A New York appeals court threw out the massive civil fraud penalty against President Donald Trump, ruling Thursday that the judgment was unconstitutional and violated the Eighth Amendment’s prohibition on excessive fines.
The five-judge panel of the Appellate Division said the verdict, which had swelled to more than $515 million with interest, was “excessive.” The ruling comes seven months after Trump returned to the White House, and it represents a major setback for New York Attorney General Letitia James, the Democrat who filed the lawsuit accusing Trump of inflating his wealth.
Judge Arthur Engoron, who presided over the trial, initially ordered Trump last year to pay $355 million after finding he engaged in fraud by padding financial statements provided to lenders and insurers. With interest, the penalty ballooned past half a billion dollars, and combined with fines against Trump’s sons Eric Trump and Donald Trump Jr., the total judgment exceeded $527 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,” Judges Dianne T. Renwick and Peter H. Moulton wrote, according to the Associated Press.
Engoron had also barred Trump and his sons from holding leadership positions in New York corporations for several years, though those sanctions were paused during the appeal. Trump avoided immediate payment by posting a $175 million bond earlier this year.
APPEALS COULD DETERMINE WHETHER TRUMP PAYS $500 MILLION IN CIVIL JUDGMENTS AS PRESIDENT
The appellate court dismissed the penalty in its entirety while allowing injunctive relief to stand. Trump may now appeal the remaining provisions to New York’s highest court, the Court of Appeals.
James previously said Trump engaged in “lying, cheating, and staggering fraud.” Trump denied wrongdoing, calling the case a political attack by Democratic officials. The trial during the 2024 election revealed there were no victims of the alleged fraud.