A New York appeals court on Thursday overturned the $500m penalty that President Donald Trump was ordered to pay in his civil fraud trial last year, ruling that the fine was excessive and likely violated constitutional protections against severe punishment.
The case, led by Judge Arthur Engoron, originally imposed a $355m fine, which grew to more than $500m with interest, after finding that Trump and his company inflated property values to secure favorable loans. While affirming Trump’s liability for fraud, the Appellate Division of the New York Supreme Court struck down the massive financial penalty.
Judge Peter Moulton, writing for the panel, noted:
“While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award to the state.”
Trump hailed the ruling as a “total victory” on his social media platform Truth Social, calling the original fine a “political witch hunt.” His son, Eric Trump, also celebrated, posting: “After 5 years of hell, justice prevailed!”
However, the New York Attorney General’s Office, led by Letitia James, framed the decision as a win too, highlighting that the judges upheld the fraud liability and other non-financial penalties, including a three-year ban on Trump serving as a company director or securing loans in the state. The office said it would appeal the fine’s dismissal to the New York Court of Appeals, the state’s highest court.
The 323-page ruling revealed divisions among the five-judge panel. While most agreed James was within her power to bring the case, one judge felt it should have been dismissed entirely, and two others said a narrower retrial was warranted but ultimately joined in tossing the fine “for the sole purpose of ensuring finality.”
Legal experts noted the unusual length and complexity of the decision, reflecting the historic challenge of adjudicating a massive fraud case involving a sitting president. The ruling delays a definitive outcome, with analysts suggesting the ultimate resolution now lies with the state’s top court.
