A New York appellate court threw out the half-billion-dollar penalty in the civil fraud case against President Trump and others on Thursday, ruling that the fine was "excessive."
One of the justices on the Appellate Division, First Judicial Department wrote that the penalty, known as a disgorgement, against Mr. Trump, two of his sons and other executives and their company was "an excessive fine barred by the Eighth Amendment."
In February 2024, a New York judge ordered Mr. Trump and his codefendants to pay the state nearly $364 million in "ill-gotten gains" and millions more in interest dating back years, a total that has since ballooned to about $527 million. Judge Arthur Engoron's judgment left Mr. Trump on the hook for nearly 98% of the total.
New York Attorney General Letitia James can appeal Thursday's decision to the state's highest court.
James first brought the case in 2022, alleging Mr. Trump oversaw a scheme to deliberately mislead companies he was in business with about the values of properties and Mr. Trump's overall net worth.
Mr. Trump's lawyers have long argued that the civil case was driven by politics. But Engoron disagreed, ruling in February 2024 that Trump and his codefendants had misrepresented his wealth and inflated the valuations of his properties by hundreds of millions of dollars over the course of a decade. The state said the scheme was intended to trick banks and insurers into offering more favorable deal terms.
The president appealed the judgment, and the five-justice appellate panel heard arguments in September 2024. At least two of the justices seemed skeptical of the size of the judgment. One called it "immense" and "troubling." Mr. Trump was represented during the September proceeding by D. John Sauer, who is now the solicitor general.
The majority concluded on Thursday that the penalty "was far from a reasonable approximation," as one of the justices wrote.
The appellate court typically issues decisions within a few months of arguments. Sources on both sides of the dispute expressed surprise to CBS News about the length of the wait for a resolution, as the seasons changed and the court drew closer to a year without a ruling.
Jame's office has defended the punishment, saying it accurately reflects the size of Mr. Trump's profits from fraud.
Engoron wrote in his ruling that documents in evidence prove "over and over again" that the defendants falsely inflated Mr. Trump's wealth and reported those fraudulent numbers to business partners.
He said Mr. Trump's "complete lack of contrition and remorse borders on pathological," and said his company gave their accountants "blatantly false financial data."
Mr. Trump testified during a bench trial in the case, in November 2023, blaming his employees and others while also insisting his books were kept appropriately. Accused of falsely inflating his wealth, Mr. Trump claimed the opposite was true, saying his company "underestimated" the value of his properties.
"The numbers you are talking about here is, you know, they are very big numbers, very, very big. Far bigger — the values are far bigger than what is on the financial statement," Mr. Trump said, later adding, "billions of dollars more."
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