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(Reuters) - The attorneys general of Maryland and the District of Columbia plan to file a lawsuit on Monday alleging that foreign payments to President Donald Trump's businesses violated the U.S. Constitution, according to a source familiar with the situation.
Trump already faces a similar lawsuit brought in January by plaintiffs including an ethics nonprofit group.
However, the case from two Democratic attorneys general could stand a better chance in court as the first government action over allegations that Trump, a Republican, violated the Constitution's so-called emoluments clause.
Democratic attorneys general have taken a lead role in challenging Trump policies, successfully blocking executive orders restricting travel from some Muslim-majority countries. They are also resisting efforts to roll back environmental regulations and insurance subsidies under the Affordable Care Act.
A spokesman for Maryland's attorney general declined to comment on the latest emoluments case. D.C. attorney general Karl Racine and a spokeswoman for the U.S. Department of Justice could not immediately be reached for comment.
In the January case filed in federal court in Manhattan, the ethics non-profit, Citizens for Responsibility and Ethics, a restaurant group and a hotel events booker alleged that Trump violated the Constitution's "emoluments" clause, which bars him from accepting gifts from foreign governments without congressional approval, by maintaining ownership over his business empire despite ceding day-to-day control to his sons.
Businesses such as hotel bookers are injured when foreign governments try to "curry favour" with Trump by doing business with his enterprises, according to the lawsuit.
The Justice Department on Friday argued that those plaintiffs lacked the legal standing to sue because they cannot allege enough specific harm caused by Trump's businesses. The government also said Trump hotel revenue does not fit the definition of an improper payment under the Constitution.
The government also said payments to Trump's hotels do not qualify as a violation of the emoluments clause, which is intended to cover personal services performed by the president.
Attorney General Racine told Reuters in a March interview that the District of Columbia has suffered particular harm because it subsidized the construction of hotels that are now impacted by foreign payments to Trump properties.
As a result, the district is in a "unique position" to file legal claims over the emoluments clause, Racine said.
The Washington Post first reported the Maryland and D.C. lawsuit.