US judge dismisses Trump lawsuit, allowing New York investigation

Former United States President Donald Trump has lost a bid to stop the New York state attorney general’s investigation into his business practices, allowing the three-year probe to continue.

In a 43-page ruling, US District Judge Brenda Sannes said on Friday that she based her decision on case law that, in most instances, bars federal judges from interfering in state-level investigations.

Sannes said there was “no evidence” that Letitia James’s investigation was undertaken in bad faith.

“In a big victory, a federal court has dismissed Donald Trump’s baseless lawsuit to stop my office’s investigation into his and the Trump Organization’s financial dealings,” James said in a tweet, welcoming the judge’s decision.

“Frivolous lawsuits won’t stop us from completing our lawful, legitimate investigation.”

#BREAKING: In a big victory, a federal court has dismissed Donald Trump's baseless lawsuit to stop my office's investigation into his and the Trump Organization's financial dealings.

Frivolous lawsuits won't stop us from completing our lawful, legitimate investigation. https://t.co/Ax3rmLORpR

— NY AG James (@NewYorkStateAG) May 27, 2022

Sannes’s ruling came a day after a New York appeals court ruled that Trump must answer questions under oath in James’ probe, upholding a lower-court ruling requiring him to sit for a deposition.

Trump last year sued James in federal court in Albany, New York, arguing that the civil investigation into whether the Trump Organization misled banks and tax authorities about the valuations of its assets should be halted because he felt James, a Democrat, was using the case to further her political career.

The former Republican president alleged that the probe was political in nature and that James had violated his constitutional rights in a “thinly-veiled effort to publicly malign Trump and his associates”.

James replied in a January court filing that Trump’s “allegations of political disagreement cannot insulate” him from the investigation.

Alina Habba, a lawyer for Trump, said in a statement that she would appeal the decision, adding that James’s “egregious conduct and harassing investigation” met the definition of bad faith.

The ruling was the latest blow to Trump’s various challenges to the investigation. An intermediate state appeals court ruled on Thursday that Trump and his two eldest children, Donald Trump Jr and Ivanka Trump, must testify under oath as part of the probe.

Last week, Trump paid a $110,000 fine for failing to respond to James’ subpoena, one of the conditions needed to permanently lift a contempt of court order issued against him by the judge in the case, Arthur Engoron.

Trump had said he did not have any documents James sought, a claim Engoron called “surprising”.

James said in January that the investigation had uncovered significant evidence of possible fraud. Trump has denied wrongdoing.

At a May 13 hearing that precipitated Sannes’s ruling on Friday, a lawyer for James’s office said the probe is winding down and that evidence from it could support legal action against the former president, his company, or both.

The lawyer, Andrew Amer, said, “There’s clearly been a substantial amount of evidence amassed that could support the filing of an enforcement proceeding” – although a final determination on filing such an action has not been made.

Amer, a special litigation counsel in James’s office, said the office is “nearing the end” of the civil investigation, which James has said uncovered evidence Trump’s company misstated the value of assets such as skyscrapers and golf courses on financial statements for more than a decade.