed and substantial evidence to establish that the subpoena advances a valid legislative purpose;
4. Paying due regard to the burdens on President’s time and attention stemming from judicial process and litigation [p. 24-25].

Justice Thomas and Justice Alito authored dissenting opinions. Basing findings on a detailed chronological historical analysis of Congress’s implied powers, Justice Thomas argued that unlike the Parliament which holds supreme authority, the implied legislative powers of the Congress were very limited and did not extend to the issue of legislative subpoenas for private, nonofficial documents (quoting Kilbourn v. Thompson and McGrain v. Daugherty). An inquiry into the private affairs of a citizen was a ‘judicial and not legislative power’ and the only way to investigate alleged wrongdoings of the President by obtaining documents from him was through an impeachment process [p. 43]. Justice Thomas viewed the four-point solution of the majority as ‘better than nothing’, given that Congress’ legislative power did not authorise it to engage in inquisition of private, non-official information.

Justice Alito, though not going so far as declaring unconstitutional issue of Congressional subpoenas for a President’s personal documents, agreed that such legislative subpoenas were ‘inherently suspicious’ [p. 47]. Calling for a ‘more than perfunctory showing of legitimate legislative purpose’, Justice Alito found the terms of remand of the majority inadequate and sought to require a description of the type of legislation considered, the constitutional authority to enact the type of desired legislation, reasons to  obtain information through subpoenas as opposed to information from other sources and the scope of subpoenas in relation to the articulated legislative needs.

Accordingly, by a ratio of 7-2, the judgment of the Courts of Appeals for the D. C. Circuit and the Second Circuit were vacated by the Court and the cases were remanded for further proceedings.