Lawsuits Over Trump Business Threaten to Tie Up Presidency | NBC Southern California
Donald Trump's First 100 Days in Office

Donald Trump's First 100 Days in Office

The latest news on President Donald Trump's first 100 days

Lawsuits Over Trump Business Threaten to Tie Up Presidency

The presidency may offer no protection from lawsuits that started before Trump took office

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    Donald Trump

    As a businessman, Donald Trump has kept the courts busy. That's hardly likely to change when he enters the Oval Office, creating an unusual and potentially serious problem for a sitting president. 

    Only a handful of presidents have undergone legal depositions during their terms, and even fewer have become embroiled in private lawsuits. Trump is poised to join that small club.

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    Just last week, the president-elect sat for a deposition in a lawsuit involving his Washington hotel, and he is still tied up in legal disputes that are to proceed after Inauguration Day. Trump is also under investigation by the New York attorney general over whether he used his charity for personal benefit.

    Those are only some of the pending matters. 

    While Trump has said he will turn over management of his company to his adult sons, he has left open the possibility he will keep not only an ownership interest but the legal liability that accompanies it. He is expected to give more details about stepping away at a news conference on Wednesday. 

    The details are important because the closer Trump remains to his business while in office, the more he makes himself and the company targets for litigation. Those attacks could include lawsuits brought by deep-pocketed political opponents who could use the courts as one more battleground to fight his administration. 

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    "He is going to be not just a litigation magnet, but a litigation vortex that sucks in every political and personal adversary he has," said Norman Eisen, the Obama administration chief White House ethics counselor from 2009 through 2011. Eisen has encouraged Trump to sell his assets and put the cash in a blind trust to avoid conflicts of interest and legal pitfalls. 

    Given the heated political climate, Eisen said Trump could end up on the other end of a strategy that one of his advisers, billionaire PayPal co-founder Peter Thiel, was accused of using in a civil privacy lawsuit against Gawker Media LLC: bankrolling someone else's lawsuit to exact revenge or further a personal or political agenda. 

    Under constitutional immunity protections, Trump can't be sued over official acts in the Oval Office. But he could be named in lawsuits for personal actions or those involving his businesses. And the presidency may offer no protection from lawsuits that started before he took office.

    "Prior litigation related to his business will not be so easy to dismiss," said Jonathan Turley, a law professor at George Washington University. "Those types of cases are generally not covered by immunity rules."

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    That raises the prospect of President Trump answering questions under oath in more depositions. Presidents and other high-ranking public officials aren't exempt from them, Turley said, as Bill Clinton discovered in the Paula Jones case that led to his 1998 impeachment by the House of Representatives.

    The danger for Trump is heightened given the sprawling nature of his business, the Trump Organization. The president-elect owns or controls some 500 companies involved in hotels, golf resorts, office buildings and condominium towers in several countries including Scotland, Ireland, Dubai and Indonesia.

    "We've had presidents before who were rich, but we're in some uncharted territory given Trump's wealth and his myriad of business interests," said Saikrishna Prakash, a professor at the University of Virginia School of Law who specializes in constitutional separation of powers.

    Prakash said Trump's businesses could also be tempting legal targets because potential plaintiffs may think he would be more likely to settle cases — as he did with Trump University fraud lawsuits in the weeks after the election.

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    Trump paid $25 million to settle three lawsuits alleging the real estate school misled students into paying as much as $35,000 a year for instruction of little value. Trump said he did nothing wrong and was only settling so he could focus on the presidency.

    The Trump Organization's general counsel, Alan Garten, rejects the idea that the company is now more willing to pay judgments to plaintiffs, noting that Trump sat for a deposition last week instead of settling. Garten said the Trump Organization faces dozens of lawsuits, but most are small — personal injury lawsuits brought by visitors to Trump hotels and resorts, for example, or lawsuits brought by the company against guests who left without paying. He said no more than a dozen cases are significant.

    Garten also said he wasn't worried about future legal attacks funded by political opponents. "People will be wasting their time," he said. He added he will "zealously defend" the company.

    But that instinct to fight has sometimes led to Trump and his businesses dragging out cases.

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    Trump has decided to pursue two lawsuits against chefs— Jose Andres and Geoffrey Zakarian— who pulled out of restaurant deals in his new Washington hotel after the candidate made disparaging comments during his campaign about Mexican immigrants in the U.S. illegally.

    The hotel may be facing additional legal entanglements. As The Washington Post recently reported, two contractors have filed liens against the property in the past month, saying they are still owed money for their work.

    Garten said that contractors filing liens aren't unexpected given the hotel was such a big project, and that they aren't a big deal.

    Allegations of unpaid work are at the center of another pending dispute.

    In 2014, a Florida paint store filed a lien against Trump's Doral golf resort for $32,000 that it said it was owed for supplies during a renovation. Trump fought back and now, two years later, the store's fees for its lawyers have mounted and added to the bill. In October, a circuit court awarded more than $310,000 to the store, but the case is still pending on an appeal filed by Trump and likely to continue months longer, said store lawyer Daniel Vega of Taylor Espino Vega & Touron.

    Another tactic that may haunt Trump is his use of courts or private arbitration to attack the media, silence his critics and keep employees from talking.

    Throughout his campaign, Trump routinely threatened legal action against news outlets, including The Associated Press, for coverage he claimed was unfair. He sought $10 million in damages against a former adviser he accused of violating a non-disclosure agreement. The matter was settled after the adviser, Sam Nunberg, contested the proceeding in New York state court.

    Trump is also coming in with a state investigation into his charity hanging over his head.

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    New York Attorney General Eric Schneiderman launched an investigation of The Donald J. Trump Foundation last year after news organizations revealed that Trump used the charity to settle lawsuits, make an illegal $25,000 political contribution to a group supporting Florida Attorney General Pam Bondi and purchase items such as a painting of himself that was displayed at one of his properties.

    In December, Trump said he would dissolve the charity to avoid conflicts of interest, but Schneiderman has said the charity cannot close while the investigation is going on. In an email to the AP, spokeswoman Amy Spitalnick said she couldn't say when the investigation will wrap up. Trump does not face the potential for criminal charges in that investigation, but he or the foundation could face fines and other civil penalties.

    Prakash said the litigation problem is so big that Congress should pass a law freezing any legal action against sitting presidents until after they leave office. Such a law, Prakash argued in a Los Angeles Times op-ed article, should also bar presidents from bringing personal or business lawsuits while in office.

    Obama ethics lawyer Eisen thinks the best solution is for Trump to divest his assets, as most recent presidents have done. The president-elect has given no indication he is considering such a move.

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    "Their timing couldn't have been better in my opinion, I mean everybody wants to celebrate," said Kyle Steele, a customer at the drive-thru.

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    "This is going to be a monumental distraction," Eisen said. Litigation facing the next president, he added, is likely to prove "embarrassing and damaging not just to Donald Trump but to the country."