A judge said the penalty violated the Eighth Amendment’s prohibition on excessive fines.

Former President Donald Trump sits in New York State Supreme Court during the civil fraud trial against the Trump Organization in New York City on Jan. 11, 2024. Peter Foley/Pool/AFP via Getty Images

 

Sam Dorman

Washington Correspondent

 

President Donald Trump has scored a significant win, with a New York appeals court throwing out the half-a-billion-dollar penalty he received in his business fraud case.

The decision on Aug. 21 was issued after a hearing last year in which the appeals court seemed skeptical of the case against Trump.

A concurring opinion from Justice Peter Moulton said that the lower “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.”

New York Supreme Court Justice Arthur Engoron ruled against Trump in February 2024, leaving him with a judgment exceeding $460 million with interest accruing. Trump posted a bond of $175 million, with the appeals process playing out in the New York Appellate Division, First Judicial Department.

As a whole, the appeals court ultimately affirmed the judgment from Engoron, but the panel of five judges was divided, with three separate opinions, including partial dissents. The court also allowed a path forward for another appeal before New York’s highest court, the Court of Appeals.

Two of the judges–Moulton and Justice Dianne Renwick–said they thought Attorney General Letitia James “acted well within her lawful power in bringing this action, and that she vindicated a public interest in doing so.” Both, however, disagreed with the high penalty.

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Justices John Higgitt and Llinét Rosado joined an opinion saying Engoron’s judgment should be vacated with a new trial ordered. In a footnote, Higgitt said the two joined the court’s order despite their determination that a new trial was the appropriate resolution.

“Notwithstanding our analysis, as reflected in our writing, that vacatur of the judgment and a new trial is the appropriate resolution, Justice Rosado and I, after much consideration, with great reluctance and with acknowledgement of the incongruity of the act, join the decretal modifying the judgment to the extent of vacating the disgorgement and sanctions awards,” Higgit said.

“Under the truly extraordinary circumstances here, where none of the writings enjoys the support of a majority, we are moved to take this action to permit this panel to arrive at a decision and to permit the parties and the Court to avoid the necessity of reargument.”

James said her office would pursue an appeal and emphasized the court’s decision to uphold Engoron’s judgment.

“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,” she said in a statement on X.

“The court upheld the injunctive relief we won, limiting Donald Trump and the Trump Organization officers’ ability to do business in New York.”

Justice David Friedman was more critical of the Supreme Court’s ruling and James’s action, accusing her of being interested in “political hygiene, ending with the derailment of President Trump’s political career and the destruction of his real estate business.”

He said that the court’s decision “unanimously derails the effort to destroy his business.”

In a post declaring “TOTAL VICTORY,” Trump said on Truth Social that he was “so honored by Justice David Friedman’s great words of wisdom, which should be read by everyone.”

Acting U.S. Attorney for New Jersey Alina Habba, who also represented Trump in his fraud trial, praised the appeals court ruling on social media.

“Today’s ruling by the New York appeals court is a resounding victory for President Trump and his company,” she said in a statement posted to X.

“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.”

 

Sam Dorman

Washington Correspondent

Sam Dorman is a Washington correspondent covering courts and politics for The Epoch Times. You can follow him on X at @EpochofDorman.