Washington — A federal judge on Monday imposed professional penalties against lawyers representing President Trump in a civil lawsuit he brought against the IRS and harshly criticized the Justice Department for its handling of the case, concluding that the suit was brought for an “improper purpose.”
In a scathing 56-page decision, U.S. District Judge Kathleen Williams referred one of Mr. Trump’s lawyers, Alejandro Brito, to the Florida Bar for potential disciplinary action. The judge limited the ability of a second lawyer, Daniel Epstein, to practice in the Southern District of Florida.
Williams also barred the Justice Department, IRS and Mr. Trump from citing or using provisions of a deal the two sides reached in judicial, administrative, regulatory or other proceedings as evidence of a settlement in the case.
The case, Williams wrote, “was brought for an improper purpose — to gain the imprimatur of judicial legitimacy for a ‘settlement’ that had no viable basis in law or fact.” Additionally, the president and his two older sons, who were plaintiffs alongside Mr. Trump, “acted in bad faith,” she concluded.
“In sum, the facts before this Court demonstrate there was never adverseness between the Parties; there was never a case or controversy; and there was never a question as to who would prevail,” she said.
Williams also directed a copy of her order to be mailed to the State Bar of New York and to the District of Columbia Bar, of which acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward are members, respectively. Blanche and Woodward signed documents relating to the settlement with Mr. Trump.
A spokesman for Mr. Trump’s legal team said in response to the decision, “The IRS wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets, which was then illegally released to millions of people. President Trump continues to hold those who wrong America and Americans accountable.”
Williams’ extraordinary order came in response to concerns raised by a group of 35 former judges about the settlement agreement reached in May. The deal brought to an end the $10 billion civil lawsuit the president and his two oldest sons filed against the IRS earlier this year over the leak of Mr. Trump’s tax returns by a government contractor.
The settlement initially included the creation of a $1.776 billion “anti-weaponization” fund that aimed to provide taxpayer-funded payouts to individuals who alleged the federal government had been “weaponized” against them. But after immense blowback from Congress and a federal judge’s ruling, Blanche said the Justice Department was “not moving forward” with the program.
Another provision of the settlement that permanently bars the IRS from pursuing tax claims against Mr. Trump, his oldest sons, his company or affiliated companies of his family remains intact.
The former judges asked Williams in May to reopen the case between Mr. Trump and his administration, arguing that the agreement they reached to resolve the president’s civil lawsuit was “the product of collusion” and a “fraud on the court.” The settlement was reached as Williams was weighing whether she even had jurisdiction over the case.
In her order, Williams said that there was no case or controversy for the court to decide. Since it was filed by Mr. Trump against a federal agency and officials that he, as president, had control over, there would be no adverse litigant, she found. Williams determined that Mr. Trump “improperly employed this lawsuit to justify a particular award in this matter — access to taxpayer funds and exemption from audits and other investigations — which was accomplished by leveraging control over Defendants.”
“President Trump did not pursue his claims until he once again occupied the White House and had appointed his former lawyer, and the former lawyer of persons who are putative beneficiaries of the ‘Anti-Weaponization Fund’ to prominent positions in the DOJ,” she wrote in her order. “These officials then negotiated on behalf of the United States, with his current lawyers, including his former White House Counsel to reach a ‘settlement.’ It is risible to suggest that there was ever adverseness between the Parties.”
Williams excoriated the Justice Department for its handling of the case and accused it of “abdicating its responsibility to zealously defend the interests of the United States.” By entering into the settlement with Mr. Trump, Williams said the administration “disregarded DOJ policies, and accomplished objectives beyond those authorized, as well as those specifically prohibited, by law.”
“The nature of the suit itself and the conduct of the Parties and counsel from its filing make plain that this was an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law,” Williams wrote. “The President may be the functional ‘dominus litus’ of the Executive Branch, but as a party to a civil suit, he, as well as all the parties and lawyers before a court, are bound by the rules.”
The judge, who was appointed by President Barack Obama, rejected characterizations of the case as “ordinary” by Mr. Trump and his lawyers, calling it a “startling misstatement.”
“Lead Plaintiff and Defendants are public servants — the pinnacle of the Executive Branch — sworn to uphold the law, faithfully perform the duties of their office, and protect the interests of the American public,” she wrote. “The issue before the Court is whether, instead, they ignored ethical norms, court rules, and legal authority to manipulate the judicial process. The issue is whether they did so to gild their efforts to gain unprecedented access to the public fisc with the patina of legitimacy. There is nothing ‘ordinary’ about this case.”
Williams also took aim at the government lawyers working the case, saying the Trump administration “failed to defend this lawsuit or to respond to the Court’s jurisdictional inquiry because its position would not withstand judicial scrutiny.”
She said the $1.776 billion pledged for the “anti-weaponization” fund “speaks of a ‘branding’ effort rather than a deliberate and thoughtful calculation of damages.”
The judge’s order comes days before Blanche is set to appear before the Senate Judiciary Committee for his confirmation hearing for attorney general. He is expected to face sharp questions regarding the creation of the “anti-weaponization” fund and the effective grant of immunity to Mr. Trump. The president formally nominated Blanche, who served as Mr. Trump’s private criminal defense attorney, to lead the Justice Department last month.