New York Appeals Court Tosses Trump’s Massive Civil Fraud Judgment

NEW YORK — An appeals court on Thursday tossed a roughly $500 million civil fraud judgment against President Donald Trump and his family business, marking a significant victory for the president in a case that he repeatedly derided as a political stunt by state Attorney General Tish James.

The court, however, declined to overturn the fraud case against Trump, leaving open the possibility that he will seek to appeal the decision to New York’s highest court. And the three separateopinions issued Thursday by the appeals court revealed disagreement within the five-judge panel that one judge described as “profound.”

“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,” one of the judges, Peter Moulton, wrote.

The outcome is an enormous blow to James, who has trumpeted the massive financial penalty and who campaigned for office on pursuing Trump. In a statement Thursday, James praised the appeals court for upholding the fraud case, saying it “affirmed the well-supported finding of the trial court: Donald Trump, his company, and two of his children are liable for fraud.”

“It should not be lost to history: yet another court has ruled that the president violated the law, and that our case has merit,” she said. The office said it would appeal to New York’s highest court.

On social media, Trump called the outcome a “total victory.” “It was a Political Witch Hunt, in a business sense, the likes of which no one has ever seen before,” he wrote.

Alina Habba, who represented Trump at trial, said the decision was a “resounding victory.” Habba, who is now the acting New Jersey U.S. attorney, added that “the Attorney General’s case was politically motivated, legally baseless, and grossly excessive.”

In February 2024, a Manhattan trial judge found that Trump and other defendants — including his adult sons, Don Jr. and Eric, along with several business associates — fraudulently inflated his net worth and the value of his real estate properties to obtain favorable rates from banks and insurers.

The three-month trial proved contentious, with Trump repeatedly lashing out at James and the judge, Justice Arthur Engoron, and earning himself a gag order as well as two fines for violating it.

At the time Engoron issued the judgment, which was $464 million, it posed a serious financial threat to Trump, who was then engaged in his campaign to win back the White House for a second term.

Trump said in court filings then that posting a bond for the full amount would be impossible, and James had threatened to begin collecting on the judgment, which could have included seizing his assets. At the last moment, however, a panel of state appeals judges gave Trump a reprieve by lowering the amountof the bond he could post to stop enforcement of the judgment.

In the time since the judgment was first issued, the total amount plus interest ballooned to more than half a billion dollars.

Though the decision to throw out the massive judgment against Trump was unexpected, the judges signaled during oral arguments nearly a year ago that they had serious questionsabout the legitimacy of the case.

In fact, they could hardly agree on a ruling., with Moulton’s opinion throwing out the financial penalty and declining to overturn the case was joined by one other vote from Justice Dianne Renwick, the chief judge.

Two other judges, John Higgitt and Llinét Rosado, said James had the authority to bring the case but argued for giving Trump a new trial. And the fifth judge, Justice David Friedman, argued to throw out the case, saying James lacked the authority to bring it.

Higgitt and Rosado, however, joined the opinion written by Moulton “for the sole purpose of ensuring finality, thereby affording the parties a path for appeal to the Court of Appeals.”