New York appeals court tosses Trump $500 million fraud fine as excessive Eighth Amendment violation

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. Here’s what you need to know about the major legal victory for Trump:

The appeals court ruling

Five-judge panel unanimously overturns massive penalty:

• Court heard dispute nearly a year ago and had yet to deliver decision, which is unusual as New York Appellate Division usually issues rulings within few weeks
• Five-judge panel’s move tosses massive penalty, with all judges agreeing 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,” wrote Judges Dianne T. Renwick and Peter H. Moulton
• Decision from panel was 5-0, though judges struggled with total agreement on reasoning

The original case details

Attorney General James won lower court ruling against Trump Organization:

• President was looking at more than $500 million penalty after James won case against him and Trump Organization for allegedly defrauding banks
• However, banks testified at trial that they were paid in full
• Attorney general’s office claimed Trump Organization committed deceptive business practices against banks and insurance companies
• Manhattan Judge Arthur Engoron sided with James and suggested Trump inflated values of his properties in New York and Florida

The upheld restrictions

Some punishments against Trump Organization remain intact:

• Judges found that James acted lawfully in bringing the case
• Some punishments against Trump Organization were upheld
• Five-judge panel left intact punishments barring Trump and other leaders from overseeing company and doing business in New York
• Independent monitor for three years remains in place, along with other injunctive relief

The trial process criticism

Judge denied jury trial and required massive appeal bond:

• Judge Engoron didn’t let Trump have jury trial
• President had to post $175 million bond to appeal
• Five-judge panel canceled sanctions that were handed down against Trump’s lawyers
• One judge said consumer fraud case against Trump was unusual because there were no victims

The Trump victory celebration

President declares total victory on social media:

• “TOTAL VICTORY in the FAKE New York State Attorney General Letitia James case!” Trump posted on Truth Social
• Praised court for having “courage” to toss 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”

The judicial skepticism

Appeals court appeared doubtful during oral arguments:

• Ruling not shocking, since during oral arguments last September some judges appeared skeptical of state’s case
• Some thought James didn’t have authority to bring case, while others thought case could be remanded back to lower court for new trial
• Dispute has been pending since oral arguments in September 2024
• Either way, massive civil penalty being erased is major win for Trump

The political lawfare criticism

Critics say Democrats overreached with legal strategy:

• “They really overplayed their hand on this because they thought they could take Donald Trump out,” said White House counselor Peter Navarro
• “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,” said Hamline University professor David Schultz
• “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 remaining legal battles

Trump still faces other pending cases:

• Attorneys have appealed his felony convictions in Manhattan hush money trial, hoping to move dispute to federal court
• Argue New York district attorney investigated Trump’s official acts during first term and turned state case into federal case over federal campaign law
• Three-judge appellate court panel of two Obama appointees and Biden appointee heard arguments in June but has yet to issue ruling
• Trump’s attorneys have also appealed his conviction in state court

The hush money case outcome

President received minimal punishment in felony conviction:

• Trump convicted in May 2024 of 34 felony counts related to falsifying business records
• Prosecutors argued Trump falsified business records by labeling hush money he paid adult film actress Stormy Daniels as “legal fees”
• Payment designed to keep her quiet during 2016 election campaign
• He was sentenced in January to unconditional discharge, essentially no punishment

The Georgia election case

Fulton County criminal case still pending:

• Trump is defendant in pending criminal case in Fulton County, Georgia
• In August 2023, county indicted Trump and 18 others on charges of participating in conspiracy to overturn Georgia’s 2020 election results
• State claims defendants violated Georgia’s Racketeer Influenced and Corrupt Organizations Act
• Charges related to trying to overturn Democrat Joseph R. Biden’s narrow official victory in that election

Read more:

• New York appeals court tosses Trump’s ’excessive’ fraud fine in blow to AG