New York Appeals Court Tosses Out $464 Million Civil Fraud Penalty Against Donald Trump

A New York appeals court tossed out a $464 million civil penalty against Donald Trump, finding the damages amount excessive, while upholding the ruling that he, his family members and companies were liable for business fraud.

“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,” the judges wrote in their ruling.

The five-judge panel struggled to get a majority ruling, and only did so after two justices joined in to make a majority “for the sole purpose of ensuring finality,” setting the stage for an appeal.

Last year, Judge Arthur Engoron found Trump liable for overstating his net worth as a way to get better loan terms. The judge ruled that Trump could not serve as an officer or director of any corporation or other legal entity in New York State for three years, or seek loans. His sons, Donald Jr and Eric, were prohibited from serving in any business in the Empire State for two years.

The case was brought by New York Attorney General Letitia James.

In their appellate ruling, the judges wrote, “The documentary evidence supports Supreme Court’s conclusion that the Attorney General made a prima facie showing that each defendant participated in the
fraudulent scheme.”

Trump has continuously blasted the ruling as an abuse of power and, coming during last year’s presidential race, “election interference.” As it turned out, the proceedings were just a prelude to Trump’s New York criminal trial later in the year on allegations related to hush money payments made to Stormy Daniels. Trump was convicted of all 34 felony charges. That case also is on appeal.

Alina Habba, one of the president’s attorneys, wrote on X, “Today’s ruling by the New York appeals court is a resounding victory for President Trump and his company. The court struck down the outrageous and unlawful $464 million penalty, confirming what we have said from the beginning: the Attorney General’s case was politically motivated, legally baseless, and grossly excessive. President Trump won – and justice won with him.”

James said that they would seek an appeal, while noting that the justices “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.”