A New York appeals court threw out the massive civil fraud penalty against President Donald Trump, ruling Thursday that the judgment in part was unconstitutional by violating the Eighth Amendment’s prohibition on excessive fines.
The five-judge panel of the state’s midlevel Appellate Division said the verdict, which had swelled to more than $515 million with interest, was “excessive.” However, the panel did not absolve Trump and his business empire of wrongdoing, upholding the finding that his eldest sons and another business executive at the Trump Organization conspired to alter Trump’s net worth for favorable tax and insurance premiums.
“While the injunctive relief ordered by the court is well crafted to curb defendants’ business culture, the court’s disgorgement order, which directs that defendants pay nearly half a billion dollars to the State of New York, is an excessive fine that violates the Eighth Amendment,” Judges Dianne T. Renwick and Peter H. Moulton wrote, according to the Associated Press.
If Trump seeks another chance to overturn the full judgment against him, the ruling allows both Trump and the state to appeal the remaining judgment to the state’s highest court, the New York Court of Appeals. Trump and his co-defendants have denied wrongdoing.
The ruling in the civil fraud case comes 11 months after the court heard the appeal last September and seven months after Trump returned to the White House. It represents a major setback for New York Attorney General Letitia James, the elected Democrat who campaigned on filing the lawsuit against Trump. James previously said Trump engaged in “lying, cheating, and staggering fraud.” Trump denied wrongdoing, calling the case a political attack by Democratic officials.
Judge Arthur Engoron, who presided over the trial against the Trump Organization from late 2023 to January last year, initially ordered Trump to pay $355 million after finding he engaged in fraud by padding financial statements provided to lenders and insurers. With interest, the penalty ballooned past half a billion dollars, and combined with fines against Trump’s sons, Eric Trump and Donald Trump Jr., the total judgment exceeded $527 million.
The president avoided immediate payment by posting a $175 million bond earlier this year.
Engoron had also barred Trump and his sons from holding leadership positions in New York corporations for several years, though those sanctions were paused during the appeal. Those penalties are likely to go into effect if the state’s highest court upholds Engoron’s findings from the trial.
Although the ruling was not a complete win for Trump and his business, the president celebrated the ruling as a “TOTAL VICTORY” in a lengthy post on Truth Social, declaring the case “a Political Witch Hunt” and “a Case of Election Interference.” He blasted Engoron as “one of the most overturned in History,” adding that the judgment had unfairly chilled business in New York and cost him “millions of dollars a month” in bond payments.
Trump also tied the New York fraud case to what he described as a broader pattern of politically motivated prosecutions. He railed against Judge Juan Merchan, who presided over Trump’s criminal trial in Manhattan, calling him a “Political Hack” who refused to recuse despite alleged conflicts of interest involving his daughter’s consulting work for Democrats.
Trump also attacked Judge Lewis Kaplan, who oversaw civil defamation trials brought by writer E. Jean Carroll. The president accused Kaplan of bias and abusing his authority. Both cases, Trump noted, are on appeal.
James said Thursday she would appeal the ruling tossing the massive financial penalty against Trump.
APPEALS COULD DETERMINE WHETHER TRUMP PAYS $500 MILLION IN CIVIL JUDGMENTS AS PRESIDENT
In recent weeks, the Justice Department has subpoenaed James for records related to her civil suit as part of an investigation into whether she violated Trump’s civil rights. James is represented by attorney Abbe Lowell, who last year represented former President Joe Biden’s son, Hunter Biden, in his criminal cases and decried Trump’s attacks on James as a “retribution campaign.”
Attorney General Pam Bondi has also authorized special attorney Ed Martin to investigate allegations of mortgage fraud involving James. A grand jury will convene in Virginia to investigate whether James falsified records to secure favorable loan terms on her property in the state.
