New York appeals court tosses $515m civil fraud penalty against Trump

An appeals court in New York has thrown out a civil fraud penalty that would have cost United States President Donald Trump and his business associates nearly half a billion dollars, calling the fine "excessive", reports Al Jazeera.

On Thursday, a five-judge panel in New York's Appellate Division rendered its decision after weighing Trump's appeal for nearly 11 months.

In its ruling, the panel cited the Eighth Amendment of the US Constitution, which prohibits the government from levying unduly harsh penalties on its citizens.

The case stems from a civil suit brought by New York Attorney General Letitia James, who argued that Trump had inflated his financial records in order to secure advantages with insurance companies, banks and other financial institutions.

In February 2024, a lower court had ordered Trump to pay $355m in penalties, an amount the appeals court called into question. That amount has since grown to about $515m due to accumulating interest.

"While the injunctive relief ordered by the court is well crafted to curb defendants' business culture, the court's disgorgement order, which directs that defendants pay nearly half a billion dollars to the State of New York, is an excessive fine that violates the Eighth Amendment of the United States Constitution," two of the panel's judges, Dianne T Renwick and Peter H Moulton, wrote in one opinion.

Trump quickly applauded the decision on his social media platform, Truth Social.

"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," he wrote.

While the court did dismiss the penalty in its entirety, its judges were divided over the merits of the lower court's ruling, which found that Trump and his co-defendants had misrepresented their wealth in "fraudulent ways".

One Republican-appointed judge on the panel, David Friedman, accused James of seeking the "derailment of President Trump's political career and the destruction of his real estate business".