Why a wine bar is suing Donald Trump

Posted at 3:24 PM, Mar 09, 2017
and last updated 2017-03-09 15:24:34-05

Diane Gross (l.) and Khalid Pitts, owners of the Cork Wine Bar, announce the filing of an unfair competition lawsuit against the Trump International Hotel. (Photo credit should read MANDEL NGAN/AFP/Getty Images)

By Meg Wagner

Allegedly a strictly-business lawsuit

A Washington, D.C. wine bar is suing President Donald Trump, arguing that the restaurant inside his eponymous hotel is stealing business away.

The husband-and-wife duo who own Cork Wine Bar announcedtheir lawsuit Thursday against Trump himself and the LLC that runs the $212 million Trump International Hotel, opened in 2016 near the White House.

Khalid Pitts and Diane Gross claim that the hotel — which sits 1.5 miles away from their restaurant and includesa steakhouse and full bar — has an unfair advantage in attracting diners. The Trump name has attracted hungry politicos to the hotel, who may see dining there as a way to get close to the president, they say.

“We have events we do here for elected officials, nonprofits, foreign dignitaries, the World Bank, law firms,” Grosstold the Washington Post. “Those folks are now being courted to come and want to go there because they see it as advantageous to them to curry favor with the president.”

Trumpresigned from his role managing of the Trump Organization — which owns the company that manages the hotel, Trump Old Post Office LLC — after he took office in January. But hehasn’t divested his financial interests.

Gross said that she is a Democrat and Pitts has worked for the progressive political consulting firm Democracy Partners, and the environmental advocacy group Sierra Club. But they insist the lawsuit is about business, not politics.

“It has nothing to do with the policies of the president,” Gross said.

A not-so blind trust

Since he began his presidential campaign in 2015, Trump has faced questions about how he’d handle his businesses while running the country. The Trump Organization maintains real estate properties all over the world, andcritics argued that having its boss in the White House could pose a host of conflicts of interest with foreign governments.

After winning the November election, Trump said he’d put his businessesinto a blind trust: He’d hand over his business portfolio to an independent third-party that would make financial decisions for him and without his knowledge — in theory eliminating the possibility that his business interests would conflict with his presidential interests.

Trump also said he’d hand the organization over to his children — but critics argued that wouldn’t eliminate the problem, sinceTrump’s self-interests are largely the same as his kids’.  

So far, Trumphas not followed through on the blind trust idea. While his holdings are, in fact, in a trust, they’re maintained by his oldest son, Donald Jr., and the Trump Organization’s chief financial officer, Allen H. Weisselberg. A blind trust would require the trustees be from a third-party — not family and friends.

Trump did follow through on his promise to let his kids run his business though. In January, he announced that he’d step down from managing the day-to-day operations. But that doesn’t mean he’s removed from the business: he still maintains ownerships, even if he’s not managing it.

The business set-up has not appeased Trump’s top critics. In January, a group of ethics lawyers filed a lawsuit against the president alleging that his continued involve in his real estate empireviolates the Constitution’s Emoluments Clause, which forbids elected officials from accepting anything of value from foreign countries.

Not looking for money

Ascritics continue to rail against Trump for refusing to divest from his business, the wine bar lawsuit may finally force his hand on the matter.

Gross and Pitts are not suing for monetary damages. Instead, their lawsuit seeks a remedy to the alleged unfair competition, likely in the form of a court order stopping the hotel and the BLT Prime steakhouse inside from conducting business while Trump is president.

But there’s another way to make the Washington, D.C. restaurant playing field fair again, the couple’s lawyers said: Trump could finally forfeit ownership of the Trump Organization and divest his financial interests.

The Cork Wine Bar lawsuit is in its earliest stages, and possible divestment is a long way off. Lawyers for the bar owners said that they are speaking with other Washington, D.C.-area restaurants and may add more plaintiffs to the case, although theydid not detail how many could possibly join.

The next immediate step in the suit is to serve Trump the legal papers, although Mark Zaid, one lawyers representing the wine bar, said that may be easier said than done.

“None of us want to be tackled by the Secret Service,”he joked.