A Florida federal judge said Monday that President Donald Trump’s $10 billion lawsuit against the Internal Revenue Service was filed for an improper purpose and in bad faith, then moved to strip the deal of any legal shine by barring the parties from using the purported settlement in court or elsewhere as proof of anything legitimate.
U.S. District Judge Kathleen Williams said the case was an attempt to manipulate the judicial process and to gain the appearance of judicial legitimacy for a controversial settlement with the Justice Department. That’s the machinery at work: a federal agency, a president, and a legal system pressed into service to bless an agreement the judge said never deserved the court’s seal.
Who Pays, Who Benefits
Williams said Trump’s complaint was an exercise in self-dealing. She wrote that he and his lawyers manipulated the court system by suing a federal agency under his control while bypassing the requirement that parties in a lawsuit have adverse interests. The judge said the suit was designed to use the court to provide legitimacy to an agreement that would confer immunity on people and entities affiliated with the president and earmark billions of dollars from American taxpayers to redress grievances not defined in law.
The people at the bottom of that arrangement are named plainly enough: American taxpayers. The benefits, by contrast, were aimed upward, toward people and entities affiliated with the president. That’s the hierarchy in one sentence, dressed up as litigation.
Williams also said the government cannot claim in official proceedings that the agreement was the result of a legitimate legal process. She barred Trump, the Justice Department and other parties from using the purported settlement agreement in judicial or other proceedings as evidence of a settlement of the lawsuit. The court, at least for now, refused to let the paper trail pretend it was something cleaner than it was.
What the Settlement Tried to Do
The case stemmed from Trump’s January lawsuit against the IRS and Treasury Department over a leak of his tax information to news outlets between 2018 and 2020. The settlement announced in May briefly led the Justice Department to create a now-abandoned $1.8 billion fund, described in some reporting as an anti-weaponization fund and in other reporting as a lawfare fund, to compensate people who believed they had been unfairly targeted by the department.
The settlement also included a memorandum from Acting Attorney General Todd Blanche prohibiting the IRS from investigating Trump, his family or his businesses for past tax issues, or other federal claims for conduct before the deal. Williams said that tax-amnesty provision directly contravenes a federal law barring the executive branch from influencing taxpayer audits and other investigations. She also said the conferral of possibly millions of dollars in tax relief potentially violates the Constitution’s bar on increasing compensation paid to a president during his tenure in the White House.
That’s the state apparatus talking to itself, then trying to call it justice.
Williams said the Justice Department’s response to the case disregarded DOJ policies and potentially the law. She wrote that the government entered into a settlement that deviated from its litigation posture in similar actions, disregarded DOJ policies and accomplished objectives beyond those authorized, as well as those specifically prohibited, by law. She also said Blanche’s testimony in early June, when he said the fund was no longer moving forward, was misleading and, at worst, disingenuous.
The Lawyers and the Bar Associations
The judge referred Trump attorney Alejandro Brito to the Florida Bar for consideration of whether he should be disciplined. She also ordered that her opinion be sent to the New York State Bar Association and the District of Columbia Bar, where ethics complaints have been filed against Todd Blanche and Associate Attorney General Stanley Woodward. Williams said Daniel Epstein will not be granted permission to file within the Southern District of Florida for up to a year.
Williams’ order came in response to a brief filed by 35 former judges asking her to reopen the case after it had been dismissed. Attorneys for the former judges, Norm Eisen and Matt Platkin, called the opinion a resounding victory for the rule of law. A spokesman for Trump’s legal team said the IRS wrongly allowed a rogue, politically motivated employee to leak private and confidential information about President Trump, his family and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets, and said President Trump continues to hold those who wrong America and Americans accountable. A DOJ spokesperson said there was no collusion in the case and that the partisan judge had disregarded decades of precedent.
Williams said Blanche’s apparent capacity to speak for both plaintiffs and defendants, sign a settlement document on behalf of all parties and then repudiate part of that agreement showed there was only one party whose interests were being represented throughout the case. She also raised ethical concerns about Blanche and Woodward because Blanche had previously represented Trump and Woodward had represented Capitol riot defendants and a Trump aide prosecuted alongside the president in the classified documents case.
Blanche, who was Trump’s former criminal defense lawyer, announced the creation of the DOJ compensation fund after Trump dropped his lawsuit. The Senate Judiciary Committee is due to hold hearings on Blanche’s nomination to be attorney general on Wednesday and Thursday. Williams said she was extremely troubled by Blanche’s testimony in May that the court had no role in reviewing the agreement.
The lawsuit had sought $10 billion over the leak of Trump’s tax information by an agency contractor, Charles Littlejohn, who pleaded guilty in 2024 and was sentenced to five years in prison. The settlement was not submitted to Williams or any other court for review. Williams said the fund amount of $1.776 billion spoke of a branding effort rather than a deliberate and thoughtful calculation of damages.