A New York appeals court on Thursday tossed the roughly $500 million fine against President Trump in a defeat for New York Attorney General Letitia James, who accused his business of inflating property value and deceiving banks.
The court heard the dispute nearly a year ago and had yet to deliver a decision, which is unusual as the New York Appellate Division, First Judicial Department, usually issues rulings within a few weeks.
The five-judge panel’s move tosses the massive penalty. Although the ruling was delivered in several writings, all the judges agreed the judgment went too far.
“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 of the United States Constitution,” Judges Dianne T. Renwick and Peter H. Moulton wrote, according to The Associated Press.
The judges, though, found that Ms. James acted lawfully in bringing the case. Some of the punishments against the Trump Organization were upheld.
A spokesperson for Ms. James didn’t immediately respond to a request for comment.
The dispute has been pending since oral arguments in September 2024.
The president was looking at a more than $500 million penalty after Ms. James won a case against him and the Trump Organization for allegedly defrauding banks. However, the banks testified at trial that they were paid in full.
The attorney general’s office claimed that the Trump Organization committed deceptive business practices against banks and insurance companies.
Manhattan Judge Arthur Engoron sided with Ms. James and barred Mr. Trump and other leaders at the organization from overseeing the company and doing business in New York, with an independent monitor for three years. The judge suggested Mr. Trump inflated the values of his properties in New York and Florida — a dispute the president contests.
Judge Engoron didn’t let Mr. Trump have a jury trial. The president had to post a $175 million bond to appeal.
The five-judge panel left those punishments intact but did away with the massive civil fraud penalty against Mr. Trump and canceled sanctions that were handed down against his lawyers.
The ruling is not shocking, since during oral arguments last September some of the judges appeared skeptical of the state’s case.
One judge said the consumer fraud case against Mr. Trump was unusual because there were no victims.
Mr. Trump celebrated Thursday’s win on Truth Social.
“TOTAL VICTORY in the FAKE New York State Attorney General Letitia James case!” he posted.
He praised the court for having the “courage” to toss the judgment, which with interest amounted to about $550 million.
“It was a Political Witch Hunt, in a business sense, the likes of which no one has ever seen before. This was a Case of Election Interference by the City and State trying to show, illegally, that I did things that were wrong when, in fact, everything I did was absolutely CORRECT and, even, PERFECT,” Mr. Trump posted on his social media platform.
The decision from the panel was 5-0, with the judges struggling with total agreement. Some thought Ms. James didn’t have the authority to bring the case, while others thought the case could be remanded back to the lower court for a new trial.
Either way, the massive civil penalty being erased is a major win for Mr. Trump, who had to defend himself in courtrooms up and down the East Coast as he campaigned in 2024.
Critics of the lawfare against Mr. Trump say Democrats blew it.
“They really overplayed their hand on this because they thought they could take Donald Trump out,” White House counselor Peter Navarro said Thursday, referring to Democratic prosecutors. “They didn’t, and in the process, they totally destroyed the American people’s faith in our Justice Department.”
“You think back to about a year before the presidential election, he’s facing multiple civil and criminal cases. Democrats are thinking, ’Oh, this is gonna do him,’ but for the most part they’ve all disappeared and didn’t hurt him,” said David Schultz, a professor of politics and legal studies at Minnesota’s Hamline University who tracked Mr. Trump’s legal issues. “He’s more or less been able to clear the decks or, to use a bad line from a movie, he’s pretty much ’beaten the rap’ on everything.”
The president still has other legal battles pending.
His attorneys have appealed his felony convictions in his Manhattan hush money trial, hoping to move the dispute to federal court. They argue that the New York district attorney investigated Mr. Trump’s official acts during his first term and turned a state case into a federal case over federal campaign law. That means the appeal should be in federal court, they say.
A three-judge appellate court panel of two Obama appointees and a Biden appointee heard arguments on the matter in June but has yet to issue a ruling.
Mr. Trump’s attorneys have also appealed his conviction in state court.
The president was convicted in May 2024 of 34 felony counts related to falsifying business records. Prosecutors argued that Mr. Trump falsified business records by labeling hush money he paid adult film actress Stormy Daniels as “legal fees” to keep her quiet during the 2016 election campaign.
He was sentenced in January to an unconditional discharge, essentially no punishment.
Mr. Trump is also a defendant in a pending criminal case in Fulton County, Georgia.
In August 2023, the county indicted Mr. Trump and 18 others on charges of participating in a conspiracy to overturn Georgia’s 2020 election results. The state claims the defendants violated Georgia’s Racketeer Influenced and Corrupt Organizations Act in trying to overturn Democrat Joseph R. Biden’s narrow official victory in that election.
• Alex Swoyer can be reached at aswoyer@washingtontimes.com.