(Bloomberg) -- Former President Donald Trump qualified as a government employee when he was in office, a federal appeals court ruled, putting at risk a defamation suit filed against him by New York columnist E. Jean Carroll.

The finding Tuesday by a panel of the 2nd US Circuit Court of Appeals means Trump is covered by a federal statute that protects government employees from lawsuits over actions that relate to their official duties. The case is still far from over.

“As Trump points out in his brief, the president is a government employee in the most basic sense of the term,” the appeals court held in a 2-1 ruling. “He renders service to his employer, the United States government, in exchange for a salary and other job-related benefits.”

The opinion didn’t answer a key question: whether Trump was acting within his official duties in 2019 when he denied Carroll’s claim that he’d raped her more than two decades ago in a department store dressing room and derided her over the allegation. The appeals court asked DC’s highest local court to answer that question in a later proceeding, leaving the case unresolved for now.

The ruling, while not the last word on the matter, is still a major win for Trump as he battles legal challenges on multiple fronts, including probes into the Jan. 6 insurrection and his handling of classified documents. 

Protecting Presidents

Alina Habba, a lawyer for Trump, said in a statement that she and her client were “extremely pleased” with the ruling.

“This decision will protect the ability of all future presidents to effectively govern without hindrance,” Habba said. “We are confident that the DC Court of Appeals will find that our client was acting within the scope of his employment when properly repudiating Ms. Carroll’s allegations.”

Carroll’s lawyer, Roberta Kaplan, said she is “confident” the DC court will agree that Trump’s comments about Carroll weren’t part of his official duties, “because he was not serving any purpose of the federal government and because the comment ‘she’s not my type’ is not something one would expect the president of the United States to say in the course of his duties.”

The case, including the exchange of evidence and an planned deposition of Trump, has been continuing in the lower court during the appeal. Habba said earlier this month that Trump is “happy and willing to sit for a deposition.”

But on Tuesday Habba said she’ll ask the lower court to put the case on hold while the DC court considers whether Trump was acting within the scope of his employment.

Win for Biden

The decision reversed a finding by a trial judge who held that Trump didn’t qualify as a government employee under the law, called the Westfall Act. The appeals court also vacated a finding that crude comments Trump made about Carroll in denying her claims could not have qualified as a presidential duty.

The ruling is also a win for the Biden administration, which surprised many observers by going to court in 2021 to back Trump’s argument that presidents qualify as employees and have broad protection under the law.

The ruling moves the Justice Department a step closer to replacing Trump as the defendant in the suit, effectively ending the case, because the US can’t be sued for defamation. For that to happen, Trump will need to win in the Washington court, too.

“If the government is correct that the United States must be substituted for Trump in the case under the Westfall Act, then Carroll is left without any remedy, even if Trump indeed defamed her,” Judge Denny Chin wrote in a dissenting opinion.

Survivors Act

Carroll claims Trump assaulted her in a department store dressing room in the 1990s, a claim he denied, adding personal insults. She signaled in a recent filing in the lower court that she is planning to sue him under New York’s Adult Survivors Act, which goes into effect in November. 

The new law creates a one-year window in which people who claim they were previously victims of sexual assault can bring lawsuits that would otherwise be barred by the statute of limitations. Such a lawsuit would circumvent the Westfall Act.

The Justice Department said in a June 2021 filing with the appeals court that Carroll’s rape allegations were “serious” and that Trump’s response was “crude and disrespectful.” But the department said Trump’s comments nonetheless fell within the scope of his duties, adding that the Westfall Act had also protected former secretary of state Hillary Clinton from a suit alleging her use of a private email server contributed to deaths in the 2012 attack on a US compound in Benghazi, Libya.

When Trump’s Attorney General Bill Barr first cited the Westfall Act in the case, in September 2020, it was seen by many legal experts as an overreach, and the lower court rejected it.

Sharp Response

The attempt to shield Trump from Carroll’s claims drew a sharp response from an anti-sexual-violence nonprofit group. In April 2021, a lawyer for the Rape, Abuse and Incest National Network, or Rainn, said in a filing with the appeals court that allowing Trump to dodge the suit under the Westfall Act would help to silence those who are sexually assaulted by powerful government officials.

The case had been proceeding in the lower court while the appellate panel weighed the Justice Department’s argument. The lower court in March rejected Trump’s request to bring counterclaims against Carroll, saying the former president had waited too long to accuse her of bringing the suit in bad faith in violation of New York law.

The case is Carroll v. Trump, 20-03977, 2nd US Circuit Court of Appeals (Manhattan).

(Updates with planned deposition in lower court.)

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