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AG Nessel Condemns Unprecedented Misuse of Legal System in Trump v. IRS

LANSING — Michigan Attorney General Dana Nessel, as part of a multistate coalition, filed an amicus brief (PDF) urging the U.S. District Court for the Southern District of Florida to carefully scrutinize the parties’ conduct and purported “settlement” agreement in Trump v. IRS. In January 2026, President Trump, his family, and his business organization filed suit against the U.S. Department of the Treasury and the Internal Revenue Service (IRS), asserting claims related to the disclosure of President Trump’s tax return information by a government contractor. The District Court noted the possible lack of real adversity between the parties to the lawsuit and was skeptical of its own jurisdiction, but shortly before briefing on that issue was due, President Trump voluntarily dismissed his claims and entered into a “settlement” agreement with the Department of Justice (DOJ), granting President Trump and his family immunity from all investigations and prosecutions related to past conduct and requiring the DOJ to establish a $1.776 billion “Anti-Weaponization” fund.

In the brief, Attorney General Nessel and the coalition argue that the lawsuit and subsequent settlement are nothing more than a collusive fraud engineered to violate the constitutional limits on presidential authority under the veneer of a settlement.

“This so-called settlement is a blatant scheme cooked up by Donald Trump that shields his family from accountability and would enrich his friends and political allies at the expense of the American taxpayers he is meant to serve,” said Attorney General Nessel. “Rather than defend against the lawsuit, the DOJ chose to defraud the Court by entering into a collusive agreement with the President. This case must be reopened to protect the rule of law”

Prior to President Trump’s abrupt dismissal of the lawsuit, the District Court recognized that there was a threshold jurisdictional question posed by the complaint, which the President brought against agencies whose leadership serves at his pleasure. The Court ordered the parties to brief the question of whether a case or controversy existed. Following the “settlement” and dismissal, the District Court is now considering reopening the case under Rule 60, which permits a court to set aside a judgment and reopen a case on the basis that there was fraud or deception perpetrated by parties upon the court. In the amicus brief, Attorney General Nessel and the coalition offer their perspective as the chief law officers of their states, highlighting that the self-dealing and corrupt nature of this settlement agreement is antithetical to the responsibilities of attorneys general and the rule of law.

The coalition argues that the timing of the dismissal of President Trump’s claims and the irregularities of the settlement itself indicate that this case was collusive and an attempted end-run around constitutional limits on Executive Branch authority. The coalition highlights that the settlement contravenes basic principles of contract and settlement law, is untethered to the value of President Trump’s claims – which suffer from fatal legal deficiencies – and may transgress legal and policy limits on DOJ’s settlement authority. The coalition emphasizes that this kind of collusion between a President and a Department he oversees undermines the separation of powers, public confidence in the court system, the powers exercised by state attorneys general, and the rule of law.

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