Trump Hotel’s Ties To White House ‘Unfair,’ DC Eatery Says
Source: Law360
By Jimmy Hoover
March 9, 2017
A D.C. restaurant and bar has sued President Donald Trump to force him to relinquish his stake in the Trump International Hotel, claiming that Trump’s association with the brand amounts to “unfair competition” and has diverted customers eager to please his administration.
Cork Wine Bar filed the lawsuit Wednesday in D.C. Superior Court claiming that since the election, lobbyists, government officials and foreign dignitaries seeking to curry favor with the president have overwhelmingly chosen to dine at the Trump’s flagship luxury hotel on Pennsylvania Avenue, which he leases from the U.S. General Services Administration, a form of unfair advantage.
“The lawsuit a wild publicity stunt completely lacking in legal merit,” Alan Garten of the Trump Organization said in a one-sentence statement Thursday. White House Press Secretary Sean Spicer for the most part declined to discuss the suit the same day other than to say President Trump is a “champion” of small businesses.
Citing media reports of foreign dignitaries patronizing the hotel and Trump using his bully pulpit to encourage as much, Cork co-owner and failed D.C. City Council candidate Khalid Pitts said at a press conference Thursday morning announcing the suit that Trump’s affiliation with the hotel’s brand has given the restaurant “a big leg up” in winning business from other restaurants.
“We have seen that our business has declined . both in dining as well as in private events that we do,” Pitts said.
According to the complaint, former customers like the ambassador of Azerbaijan have patronized the hotel since the election. The bar also lists a number of examples of the president and his associates purportedly using Trump’s perch atop the federal government to promote the business, including a Jan. 19 press conference in which soon-to-be White House Press Secretary Sean Spicer: “It’s an absolutely stunning hotel. I encourage you to go there if you haven’t been by.”
The suit also refers to the Inaugural Parade on Jan. 20, in which Trump, in view of national television cameras, exited his motorcade on Pennsylvania Avenue near the hotel’s facade, which displays the name “Trump,” in block capital letters. Cork quotes at length from media interviews with anonymous lobbyists and foreign officials who say staying at the newly renovated building is an effective way to please the administration.
“It’s clear that those who are looking to influence this administration are going to look to that business first,” Scott Rome of The Veritas Law Firm, Cork’s regular outside counsel and one of the authors of the suit, said during the presser, which took place at the National Press Club.
As a legal basis for the suit, Cork claims that the president’s stake in the hotel violates the terms of Trump Organization’s $180 million, 60-year deal with the U.S. General Services Administration to operate the hotel out of the Old Post Office Building in D.C., mere blocks from the White House. Among other requirements, the contract includes a clause stating that “[no] member or delegate to Congress, or elected official of the government of the United States . shall be admitted to any share or part of this lease, or to any benefit that may arise therefrom.”
“Defendants have taken no action to cure the violation [of the lease] or the unfair competition they have created,” read the complaint.
Framed as a local business dispute under common law, the suit does not seek monetary damages but asks the court for an order either preventing operation of the hotel during Trump’s term, or that sees Trump and his family “fully divesting themselves” of interest in the hotel under the lease. Rome indicated that his legal team would fight any effort by the Trump Organization to remove the case to federal court.
This isn’t the first major lawsuit targeting Trump’s business holdings. Shortly after the inauguration in late January, a handful of renowned ethics and constitutional lawyers filed a federal lawsuit in Manhattan seeking to make President Donald J. Trump divest all of his various assets that do business with foreign governments. That suit from named plaintiff Citizens for Responsibility and Ethics in Washington, which also references the hotel, alleges Trump’s real estate empire violates the emoluments clause of the U.S. Constitution, a provision in Article I of the Constitution that bars U.S. officials from receiving gifts, payments or other personal benefits from foreign governments without congressional approval.
Some legal commentators, however, have said the plaintiffs may have a tough time showing an injury that can establish standing. CREW’s argument is that the time spent exploring and challenging Trump’s business ties has taken time and resources away from its other work, giving it standing to sue under previous U.S. Supreme Court precedent. Trump, for his part, described the lawsuit as “without merit.”
Incidentally, CREW has also asked the GSA to revoke the lease for the hotel. The group’s executive director wrote in a letter that elected officials are “barred from receiving any benefit under the lease” and warned of the potential conflict of interest now that the GSA’s administrator serves at the “pleasure of the president.”
While the GSA has remained silent on the issue, other government officials have shown no such reticence when it comes to the new president’s business ties. At a press conference at the Brookings Institution, Walter M. Shaub, director of the U.S. Office of Government Ethics, slammed Trump’s decision to put his business in a “blind trust” operated by his children as inadequate.
Shaub said the solution is “not even close” to a real blind trust given that “he knows what he owns.”
Cork is represented by Scott Rome, Andrew Kline and Christopher LaFon of the Veritas Law Firm, Mark S. Zaid and Bradley P. Moss of Marks S. Zaid PC, and Alan B. Morrison and Steven L. Schooner of George Washington University Law School.
Counsel information for the defendants was not immediately available.
The case is K&D LLC v. Trump Old Post Office LLC, in the Superior Court for the District of Columbia. The case number was unavailable Thursday.