For the second time in a year, the U.S. Court of Appeals for the Second Circuit recently upheld a 2019 grand jury subpoena duces tecum served on President Donald J. Trump's accounting firm for his financial and tax records. In an Oct. 7, per curiam decision, circuit Judges Robert Katzmann, Pierre Leval and Raymond Lohier Jr. affirmed the District Attorney for New York County's (the Manhattan DA) motion to dismiss the president's Second Amended Complaint (the SAC) to block enforcement of the subpoena, concluding that the subpoena was neither overbroad nor issued in bad faith. In so limiting its review to wellestablished doctrines, the Second Circuit affirmed in dicta that though a sitting President may be entitled to unique subpoena-specific constitutional challenges, any complaint seeking to quash a grand jury subpoena is required to include well-plead facts sufficient to rebut the presumption of validity

On Oct. 13, the president filed an emergency application for a stay in the U.S. Supreme Court, pending the filing and disposition of a petition for writ of certiorari, which he requested also be treated as a petition for a writ of certiorari. At the time of the publication of this article, the Supreme Court has not yet ruled on the application.

The President's Initial Challenge to the Manhattan DA's Subpoena

As we first discussed in our Nov. 27, 2019, column, on Aug. 29, 2019, the Manhattan DA served a grand jury subpoena on Mazars USA LLP (the Mazars subpoena), an accounting firm that has provided services to President Trump and his businesses. Manhattan DA requested, among other things, the president's personal and business tax returns dating back to 2011. Less than a month later, the president filed a complaint and an emergency motion for a temporary restraining order and preliminary injunction in the Southern District of New York, claiming the president is immune from state criminal process during this time in office.

Following expedited briefing, U.S. District Court Judge Victor Marrero denied the president's motion on Oct. 7, 2019. In ruling against the president, Judge Marrero first applied the doctrine of abstention set forth in Younger v. Harris, 401 U.S. 37 (1971), under which a federal court should decline jurisdiction where a plaintiff attempts to enjoin an ongoing state criminal prosecution. On that basis, Judge Marrero abstained from exercising jurisdiction and dismissed the case. In the alternative, the district court denied the president's motion for a preliminary injunction, finding that the president had not met his burden for obtaining injunctive relief. A month later, the Second Circuit in a unanimous opinion, written by thenChief Circuit Judge Robert Katzmann, and joined by Circuit Judges Christopher Droney and Denny Chin,affirmed the district court's holding that the president was not entitled to preliminary injunctive relief, concluding that presidential immunity does not bar enforcement of a state grand jury subpoena for nonprivileged personal records held by a third-party solely because they relate to a sitting president. The Second Circuit also rejected an argument raised by the United States in amicus briefing that a prosecutor must make a heightened showing of need for documents related to a sitting president. The Second Circuit dismissed that argument as relying on cases that concerned documents protected by executive privilege, and which therefore had scant bearing on a subpoena for tax returns which fall outside the scope of that privilege.

In July 2020, the Supreme Court affirmed the Second Circuit's decision, holding that absolute presidential immunity from compliance with a state grand jury subpoena is not "necessary or appropriate" under Article II or the Supremacy Clause, and rejecting the arguments for a heightened standard for subpoenas seeking the president's documents. The Supreme Court stressed, however, that sitting presidents may "avail [themselves] of the same protections available to every other citizen" by challenging a subpoena on state-law grounds, like overbreadth and bad faith. Further, the Supreme Court noted that a sitting president may be entitled to raise "subpoena-specific constitutional challenges" including arguments that the subpoena is an attempt to influence the president's performance of official duties in violation of the Supremacy Clause. The Supreme Court remanded the case so the president could raise further arguments as appropriate.

The President's Renewed Challenge to the Manhattan DA's Subpoena

Immediately following the Supreme Court's decision, the president filed the SAC in the district court, alleging that the Mazars subpoena is overbroad and was issued in bad faith. The SAC sought to bolster these statelaw challenges by arguing that the allegedly overbroad and retaliatory subpoena amounted to harassment based on the special position the president occupies.

The Second Circuit dismissed that argument as relying on cases that concerned documents protected by executive privilege, and which therefore had scant bearing on a subpoena for tax returns which fall outside the scope of that privilege.

On Aug. 3, the Manhattan DA moved to dismiss the SAC for failure to state a claim, arguing that the president did not allege any burden to, or violation of, his Article II rights or duties, and did not rebut the subpoena's presumptive validity with sufficient factual support to render the claims of overbreadth and bad faith plausible.

Following expedited supplemental briefing, Judge Marrero granted the Manhattan DA's motion to dismiss, holding that the SAC did not state a plausible claim for relief by failing to provide specific facts to suggest overbreadth or bad faith. Further, Judge Marrero repeatedly noted that he did not regard as plausible the president's arguments that an overbroad or bad faith subpoena, on its own, would violate his Article II rights or duties.

The president immediately appealed Judge Marrero's decision. On Sept. 1, the Second Circuit granted the president's motion to stay the district court's order and directed that the appeal be heard on an expedited basis.

The Second Circuit's Oct. 7 Opinion

In a relatively straightforward decision, the Second Circuit affirmed the "comprehensive opinion" issued by Judge Marrero. Trump v. Vance, 2020 WL 5924199, *1, *3 (2d Cir. Oct. 7, 2020). The court, like the district court, noted in dicta that it did not "understand" the president's allegations that the purported overbreadth and bad faith of the subpoena "amounted to harassment of the president" in violation of Article II to be "separate and distinct constitutional claims." Instead, the court evaluated the president's state-law challenges to the subpoena, which it described as "anything but novel" and no different from challenges available to every other citizen.

Turning first to the president's overbreadth arguments, the court rejected the president's allegations that the scope of the grand jury's investigation is limited to payments made in 2016 by the president's thenattorney, Michael Cohen, to certain individuals. Noting that the SAC does not go as far as to allege that the Cohen payments are the "sole object of the investigation," the court summarized long-standing judicial precedent that grand jury investigations are "ranging [and] exploratory," and then concluded that it would not limit the Mazars subpoena based on speculation or previous subpoenas issued by the Manhattan DA in the matter.

Next, the court addressed the specific overbreadth allegations raised in the SAC. The president argued that the subpoena was overly broad because it seeks materials from a broad array of entities; materials from entities that have operations outside New York County; many types of documents; documents covering a nine-year period; and nearly identical documents as those sought by the House Oversight Committee in a subpoena to Mazars. After addressing each allegation briefly, the court concluded that grand jury subpoenas similar to the Mazars subpoenas are common in complex financial investigations where the potentially relevant transactions span a significant period of time. Further, the court noted that the president's repeated arguments that the subpoena as written asked for more documents than would be relevant in the investigation as "neither uncommon or unlawful" for grand jury investigations such as this.

The court then addressed the president's bad faith claims, concluding that none of his allegations amount to plausible arguments of retaliatory bad faith on the part of the Manhattan DA. First, the president alleged that the Manhattan DA issued the Mazars subpoena in retaliatory bad faith because the president refused to produce his tax returns in response to a previous subpoena issued by the Manhattan DA to the Trump organization. Second, the president alleged that the Manhattan DA issued the subpoena in order to obtain his tax records for "partisan political reasons." Finally, the president argued the Manhattan DA issued the Mazars subpoena because he believed that a thirdparty would be more likely than the president to produce the tax returns. Finding that the president's bad faith allegations "amount[ed] to nothing more than 'labels and conclusions' of improper motive," lacked requisite specificity, and do not "permit [the court] to infer more than the mere possibility of bad faith," the court held that these allegations failed to pass the plausibility test required under federal pleading standards.

The court evaluated the president's state-law challenges to the subpoena, which it described as "anything but novel" and no different from challenges available to every other citizen.

About a week after the Second Circuit issued its decision, President Trump filed an emergency application for a stay in the Supreme Court, pending the filing and disposition of a petition for writ of certiorari. In his application, the president argued that the district court failed to undertake the proper process to allow him to quash the subpoena, and by not accepting the facts asserted in the SAC as true, the Second Circuit did not properly apply the federal pleading standards. He also addressed the Article II concerns, noting that there is a reasonable probability that the Supreme Court will grant certiorari to address the District Court's unwillingness to address the subpoena-specific arguments raised in the SAC. At the time of publication, the Supreme Court has not ruled on the application.

Conclusion

By focusing on President Trump's overbreadth and bad faith arguments, the Second Circuit's second decision in Trump v. Vance reinforces that a sitting president, despite not being an "ordinary individual," is still subject to the same pleading standards and protections as every other citizens while challenging a grand jury subpoena where express Article II concerns are not articulated. It remains to be seen how the Supreme Court will address this latest challenge to the Mazars subpoena

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