Slowly Moving Forward: An Update on the Lawsuit Against the Trump Foundation

On December 18, Donald Trump agreed to shut his foundation, in response to a lawsuit filed filed by the New York attorney general. Earlier this year, I examined the lawsuit, which is a learning opportunity for everyone connected to a private foundation.

Here, I briefly look at what has happened since that lawsuit was filed. Although there have been a number of headlines about the judge’s decision to allow the case to proceed prior to the news that the Trump Foundation will close, no decisions on the merits of the case have been made.

The initial response from the Trump Foundation was to file a motion to dismiss with the Supreme Court of the State of New York. This was filed on August 30, 2018 and is a common action by a defendant. Such a motion claims that the suit should not be allowed to proceed, and the reasons why. It is important to note that this is a not a defense of the charges discussed in the original suit. Rather, it is an attempt to stop the case from moving forward without a discussion of the merits of the issues raised.

This motion to dismiss was rejected. The fact that it was rejected is meaningless with regard to the charges, which have yet to be answered by the defendant. The judge reviewing the motion to dismiss has made no qualitative assessment of the issues raised by the AG in bringing the lawsuit. This was simply a rejection of the motion to dismiss. In other words, the judge only rejected the reasons put forth by the Trump Foundation team for dismissal.

In its dismissal motion, the Trump legal team asserted that the AG’s investigation was political, which affected the results; that the relief sought in the AG’s suit are without legal precedent; and that Trump had announced his intention to dissolve the charity after the election, but was forced to keep it open because of this suit and the failure of the AG to grant permission for its dissolution. Trump’s lawyers also argued that the court did not have jurisdiction over Mr. Trump as president, and that the statute of limitations had expired on many of the allegations in the case.

In late November, a New York state judge ruled that the lawsuit can proceed—effectively ruling against the motion to dismiss. Of most significance here is the ruling that a president is not immune from civil court cases that do not involve his official activities as president. This is not new ground, however, as President Clinton also had to address civil charges while serving as president.

While the news made headlines, the reality is that nothing of significance regarding the questions relating to the appropriate or inappropriate activities of private foundations has yet been addressed. As you can see from the timeline, the wheels of justice move very slowly, and this case will meander throughout much of 2019 before we have any resolution of the numerous charges contained in the original AG complaint.

Stay tuned.