A Florida federal judge in a scathing order Monday said President Donald Trump filed a $10 billion lawsuit against the Internal Revenue Service “for an improper purpose” — to gain the appearance of “judicial legitimacy for a ‘settlement’ that had no viable basis in law or fact.”
That controversial out-of-court settlement with the Department of Justice in May briefly led the DOJ to create a since-abandoned $1.8 billion “lawfare” fund to compensate purported victims of prosecutorial overreach by the department.
It also led to Trump, his family members and related business entities being granted effective immunity from audits, prosecution or regulatory enforcement action by the IRS for tax returns filed up to the date of the settlement in May.
Judge Kathleen Williams, in her new order in U.S. District Court in Miami, said that because Trump has control over the DOJ and the IRS, “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.”
“The Lead Plaintiff and the Government are one, a fully realized unitary interest,” Williams wrote.
Williams referred Trump’s lawyer in the suit, Alejandro Brito, to the Florida bar for consideration of whether Brito should be disciplined in light of her findings.
She also ordered a copy of the order to be sent to the New York State Bar, 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.
Blanche, who is Trump’s former criminal defense lawyer, was responsible for signing off on the settlement with Trump on behalf of the IRS. The settlement was not submitted to Williams or any other court for review.
Trump, his adult sons Donald Trump Jr. and Eric Trump, and the Trump Organization had sued the IRS in January over the leak of his tax records by an agency contractor, who pleaded guilty in connection with that act in 2023.
Trump has nominated Blanche to serve as attorney general. The Senate Judiciary Committee is due to hold hearings on Blanche’s nomination on Wednesday and Thursday.
Williams, in her order, barred Trump, the DOJ and other parties in the case from using “the purported ‘settlement agreement'” in judicial or other proceedings as evidence of a settlement of the lawsuit.
In a footnote, she pointedly wrote that the question of “whether a private agreement” between both sides is valid and enforceable “is not before this court.”
“This action was never about a party seeking judicial resolution of a legal issue or a factual dispute,” Williams wrote in her order.
“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,” the judge wrote.
Williams pointed to the specific dollar amount of the DOJ’s “Anti-Weaponization Fund,” which was a nod to the year 1776, the year in which the Declaration of Independence.
She said that Trump and the other plaintiffs could make no connection in their lawsuit “between the billions of dollars they sought, and the recovery authorized under the governing statute,” and that they filed the suit “asserting claims that they knew, or should have known, were time-barred and for an amount of damages unsupported by facts or law.
In a footnote, Williams wrote, “Even the Fund amount — $1.776 billion — speaks of a ‘branding’ effort rather than a deliberate and thoughtful calculation of damages.”
Williams’ order came in response to a brief filed by 35 former judges calling on her to reopen the case, which Trump and the IRS settled before Williams could rule on the question of whether the parties were actually adverse to each other given Trump’s position as president and head of the executive branch of government, which includes the IRS.
“The court’s opinion is a resounding victory for the rule of law,” said the lawyers who represented the judges, Norm Eisen and Matt Platkin, in a statement.
“We are proud to represent these former judges in presenting the arguments that the court adopted,” the attorneys said.
A spokesman for Trump’s legal team, which includes Brito, in a statement responding to the order, said, “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,” the spokesman said.
The White House declined to comment to MS NOW, referring questions to the Trump legal team spokesman.
CNBC has requested comment from the DOJ.
Source link