The standoff between Fusion GPS and House investigators over bank records raises an important legal question, and the judge handling the case is not happy parts of it are continuing behind closed doors.
In a hearing Thursday in the federal district court in Washington, D.C., Judge Richard Leon criticized lawyers from both sides for what he said was a “very troubling” volume of sealed documents. In the case, Fusion GPS, the firm behind the now-infamous unverified dossier that contains salacious claims about President Donald Trump, sued its bank last month to block it from complying with the House Intelligence Committee’s subpoena for records about the firm’s clients.
The parties reached a confidential agreement in late October, but Fusion moved to reopen it on the grounds the committee wants 70 pages of records the firm doesn’t think it’s entitled to. The hearing Thursday was held in two parts: one open to the public, and one behind closed doors. It also features big-name lawyers: Fusion GPS is represented by a team from Zuckerman Spaeder, which includes partners William Taylor as well as Steven Salky, who argued Thursday. Also on the Fusion team is a group from Cunningham Levy Muse. The bank is represented by Duane Morris’ Joe Aronica, and Thomas Hungar represents the committee.
Here’s what to know about this case:
Unprecedented question in D.C. Circuit: The case deals with a separation of powers question that has yet to be answered in the D.C. Circuit. That’s whether a court has the authority to evaluate a congressional subpoena to a willing, private third party at the request of another private party. Fusion GPS has sued the bank, whose identity remains anonymous in court though press reports indicate it is TD Bank, to stop it from complying with the committee’s subpoena.
Salky told Leon that Fusion GPS is being forced to turn over records that aren’t pertinent to the committee’s investigation into Russian interference in the U.S. election, and that the subpoena violates its First Amendment rights to freely associate with clients without the government peaking in.
Hungar, however, said that while there are situations where court’s can step in to block congressional subpoenas, this isn’t one of them. He said the burden is not on the committee to show the “pertinence” of the records, but rather on Fusion to show it has a clear and compelling legal right to block the subpoena. He said they’ve shown no such right.
As for the First Amendment issue, Hungar said that for protection to apply, Fusion must prove it’s an “association,” which it can’t. He added Fusion cannot assert that right on behalf of its customers.
Leon’s transparency concerns: Leon began the hearing by scolding the parties for concocting a “whole host” of sealed documents. He said he’s concerned about the lack of transparency in the case, especially because it presents a “relatively discreet legal question.”
Leon lamented that he had to hold the hearing in two parts, adding it was ”very troubling” the court may not be able to issue a public opinion due to the sealed filings, or issue one “that shows what really happened.”
Implications for law firms: After Fusion and the House came to their agreement last month, news surfaced that two law firms, Perkins Coie and Baker & Hostetler, had paid the company. Perkins retained Fusion to do research in connection with its representation of Hillary Clinton in the 2016 election, and Baker & Hostetler did so for research related to its representation of a Russian company in litigation.
According to Fusion, the House committee wants 19 records related to law firms paying the company for its services. Though the records in question only show how much a firm paid without indicating exactly what it paid for, they would still reveal which firms paid the company for its services. During the hearing, Salky said that in addition to other concerns, it was possible that the names of those firms could be leaked to the media or otherwise made public.