A divided New York state appeals court on Thursday unanimously struck down a nearly half-billion-dollar financial penalty against US President Donald Trump as unconstitutionally excessive, while issuing a fractured ruling on the underlying fraud allegations that produced no clear majority.
The five-justice panel of the Appellate Division’s First Judicial Department vacated the entire $464.6 million disgorgement award, ruling it violated the Eighth Amendment of the US Constitution, which prohibits excessive fines. However, the justices were sharply divided on the underlying fraud findings, with no majority opinion emerging.
Two justices—Dianne Renwick and Peter Moulton—wanted to affirm fraud liability. Two others—John Higgitt and Llinét Rosado—sought to overturn the findings and order a new trial. Meanwhile, one—David Friedman—argued the case should have been dismissed entirely. The final judgment technically “affirmed” the fraud findings only because Higgitt and Rosado voted with the court’s order to avoid deadlock and ensure a final decision.
The court maintained some business restrictions on Trump, including court-appointed monitoring of his operations. Sanctions against Trump’s attorneys were also overturned.
The case stems from a 2022 lawsuit by New York Attorney General Letitia James, who alleged Trump’s company inflated asset values on annual financial statements from 2011 to 2021. The statements were used to secure bank loans and other deals, according to court documents. In February 2024, a New York State Supreme Court judge ruled that Trump and his companies had falsified business records, issued false financial statements and conspired to commit fraud and insurance fraud.
Trump on Thursday lauded the decision, saying:
TOTAL VICTORY in the FAKE New York State Attorney General Letitia James Case! I greatly respect the fact that the Court had the Courage to throw out this unlawful and disgraceful Decision that was hurting Business all throughout New York State.
Attorney General James vowed to appeal, stating:
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. It should not be lost to history: yet another court has ruled that the president violated the law, and that our case has merit. We will seek appeal to the Court of Appeals and continue to protect the rights and interests of New Yorkers.
