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Litigation and manufactured “settlement” agreement designed to create a tax-payer funded windfall for President Trump and his family

OAKLAND — California Attorney General Rob Bonta today, leading a coalition of 23 attorneys general, filed an amicus brief 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 granting President Trump and his family immunity from all investigations and prosecutions related to past conduct and requiring the Department of Justice to establish a $1.776 billion “Anti-Weaponization” fund. In the brief, Attorney General Bonta 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, all at the expense of American taxpayers.
 
“At a time when millions of families are struggling to afford the cost of food and gas, President Trump’s blatantly corrupt lawsuit and astonishing settlement with his own Department of Justice amounts to nothing more than a taxpayer-funded political patronage program,” said Attorney General Bonta. “We cannot become desensitized to the self-dealing and rank partisanship by this Administration. We cannot standby and sanction the President Trump’s latest boondoggle. We urge the Court to take a closer look.”
 
Prior to President Trump’s abrupt dismissal of his complaint, the District Court recognized that there was a threshold jurisdictional question posed by a complaint brought by the President against agencies whose leadership serves at his pleasure and ordered the parties to brief the question of whether a case or controversy existed in this matter. The District Court is now considering reopening Trump v. IRS 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 today’s brief, Attorney General Bonta 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 Trum’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.
 
Attorney General Bonta was outspoken this year in defense of the rule of law. Along with other state attorneys general, he issued an open letter to the legal community in response to President Trump’s calls for the impeachment of federal judges and threats of retribution against law firms. He stood with WilmerHale, Jenner & Block, Susman Godfrey, and Perkins Coie in amicus briefs in support of their lawsuits challenging the Trump Administration’s retaliatory executive orders targeting law firms that represent clients or positions it disagrees with. And he issued a separate statement on the need to speak up and push back when our democratic norms are violated, our legal system is undermined, and our laws are broken. 
 
The Attorney General also sent letters to the U.S. Department of Justice raising alarm about the abuse of executive power with the indictments of New York Attorney General Letitia James and former FBI Director James Comey and challenging Federal Communications Commission Chair Brendan Carr’s campaign of censorship that led to the suspension of late-night host Jimmy Kimmel.