NEW YORK (Reuters) - Former U.S. President Donald Trump on Friday lost a bid to stop New York state Attorney General Letitia James' probe of his business practices, allowing the three-year investigation to move forward.
Trump, a Republican, last year sued James in federal court in upstate Albany, arguing the civil investigation into whether the Trump Organization misled banks and tax authorities about the valuations of its assets should be halted because he felt James, a Democrat, was using the case to further her political career.
James replied in a January court filing that Trump's "allegations of political disagreement cannot insulate" him from the investigation.
U.S. District Judge Brenda Sannes dismissed the lawsuit on Friday, stating in a written decision there was "no evidence" that James' investigation was undertaken in bad faith.
"No one in this country can pick and choose how the law applies to them, and Donald Trump is no exception," James said in a statement. "We will continue this investigation undeterred."
Alina Habba, a lawyer for Trump, said in a statement that he would appeal the decision, adding that James' "egregious conduct and harassing investigation" met the definition of bad faith.
The ruling was the latest blow to Trump's various challenges to the investigation. An intermediate state appeals court ruled on Thursday that Trump and his two eldest children, Donald Trump Jr. and Ivanka Trump, must testify under oath as part of the probe.
Last week, Trump paid a $110,000 fine for failing to respond to James' subpoena, one of the conditions needed to permanently lift a contempt of court order issued against him by the judge in the case, Arthur Engoron. Trump had said he did not have any documents James sought, a claim Engoron called "surprising."
James said in January that the investigation had uncovered significant evidence of possible fraud. Trump denies wrongdoing.
Kevin Wallace, a lawyer with James' office, said at a court hearing last month that the attorney general will likely "bring some kind of enforcement action in the near future," without elaborating.
(Reporting by Luc Cohen and Karen Freifeld in New York; Editing by Matthew Lewis)