It's the latest loss for the president in his bid to stop any disclosure of his personal financial records, especially his tax returns. The US Court of Appeals for the 2nd Circuit ruled that any immunity Trump might be entitled to against criminal prosecution didn't apply to a state grand jury subpoena to his accounting firm, and rejected his argument that there was a "serious stigma" associated with being the "target" of a criminal investigation.
"Even assuming, without deciding, that a formal criminal charge against the President carries a stigma too great for the Constitution to tolerate, we cannot conclude that mere investigation is so debilitating," 2nd Circuit Chief Judge Robert Katzmann wrote for the court.
Even assuming that a sitting president can't be criminally prosecuted — an issue the 2nd Circuit made clear it was not ruling on in Monday's order — the court noted that Trump conceded that any immunity would only last while a president was in office and that he could be charged after leaving the White House.
"There is no obvious reason why a state could not begin to investigate a President during his term and, with the information secured during that search, ultimately determine to prosecute him after he leaves office," Katzmann wrote.
Jay Sekulow, one of Trump's personal lawyers, said in an email that they planned to petition the US Supreme Court to hear the case. The Justice Department is not representing the president in the case, but filed a brief supporting his effort to block the subpoena.
"The issue raised in this case goes to the heart of our Republic. The constitutional issues are significant," Sekulow wrote.
A state grand jury in New York issued a subpoena to Trump's longtime accounting firm, Mazars USA LLP, in August, seeking Trump's tax returns going back to 2011. Trump sued New York District Attorney Cyrus Vance's office in federal district court in Manhattan, arguing that the subpoena was unconstitutional because a sitting president cannot be criminally charged and that meant a president couldn't be subjected to "criminal process," such as a grand jury subpoena.
A lower court judge dismissed the case in early October, citing a legal doctrine known as "abstention," in which a federal judge in rare circumstances can decline to exercise jurisdiction over a case if it would interfere with certain government functions at the state level, such as state criminal prosecutions. US District Judge Victor Marrero also rejected Trump's immunity argument.
In Monday's opinion, the 2nd Circuit disagreed that the lawsuit was barred by the "abstention" doctrine, but agreed with the decision that any immunity that might shield Trump from being criminally charged didn't apply in the case of the Mazars subpoena; the appeals court judges made clear that they were not ruling on the "precise contours and limitations of presidential immunity from prosecution."
"[W]e conclude only that presidential immunity does not bar the enforcement of a state grand jury subpoena directing a third party to produce non‐privileged material, even when the subject matter under investigation pertains to the President," Katzmann wrote for the court.
The appeals court pointed to the US Supreme Court's 1974 decision in US v. Nixon, where the justices rejected then-president Richard Nixon's challenge to a federal grand jury subpoena for White House tapes. Trump's private tax returns didn't implicate his duties as president and, as a result, didn't involve issues of executive privilege, the court found.
"The President has not persuasively explained why, if executive privilege did not preclude enforcement of the subpoena issued in Nixon, the Mazars subpoena must be enjoined despite seeking no privileged information and bearing no relation to the President’s performance of his official functions," Katzmann wrote.
The court also included a footnote highlighting the fact that the last six presidents had voluntarily released their tax returns. That wasn't a main factor in the court's decision, Katzmann wrote, but it "reinforces" the idea that disclosure of personal financial information was unlikely to interfere with a president's official duties.
A spokesperson for Vance's office declined to comment.