Aug. 21 (UPI) — A divided appeals court threw on Thursday out the nearly $500 million judgment that President Donald Trump owed to the state of New York for a fraud ruling.
“While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half-billion-dollar award to the state,” wrote Peter Moulton, one of the five appeals judges to rule on Trump’s appeal.
The First Judicial Department of the Appellate Division of New York Supreme Court upheld the fraud ruling, but eliminating the penalty means Trump can move the case to the highest state court, giving him another chance to fight the guilty verdict.
The appeals court said the penalty, “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.”
But in the same ruling, the court said that other non-monetary sanctions imposed on Trump, the Trump Organization and others were “well crafted to curb defendants’ business culture.”
In a 323-page opinion, all five judges agreed that the half-billion-dollar penalty should be thrown out.
Two of the judges said Trump was properly held liable for business fraud, but the penalty was excessive. Two of the judges said the trial court was wrong to decide Trump committed fraud and the case should be retried. But those two judges said they joined the decision “with great reluctance” to allow the case to proceed on appeal.
A fifth judge said New York Attorney General Letitia James should not have brought the case in the first place.
James said she will appeal to the state Supreme Court.
“The First Department today affirmed the well-supported finding of the trial court: Donald Trump, his company, and two of his children are liable for fraud,” James said. “The court upheld the injunctive relief we won, limiting Donald Trump and the Trump Organization officers’ ability to do business in New York,” James said.
Trump posted about the ruling on Truth Social.
“TOTAL VICTORY in the FAKE New York State Attorney General Letitia James Case!” he wrote.
“I greatly respect the fact that the court had the courage to throw out this unlawful and disgraceful decision that was hurting business all throughout New York State. Others were afraid to do business there. The amount, including interest and penalties, was over $550 million dollars. 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, in a social media post, wrote, “Total victory in the sham NY Attorney General case!!! After 5 years of hell, justice prevailed!”
Eric Trump and his brother Donald Trump Jr. operate the Trump Organization.
Manhattan Supreme Court Judge Arthur Engoron in February 2024 ordered Trump to pay around $454 million in total penalties after holding him liable for business fraud.
Engoron found that Trump’s statements of financial condition, signed between 2014 and 2021, overvalued his assets from between $812 million and $2.2 billion.
With interest, the penalty imposed on Trump and other defendants in the case had grown to more than $500 million.
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