BREAKING: Court Drops Trump Fraud Penalty

In breaking news today, a New York appeals court has tossed out President Trump’s half-billion-dollar civil fraud penalty, a significant win even as Trump's civil fraud case appeal continues. The ACLJ played a role in this legal victory. Now the question is, what does this ruling mean for President Trump, and how is New York Attorney General Letitia James – who is currently embroiled in her own legal issues – likely to respond?

As reported:

A New York appeals court threw out the roughly $500 million civil fraud penalty against President Trump on Thursday, but it declined to toss the case entirely.

It deals a significant blow to New York Attorney General Letitia James’s sprawling case against the president and his business . . . the court upheld a lower court’s finding that Trump, his eldest sons and another executive conspired to alter his net worth for tax and insurance benefits.

However, the eye-popping financial penalty against the president and his business will not stand, with the judges saying it amounts to an unconstitutional excessive fine. The ruling enables the case to move toward New York’s top court.

The case, brought in 2022, made James one of the president’s most prominent adversaries, as it threatened his billionaire status and the future of the business that built his fame — and paved his path to the White House.

If this is ringing a bell, it’s because your ACLJ was fighting front and center on this. We filed an urgent amicus brief defending President Trump from what was obviously political retaliation.  As we told you at the time:

Our amicus brief, filed with the local assistance of New York attorney Alexander Lonstein, focused on the First Amendment violation here. AG James has focused her office’s immense resources on investigating Trump and his businesses while ignoring potential wrongdoing by others. This selective enforcement of the law reeks of political bias. During her campaign for AG, James repeatedly vowed to target Trump, even before having access to any evidence. This clearly demonstrates her predetermined intent to use the power of her office for political purposes. By pursuing legal action against Trump based on his outspoken conservative views and policies, James is effectively attempting to criminalize protected political speech. This sets a chilling precedent for all Americans who dare to challenge the liberal establishment.

Your ACLJ is even cited by one of the judges in the official opinion:

[A]nd damages that are part of a common-law fraud cause of action. To quote another one of the amici: "[The statute provides a license for the Attorney General to pursue anyone based on any alleged inaccuracy and regardless of whether anyone has been harmed, just as she did here. By removing the inherent protections of traditional fraud law, [section 63(12)] enables political opponents to be prosecuted, albeit civilly, under a regime of strict liability, regardless of any actual culpability or mental state" (NY St Cts Elec Filing [NYSCEF] Doc No. 177, Brief American Center for Law and Justice, amicus curiae, in support of defendants-appellants, at 19).

My dad, ACLJ Chief Counsel Jay Sekulow joined us to share his reaction to this judgement, and pointed to this as a perfect example of why our work matters:

Well, I think first of all, it's very significant because it eliminated what was clearly an excessive fine. It violated the Eighth Amendment. What you and Will have been talking about in the first segment is correct. The ACLJ played a pivotal role here. We wrote a brief that argued that allowing that judgment to stand, that Letitia James brought the suit, that allowing it to stand would in fact violate the Constitution, would also inhibit free speech, and political discourse. And what is, I think, very significant here is Judge Friedman, in his opinion, writes,...it quotes, not just references our brief, but quotes our brief.

We said the statute provides a license for the Attorney General to pursue anyone based on an alleged inaccuracy and regardless of whether anyone has been harmed just as she did here. And then it said by removing the inherent protections of traditional fraud law, Section 63 enables political opponents to be prosecuted. Under a regime of strict liability, regardless of any actual culpability or mental state. The mental state is an intent to commit civil fraud.

When we talk about an amicus brief, some people say, well, what is that exactly? Amicus stands for friend of the court. We had standing to file a brief in the case as a friend of the court, and our amicus briefs have been cited not only by appellate courts, federal appellate courts, and state appellate courts, but we've been cited by the US Supreme Court.

As my dad also pointed out, this is a very positive step, but it’s not over just yet:

So this is a huge win . . . now there's going to be an appeal here to the next level. This was the appellate division, which is the intermediate appellate court. It will now go to the Court of Appeals, and I will assure everyone that's listening right now that the American Center for Law and Justice is going to be front and center. We spent a lot of time on this brief and to work it out. And the reality is this is a big win, but we need the next step here, which is two of the justices would have voted to dismiss the entire matter.

Today’s Sekulow broadcast included more discussion of this latest legal victory for President Trump and the ACLJ, as well as the latest updates on Director of National Intelligence Tulsi Gabbard’s  efforts to root out the politicization and weaponization of our federal agencies.

Watch the full broadcast below: