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Improper Purpose Ruling
A federal judge in Florida ruled Monday that President Donald Trump’s $10 billion lawsuit against the Internal Revenue Service over his leaked tax returns was filed for an “improper purpose,” characterizing it as an exercise in self-dealing.
U.S. District Judge Kathleen Williams said the case was an attempt to “manipulate” the court process and legitimize a settlement that afforded Trump significant tax protections and sought to establish a nearly $1.8 billion fund.
Williams accused Trump of having manipulated the court system by suing a federal agency under his control and bypassing the requirement that parties in a lawsuit must have adverse interests.
The ruling came as Acting Attorney General Todd Blanche prepared to face the Senate Judiciary Committee for his confirmation hearing on Wednesday, with the judge’s decision described as a politically damaging storyline.
The judge stopped short of explicitly voiding the deal shielding Trump from tax scrutiny but said the government cannot claim in official proceedings that the agreement was the result of a legitimate legal process.
Sanctions and Bar Referrals
Williams referred Trump lawyer Alejandro Brito to the Florida Bar for potential disciplinary action and barred another lawyer, Daniel Epstein, from pro hac vice admission in the Southern District of Florida for one year.
The judge also directed that a copy of her order be mailed to the State Bar of New York and to the District of Columbia Bar, where acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward are members, respectively.
In her 56-page order, Williams wrote that “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.”
Trump’s legal team responded that “The IRS wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization.”
NBC News reported Williams said the lawsuit was brought in “bad faith” to “manipulate the judicial process,” while the judge ordered sanctions against people involved including Blanche and Woodward.
What Comes Next
The decision blocks both Trump, his sons, and business, and the government from “using, offering, admitting, or citing” anything from the so-called settlement agreement in any kind of proceeding.
Williams said there had never been a genuine controversy in the case because Trump controlled the treasury department, and she characterized the arrangement as having no viable basis in law or fact.
The ruling also tees up questions for Blanche at his Senate confirmation hearing on Wednesday, with the judge’s order described as a scathing rebuke and a line of questioning for the acting attorney general.
The settlement initially included a $1.776 billion “anti-weaponization” fund, but Blanche later announced the Justice Department was “not moving forward” with the program while the tax immunity provisions remained in place.
The judge’s order said the government can’t portray the deals as part of a judicial agreement, and it directed that future applications by Daniel Z. Epstein to join cases in the Southern District of Florida “be DENIED for one year or until further order of this Court.”
