Case Summary and Outcome

The Supreme Court of the United States ruled that US President Donald Trump must comply with a grand jury subpoena for his personal financial records, rejecting his claim of absolute immunity while in office. New York District Attorney Cyrus Vance, Jr. issued a grand jury subpoena to Trump’s accounting firm Mazars USA, LLP for personal financial records, including his tax returns as part of a criminal investigation into alleged campaign finance violations and other illegal conduct involving the President and his businesses. President Trump brought the action claiming neither he nor Mazars had to comply on the grounds that as President he had complete immunity from state criminal processes under the Supremacy Clause of the US Constitution and that the subpoena created a burden of ‘diversion, stigma and harassment’ which interfered with his  ability to execute his official duties under Article II. The Court rejected Trump’s argument that it would create an undue burden and taking into consideration that the subpoena was for personal documents required for a state criminal investigation, the Court found the President stood in ‘nearly’ the same situation as any other ordinary citizen. Further, rules of grand jury secrecy would prevent any stigmatization and grand juries were prohibited from initiating investigations out of an intent to harass or cause malice.  The Court also rejected the argument that a heightened standard of need was required for such information under Article II on the ground that denying the grand jury evidence for the criminal investigation would hamper the public interest in fair and effective law enforcement.

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Facts

In April 2019, following hearings regarding the President’s financial holdings and business ventures, the Oversight Committee of the U.S. House of Representatives issued a subpoena to the President’s accounting firm, Mazars USA, LLP. Mazars (a New York accounting firm accounting for the President’s personal and business dealings) was responsible for, among other things, preparing financial statements for businesses owned by President Trump, as well his personal tax returns. The Committee claimed to be investigating a number of issues, including the President’s past financial transactions, possible violations of the Emoluments Clauses of the U.S. Constitution and federal financial disclosure laws.

The District Attorney of New York County opened its own investigation into the President’s business dealings, including certain payments made in 2016. As part of that investigation, on August 1, 2019, the District Attorney served a grand jury subpoena on the Trump Organization that demanded several documents and communications concerning the President from the period between June 1, 2015 to September 20, 2018. The documents and communications sought were in response to multiple public reports of possible criminal misconduct by employees of the Trump Organisation, including one such instance related to suspected ‘hush money’ payments made to two women with whom Trump allegedly had extra marital affairs. The items sought by this demand included emails, memoranda, and other communications; invoices; agreements; accounting and other book entries or backup documents; general ledger records; wire transfer requests and related records, check images, bank statements, and any other evidence of payments or installments; and organizational documents and agreements, including articles of incorporations, limited liability agreements, and minutes of director or member meetings.

The President’s attorneys opened a communication channel with the District Attorney to collect and produce documents demanded by the subpoena, but it was subsequently revealed by the District Attorney’s Office that the subpoena intended to cover The Trump Organization’s tax returns as well. This led to a dispute over the subpoena’s scope, and the District Attorney sought to bypass the President by subpoenaing Mazars, a neutral third party custodian instead. The subpoena titled “Investigation into the Business and Affairs of John Doe” – named the President personally and demanded production of his personal records (including his tax returns). It is interesting to note that the District Attorney’s subpoena to Mazars is identical to the House Oversight Committee’s subpoena to Mazars, with the sole exception being that the subpoena issued by the House Oversight Committee did not ask for Mazar’s tax returns. The Mazars subpoena sought financial records dating from January 1, 2011 to present and relating to the President, the Trump Organisation and related entities.

After attempts to engage in good-faith negotiations failed, on September 19, 2019, the President, acting in his personal capacity, filed a federal action challenging the validity and enforceability of the District Attorney’s subpoena. The complaint by the President asserted a broad presidential immunity from criminal processes of the state and requested that a declaratory judgment be issued stating Mazars subpoena invalid and unenforceable during the President’s term in office.

On October 7, 2019, the District Court issued an order in the case, dismissing the President’s complaint and denying his motion for injunctive relief. Specifically, the court held that it was required to abstain from exercising the jurisdiction and that the President’s immunity claim be pursued in state court under Younger v. Harris, 401 U.S. 37 (1971), and dismissed the complaint on that basis. As an alternative holding, the District Court denied the immunity claim by the President, holding that he may not be immune from shorter prison sentences.

Mazars was required to comply with the subpoena at 1 PM on October 7, 2019, following a stay on enforcement to allow parties to argue the case. Given that the District Court ruling was issued on 8.47 AM on October 7 leaving hours before Mazars could comply with the subpoena, the President filed a notice of appeal and an emergency motion for stay with the Second Circuit. An agreement was reached between the parties to stay the enforcement of the subpoena  between the date of oral arguments in the Second Circuit and 10 calendar days after the Second Circuit issued its ruling.

On November 4, 2019, in an opinion issued by the Second Circuit, the Court disagreed with the District Court’s dismissal of complaint, but affirmed the denial of a preliminary injunction. In particular, it held that the President was unlikely to prevail on his claim that he is “absolutely immune from all stages of state criminal process while in office, including pre-indictment investigation, and that the Mazars subpoena cannot be enforced in furtherance of any investigation into his activities” [p. 14-15]. The Second Circuit remanded the case to the District Court for further proceedings.

Against the decision of Second Circuit, a petition for a writ of certiorari was filed by President Trump  in the Supreme Court on November 14, 2019.

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Decision Overview

Chief Justice Roberts delivered the opinion of the United States Supreme Court. The primary question before the Court was whether the District Attorney’s issuance of criminal process demanding a sitting President’s records from a third-party custodian over which the President has no claim of executive privilege violates the immunity that he holds under Article II and the Supremacy Clause of the Constitution.

Summarily, Trump’s claims were made under Article II and the Supremacy Clause, which provides that the President of the United States cannot be “subject to the criminal process” while he is in office. Before the District Court, he argued that a sitting President enjoys complete immunity from state criminal processes, and an issue of subpoena against him interferes with the President’s ability to execute his duties under Article II, violates the Supremacy Clause, and is irreconcilable with the constitutional design.

The District Court by a ruling issued on October 7, 2019 held that the President’s temporary immunity from criminal process – including indictment and imprisonment – while in office were to be assessed on a case-by-case basis. As a result, although the President might be immune from ‘lengthy imprisonment’ or ‘a charge of murder’, he might not be immune from a shorter prison sentence or prosecution for lesser crimes such as ‘failing to pay state taxes, or of driving while intoxicated’. In so holding, the court ‘reject[ed]’ the contrary views of the Department of Justice over the last 50 years even though they ‘had assumed substantial legal force’. Applying its novel balancing test, the District Court held that the President is not immune from this subpoena while in office.

The decision of the District Court was subsequently affirmed by the Second Circuit, which held ‘that any presidential immunity from state criminal process does not bar the enforcement of [this] subpoena’ [p. 28]. The Appellate Court declined to decide on the precise contours and limitations of the presidential immunity but instead held that a third party cannot be restricted from producing non-privileged material under the guise of presidential immunity, even when the subject matter under investigation pertains to a sitting President.

Interestingly, while the Second Circuit recognized that this was a unique instance where a subpoena was issued to the President by a local grand jury operating under the supervision of state court, it explained that it was not faced with the President’s arrest or imprisonment, or with an order that compels the President himself to do anything. Instead, the Mazars subpoena was directed to his accountants, which sought no privileged information and bore no relation to the President’s performance of his official functions. Given these circumstances, the Court held that the petitioner failed to explain why any burden or distraction the third-party subpoena causes would rise to the level of interfering with his duty to faithfully execute the laws.’

At the first instance, the Supreme Court began with the question of absolute immunity. It relied on two centuries old Chief Justice Marshall’s ruling in United States v. Burr, 25 F. Cas. 187 (No. 14,694) as well as the United States v. Nixon, 418 U. S. 683 (1974) decision to hold that federal criminal subpoenas did not forbid impairment of the ability of the Executive to perform functions mandated by the Constitution.

Before the Supreme Court, Trump had argued that there was a general burden associated with state criminal subpoenas, causing ‘diversion, stigma and harassment’ [p. 16]. In addressing each of them specifically, the Court declared, first, that the standard laid down in Nixon v Fitzgerald 457 U. S 749 (which grants absolute immunity from damages liability predicated on his official acts) was not enough to hold that ‘distraction was sufficient to confer absolute immunity’ [p. 17]. The Court categorically held that distraction, alone, cannot be a basis for a grant of immunity (relying on the decision in Clinton v Jones 520 U.S. 694). Thus, the ‘overwhelming degree of mental preoccupation’ posed by the prospect of a future criminal liability was not an adequate ground, in view of the Court.

Next, Trump had claimed that the stigma of being subpoenad can ‘undermine his leadership at home and abroad’ [p.19]. This was also rejected by the Court on the basis that furnishing relevant information in performance of a normal duty of the citizen was not stigmatizing. On the contrary, the Court claimed that an investigation against the President, rather than causing a ‘tarnished reputation’, may instead increase his public standing. In either case, given the sharp restrictions on the extent to which matters occurring before grand jury may be disclosed to outside persons, the Supreme Court noted that rules of grand jury secrecy were meant to ‘prevent the very stigma the President anticipated’ [p. 19-20].

With respect to Trump’s third argument concerning ‘harassment’ resulting from criminal subpoenas, it was contested that state prosecutors might be inspired by political motivations ‘undermining the President’s ability to deal fearlessly and impartially’ with the states. However, this was rejected by the Court as well. Even though the Court recognized that subpoenas could harass the President by ‘threatening the independence or effectiveness of the Executive’, it nevertheless held that federal courts were ‘equipped’ with the tools to deter such vexatious suits. Additionally, the Court also noted that grand juries were prohibited from initiating investigations out of an intent to harass or cause malice and could be challenged on grounds of impropriety or bad faith.

On the basis of the reasoning above, the Court unanimously concluded that absolute immunity was neither necessary nor appropriate under Article II or the Supremacy Clause.

It is interesting to note that the Solicitor General, arguing on behalf of the President, had raised an additional ground. He contended that a state grand jury subpoena should be subject to a ‘heightened standard of need’ which was not met in the present case [p. 15]. Accordingly, he claimed that subpoenas should be considered as a last resort, seeking evidence which is ‘critical’ for ‘specific charging decisions’ and cannot wait until the end of the President’s term.

The majority opinion, however, disagreed on these points. Applying a heightened standard, in the view of the Court, was inappropriate as it would extend protection designed for official documents to President’s personal papers as well. The Court cited Burr to hold that with respect to personal documents, the President stood in ‘nearly’ the same situation as any other ordinary citizen (except in cases where the documents, while private, have an ostensible character of an official paper). On other fronts, the Court also noted that a heightened protection was unnecessary for the Executive to fulfil Article II functions; and would hamper the public interest in fair and effective law enforcement by depriving the grand jury of ‘exculpatory evidence’ that the evidence might yield during investigations. In any case, the President did not require a heightened protection as he possesses the right to challenge the subpoena in state and federal courts, including subpoena-specific constitutional challenges deriving from his authority.

In a concurring opinion written by Justice Kavanaugh and joined by Justice Gorsuch, Justice Kavanaugh sought to apply the ‘demonstrated specific need’ standard laid down in Nixon case. The Nixon standard required the subpoenaed information to sufficiently justify an intrusion on Article II. Justice Kavanaugh felt that this standard accommodated both the interests of the criminal processes and Article II interests, but also highlighted important concerns on constitutional balance of powers raised by the majority opinion.

Finally, in a dissenting opinion written by Justice Thomas, he claimed that while the President was not entitled to absolute immunity against the issuance of the subpoena as held by the majority, he was nevertheless entitled to a relief against its enforcement [p. 33]. Justice Thomas, therefore, sought to vacate and remand the case to lower courts to address this point, by applying the standard laid down by Chief Justice Marshall in Burr (which allows injunction on the enforcement of subpoena if the President can prove that his constitutional obligations demand his full time for national objects).

On similar lines, Justice Alito, in his dissenting opinion, held that legal proceedings involving a sitting President must recognize the responsibilities and demands of his office [‘a State’s sovereign power to enforce its criminal laws must accommodate the indispensable role the Constitution assigns to Presidency’, p. 52]. Consequently, subjecting a sitting President to criminal prosecution would restrict his ability to perform constitutional obligations and deprive the right of all people to a ‘functioning government’. Thus, while agreeing that not all subpoenas should be barred, he noted that a subpoena in the present case should not be allowed unless a higher standard is met, consistent with prior cases requiring Presidential subpoenas to apply special, heightened standards. Justice Alito laid down three requirements to be imposed on prosecutors:

– To provide a general description of offences under investigation,

– To outline how subpoenaed records relate to the offences under question, and

– To explain the need for the records during the President’s term in office [p. 62].

By a decision of 7-2, the Court affirmed the decision of the Court of Appeals and remanded the case for further proceedings.

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