A federal judge pointedly questioned a lawyer for former President Donald Trump Friday as Trump presses his bid to shut down New York Attorney General Letitia James’ investigation into possible fraud in his business empire.
The suit Trump filed last December is considered a longshot because federal judges almost never step in to halt state court proceedings or investigations conducted by state or local officials.
But during an hour-long hearing on the case held by videoconference, U.S. District Court Judge Brenda Sannes issued no immediate ruling and gave few hints about whether she plans to grant or deny James’ motion to throw the suit out.
Trump lawyer Alina Habba railed against James — echoing Trump’s previous complaints that as a candidate, she displayed obvious bias against Trump by repeatedly promising to aggressively investigate and litigate against him.
“James’ egregious and wildly inappropriate statements are unprecedented in New York history,” said Habba. “She made it absolutely clear that she was obsessed with, as she said, taking on Trump.”
Sannes, a Syracuse-based appointee of President Barack Obama, chimed in to urge Habba to move on to the legal issues in the case. “I’m familiar with all of those statements,” the judge said.
The key issue before Sannes is whether she agrees with James’ office that a legal doctrine known as Younger abstention calls for the judge to dismiss the federal case because it would improperly interfere with state enforcement actions.
Habba argued that the rule urging federal courts to butt out doesn’t apply because, so far, the only litigation Trump has been involved in stemming from James’ probe is limited to disputes over subpoenas and depositions. “All we’re doing is dealing with individual subpoenas” in the state court hearings, she said. “We’re not dealing with the investigation’s purpose.”
The full contours of James’ investigation remain unclear, but it centers at least in part on allegations that Trump or his aides gamed property valuations — minimizing such values for tax purposes while inflating them if the properties were needed as collateral for loans. During a Congressional hearing in 2019, former Trump personal lawyer Michael Cohen claimed such fraud was commonplace at the Trump Organization.
“The investigation is very broad and robust,” James aide Andrew Amer said during the hearing.
Last month, New York Supreme Court Judge Arthur Engoron held Trump in contempt for failing to comply with a document subpoena from James and began imposing a $10,000-a-day fine. However, on Wednesday, Engoron suspended the fine as part of an agreement by Trump to work toward compliance.
Sannes asked Habba why the Trump Organization began turning over documents last year if Trump believed he had an argument that he was immune from the litigation because it allegedly targeted him as a result of his White House tenure.
“Why didn’t the plaintiffs raise these constitutional challenges earlier?” the judge asked.
Habba suggested the initial inquiry didn’t seek information directly from Trump, but from his businesses, vendors and other consultants.
“We complied in good faith with the subpoena of the attorney general, but it’s important to note that Donald Trump was only brought into this action recently, a couple of months ago,” she said.
Habba said the New York attorney general’s investigation clearly began during Trump’s presidency, so it’s at least plausible that Trump has legal claims that it is an impermissible intrusion on his presidential powers.
But Amer said the efforts to enforce his office’s subpoenas began well after Trump left office. “This case involves a state court enforcement action brought against an ordinary citizen and nothing more,” the James aide said.
While a criminal tax evasion case was filed last July against the Trump Organization and its former chief financial officer, Allen Weisselberg, that was brought by the Manhattan district attorney’s office. Both the Trump Organization and Weisselberg have pleaded not guilty in that case.