Rep. Ted Lieu (D-Calif.) predicted Tuesday that Acting Attorney General Todd Blanche faces congressional investigation and potential future prosecution after a federal judge in Florida issued a scathing 56-page ruling finding that President Trump’s $10 billion lawsuit against the IRS was filed in “bad faith” for an “improper purpose” — and directed copies of her ruling to the state bar association where ethics complaints against Blanche are already pending.
“I regret to inform you that the Acting Attorney General of the United States is an unethical, lawbreaking partisan hack,” Lieu wrote on X. “Acting AG Todd Blanche will be investigated next year by Congress. And if the facts warrant, he will be prosecuted by a future Administration. November is coming.”
The ruling came one day before Blanche was scheduled to appear before the Senate Judiciary Committee for his confirmation hearing as attorney general — a timing that is likely to define the opening hours of Wednesday’s proceedings.
What the Judge Found
U.S. District Judge Kathleen Williams, an Obama appointee, ruled Monday that Trump’s lawsuit against the IRS “was not brought to vindicate rights” but to “manipulate the judicial process.” She found that Trump and his sons — who were co-plaintiffs — “acted in bad faith” and that the case “was brought for an improper purpose — to gain the imprimatur of judicial legitimacy for a ‘settlement’ that had no viable basis in law or fact.”
The judge found the lawsuit lacked a fundamental requirement of federal litigation — adverseness between parties. Since Trump as president controls the DOJ, which represented the IRS, and also controls the IRS itself, there was never a genuine legal dispute. “The President may be the functional ‘dominus litis’ of the Executive Branch, but as a party to a civil suit, he, as well as all the parties and lawyers before a court, are bound by the rules,” Williams wrote.
Williams directed copies of her ruling to the New York State Bar Association — where ethics complaints against Blanche from two nonpartisan legal groups and 101 former judges have been pending since June 22, per the official ethics complaint filed by Lawyers Defending American Democracy — and to the District of Columbia Bar, where a complaint against Associate Attorney General Stanley Woodward is pending. She also referred Trump’s personal lawyer in the case, Alejandro Brito, to the Florida Bar for potential disciplinary action and barred another Trump lawyer, Daniel Epstein, from practicing in the Southern District of Florida for one year.
The IRS Lawsuit and the $1.776 Billion Fund
Trump, his sons and the Trump Organization sued the IRS in January 2026, seeking $10 billion in damages after an IRS contractor, Charles Littlejohn, leaked Trump’s tax returns to the New York Times and ProPublica during his first term. Littlejohn was convicted and sentenced to five years in prison for the disclosures. Trump’s appointment of the agency heads he was suing against presented immediate conflicts of interest — Trump acknowledged publicly that he was “supposed to work out a settlement with myself,” per the Wikipedia case record.
The DOJ, represented by Blanche and Woodward, settled the case in May 2026 by establishing a $1.776 billion “Anti-Weaponization Fund” for individuals claiming the DOJ had been weaponized against them, and issued a separate addendum the following day permanently ending IRS audits of Trump, his family and his businesses — an immunity arrangement critics called historically unprecedented. The official DOJ press release announcing the fund was issued May 18, the same day the lawsuit was dropped.
Bipartisan criticism was immediate and severe. After a federal judge temporarily blocked the fund and facing Republican pressure in Congress, Blanche announced in June that the DOJ would not move forward with the $1.776 billion fund. But the IRS audit immunity for Trump and his family remained in place. The day after Williams’ ruling — July 14 — Blanche issued a supplemental order formally dropping all ongoing and potential IRS audits of Trump, his family, related associates and their businesses, which according to the New York Times likely eliminated a dispute over a $72.9 million tax refund Trump claimed as host of The Apprentice, per the Wikipedia case record.
What the Judge Said About Blanche Specifically
Williams was particularly pointed in her criticism of Blanche. She noted in a footnote that she was “extremely troubled” by testimony Blanche gave to Congress in May in which he said the court had no role in reviewing the settlement agreement. “While temporally accurate, this answer is, at best, misleading and, at worst, disingenuous,” she wrote. The judge further found that Blanche’s “apparent capacity to speak for both Plaintiffs and Defendants, sign a ‘settlement’ document on behalf of all Parties to this action, and then repudiate part of that agreement, demonstrates that there was only one party whose interests were being represented throughout this case.”
Williams also raised ethical concerns about Blanche’s involvement in the settlement given his past representation of Trump as a private defense attorney — the very role he held when he defended Trump against the federal criminal cases that were later dropped after the 2024 election, per the ethics complaint.
Confirmation Hearing Context
Blanche’s Senate Judiciary Committee confirmation hearing is scheduled for July 15 and 16 at the official Senate Judiciary Committee hearing page. The judge’s ruling lands two days before the hearing, virtually guaranteeing that the IRS lawsuit, the Anti-Weaponization Fund, the IRS audit immunity order and Blanche’s conduct throughout the case will dominate questioning from Democratic senators and potentially some Republicans.
Lieu’s prediction that Blanche will face prosecution by a future administration echoed a broader Democratic argument about accountability after the midterms. Democrats need to flip six seats to retake the Senate majority in November — a threshold that would make them the majority on the very Judiciary Committee Blanche faces Wednesday. Whether they can achieve that margin, and whether a future administration would have the appetite to pursue Blanche, remains to be seen. Williams’ ruling, however, has already accomplished something concrete — it stripped the settlement of any legal legitimacy and ensured that neither Trump, his family nor the DOJ can cite its provisions as evidence of a binding settlement in any future judicial, administrative or regulatory proceeding.