How Trump Can Win on Appeal, Parts of the NY Ruling Most Likely to Get Overturned
Former President Donald Trump has good grounds to appeal the $355 million New York civil fraud ruling handed down against him on Friday.
The most obvious ground is the excessive amount of the fine imposed, which Trump’s team will likely argue runs afoul of the U.S. Constitution’s Eighth Amendment.
When interest is added in, the amount of damages New York Judge Arthur Engoron required Trump to pay the state of New York is over $450 million, the Associated Press reported.
The judge’s ruling also imposed a three-year ban on Trump serving as an officer or director of any New York company and bars his sons Donald Jr. and Eric Trump for two years, which in effect requires the Trump Organization to find new leadership for the near term, at least.
Engoron determined that the Trump Organization inflated the value of its properties to obtain better loan terms.
Trump countered during the trial that all the loans from banks were paid on time, in full, so there were no victims. The banks actually made millions of dollars by loaning to his company, he argued.
His attorney Alina Habba told Fox News on Wednesday that Democratic New York Attorney General Letitia James had initially sought $250 million in damages from Trump, but increased the amount to $370 million in January.
“When she got a glimpse of just how wealthy the Trump Organization is because they are a successful business in the state of New York, because they employ thousands of people and pay hundreds of millions of dollars in taxes to the state of New York, she upped that ask,” Habba said, claiming it was an effort to really hurt Trump and damage the company.
The lawyer predicted James will not succeed after the case is reviewed on appeal.
Trump indicated during a Fox News town hall Tuesday night that he will have the cash needed to make the appeal and suggested the excessive fine will be one basis of the appeal.
“We’ll have a lot of cash, but that doesn’t mean he can take it,” Trump told host Laura Ingraham. “You know what he did, I think he looked at my cash, and he said, ‘Well, we’ll take all of his cash.’”
He also read the text of the Eighth Amendment, which states, “Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.”
Other legal experts have pointed to the Eighth Amendment as a basis for Trump’s appeal.
Mark Levin, who served as chief of staff to Attorney General Edwin Meese during the Reagan administration, posted on X, “The key to dealing with New York’s attempt to legalize the stealing of President Trump’s property is the 8th amendment and the Supreme Court’s most recent ruling.”
The key to dealing with New York’s attempt to legalize the stealing of President Trump’s property is the 8th amendment and the Supreme Court’s most recent rulinghttps://t.co/Q8XETyOHAz
— Mark R. Levin (@marklevinshow) February 21, 2024
Levin added, “The enormity of the fine against President Trump and the use of a facially preposterous statute, never used in this way before, and the attorney general’s own campaign statements as well as her most recent statements on her TV media tour, together create a prima face case of an 8th amendment violation against excessive fines and penalties.
“In 2019, the Supreme Court unanimously ruled that the 8th amendment applies to states through the 14th amendment,” he said.
The U.S. Supreme Court held in the 2019 case Timbs v. Indiana the amendment is applicable to the states.
The court ruled against Indiana for assessing a fine that was “grossly disproportionate” to the gravity of the offense.
George Washington University Law School professor Jonathan Turley concluded such is the case with Engoron’s fine.
“The size of the damages is grotesque and should shock the conscience of any judge on appeal. Even if the Democrat-appointed judges on the New York Court of Appeals were to ignore the obvious inequity and unfairness, the United States Supreme Court could intervene,” he wrote in a column for The Hill.
Arthur Fergenson, senior counsel with Ansa Assuncao LLP, argued in an opinion piece for Fox News, that an Eighth Amendment argument would allow Trump’s attorneys to address the political prejudices James and Engoron brought to the case.
James campaigned for office in 2018 promising that she would “get Trump,” calling him an “illegitimate president.”
Engoron’s $355 million ruling came in just shy of the $370 million James sought.
The language Engoron used in his decision appeared to reveal an animus toward Trump.
“Overall, Donald Trump rarely responded to the questions asked, and he frequently interjected long, irrelevant speeches on issues far beyond the scope of the trial. His refusal to answer the questions directly, or in some cases, at all, severely compromised his credibility,” Engoron said.
Further, Engoron concluded that Trump and his fellow co-defendants’ “complete lack of contrition and remorse borders on pathological.”
In addition to the pointing to the Eighth Amendment, Trump also mentioned during his town hall that there were no real victims, which would go to the issue of whether there was actually fraud.
Engoron acknowledged in his ruling that fraud normally requires a reliance on false statements by the party that was allegedly defrauded. Further the aggrieved party must prove the damages they incurred because of the misrepresentations.
But James’ office built their case on New York Executive Law 63(12), which does not require damages to be shown and grants the court the power to impose whatever penalties the judge deems proper.
In September, Engoron ordered the dissolution of the Trump Organization, but a New York appeals court temporarily stayed the decision in early October to give Trump the chance to appeal the ruling.
In January, the AP reported that after analyzing 70 years of civil fraud cases under 63(12) — nearly 150 cases in all — its researchers concluded that Trump’s case would be the “only big business found that was threatened with a shutdown without a showing of obvious victims and major losses.”
Engoron ultimately did not include dissolution in his final ruling.
Venture capitalist and “Shark Tank” host Kevin O’Leary told CNN Thursday that what the Trump organization did was not even fraud, but a common business practice.
“You get a developer that builds a building, and he says it’s worth $400 million, and he wants to borrow $200 million from a bank, which happens every day, everywhere on earth, including every American city,” O’Leary said.
The bank then does its own due diligence, which they are “very good” at, and decides it’s worth $300 million and authorizes a loan for $150 million, he explained.
“That haggling has gone on for decades. That’s how it works. … The bank that was supposedly defrauded testified and said, ‘We didn’t lose anything. We want to do business with this guy again. We’d like to,’” O’Leary said.
“But the judge said, ‘No, no, no, no, no, no. Let’s penalize this developer for $355 million.’”
JUST IN: Kevin O’Leary educates CNN host about the Trump “fraud” trial, says every developer in America would be penalized like Trump if treated the same way.
🔥🔥🔥
“Excuse me. What fraud? You get a developer that builds a building and he says it’s worth $400 million, and he… pic.twitter.com/xSXaeo03MY
— Collin Rugg (@CollinRugg) February 20, 2024
Former U.S. attorney Andrew McCarthy is not sure an appeals court will completely reverse Engoron’s decision.
“To my mind, it is unlikely that Trump’s appeal will result in a clean win for either side,” he wrote in a National Review column Tuesday. “That is, I could easily see the disgorgement penalty being substantially slashed.”
“Yet that does not necessarily mean an appellate court is going to reverse the underlying findings that Trump and his underlings grossly exaggerated asset values in contexts where they were obliged to provide good faith estimates — even if their counterparties were sophisticated financial actors who were sure to do their own due diligence,” McCarthy continued.
He pointed out that appeals courts generally do not overturn factual conclusions reached at the trial level, but will reverse lower courts when they wrongly apply those facts to the law.
However, in this case, Engoron was the sole fact finder and denied Trump the opportunity for a jury trial, which the law in question did not require.
But given the stiff penalties meted out, McCarthy thinks the former president’s attorneys could argue the case is beyond the normal scope of a 63(12) matter, and therefore, he should have received a jury trial.
McCarthy could see the appeals court deciding to leave the restrictions Engoron put in place regarding Trump and his sons not being able to run the Trump Organization for a period of years.
He concluded: “For the sake of the business climate in New York, it would be better if the case were overturned. But the realist in me is not banking on a sweeping appellate win for Trump. I anticipate that he will get material relief in terms of the dollar amount, but I wouldn’t hold my breath on the rest of the penalties. And those penalties matter, a lot.”
Fox News host Martha MacCallum asked Habba on Wednesday what she thought of McCarthy’s conclusion.
“I’ve been on this case for the better of three years,” Habba responded. “I can tell you right now, there are truly no facts that support any of these decisions, and that will be made very clear in our appeal.”
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