Trump Appointee Body Slams Former President’s Privilege Claims In Tax Return Dispute

Last night US District Judge Trevor McFadden ruled that the House Ways and Means Committee is entitled to get Donald Trump’s tax returns from the IRS, kicking the two-year-old lawsuit up to the DC Circuit and inevitably the Supreme Court as well.

When Democrats took back the gavel in 2019, making Rep. Richie Neal chair of Ways and Means, he demanded several years of Trump’s personal and business returns under 26 U.S.C. § 6103, which specifies that the IRS “shall furnish such committee with any return or return information” requested by the Committee chair. Neal claimed the returns were necessary to the Committee’s study of the Presidential Audit Program, under which the returns of the president and vice president are routinely audited every year.

Then-Treasury Secretary Mnuchin refused to comply, claiming that he had looked into Chairman Neal’s soul and determined that his motives were non-legislative, making the apparently non-discretionary statute totally optional. As one does.

Attorney General Bill Barr, as was his wont when his boss’s interests were on the line, swooped in to save the day, instructing the OLC to dummy up a memo saying Munch could withhold the documents based on his own evaluation of congressional intent. But after President Biden was elected, the OLC reversed its position, an event that Trump argues is a nullity because it “came under President Biden, a Democrat who made the disclosure of President Trump’s tax returns a campaign issue and knows that President Trump remains the most high-profile Republican and his top political rival.”

Judge McFadden, a Trump appointee, acknowledged that the potential for partisan abuse exists, particularly when, as here, multiple members of the Committee made (perhaps intemperate) statements about getting their hands on Trump’s financial documents. But that doesn’t outweigh the judiciary’s high degree of deference to congressional demands and reluctance to evaluate legislators’ motives when there is a plausible legislative purpose.

“But even if the former President is right on the facts, he is wrong on the law,” Judge McFadden wrote. “A long line of Supreme Court cases requires great deference to facially valid congressional inquiries. Even the special solicitude accorded former Presidents does not alter the outcome. The Court will therefore dismiss this case.”

The decision was, in every respect, an absolute smackdown of each and every one of Trump’s claims. Which makes sense, because they were always garbage, particularly after Biden was inaugurated.

But since we are destined to spend eternity wading through endless lawsuits where the former president and his henchmen argue that his executive powers extend for all eternity — indeed, my job appears to consist of little else! — it’s worth highlighting Judge McFadden’s analysis of the separation of powers issues as a president leaves office.

The three strongest precedential cases thus far are: United States v. Nixon (AKA Nixon I), in which the Supreme Court held that presidential privilege was not absolute, and could be overcome by the necessity of gaining information for criminal prosecution; Nixon v. GSA, in which the Court held that, while the former president retained some authority over his own papers, the Presidential Recordings and Materials Preservation Act, now known as the Presidential Records Act, which made executive branch communications the property of the federal government, was not unconstitutional; and Trump v. Mazars, which lays out a four-part test for evaluating congressional subpoenas of a sitting president’s personal records.

Judge McFadden writes:

[A]s the “potential for disruption” increases, the concomitant showing required to justify that disruption increases. See Nixon I, 418 U.S. at 706; Nixon v. GSA, 433 U.S. at 445–446; Mazars, 140 S. Ct. at 2036.

Viewed this way, the trilogy forms a sliding scale. At one end is Nixon I—to justify piercing a sitting President’s executive privilege, the Special Prosecutor had to show a “demonstrated, specific need for evidence in a pending criminal trial.” 418 U.S. at 713. This was a high bar indeed. Next is Mazars—the separation-of-powers concerns there were lessened relative to Nixon I because the information sought was not covered by executive privilege. But an “interbranch conflict” did not “vanish simply because the subpoenas s[ought] personal papers.” Mazars, 140 S. Ct. at 2034. Congress would have to show “detailed and substantial” evidence of a valid legislative purpose and that such purpose “warrants the significant step of involving the President and his papers.” Id. at 2035, 2036. Then comes Nixon v. GSA, a case involving a former President but implicating materials potentially covered by executive privilege. Because the PRMPA directed retention of the disputed materials within the Executive and guarded against unlawful disclosure, there was little “potential for disruption” on the Executive qua Executive. Nixon v. GSA, 433 U.S. at 443. The Court’s review was accordingly far less searching.

And, of course, all three tests sit above the low threshold set for congressional subpoenas to private parties. Because such a request would never implicate the “constitutionally assigned functions” of another branch, id., the only question is whether the request “relate[s] to a valid legislative purpose,” Barenblatt, 360 U.S. at 127.

With all due respect to the DC Circuit, this is a much more coherent rubric than the appellate panel issued last week when it rebuffed Trump’s attempt to stop the National Archives from releasing his records to the January 6 Select Committee. And having laid out the spectrum of precedents, Judge McFadden had no trouble concluding that Nixon v. GSA was the appropriate standard.

That leaves the question of what standard governs the separation-of-powers analysis. Intervenors say the Court should apply Mazars, the Executive Branch seems to agree, and the House says the Court must apply Nixon v. GSA. The House is correct. Applying Nixon v. GSA, the Committee’s 2021 Request does not trench on the separation of powers

Having concluded that the precedent governing ex-presidents was the appropriate standard, the court concluded that the case must be dismissed because no executive branch interests are implicated in the disclosure of a private citizen’s tax returns to Congress, in accordance with statute, with facially valid legislative purpose, and when the sitting executive does not object.

This will not put the matter to rest, of course. Trump immediately noticed his appeal to the DC Circuit, and the court stayed its order for 14 days. But it is an incisive opinion from a conservative jurist with impeccable Federalist Society bona fides. Now we wait to see whether the appellate panel butchers it.

COMMITTEE ON WAYS AND MEANS, UNITED STATES HOUSE OF REPRESENTATIVES v. UNITED STATES DEPARTMENT OF THE TREASURY (1:19-cv-01974) [Docket via Court Listener]

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Liz Dye lives in Baltimore where she writes about law and politics.