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Daily Tax Report: State

Trump, RNC File Suit to Block California Tax Return Law (3)

Aug. 6, 2019, 5:53 PMUpdated: Aug. 6, 2019, 9:31 PM

President Donald Trump, the Republican National Committee, and the California Republican Party filed separate lawsuits Aug. 6 to block California’s new law requiring presidential candidates to release their tax returns.

“The effort to deny California voters the opportunity to cast a ballot for President Trump in 2020 will clearly fail,” Jay Sekulow, counsel to the president, said in a prepared statement. “Legal scholars from across the political spectrum have roundly condemned this flagrantly illegal statute.”

Trump filed suit as an individual and through his campaign, alleging Democrats who enacted the California law “made it clear they were retaliating against President Trump for his political associations and speech,” the complaint said.

California lawmakers passed the law in response to Trump’s break from years of tradition by choosing not to release his tax returns. When Gov. Gavin Newsom signed the law July 30 he broke from his predecessor, former Gov. Jerry Brown, who vetoed a similar billin 2018 because he said it could be unconstitutional.

California’s law adds unconstitutional qualifications for presidential candidates—the release of five years of tax returns—to a fixed list in the U.S. Constitution, according to Trump’s complaint. The law also violates the First Amendment and is preempted by the Ethics in Government Act, the complaint alleges.

The committee made similar legal claims, saying the California law “is a naked political attack against the sitting President of the United States.” A Republican member of the California Assembly, two potential California delegates for Trump, and the California Republican Party joined the committee in its lawsuit.

Both the Trump and committee suits ask the court to block Secretary of State Alex Padilla and state officials from enforcing the law. They were filed in federal court in Sacramento.

Separately, the California Republican Party filed an emergency petition in the state’s Supreme Court alleging the law violates a 1972 state constitutional amendment that requires the Secretary of State to place the names of all presidential candidates on the ballot.

S.B. 27 requires presidential and gubernatorial candidates to release five years of tax returns to appear on the state primary ballot. It took effect immediately when Newsom signed it.

Not Backing Down

Newsom and bill author Sen. Mike McGuire, both Democrats, showed no sign of backing away from the law.

“There’s an easy fix Mr. President—release your tax returns as you promised during the campaign and follow the precedent of every president since 1973,” Newsom said on Twitter soon after the lawsuits were filed.

“It comes as no surprise that President Trump would freak out at the prospect of presidential transparency and accountability, but he will need to get used to it,” McGuire said. “Welcome to the rule of law, Mr. President.”

Two other lawsuits challenging the California law—filed by a Republican candidate and a group of voters—are pending.

All four suits make similar claims, but Trump and the Republican National Committee can raise First Amendment claims that others can’t, Richard L. Hasen, professor of law and political science at the University of California Irvine School of Law, said.

“Having this many suits makes it more likely that courts will be able to find at least someone has standing to complain and to reach the merits of these claims,” Hasen said.

The cases are Donald J. Trump for President, Inc. v. Padilla, E.D. Cal., No. 2:19-at-00705, complaint filed 8/6/19, Melendez v. Newsom, E.D. Cal., No. 2:19-at-00706, complaint filed 8/6/19, and Patterson v. Padilla, Cal., No. S257302, emergency petition filed 8/6/19.

To contact the reporter on this story: Laura Mahoney in Sacramento, Calif. at lmahoney@bloomberglaw.com

To contact the editors responsible for this story: Jeff Harrington at jharrington@bloombergtax.com; Karen Saunders at ksaunders@bloombergtax.com