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Trump’s federal suit against New York AG is dismissed

Brenda K. Sannes, the federal judge, rejected former president Donald Trump’s claim that New York Attorney General Letitia James's investigation into his business practices was politically motivated and that James had violated his rights Friday. This marked Trump's second failure to successfully fend off the James's inquiry.Veasey Conway/NYT

NEW YORK — In the latest legal blow to Donald Trump, a federal judge Friday dismissed a lawsuit the former president filed that sought to halt the New York attorney general’s civil investigation into his business practices.

The ruling, in federal court in Albany, was Trump’s second defeat related to the investigation in two days. On Thursday, an appellate court ordered Trump and two of his children to sit for questioning under oath from the office of the state attorney general, Letitia James.

Together, the rulings clear the way for James to complete her investigation in the coming weeks or months. While James, a Democrat seeking reelection, does not have the authority to seek criminal charges against Trump or his family’s real estate business, she can file a lawsuit if she concludes that they committed fraud.

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Last month, one of her lawyers indicated that a suit could be coming soon, saying that the office was preparing an “enforcement action” in the near future.

It is unclear if Trump plans to appeal either of the rulings. His lawyers did not immediately respond to requests for comment.

“The courts have made clear that Donald J. Trump’s baseless legal challenges cannot stop our lawful investigation into his and the Trump Organization’s financial dealings,” James said in a statement. “No one in this country can pick and choose how the law applies to them, and Donald Trump is no exception. As we have said all along, we will continue this investigation undeterred.”

Lawyers for Trump filed the federal lawsuit in December, arguing that James’s public criticism of Trump, and the subpoenas she had issued him and his company, violated several of his constitutional rights, including those to free speech and due process.

In the ruling Friday, Brenda Sannes, the federal judge, rejected Trump’s claim that the investigation was politically motivated and that James had violated his rights.

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Trump’s suit had cited a litany of James’s public statements criticizing Trump, including a 2017 tweet declaring that she was “leading the resistance against Donald Trump in NYC.”

While James’s statements could reflect political or personal animus toward Trump, the judge said, her comments were not enough to prove that the attorney general had infringed upon Trump’s rights.

Sannes also found “no evidence that the subpoena enforcement proceeding has been conducted in such a way as to constitute harassment.”

Trump has denied all wrongdoing and has blasted James, calling her investigation “a witch hunt.”

Her investigation is focused on his annual financial statements, which contain estimated values of his golf courses, hotels and other properties. James is scrutinizing whether Trump and his company falsely — and fraudulently — inflated those values to secure loans and other financial benefits.

In a court filing this year, James revealed that Trump’s longtime accounting firm had cut ties with him and essentially retracted nearly a decade’s worth of the financial statements.

She also argued, in a separate filing, that the Trump Organization had engaged in “fraudulent or misleading” practices. But her lawyers said that they needed to collect additional records and testimony, from Trump in particular, before they could decide whether to file a lawsuit.

Last month, a state judge in Manhattan, Arthur F. Engoron, held Trump in contempt of court for failing to fully comply with James’s subpoena seeking his personal records. (The judge recently released the contempt order, after Trump paid a $110,000 fine and filed additional documents.)

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Engoron also ordered Trump — as well as two of his children, Donald Trump Jr. and Ivanka Trump — to be interviewed under oath by James’s office. In its ruling Thursday, a New York state appeals court upheld that order.

As James is escalating her civil inquiry, Trump also faces a criminal investigation by the Manhattan District Attorney’s Office into some of the same business practices James is reviewing.

But while the criminal investigation is continuing, prosecutors stopped presenting evidence about Trump to a grand jury early this year.