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 won a conviction against him and his company for inflating property value and deceiving banks.
The appeals judges said the massive penalty violated the Eighth Amendment protection against excessive fines and cruel and unusual punishment. The five-judge panel revoked the fine.
The ruling was a financial win for Mr. Trump but also a measure of vindication.
“TOTAL VICTORY in the FAKE New York State Attorney General Letitia James case!” Mr. Trump wrote on social media.
He praised the court for having the “courage” to toss the fine, 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,” he said.
The judges also found that Ms. James acted lawfully in bringing the case. Some of the punishments against the Trump Organization were upheld.
Ms. James said she will appeal. She also celebrated that other punishments were upheld.
She said the ruling “affirmed the well-supported finding of the trial court: Donald Trump, his company and two of his children are liable for fraud.”
“The court upheld the injunctive relief we won, limiting Donald Trump and the Trump Organization officers’ ability to do business in New York. It should not be lost to history: Yet another court has ruled that the president violated the law and that our case has merit.”
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.
Although the ruling was delivered in several writings, all the judges agreed that 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.
The prosecution of Mr. Trump in his former hometown of New York City was steeped in politics. Ms. James won a case against Mr. Trump and the Trump Organization for defrauding banks, despite the banks testifying at trial that they were repaid in full for the loans.
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 said Mr. Trump inflated the values of his properties in New York and Florida — an assertion the president continues to contest.
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 erased the civil fraud penalty and canceled sanctions that were handed down against his lawyers.
During oral arguments in 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.
In the ruling, some of the judges said Ms. James didn’t have the authority to bring the case. Others said the case could be remanded back to the lower court for a new trial.
Either way, the ruling 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 told reporters Thursday, referring to Democratic prosecutors. “They didn’t, and in the process, they totally destroyed the American people’s faith in our Justice Department.”
David Schultz, a professor of politics and legal studies at Minnesota’s Hamline University, said the ruling adds to the president’s winning streak.
“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,” the professor said. “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.”
Rep. Elise Stefanik, New York Republican and staunch Trump ally, had filed ethics complaints against Judge Engoron and Ms. James for their conduct toward Mr. Trump.
“From the outset, I have fought tirelessly against this injustice,” Ms. Stefanik said in a statement. “This ruling vindicates not only President Trump, but also the countless Americans harmed by the Far Left’s illegal weaponized lawfare tactics. Letitia James and her allies must be held accountable for their corrupt actions, and I will continue to lead the charge in Congress to expose and end this weaponization of government.”
Ms. James is also under investigation by the Justice Department for alleged mortgage fraud and for her involvement in the civil fraud case against Mr. Trump.
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 not issued 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 to adult film actress Stormy Daniels as “legal fees” 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.
Several charges have been dropped but the case has not been fully dismissed.
