An intermediate New York appeals court on Thursday knocked down the roughly $464 million disgorgement portion of the civil fraud judgment against former President Donald Trump, while leaving intact findings that he and others engaged in fraud. The decision, which was not unanimous, means the case can proceed on appellate review for further action, and Trump’s liability for fraud remains in place.
The court held that while the injunctions crafted to curb the defendants’ business practices are appropriate, the disgorgement order directing payment to the State of New York was an excessive fine that violates the Eighth Amendment. The ruling did not wipe out the fraud finding, but it did reduce the financial penalties tied to that finding. As a result, Trump will not have to pay the nearly half-billion-dollar disgorgement at this stage, though the underlying fraud finding stands for now.
The majority affirmed Judge Arthur Engoron’s conclusion that Trump and the other defendants engaged in years of fraud by issuing falsified financial statements that inflated property values and misled insurers and lenders. The decision also leaves open the possibility of further appellate review on the broader questions raised by the case. New York Attorney General Letitia James is expected to appeal to the state’s highest court, though she did not have an immediate comment.
The panel’s decision was split. Four judges agreed that the lower court correctly found liability and that James had the power to bring the action under New York Executive Law 63(12). Two judges believed the case should be retried to address alleged errors by Engoron. One judge, Justice David Friedman, wrote separately that the entire complaint should be dismissed and criticized James’s motivations, suggesting the decision reflected political factors.
Last year, the appeals court reduced the bond Trump had to post to stop collection during the appeal to $175 million; that amount will be returned to Trump once the appeals process is exhausted. The court’s 322-page set of opinions reflects a complex, closely watched ruling in a high-profile political and legal battle.
Separately, the Trump Justice Department is reportedly investigating James for bringing the case, with subpoenas issued for information about her activities. A separate DOJ inquiry into mortgage-related claims tied to the case’s context has also been cited by officials close to the matter.
This is a developing story and will be updated with further statements and decisions as they become available.
What it means moving forward
– The ruling reduces the immediate financial pressure on Trump by striking down the large disgorgement while preserving the fraud finding.
– The case remains alive on appeal, with the New York Court of Appeals likely to provide the next major ruling on the state’s civil fraud action.
– The dispute sits at the intersection of high-stakes politics and corporate accountability, illustrating how constitutional limits on penalties shape civil enforcement actions.
Summary: A New York appeals court trimmed the civil fraud penalty against Donald Trump—striking the nearly $464 million disgorgement but keeping the fraud finding intact—while sending the matter to further appellate review. The decision features split opinions among judges and signals continued litigation, with a potential further appeal to New York’s highest court. It also touches off ongoing political and legal tensions surrounding the case. A more hopeful takeaway for supporters is that the court avoided imposing an excessive financial penalty while maintaining accountability for alleged misconduct.