Standing for the New Plaintiffs in the CREW case

by Andrew Hessick — Tuesday, Apr. 18, 2017@andyhessick

Back in January, a group of constitutional law scholars (working with Citizens for Responsibility and Ethics in Washington (CREW)) sued President Trump for violating the Emoluments Clause. In a previous post, I explained argued that those scholars did not have Article III standing because they had not alleged a cognizable injury in fact.

Today, the plaintiffs have filed an amended complaint that adds new plaintiffs who do not face similar problems. The new plaintiffs are restaurants (and their employees) that compete with Trump’s restaurants, as well as a woman who books events at hotels that compete with Trump’s hotels. According to these plaintiffs, Trump has violated the Emoluments Clause by receiving gifts from foreign officials in the form of payments to his hotels and restaurants, and these payments to Trump harm the plaintiffs because it results in less revenue flowing their way.

Losing money because of someone else’s illegal actions is a cognizable harm for standing purposes (though it should be noted that the plaintiffs will have to provide more concrete details about whose business they are losing). But these new plaintiffs still face standing hurdles. To have standing, a plaintiff must show not only that he has suffered injury in fact, but also that the injury is “likely to be redressed by a favorable judicial decision.” That’s hard to do in cases like this one in which the injury depends on the choices of a third party not before the court. In this case, if a court were to enjoin Trump from taking the foreign business, there is no guarantee that the foreigners would choose to give their business to the plaintiffs. They might choose to use other hotels and restaurants.

The Court made this sort of argument in Allen v. Wright, 468 U.S. 737 (1984). There, parents of black public school students sued the IRS for illegally giving tax breaks to private schools that discriminated against blacks, claiming that the tax breaks undermined efforts to desegregate the public schools.   The Court denied standing. It acknowledged that stopping the tax break could force the private school either to stop discriminating or to raise tuition, which could lead to some white students leaving to attend the cheaper public school. But the Court said that the link between the tax breaks and desegregation was too indirect to support standing, because it depended on “ the independent action of some third party not before the court.” This is very similar to the third-party problem in the CREW case.

No doubt, the plaintiffs will try to get around this impediment by producing some direct evidence showing that foreign businesses would indeed use the plaintiffs but for Trump being president.   A different approach, though, is for the plaintiffs to argue that they can satisfy redressability by showing merely that there is some probability that a favorable ruling would result in more foreign business.

Although the Court has repeatedly said that a plaintiff must show that his injury is “likely to be redressed by a favorable judicial decision,” it has not always stuck to its guns. It has realized that the likelihood-of-redress requirement would prevent most challenges to agency rules on the ground that they don’t comply with the APA, because the agency could reissue the same rule after following the necessary procedures. Thus, the Court has said that a person has standing to assert a procedural right “without meeting all the normal standards for redressability.”  Such a plaintiff need show only that there is “some possibility that the requested relief will prompt the injury-causing party to reconsider the decision that allegedly harmed the litigant.”

Although the Court has said this rule applies only for procedural rights, it is entirely unclear why a court’s power to act should vary depending on the type of right asserted. The creation of an easier redressability test for procedural rights suggests that the Constitution does not impose the strict redressability requirement that the Court usually demands.

Applying this relaxed redressability requirement to the new plaintiffs in CREW would not eliminate the indirectness problem of Allen.  But it could at least lower the bar for the plaintiffs and give them an opening to argue that the redressability requirement should not be rigorously enforced.

So while the new plaintiffs in the CREW case do avoid the injury problem faced by the older plaintiffs, they raise new standing issues of their own. It will be interesting to see how it plays out.

 

 

 

 

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