'Head-of-State-Owned Enterprise' Immunity.

• Author: Quinn, Pammela S.
• Position: Trump Organization

TABLE OF CONTENTS I. INTRODUCTION 1066 II. HEAD-OF-STATE-OWNED ENTERPRISE: THE TRUMP INTERNATIONAL ORGANIZATION 1072 A. The Trump Organization and Its International Holdings 1072 B. Other International Business Interests of Donald J. Trump 1074 C. Presidential Business: The Public/Private Nature of a Head-of-State-Owned Enterprise 1076 D. Overseas Lawsuits Against Trump and His Business Enterprise 1079 III. HEAD-OF-STATE AND SOVEREIGN IMMUNITY DOCTRINES 1080 IV. GAPS AND CONFLICTS IN VARIOUS IMMUNITY DOCTRINES 1084 V. UNCHARTED TERRITORY: NOVEL QUESTIONS SURROUNDING HEAD-OF- STATE-OWNED ENTERPRISE IMMUNITY 1088 VI. CONCLUSION 1089 I. INTRODUCTION

Among the overwhelming number of stories that emerged following the election of Donald J. Trump and during the first one hundred days of the Trump presidency were news accounts noting the large number of lawsuits filed against the new US President. In just his first eleven days in office, Trump had been sued some forty-two times. (1) A few days later, the count was above fifty--compared with three to four lawsuits each filed against the three previous presidents over the same time frame. (2) While these suits challenge his official policies as well as his personal conduct, (3) being named as a defendant is nothing new for Donald Trump. As of June 2016, Trump had been sued dozens of times and "more than 200 liens ha[d] been filed against Trump or his businesses by contractors and employees dating back to the 1980s." (4) At the same time, over the past thirty years, Trump and his companies have been involved in 3,500 state and federal lawsuits. (5)

A number of the recently filed lawsuits, both public and private, relate to conduct that blurs the line between Trump's business and political activities. The fact that the two are arguably inextricably intertwined is the subject of one of the most high-profile public lawsuits, citing the Emoluments Clause of the US Constitution (6) and alleging that Trump's unprecedented failure to "to divest from his businesses [means that] he is now getting cash and favors from foreign governments.... When Trump the president sits down to negotiate trade deals... the American people will have no way of knowing whether he will also be thinking about the profits of Trump the businessman." (7)

Similarly, in what appears on its face to be a purely private lawsuit seeking payment from one of his companies, there are allegations that Trump's new political office is entangled in his business dealings. Alleging that payment was due on contracted-for electrical work at Trump's new hotel in Washington, D.C., which was performed on an accelerated work schedule, one suit seeking a mechanic's lien asserts:

At the time of the [new Trump hotel's] "soft opening," Donald J. Trump, President of Defendant, Trump Old Post Office, LLC, was a U.S. presidential candidate and the "soft opening"' had to occur to permit Mr. Trump's nationally televised campaign event from the Hotel on September 16, 2016, which was to honor U.S. veterans. But for [Plaintiffs] acceleration of work and performance of extra work on the Project, this event would not have been able to occur. (8) Both of these types of lawsuits, public and private, reflect the significant attention that has been paid to the potential domestic law implications of such entanglements. (9)

Quite surprisingly, given the intense focus on and coverage of these domestic law issues, little or no discussion has occurred yet regarding the potential international law ramifications of Trump's continuing stake in his worldwide business enterprise. (10) Yet, for many of the same reasons--involving the unprecedented nature of his business holdings, which include real and intellectual property holdings around the world, his propensity to be sued, and an apparent interest in using his office to enhance his business holdings and vice versa (11)--the Trump presidency might test under-theorized and amorphous concepts within the doctrine of sovereign immunity. (12) This Article unpacks the potential issues and highlights the at best thin treatment of the legal doctrines at their heart. But resolving the many questions likely to arise is beyond its scope. Even its more modest ambition proves to be a more challenging task than one might expect given the relatively well-developed literature surrounding the doctrines of head of state immunity and the commercial activity exception to sovereign immunity that parallel and overlap--but which do not seem to fully envelop--the phenomenon considered by this Article, "head-of-state--owned enterprise" immunity.

While other wealthy individuals and businessmen have served and do serve as heads of state, (13) Donald Trump appears to be unique in terms of the global scope of his business interests, particularly because these business interests are in property (both real and intellectual), increasing the likelihood that foreign courts would be likely fora for lawsuits involving those businesses. Now that he has assumed office, Trump's many business holdings and licenses under the Trump International umbrella can be conceptualized as being at least somewhat similar to a state-owned enterprise. That is, state-owned enterprises occupy a fuzzy space on the border of traditionally public and traditionally private activity insofar as that enterprise is created by a public entity to act on its (public) behalf--but not to engage in traditionally public activities. Instead, state-owned enterprises are specifically intended to carry out traditionally private commercial activities. (14) Likewise, as the complaints about Trump's failure to divest upon assuming the presidency suggest, Trump's assumption of high public office has caused his private business interests to become entangled with his public position in ways that are often difficult to disaggregate.

Of course, the "head-of-state--owned enterprise"--the category this Article uses to describe Trump-the-President's global business holdings--is not a creature of existing doctrine. Looking at immunity issues through the lens of this distinct categorization illuminates the ways that existing doctrine fails to grapple with the consequences of this private/public enterprise--and may need to be reconceptualized precisely because of this failure. To make this case, the Article is structured as follows:

Part II describes the Trump International Organization, including its scope and particular business holdings and interests it has in various jurisdictions around the globe. It focuses on holdings and interests in states where Trump has already become embroiled in both diplomatic and legal controversies and in which potential lawsuits are particularly likely to arise. (15)

Part III canvasses the existing understanding of both sovereign immunity (with particular attention to the commercial activities exception to that doctrine) and head-of-state immunity. The origins of head-of-state immunity as part and parcel of sovereign immunity and the evolving understanding of the head of state as distinct and separable from the sovereign are treated in detail to unpack the competing rationales and conflicting contemporary approaches to this doctrine.

Finally, Part IV considers the existing doctrine, including its gaps and contested parameters, in light of the lawsuits described in Part II. This Part describes the questions and challenges that are likely to lie ahead for immunity in civil lawsuits against "head-of-state-owned enterprises."

2. HEAD-OF-STATE-OWNED ENTERPRISE: THE TRUMP INTERNATIONAL ORGANIZATION

   1. The Trump Organization and Its International Holdings

      Because his companies are all privately owned, it is difficult to discern the exact scope of Donald Trump's international business holdings and interests. (16) In addition to approximately thirty domestic subsidiaries, the Trump Organization--of which Donald Trump had served as the Chairman and CEO until just before taking office (17)--discloses that, in addition to thirty-one domestic subsidiaries, it has ten foreign subsidiary corporations in eight countries: South Korea, the United Kingdom, Canada, Panama, the Philippines, India, Uruguay, and Turkey. (18)

      Trump allegedly has created a revocable trust and ceded day-to-day control of the business operations of the Trump Organization to his eldest son, Donald J. Trump, Jr., and to the Trump Organization's chief financial officer, Allen H. Weisselberg. (19) However, pursuant to the terms of the trust, while the president will no longer exercise direct control over his businesses, he "will receive reports on any profit, or loss, on his company as a whole, [and] can revoke [the trustees'] authority at any time.... [T]he purpose of the Donald J. Trump Revocable Trust is to hold assets for the 'exclusive benefit' of the president." (20) In addition, Trump continues to be the main "face" of the Trump Organization in its promotional materials, such as its website. (21)

      In connection with this continuing interest in the Trump Organization, Trump has pledged that the Organization will not pursue any "new" business ventures overseas during his presidential term, (22) but he has not suggested the Organization will scale back in any way. To the contrary, developments in the days following Trump's pledge suggest that it "leave[s] plenty of wiggle room." (23) Just three days after he held a press conference in which he stated his companies would not pursue new overseas investments during his term of office, (24) it was reported that "[t]he Trump Organization will press ahead with multimillion-dollar plans to expand one of the [US President's] golf resorts in Scotland." (25) The Trump Organization argued that this project "did not conflict with [Trump's] promise not to pursue new or 'pending' deals outside the US," because the implementation of "future phasing of existing properties does not constitute a new transaction." (26) The scope of the project is...