Appeals court throws out massive civil fraud penalty against President Donald Trump

[MichMan]

NEW YORK — (AP) — An appeals court has thrown out the massive civil fraud penalty against President Donald Trump, ruling Thursday in New York state's lawsuit accusing him of exaggerating his wealth.

After finding that Trump engaged in fraud by flagrantly padding financial statements that went to lenders and insurers, Judge Arthur Engoron ordered him last year to pay $355 million in penalties. With interest, the sum has topped $515 million.

“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 in one of several opinions shaping the appeals court’s ruling.

The court, which was split on the merits of the lawsuit and the lower court’s fraud finding, dismissed the penalty Engoron imposed in its entirety while also leaving a pathway for further appeals to the state’s highest court, the Court of Appeals.

https://www.wftv.com/news/appeals-court-throws/W6NOI4URMNFNHL46DV47SI7KHA/

[BoRaGard]

1. "Deal with it, you golf-cheating republicon Loser." - Justice

[Jersey Devil]

2. That's not what the news article says - they heard arguments, haven't ruled on it yet

As a lawyer I can tell you that you cannot determine how a court will rule based on oral arguments. Often, it will seem the court is leaning one way or another only to have the opposite result when the ruling is handed down.

[MichMan]

3. They ruled on it this morning

I updated the OP with more information as the media is just getting caught up

[Jersey Devil]

4. thanks - nt

x

[LetMyPeopleVote]

5. Statement by AG James

Link to tweet

https://abcnews.go.com/US/appeals-court-throws-trumps-454-million-civil-fraud/story?id=124848691&cid=social_twitter_abcnp

James, in a statement released following the decision, said that her case "has merit" and that she will appeal to the state's highest court in an attempt to reinstate the penalty.

"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. The court upheld the injunctive relief we won, limiting Donald Trump and the Trump Organization officers' ability to do business in New York," the statement said. "We will seek appeal to the Court of Appeals and continue to protect the rights and interests of New Yorkers."

"Today's ruling by the New York appeals court is a resounding victory for President Trump and his company," said Trump's former personal attorney Alina Habba, who helped represent Trump in the case and was later named interim U.S. attorney for New Jersey. "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."

[MorbidButterflyTat]

6. Thank you!

Your post should be an OP.

This is the second thread I've seen today with that misleading headline, and no follow up from Letitia James.

[MichMan]

7. Sorry for posting a couple hours before James made her statement.

Are you saying that the headline was false and that the appeals court did not throw out the civil penalty? If it was upheld, why would AG James appeal?

[LetMyPeopleVote]

8. Deadline: Legal Blog-The Trump civil fraud case is a mess. Another round of appeal could clean it up.

New York Attorney General Letitia James has already signaled her intention to seek further review at the state’s highest court.

The Trump civil fraud case is a mess. Another round of appeal could clean it up.

New York Attorney General Letitia James has already signaled her intention to seek further review at the state’s highest court.
www.msnbc.com/deadline-whi...

— Phyllis B Kantor (@wiselady11.bsky.social) 2025-08-22T15:54:35.908Z

https://www.msnbc.com/deadline-white-house/deadline-legal-blog/trump-civil-fraud-case-letitia-james-appeal-new-york-rcna226377

But that was just the beginning. The oddity grew upon seeing, toward the start of the first of three separate decisions from the five-justice panel, that “none of the three decisions garners a majority.”.....

That first opinion, by Justice Peter Moulton joined by Justice Dianne Renwick, said that those two justices thought New York’s attorney general acted lawfully in bringing the fraud case. But they said that ordering the defendants to “pay nearly half a billion dollars” to New York amounts to an “excessive” and unconstitutional fine.

The second opinion, by Justice John Higgitt joined by Justice Llinét Rosado, agreed that James had the authority to bring the suit but said they thought a new trial was warranted.

The third opinion, by Justice David Friedman, argued for dismissing the case outright in Trump’s favor.

So, we have three opinions saying different things. How did the panel attempt to come to a resolution?....

Though they thought a new trial was needed, their opinion said that “after much consideration, with great reluctance and with acknowledgement of the incongruity of the act,” they agreed to join the bottom line of Moulton and Renwick’s opinion that tosses out the massive financial penalty as well as sanctions on Trump defense lawyers, while otherwise upholding the case in James’ favor.

Citing the “truly extraordinary circumstances here, where none of the writings enjoys the support of a majority,” they said the parties “must have a decision on this matter and, concomitantly, the option of further review of this matter by the Court of Appeals.”....

James, who has denied any wrongdoing herself, said in a statement Thursday that the appeals court “affirmed the well-supported finding of the trial court: Donald Trump, his company, and two of his children are liable for fraud.” She said 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.” She concluded: “We will seek appeal to the Court of Appeals and continue to protect the rights and interests of New Yorkers.”

I followed the trial of this case and I listened to the oral arguments in this case. Prior to the oral arguments, the court had on its own motion reduced the bond that trump was required to post from $500 million or so to $175 million. I personally thought that the judge used the wrong measure of damages in his judgment and was expecting to see a remittitur or reduction of damages.

The Court of Appeals (the highest court in NY) is going to have fun in this case. The fact that court found that trump violated the law and upheld the injunctions is meaningful. trump and his kids are banned from being an officer in a New York corporation.