The Weekend Wrap: July 21, 2024

Trump FL case dismissed; Menendez convicted

Welcome to the Weekend Wrap! Here are the week’s white collar highlights:

Trump Prosecutions

Florida Federal Case - Mar-a-Lago Documents

On Monday, in a 93-page opinion, Judge Cannon granted Trump’s motion to dismiss his Florida case on the grounds that Jack Smith’s appointment as special counsel was unconstitutional.

Breaking Down Judge Cannon’s Decision: Cannon relied primarily upon the Appointments Clause in the Constitution, Art. II, Sec. 2, cl. 2. It provides that all principal “officers of the United States” must be appointed by the president and approved by the Senate. It also provides that Congress may “by law” give the heads of departments, such as the Attorney General, the power to appoint “inferior officers” without Senate confirmation.

Cannon accepted Smith’s position that a special counsel is an “inferior” officer, not a principal one that requires a presidential appointment, although she said the matter was not free from doubt. The question, then, was whether Congress has “by law” given the Attorney General the power to appoint special counsels.

The special counsel position is provided for in DOJ regulations. There is no statute passed by Congress that explicitly refers to such a position or gives the Attorney General the power to appoint a special counsel. The government argued, as it has successfully in other cases, that there are several statutes that at least impliedly give the Attorney General that authority. The most important is 28 U.S.C. 533, which provides:

The Attorney General may appoint officials—

(1) to detect and prosecute crimes against the United States;

(2) to assist in the protection of the person of the President; and

(3) to assist in the protection of the person of the Attorney General.

(4) to conduct such other investigations regarding official matters under the control of the Department of Justice and the Department of State as may be directed by the Attorney General.

Subsection one, in particular, would appear to encompass appointing a special counsel to “prosecute crimes against the United States.”

But Judge Cannon ruled that, when considered in context, section 533 does not grant that authority. She noted that the statute appears in a section of the code that deals with the FBI, not with prosecutors. She argued it would be strange for Congress to authorize the appointment of an officer with all the powers of a U.S. Attorney by “hiding” that authorization in a statute dealing with FBI personnel. She also held that an “official” under this statute is not necessarily the same thing as an “officer” under the Appointments Clause.

Cannon therefore concluded that despite the seemingly clear language of section 533, it is not a statute that authorizes the appointment of a special counsel as required by the Appointments Clause. She also rejected the other, weaker statutory bases for the appointment offered by the government.

Prosecutors also relied on a passage from United States v. Nixon, the 1974 Supreme Court case involving the White House tapes subpoenaed by the special prosecutor during the Watergate investigation:

Under the authority of Art. II, § 2, Congress has vested in the Attorney General the power to conduct the criminal litigation of the United States Government. 28 U.S.C. § 516. It has also vested in him the power to appoint subordinate officers to assist him in the discharge of his duties. 28 U.S.C. §§ 509, 510, 515, 533. Acting pursuant to those statutes, the Attorney General has delegated the authority to represent the United States in these particular matters to a Special Prosecutor with unique authority and tenure. (emphasis added)

This passage also seems very clear, and as a Supreme Court holding it would be binding on Judge Cannon. But she wrote that after reviewing all of the pleadings and arguments in Nixon, she had concluded that the power of the Attorney General to appoint a special counsel was not an issue that was briefed, argued, or resolved in that case. She characterized the quoted language as merely a “stage-setting paragraph,” not part of the Court’s holding. As such, she concluded, the language was dicta — a non-binding discussion not essential to the Court’s holding — and was not binding on her.

Cannon acknowledge that other courts, including the U.S. Court of Appeals for the District of Columbia in a case challenging the appointment of special counsel Robert Mueller, had rejected these same arguments. But those decisions from other courts outside her Circuit were not binding on her and she said she found them unpersuasive.

Finally, Cannon concluded that the appropriate remedy for this violation of the Appointments Clause was dismissal of the indictment. Because the actions of the special counsel lacked any legal authority, she held, the results of those actions must be undone — which meant dismissing the indictment of Trump and his two co-defendants.

As a back-up holding, Cannon also found that the appointment of a special counsel violated the Appropriations Clause of the Constitution, which requires that “[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” Art. I, Sec. 9, cl. 7. Smith’s office has been funded from a Congressional appropriation for the Department of Justice. Cannon held that because she had concluded Smith was not lawfully appointed, that meant the funding of his office was not pursuant to an lawful appropriation. She said that the remedy for this violation was not clear and that it might also require dismissal. But in light of her dismissal based on the Appointments Clause, she concluded she did not need to decide that now.

What Smith Should Do Now: The natural next step would be for Smith to appeal this dismissal to the 11th Circuit, and he has already filed such a notice of appeal. Following that court’s decision, which could easily take 6-12 months or more if they don’t expedite it, the losing party will petition the Supreme Court for certiorari. In all, it could be 1-2 years before this question is resolved and the case can proceed.

On Tuesday I wrote this post arguing that Smith and the DOJ have a better alternative: don’t appeal, and have the U.S. Attorney for the Southern District of Florida quickly bring an identical indictment.

What Jack Smith Should Do Now

Because the U.S. Attorney is a presidentially-appointed officer of the United States, this would eliminate the basis for Cannon’s dismissal. Smith and the rest of his staff could be hired by or detailed to the U.S. Attorney’s office to continue working on the case, and almost no time would be lost.

Not appealing may seem counter-intuitive, but for all the reasons I discussed in that post it actually makes the most sense. Even in the worst case scenario, where Smith just ends up back before Judge Cannon with the new case, he would still be far better off because he avoids all the delays of an appeal.

The other factor that makes me think this is the best course is I’m not sure Smith will win on appeal if this goes all the way to the Supreme Court. I think Cannon’s decision is wrong, but it’s not as wacko as you might have been led to believe by some of the commentary last week. Her analysis of the text of section 533, arguing that it is unreasonable to think Congress would have inserted a broader provision into a more narrowly-focused statute, is very similar to the analysis the Supreme Court employed in the recent Fischer decision, where it ignored the plain language of the obstruction statute used in January 6 prosecutions.

Supreme Court Narrows Obstruction Law Used in Jan 6 Cases

This Supreme Court is very distrustful of executive power, and of prosecutorial power in particular. I can easily see a majority of the Court agreeing with Cannon. If that happens, DOJ will have spent 1-2 years on an appeal only to be forced to have the charges brought by a presidentially-appointed U.S. Attorney - something it could do right now. Why waste the time on an unnecessary appeal that you could well lose?

Some have also suggested this appeal could be a vehicle for Smith to ask the 11th Circuit to remove Cannon from the case. That’s possible, but experts familiar with the 11th Circuit believe he probably would not succeed. Removal would require some evidence from outside the case of bias or improper influence - an incorrect ruling alone is not enough, particularly one that has been endorsed by at least one Supreme Court Justice.

Even though Smith has filed a notice of appeal, there’s still plenty of time for him to change his mind, drop the appeal, and proceed as I suggested. I have no doubt he and his team have thought about this option as well, so we will see how it plays out.

Georgia State Case - January 6 Allegations