Appeals court strikes down $500m civil fraud penalty against Trump

A New York state appeals court on Thursday struck down a civil fraud penalty of more than $500 million imposed on President Donald Trump, ruling that the fine was unconstitutional.

The Appellate Division of the New York State Supreme Court determined that the penalty, which has grown from an initial $454 million judgment to over $500 million with interest, violated the Eighth Amendment’s prohibition on excessive fines.

The ruling came in a case brought by New York Attorney General Letitia James, who accused Trump and his company of inflating asset values in financial statements between 2014 and 2021. Manhattan Supreme Court Justice Arthur Engoron had found Trump liable in February 2024 and ordered the hefty penalty.

Engoron concluded that Trump’s statements overvalued assets by between $812 million and $2.2 billion. Alongside the financial penalty, the court also imposed non-monetary sanctions to restrict Trump and his business operations, measures that remain in effect following Thursday’s decision.

In its judgment, the appeals court noted that while the injunctive measures were “well crafted to curb defendants’ business culture,” the monetary sanction directing Trump and others to pay nearly half a billion dollars was excessive.

Eric Trump, one of the defendants and a Trump Organization executive, celebrated the ruling on social media, calling it a “total victory.”

The Attorney General’s office, the White House, and the Trump Organization have yet to issue official statements. Both sides retain the right to appeal.