What You Need To Know About The Trump Tax & Financial Records SCOTUS Rulings

There were significant opinions released today by the Supreme Court of the United States (SCOTUS) in the matter of President Donald Trump’s tax and financial records. The cases are Trump v. Vance and Trump v. Mazars USA, LLP (consolidated with Trump v. Deutsche Bank AG). Here’s what you need to know.

• Vance was filed on November 15, 2019, and argued May 12, 2020. The issue was whether a subpoena for the President’s personal financial and tax records served on a third-party violates Article II and the Supremacy Clause of the Constitution found at Article VI. 
• Mazars was also filed on November 15, 2019, and argued May 12, 2020. The issue was similar: whether Congressional committees have the authority to issue a third-party subpoena for personal financial records belonging to the President.
• A third case, Deutsche Bank, was filed on December 6, 2019. The issue was primarily the same as in Mazars (which is why it was consolidated).

Why so many cases at once? A little context on how we got here is warranted.

As you may recall, during the 2016 presidential campaign, then-candidate Trump famously refused to release copies of his tax returns. The failure to release the returns made news because, since the 1970s, most presidential candidates have voluntarily released their tax returns to the public.

At first, Trump claimed that he wanted to release his tax returns, but he could not because he is being audited. Trump said, about the returns, “As far as my return, I want to file it. I will absolutely give my return but I’m being audited now.” The campaign eventually released a letter from Trump’s tax attorneys meant to confirm the audit.

Since that time, Trump has continued to refuse to release his tax returns. And these cases are not about that – necessarily. While taxpayers may believe that they have a right to know the finances of those elected to office, there is no such law that requires candidates to make them public (a 2016 bill that would have changed that went nowhere). And there’s nothing to suggest that a taxpayer has legal standing to request those records. So, these cases are not about making the President’s tax returns public.

It is, instead, a series of cases focused on access to the President’s financial and tax records by government officials (and not the general public). The cases were brought based on several subpoenas: four are from Congressional committees, and one is from Manhattan District Attorney (DA) Cyrus Vance, who is conducting a criminal investigation in the state of New York.

A subpoena is a written order to compel an individual to give testimony or present evidence on a particular subject, typically before a court. If you do not comply with a subpoena, you may be in contempt of court.

In these cases, the subpoenas were directed to third parties, including Trump’s accounting firm (Mazars) and his banks (including Deutsche Bank).

In Mazars and Deutsche Bank, the third-parties did not turn over the requested information because the President refused to grant permission, claiming that there was no authority to issue the subpoenas.

Mazars went to a lower court where the district court ruled against the President, and the U.S. Court of Appeals for the District of Columbia Circuit affirmed. In Deutsche Bank, the President asked a federal court to allow the banks to not comply with the subpoena; the district court rejected that argument, and the U.S. Court of Appeals for the 2nd Circuit agreed. The President then appealed to SCOTUS, where the cases were consolidated. Mazars and Deutsche Bank (the entities, not the cases) have declared that they will follow the Court’s ruling.

Vance is a bit different. Vance involves a state investigation into alleged criminal violations. The President also took this matter to federal district court, but on different grounds: he argued that the subpoena could not be enforced while he is President.

With that context, here’s what the opinions in Mazars and Vance said:

Vance was released first. The opinion opens with reference to United States v. Burr, 25 F. Cas. 30, 33–34. It’s the second Hamilton reference from SCOTUS this month: my guess is that our Justices have indulged in a little Disney+ during COVID. SCOTUS noted that “[i]n the two centuries since Burr, Presidents from Monroe to Clinton have accepted Justice Marshall’s ruling that the President is subject to subpoena and have uniformly agreed to testify when called in criminal proceedings.”

But, Roberts noted, those cases typically involved federal criminal proceedings. “Here, the President claims,” Roberts wrote, “that the Supremacy Clause gives a sitting President absolute immunity from state criminal subpoenas because compliance with such subpoenas would categorically impair the performance of his Article II functions.”

The President makes this argument on three grounds: diversion, stigma, and harassment. 

1. Roberts dispatches the first argument (diversion) quickly, noting, “That argument, however, runs up against the 200 years of precedent establishing that Presidents, and their official communications, are subject to judicial process, see Burr, 25 F. Cas., at 34, even when the President is under investigation, see Nixon, 418 U. S., at 706.”
2. He likewise dismisses the second argument (stigma), writing, “…the receipt of a subpoena would not seem to categorically magnify the harm to the President’s reputation. Additionally, in the grand jury context, longstanding secrecy rules aim to prevent the very stigma the President anticipates.”
3. Roberts also brushed aside the final (harassment) argument, writing, “The Court rejected a nearly identical argument in Clinton, concluding that the risk posed by harassing civil litigation was not “serious” because federal courts have the tools to deter and dismiss vexatious lawsuits.”

The most significant chunk of the ruling was reserved for a technical argument: what’s the required legal standard? Legal standards are important because they signal to the court how to consider the case. Typically, the more serious the consequences, the more detailed the required level of scrutiny.

SCOTUS concluded that “[a] state grand jury subpoena seeking a President’s private papers need not satisfy a heightened need standard” since “Burr teaches that, with regard to private papers, a President stands in ‘nearly the same situation with any other individual.'” This is not the same as declaring that the President is not entitled to protection. However, Roberts wrote, “A President may avail himself of the same protections available to every other citizen, including the right to challenge the subpoena on any grounds permitted by state law, which usually include bad faith and undue burden or breadth.”

With that, the lower court’s judgment was affirmed, but the case was remanded. That means that the case will be sent back to district court for further action based on SCOTUS’ decision on the required standard.

The Vance majority opinion is just five pages long and was written by Roberts with Ginsburg, Breyer, Sotomayor, and Kagan joining. Kavanaugh and Gorsuch concurred, meaning that they agreed with the majority on the ruling, but have a slightly different take. In that concurring opinion, written by Kavanaugh, they noted, “In our system of government, as this Court has often stated, no one is above the law. That principle applies, of course, to a President.” Thomas and Alito filed dissenting opinions. 

Mazars was released about ten minutes after Vance. While this case is ostensibly about the authority to enforce subpoenas, it’s really about separation of powers. And that, Roberts writes, is where the lower court got it wrong, holding, “The courts below did not take adequate account of the significant separation of powers concerns implicated by congressional subpoenas for the President’s information.” 

SCOTUS agreed that Congress has an “indispensable” power to obtain information, since without it, “Congress would be unable to legislate wisely or effectively” (you can, on your own, debate whether that’s what they’re doing now). But that power, Roberts wrote, “is subject to several limitations.” Notably, it must be related to a legitimate purpose and not another reason, like law enforcement – that power is assigned to the Executive and the Judiciary.

A blank check for issuing a subpoena shouldn’t be allowed because it would “leave essentially no limits on the congressional power to subpoena the President’s personal records.” But that isn’t to say that those records can’t be subject to a subpoena.

Here, SCOTUS vacated and remanded the original ruling. That means that SCOTUS did not agree with the original ruling and has sent the case back to the lower court to decide the case again using the SCOTUS opinion as a guide. And here’s what the lower court needs to consider, according to the opinion:

1. Courts should carefully assess whether the asserted legislative purpose requires involving the President and his papers. In other words, Congress may not rely on the President’s records if they can get the information they need from other sources.
2. To narrow the scope of possible conflict between the branches of government, courts should insist on a subpoena no broader than is reasonably necessary to support the legislative objective. No fishing expeditions.
3. Courts should review evidence offered by Congress to establish that a subpoena advances a valid legislative purpose. Since that’s the important bit here, the more detailed and substantial, the better. 
4. Courts should assess the burdens imposed on the President by a subpoena “particularly because they stem from a rival political branch that has an ongoing relationship with the President and incentives to use subpoenas for institutional advantage.” 

SCOTUS noted that other considerations may also warrant a look. While courts tend to like precedent, “one case every two centuries does not afford enough experience for an exhaustive list.”

Like Vance, the Mazars majority opinion is quite short – just four pages long – and was written by Roberts with Ginsburg, Breyer, Sotomayor, Kagan, Kavanaugh, and Gorsuch joining (there was no concurring opinion). Again, Thomas and Alito filed dissenting opinions. 

These rulings do not mean that the President’s tax returns will be made public. Even if the lower courts’ decisions result in enforcing the subpoenas, the financial records could, depending on the rulings, remain under seal.

These rulings aren’t necessarily a slam dunk for either side. You may see a bunch of references over the next few days about who “won” these cases. The fact they were both sent back down – with instructions – means that there isn’t a clear winner. But one thing is certain: SCOTUS convincingly ruled that separation of powers matter and that no branch, including the Executive branch, has absolute authority. 

You can read Vance here, and Mazars here (both download as a PDF).