What to Know
The suit argues that Trump is violating the Constitution by accepting profits through foreign and domestic officials who stay at his hotels
The emoluments clause of the Constitution says federal officials can't profit off outside governments without congressional approval
A mid-case appeal put the suit on hold, ahead of a deadline for Trump's defense to produce tax records from 13 Trump businesses
A federal appeals court on Tuesday grilled lawyers for the state of Maryland and the District of Columbia about their claims that President Donald Trump is violating the Constitution by accepting profits through foreign and domestic officials who stay at his Washington hotel.
A three-judge panel of the 4th U.S. Circuit Court Appeals expressed skepticism about claims in a lawsuit that alleges Trump is violating the emoluments clause of the Constitution, which prohibits federal officials from accepting benefits from foreign or state governments without congressional approval.
The judges repeatedly questioned lawyers for Maryland and the District about what they seek as a solution to their concerns about Trump's business interests.
Judge Paul Niemeyer said Trump has pulled back from active management of the Trump International Hotel and questioned whether Trump divesting himself of the business would have any effect on whether dignitaries stay there, since it would likely remain in the Trump family.
Loren AliKhan, solicitor general for the District of Columbia, said divestment would be one option to solve the problem.
Judge Dennis Shedd pressed her about whether anything short of divestment would resolve concerns about Trump violating the emoluments clause.
She said a declaration that Trump has violated the clause and an injunction ordering him not to do so could also be an option.
"I think you even want him fired from "The Apprentice," don't you?" Shedd asked.
"I don't think so," AliKhan replied.
Shedd also seemed skeptical of the lawsuit's claim that Maryland and the District have suffered harm because more people would stay at their hotels if they weren't eager to curry favor with the president by staying at Trump's hotel. He said many people visit Washington to protest the Republican president's policies and would be more likely to stay at his competitors' hotels.
AliKhan said Trump's status as president is "a driving factor" for foreign and domestic government officials to stay at his hotel.
Trump is challenging a ruling by a federal judge in Maryland to allow the lawsuit to proceed.
Trump's legal team told the appeals court that Maryland Attorney General Brian Frosh and District of Columbia Attorney General Karl Racine — both Democrats — lack authority to sue the president in his official capacity.
"The president is unique in our constitutional structure," said Deputy Assistant Attorney General Hashim Mooppan.
Trump's lawyers also argued that the emoluments clause only bars compensation made in connection with services provided in his official capacity or in "an employment-type relationship" with a foreign or domestic government.
They say that even if Frosh and Racine did have standing to sue, their claims are invalid because the president has not violated the emoluments clause.
Mooppan said the plaintiffs are arguing that they've suffered injuries from competition when the emoluments clause was meant as a check against government corruption.
"There is no support for their broad definition," he said.
The 4th Circuit's decision to hear the unusual mid-case appeal put the lawsuit on hold before deadlines to respond to subpoenas issued in December seeking tax returns, receipts and other records from more than 30 entities, including 13 Trump businesses and the federal agency that oversees the lease for Trump's hotel.
The Justice Department has argued that the discovery is "intrusive" and could distract Trump from performance of his constitutional duties.
After the hearing, Racine and Frosh downplayed the judges' aggressive questioning.
"We think our case is a strong one and we expect to prevail," Frosh said.
The 4th Circuit panel court did not indicate when it would rule. No matter how it rules, it appears likely the case will not end quickly.
Racine said that if Maryland and the District lose the appeal before the three-judge panel, they would seriously consider asking for a rehearing by the full court. He said it wouldn't surprise him if the case ended up in the U.S. Supreme Court.
All three judges on the panel were nominated to the 4th Circuit by Republican presidents: Niemeyer, by George H.W. Bush; Shedd, by George W. Bush, and Judge A. Marvin Quattlebaum, by Trump.
Two other lawsuits accusing the president of violating the emoluments clause have been filed in other federal courts.