A New York appeals court has tossed out a $454 million civil fraud verdict against Donald Trump and his family business over charges he broke state laws by inflating the values on his properties.
In Thursday’s ruling, the First Judicial Department of the New York State Appellate Division kept in place non-monetary penalties imposed by a lower court on now-President Trump and his company, but said the more than half-billion-dollar fine imposed as part of the guilty verdict is “excessive” and violates the Eighth Amendment of the U.S. Constitution.
The court’s 323-page ruling, which included several opinions, shows that the five-member panel was deeply divided over Trump’s appeal. Some judges said they were in favor of upholding the fraud ruling but dismissing the fines, others in favor of ordering a new trial, and at least one who would have dismissed the case entirely.
“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,” two of the judges, Dianne Renwick and Peter Moulton, wrote in one opinion.
A lawsuit against Trump and his company by Democratic New York State Attorney General Letitia James alleged that Trump overvalued his properties on financial statements between 2014 and 2021 by hundreds of millions of dollars, which deprived the state and New York City of tax revenue.
In February 2024, Manhattan Supreme Court Judge Arthur Engoron ordered Trump and his organization to pay around $454 million in penalties after finding him liable for business fraud. With interest, the fines were expected to reach more than $500 million. At the time, Trump was running for president.
Trump praised the court for overturning an “unlawful and disgraceful” penalty in a post on social media that blasted James as a “corrupt and Incompetent Attorney General who only brought this Case in order to hurt me politically.
She is a Trump Deranged Lunatic! They made me bond the outrageous sum, which never happened before, and which cost me Millions of Dollars a month,” he posted on X. It should have never been allowed to happen, and everyone knew it! It was a Political Witch Hunt, in a business sense, the likes of which no one has ever seen before.”
Eric Trump, the president’s son and a defendant in the lawsuit, took to social media to praise the court’s ruling and criticize James for prosecuting his family.
“Total victory in the sham NY Attorney General case!!! After 5 years of hell, justice prevailed!” he wrote.
James, a Democrat first elected in 2018, has been a frequent critic of Trump and, in addition to the civil fraud trial, has filed several multistate lawsuits against the Trump administration over federal immigration policies, rollbacks in federal funding, and worker layoffs and other actions.
Earlier this month, news reports revealed that the Justice Department has subpoenaed James as part of an investigation into whether she violated Trump’s civil rights during his civil trial on fraud charges.
James, whose office didn’t immediately comment on Thursday’s decision, is widely expected to appeal the ruling to the state’s highest court, the Court of Appeals.
