In response to highly dubious civil lawsuits, the Trump Justice Department has been exceedingly generous lately, agreeing to lucrative settlements with plaintiffs who are politically aligned with the White House. Whether Donald Trump will be among the beneficiaries, however, remains an open question.

A federal judge suggested late last week that the president might have to lower his expectations. Politico reported:

President Donald Trump’s $10 billion lawsuit against the IRS over the leaking of his tax returns ran into turbulence Friday as a judge ordered a hearing on whether the Constitution allows the president to sue the federal government he oversees.

U.S. District Court Judge Kathleen Williams has asked Trump’s private attorneys and Justice Department lawyers representing the IRS to address whether his control over the government’s actions in the case means it’s the kind of dispute federal courts cannot consider.

“Although President Trump avers that he is bringing this lawsuit in his personal capacity, he is the sitting president and his named adversaries are entities whose decisions are subject to his direction,” Williams wrote in a four-page order.

“It is unclear to this Court whether the Parties are sufficiently adverse to each other so as to satisfy Article III’s case or controversy requirement,” the judge added, referring to the Constitution.....

Shortly after his lawyers filed the case, the president told reporters that he assumed “nobody would care” if he received a lucrative payout as part of the frivolous litigation. That payout now appears in doubt. Watch this space.

Article III, Section 2, Clause 1:

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;—to all Cases affecting Ambassadors, other public Ministers and Consuls;—to all Cases of admiralty and maritime Jurisdiction; to Controversies to which the United States shall be a Party;—to Controversies between two or more States; between a State and Citizens of another State, between Citizens of different States,—between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

Federal Rule of Civil Procedure 11 (“Rule 11”) governs the filings of pleadings, motions, and other papers with the Court. “The purpose of Rule 11 is to deter baseless filings in [the] district court and thus streamline the administration and procedure of federal courts.” As relevant here, when an attorney files a pleading in federal court, he certifies that, among other things, the pleading is not being presented for an improper purpose. Because this question strikes at the heart of the integrity of the judicial process, the Court may raise the improper purpose inquiry sua sponte and at any time. ...

An improper purpose under Rule 11 includes filing suit to force a settlement....This case concerns whether Plaintiffs’ conduct, as described supra, satisfies Rule 11’s improper purpose standard. The Court concludes that it does. ... These efforts cannot be allowed in this Court.... As aptly summarized by the non-party movants, Plaintiffs acted in bad faith and for an improper purpose by “collusively filing a lawsuit with claims subject to multiple dispositive defenses solely to provide cover for a collusive settlement.” ...

The Court recognizes that Rule 11(c)(5)(B) limits a court’s ability to impose monetary sanctions on its own initiative where the show cause order follows a voluntary dismissal or settlement. .... Nonetheless, the Court need not decide whether the circumstances of this case permit monetary sanctions notwithstanding the language of Rule 11(c)(5)(B). That limitation applies only to monetary sanctions and does not prevent the Court from determining whether Rule 11 has been violated or whether appropriate non-monetary sanctions are appropriate...

Thus, after considering the totality of the circumstances, including the record, the relevant law, the written submissions, and the factors identified by the Eleventh Circuit, the Court concludes that Rule 11 sanctions are appropriate here. ... In fashioning an appropriate sanction, the Court is guided by Rule 11’s deterrent purpose. ... The Court therefore imposes non-monetary sanctions under Rule 11 as follows:

1. Plaintiffs’ Attorney Alejandro Brito is REFERRED to The Florida Bar for its consideration, review, and determination as to whether any disciplinary action is appropriate in light of the findings and rulings made in this Order. The Clerk of Court is DIRECTED to mail a copy of this Case Order to The Florida Bar, of which Attorney Alejandro Brito is a member .

2. All future applications by Daniel Z. Epstein for admission pro hac vice in the Southern District of Florida will be DENIED for one year or until further order of this Court.

3. The Parties are prohibited from referring to the purported “settlement agreement,” or using, offering, admitting, or citing any of its provisions in any judicial, administrative, regulatory, arbitration, or any other official proceeding as evidence of a “settlement” reached in this matter. ...

Having concluded that sanctions are warranted under Rule 11, the Court will now address whether sanctions are likewise appropriate under the Court’s inherent authority. Although Rule 11 limits imposing monetary sanctions following a voluntary dismissal, the Court’s inherent authority remains available to address conduct that abuses the judicial process. ... Independent of Rule 11, federal courts possess inherent authority to protect the integrity of judicial proceedings. .... Thus, while “the court ordinarily should rely on the Rules rather than the inherent power . . . if in the informed discretion of the court, neither the statute nor the Rules are up to the task, the court may safely rely on its inherent power.” The Court does so here. The conduct of the Parties triggers the Court’s inherent authority. As to Plaintiffs, they filed a multibillion-dollar lawsuit asserting claims that they knew, or should have known, were time-barred and for an amount of damages unsupported by facts or law. Plaintiffs could make no connection between the billions of dollars they sought, and the recovery authorized under the governing statute. ... This lawsuit was not brought to vindicate rights; it was brought to manipulate the judicial process to pursue benefits unavailable in litigation because the Parties were not adverse.

Defendants’ conduct is equally untenable. It is telling that the DOJ, which is tasked with enforcement of United States law, has remained conspicuously absent and silent when serious questions about this matter have been raised. ... And when representatives did choose to expound on the Department’s conduct, they offered misleading explanations of the facts and the law. In abdicating its responsibility to zealously defend the interests of the United States, the Government entered into a “settlement” that deviated from its litigation posture in similar actions, disregarded DOJ policies, and accomplished objectives beyond those authorized, as well as those specifically prohibited, by law. Under these circumstances, the Court may reasonably infer that the Government failed to defend this lawsuit or to respond to the Court’s jurisdictional inquiry because its position would not withstand judicial scrutiny and because resolution of the threshold issues identified by the Court would not have favored its preferred outcome to this case. .... The Parties used the existence of federal litigation as a means of conferring legitimacy upon a course of action that they were unwilling to subject to judicial review. The context of the “settlement,” the relationships of the people involved in negotiating and approving it, the ethical implications of their conduct, and the Parties’ swift efforts to dismiss this case after the Court raised fundamental jurisdictional questions all support this conclusion. Accordingly, the Court expressly finds that Plaintiffs acted in bad faith.

The Court finds monetary sanctions appropriate under its inherent authority and prerogative to police the matters and litigants who avail themselves of its jurisdiction. ...These monetary sanctions would include the attorneys’ fees incurred by Court-appointed amici. ... Nevertheless, the Court-appointed amici have declined any reimbursement for their important service to the Court. There remain the initial amici—whose appearance was not contested by any Party—and the thirty-five former Federal Judges, whose briefing precipitated this Order. Accordingly, these amici, if they wish, may file, within fourteen (14) days of this Order, a memorandum regarding any appropriate reimbursement. Plaintiffs may file any response seven (7) days thereafter. Finally, the Clerk of Court is DIRECTED to mail a copy of this Order to the State Bar of New York, of which Acting Attorney General Blanche is a member, AND to the District of Columbia Bar, of which Associate Attorney General Woodward is a member, where disciplinary proceedings are currently ongoing.

BREAKING

A federal judge NULLIFIES the purported “settlement” behind Trump’s $1.776B slush fund, finding there was never a “case or controversy” — and referring his attorney for possible professional discipline.

Doc https://storage.courtlistener.com/recap/gov.uscourts.flsd.706172/gov.uscourts.flsd.706172.106.0.pdf

By now, Donald Trump has probably grown accustomed to legal setbacks in court, though his case against the IRS has started to backfire in ways the president didn’t see coming. The Associated Press reported:

A federal judge said Monday that President Donald Trump’s lawsuit against the IRS over his leaked tax returns was filed for an “improper purpose” as she referred attorneys for disciplinary actions.

The ruling from U.S. District Judge Kathleen Williams amounts to a stinging rebuke of the Republican president’s lawsuit, characterizing it as an exercise in self-dealing in which he sued an entity that is effectively under his control.

.....More than a month later, she apparently did not like what she discovered, concluding that Trump and his lawyers acted “in bad faith” and filed a civil suit “for an improper purpose.”

“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 judge also prohibited the parties from even referring to it as a “settlement.”

Just as notably, as CNBC reported, Williams “referred Trump’s lawyer in the lawsuit, Alejandro Brito, to the Florida bar for consideration on whether Brito should be disciplined in light of the findings in the new order.” The judge also “ordered that a copy of her ruling be mailed to the State Bar of New York, of which Acting Attorney General Todd Blanche is a member, as well as to the District of Columbia Bar, of which Associate Attorney General Stanley Woodward is a member.”