A federal judge in Miami made a striking turnabout on Friday, reopening President Trump’s $10 billion case against the I.R.S. and saying that she wanted to investigate “grievous allegations” that the hasty deal to resolve it was “premised on deception.”
The ruling by the judge, Kathleen M. Williams, was a significant blow both to Mr. Trump, who had voluntarily dismissed the suit last week, and to the Justice Department. After the president withdrew the suit, senior department officials released a pair of extraordinary agreements that settled the case by establishing a $1.8 billion fund to compensate people who claimed they were victims of government “weaponization” by Democrats.
The deal also conferred lucrative tax benefits on Mr. Trump, his family and his businesses.
Judge Williams’s decision came in response to court papers filed on Wednesday by a bipartisan group of 35 former federal judges who urged her to bring the case back to life and dig into the details of the agreement to settle it.
Before she closed the case, Judge Williams, an Obama appointee, had questioned whether the lawsuit presented an actual conflict that she could adjudicate, given that Mr. Trump was on both sides of the suit, bringing claims against a federal agency that he controlled. When she closed it, she noted there was no “settlement of record,” but shortly after, the Justice Department released its agreement foreclosing the action.
In her brief but stern order on Friday, Judge Williams said that she wanted to investigate the circumstances surrounding Mr. Trump’s efforts to settle the lawsuit in a way that benefited him and his allies.
Asserting that she was “empowered to investigate serious misconduct” in a case before her, she ordered Mr. Trump’s lawyers to tell her by June 12 whether the case should be formally reopened because “the court was the victim of a fraud” and whether Mr. Trump had colluded with his own government to settle the case “to avoid judicial scrutiny.”
She pointed to reporting by The New York Times that described how the I.R.S. had prepared a 25-page memorandum outlining defenses against the suit that the Justice Department did not take up in court.
Lawyers for the former judges hailed Judge Williams’s decision.
“The judges and their counsel greatly appreciate the seriousness with which the court is addressing these grievous allegations,” said Norman Eisen, who represented the former judges. “We stand ready to work with the court as it investigates this matter.”
