The case alleges that the president is in violation of the Constitution’s Emoluments Clauses, which prohibit him from receiving gifts or payments from foreign or domestic governments without Congress’ permission.
It alleges as well that Trump’s hotel and restaurant lines have become unfair competitors for other businesses.
A federal district judge in New York had dismissed the case in December 2017, finding that the watchdog group, Citizens For Responsible Ethics, and the restaurant and hotel owners, did not have the legal standing to sue -- that Congress would need to file a lawsuit.
But the new ruling by the three-judge appeals panel allows the case to continue, finding merit in the argument that government patrons might be favoring Trump hotels and restaurants over other establishments in an attempt to gain favor with the president.
The panel voted 2-1 in favor of returning the case to the lower court. In their opinion, the judges rejected the district court’s view that that those patronizing Trump's establishments might be doing so only out of curiosity.
"We also note that there is no logic to the district court’s proposition that, because some government patrons might be drawn to Trump establishments by curiosity, this means that none of them patronize his establishments in the hope of currying the President’s favor by enriching him," Judge Pierre Leval wrote in the decision.
"The likelihood that some choices of government representatives will be influenced by other factors such as general curiosity in no way undermines Plaintiffs’ altogether plausible allegation of a substantial likelihood that, in some significant number of instances, government officials will choose Trump hotels and restaurants in the hope that spending their dollars at Trump establishments will influence the President in their favor in governmental decisions," Leval wrote.
When Trump became president-elect, he said he had turned over the "leadership and management" of the Trump brand to his two sons. He has also pledged to donate all profits from foreign government patrons at his hotels and other U.S. properties to the Treasury Department.
Jay Sekulow, the president’s personal attorney, has repeatedly accused those seeking to target the president over alleged violations of the Emoluments Clauses of engaging in “presidential harassment.”
But CREW Executive Director Noah Bookbinder said in a statement Friday that these measures are not enough.
"If President Trump would like to avoid the case going further and curtail the serious harms caused by his unconstitutional conduct, now would be a good time to divest from his businesses and end his violations of the Emoluments Clauses of the Constitution," the statement read.
This is not the only case alleging that Trump could be in violation of constitutional provisions. He's facing a lawsuit brought by 200 congressional Democrats that argues that Trump should have sought congressional approval before benefiting from foreign governments patronage. Last month, the two lawmakers leading the charge, Sen. Richard Blumenthal, D-Conn., and Rep. Jerry Nadler, D-N.Y., announced that they had begun issuing subpoenas as part of the discovery process. Justice Department attorneys representing the president asked the court to pause their compliance with the subpoenas pending an appeal, which the judge granted ahead of the Trump Organization’s deadline to hand over records.
Trump also is being sued by the attorneys general of Maryland and Washington, D.C., who accuse the president of illegally profiting from his Trump International Hotel in D.C. by accepting money from foreign governments. A judge ruled that the attorneys general did not have standing in this case, a decision that has since been appealed and is awaiting a decision from the appeals court.