N.Y. Intermediate Appellate Court Rejects Civil Fraud Judgment Against Trump

ABC News (Aaron Katersky, Peter Charalambous & Steven Portnoy) reports on the 323 pages of opinions by a five-judge panel:

Two of the judges said Trump was properly held liable for business fraud, but the fine was excessive.

Two of the judges said the trial court was wrong to decide Trump committed fraud and the case should be retried—nonetheless, those two judges said they joined the decision "with great reluctance" to allow the case to proceed on appeal to the state's highest court.

A fifth judge said New York Attorney General Letitia James should not have brought the case in the first place.

You can read the opinions here …. Oh, whom am I kidding? I'm surely not going to slog through the 323 pages; I can't imagine many of our readers would, either.

Comments

[jb]

You can read the opinions here …. Oh, whom am I kidding? I'm surely not going to slog through the 323 pages; I can't imagine many of our readers would, either.

I'm sure there will be a lot of hot takes, though!

[Jett's Pop]

Washington Post:

https://www.washingtonpost.com/national-security/2025/08/21/trump-new-york-fraud-case-appeal/

The Post says that the Court upheld the fraud charge. How is that possible if three of the five judges said that it was improper for the claim to be brought (1 judge) or the judge to decide the fraud issue (2 judges)? And what opinion were the two "reluctant to join"?

[Tim]

It's impossible to say, because we don't have the links to the opinions!

[Dr. Ed 2]

Is it a case of the intermediary appeals court, knowing that both parties are going to appeal this, not worrying all that much about fine nuances of law because they inevitably will be overruled anyway.

As I understand it, the issue is (a) the fine was way too big and (b) what wouldn't be too much wasn't specified, so why bother on if the case itself should never have been brought. Let the SJC sweat that out...

[David Nieporent]

Is it a case of the intermediary appeals court, knowing that both parties are going to appeal this, not worrying all that much about fine nuances of law because they inevitably will be overruled anyway.

No. They wrote hundreds of pages!

[Kazinski]

"Upheld" is the wrong word.

Left intact, is more like it, but with the fine and sanctions vacated, its more like a hollowed out shell.

The biggest winner is the NY state business climate, that is still on life support, but may eventually recover, however unlikely it seems.

[Sarcastr0]

Leaving aside your hot-take legal analysis, where do you get The NY state business climate, that is still on life support

It's got the 3rd highest GDP in America. It grew from 2023-2024.

Is there some special issue in NY you are tracking?

[Kazinski]

"New York loses $1 trillion in Wall Street business as firms flee the city: report"

"Nearly 160 Wall Street firms have moved their headquarters out of New York since the end of 2019, taking nearly $1 trillion — yes, that’s trillion with a “T” — in assets under management with them, according to data from 17,000 companies compiled by Bloomberg."

https://nypost.com/2023/08/21/new-york-loses-1-trillion-in-wall-street-business-as-firms-flee-report/

The Bloomberg article is paywalled, but the post article links to it, the Bloomberg article doesn't focus solely on NY though, here is their headline:

"New York and California Each Lost $1 Trillion When Financial Firms Moved South"

[David Nieporent]

Gee, was there something else that happened since the end of 2019 besides a lawsuit against Trump?

[Mr. Bumble]

You helped elect a cabbage as President?

[Sarcastr0]

Bloomberg doesn't seem to point to the business environment:

"“In Manhattan, even if someone has a super large apartment, you can't get like 10 families in very easily,” said Hwang, who moved with his family to West Palm Beach from New York in 2021. “In Florida you're able to go to people's homes. Several families will show up, and the kids can play in the pool while the parents are able to have conversations.”
...
For some in finance, leaving California and New York for a Republican-leaning state can be welcome. But for many others, it has the possibility to create discomfort, especially as Texas and Florida embrace right-wing policies toward migrants, restrict abortion, attack diversity initiatives and seek to impose restrictions on Chinese people buying property.

But many are flocking regardless, including as part of a relocation trend that precedes the pandemic — Baby Boomers, the wealthiest generation in human history, retiring to warmer climes in the South and Southwest. That's creating new opportunities for money managers in the region, according to Ryan Luby, an associate partner at McKinsey & Co. who has studied the impact of hybrid work."

[CDnCO2004]

I did not even make it through the summary and stopped reading.

[Brett Bellmore]

That was quite the run on sentence, wasn't it?

[LawTalkingGuy]

One of the least clear orders I’ve ever read. Needed to be in bullet or spreadsheet form.

[Dr. Ed 2]

You assume clarity was desired -- I'd argue the opposite.

If you know that Lard Arse is going to appeal because you reduced the fine, Trump is going to appeal because he's Trump, so write something which really says nothing but everyone can live with, as the SJC is going to sort it out anyway.

[David Nieporent]

There is no "SJC." Everything is not about Massachusetts. Or Maine.

[LawTalkingGuy]

No. It’s actually because a lot of judges everywhere prefer maintaining old formatting and styles in their orders because they feel clearer ways of communicating are too informal or somehow will nullify the legal effect.

[steve sturm]

Question: why did the 2 justices who said the court was wrong to conclude Trump committed fraud have to ‘reluctantly’ join the 2 who merely thought the penalty was excessive?

Couldn’t they instead have joined the 5th justice, with the result that the guilty verdict was overturned, and not just the damages?

[Armchair]

Sounds like someone brought pressure to bear on the judges...

[LawTalkingGuy]

If pressure was being brought (by whom?) wouldn’t they have joined the first opinion and not stuck to their guns on a new trial being the appropriate remedy?

[Sarcastr0]

Plenty of people don't love this appellate decision; I don't see many of them saying 'they got to the judges!'

But MAGA...MAGA would love to posit a conspiracy so they don't need to acknowledge that things legitimately didn't go 100% as they wished.

[LawTalkingGuy]

Trying to imagine a situation where someone can exert enough pressure over a judge to change their vote but not enough to make the vote actually helpful. Or a judge who is capable of being pressured but still draws the line in the sand at “I would remand for a new trial” rather than dismiss or affirm. Come on lol.

[JesseAz (Prime Meanster of Sarcasia)]

Your takes on this case the other day dont exist it seems. Weird.

Will you ever admit to having the wrong take?

[Sarcastr0]

I actually don't have a take on this decision...

It seems to get really in the weeds about really abstruse NY law and procedure.

Were I to read it, I wouldn't have the context to understand it without doing a lot more work.

And I don't need to bother putting up a hot-take given the target rich environment of insane conspiracies and otherwise knee-jerk wankery.

[Mr. Bumble]

...and yet you feel the need to comment.
No one cares what you think (of course assumes that you do indeed think).

[Brett Bellmore]

I guess they could have, but that they didn't think Trump was entirely innocent.

[Michael P]

In the eyes of the State of New York, Donald Trump is guilty until proven innocent.

[Sarcastr0]

What do you mean? Like, everyone in the state got together?

What a thoughtless shitpost.

[Don Nico]

What thoughtless shitpost response!

[JesseAz (Prime Meanster of Sarcasia)]

10 years strong. And hasn't gotten better at dumb leftist takes.

[Sarcastr0]

I mean, you seem not to prioritize substance in your posts much - mostly namecalling. Why should anyone trust your judgement about what a good comment is?

Perhaps more on-point, what do you think 'In the eyes of the State of New York' means?

[Stupid Government Tricks]

When your campaign promise is to find some way to nail Trump, there just might be a bit of bias.

[Sarcastr0]

New York State made a campaign promise?

Big if true.

[Scooter]

How about when the 'Judge' decides the State has proven guilt before the 'trial' starts?

[pdshaw]

I only read footnotes. Here is FN2 of the middle justices:

"Notwithstanding our analysis, as reflected in our writing, that vacatur of the judgment and a new trial is the appropriate resolution, Justice Rosado and I, after much consideration, with great reluctance and with acknowledgement of the incongruity of the act, join the decretal modifying the judgment to the extent of vacating the disgorgement and sanctions awards. Under the truly extraordinary circumstances here, where none of the writings enjoys the support of a majority, we are moved to take this action to permit this panel to arrive at a decision and to permit the parties and the Court to avoid the necessity of reargument (see Judiciary Law § 82). Moreover, joining the decretal effectuates the core point of agreement among the members of this panel: that the judgment, as entered by Supreme Court, cannot stand. The parties must have a decision on this matter and, concomitantly, the option of further review of this matter by the Court of Appeals, as recognized by Justice Friedman. We must therefore agree with Justice Friedman in his observation that a remarkable situation has necessitated a remarkable solution."

[Just Eric]

Thank you for a most helpful post which appears to provide key rationale and which should have been better explained by various reporters, if they cared to illuminate audience on panel's reasoning.

[pdshaw]

I can't say it makes complete sense to me, but "the acknowledgement of the incongruity of the act," seems to admit that.

The middle justices folded to reach a final decision reasoning that the ultimate decision would be made by the higher court. There is some discussion by the middle justices of why they couldn't get a third concurrence. They say that two are concerned that if it is reversed for new trial, a new trial would never actually happen. The justice that thinks the case shouldn't have been brought believes that a new trial would interfere with the President's performance of his duties.

[Dr. Ed 2]

In other words, get the heck out of OUR courtroom -- you're taking this to the SJC anyway, so GO....

[David Nieporent]

Those are indeed other words that do not reflect what the court said, and there's still no "SJC."

[denizen]

Because the opinion has effects in other cases and doesn't just decide the dispute between the parties. Friedman wanted to create essentially a new element for § 63(12) cases that the case serve the public interest, which apparently is not so in disputes between sufficiently sophisticated parties when certain other grounds for a "public interest" finding don't exist. Nobody else wanted that.

[Brett Bellmore]

So, the fine was too large. What next?

[LawTalkingGuy]

Cross-appeals to the NY Court of Appeals.

[Brett Bellmore]

Would the state really want to appeal, though? Literally nobody on the panel agreed with the state on the fine, so you'd think the odds of getting it restored are pretty slim. That's all the state stands to win on appeal, right?

Or is it a given, since they're spending other people's money on the legal fees?

[LawTalkingGuy]

Well the defendants are certainly going to appeal anyway because there is still and injunction and liability finding. So I imagine the State puts the damages issue before the judges since they’ll be there anyway.

[Dr. Ed 2]

Lard Arse says she's gonna appeal.

Why not, it isn't her money.

[Life of Brian]

Or is it a given, since they're spending other people's money on the legal fees?

I'd say it's also a given since it keeps Trump's bond money tied up for another year give or take until the Court of Appeals affirms the vacating of the disgorgement award.

[LawTalkingGuy]

2 for vacating financial penalties only
2 for new trial
1 for dismissal

The dismissal judge should have joined the opinion remanding for a new trial. That’s as good as a dismissal given the context, and that would go to the CoA anyway.

[Brett Bellmore]

But, how can you join the opinion remanding for a new trial when you think that it was improper to bring the charges in the first place? It would be just as improper to hold a new trial, after all.

[LawTalkingGuy]

Discretion is the better part of valor here.

[David Nieporent]

? Only Friedman thought the suit (not "charges." It's a civil suit.) shouldn't have been brought.

[David Nieporent]

Okay, I misread what Brett was saying, not grasping that he was responding to LTG's suggestion. So, yes, I agree (!) with the point he was making. (But my correction of his vocab choice still holds.)

[M L]

Yes but the new trial judges could have also joined the dismissal judge. I'll be curious to see their reasoning for disagreeing with the dismissal judge.

[Josh R]

Oh, whom am I kidding? I'm surely not going to slog through the 323 pages.

Me neither, and don't call yourself Shirley.

[Kazinski]

Bloomberg said the fine was vacated.

CNN Legal Analyst Elie Honig:

This is a huge win for Donald Trump, any way you cut it. And this is a stinging rebuke to James,” Honig said on CNN’s “The Situation Room.”

Trump claimed “total victory.”

“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,” Trump wrote on Truth Social. “It was a Political Witch Hunt, in a business sense, the likes of which no one has ever seen before.”

https://www.cnn.com/2025/08/21/politics/trump-civil-trial-trump-organization-appeal

[Kazinski]

Here is the bottom line from the decision:

"Because none of the three decisions garners a majority, Justices Higgitt and Rosado join the decretal of this decision for the sole purpose of ensuring finality, thereby affording the parties a path for appeal to the Court of Appeals. "

[Mr. Bumble]

American law, the never ending story.

[Bob from Ohio]

David N. assured me earlier this that only the fine was an issue, that it would be affirmed in all other aspects. My faith in him is diminished.

[Kazinski]

Well I have to say, while that may not be the final, final result, it is the result of this decision.

The only thing they agreed on is the fine is vacated, that leaves the rest of the proceedings intact.

But I guess that is somewhat short of an affirmation.

[Bob from Ohio]

"somewhat short of an affirmation"

3-2 against the trial court's fraud judgment. They just differed on the terms of the mandate so this bizarre procedure posture results.

[David Nieporent]

I of course did not "assure" you of any such thing. I did made a prediction abut the most likely outcome. (And, in fact, it was directionally correct. Only one judge on the panel wanted to toss the case.)

[Bob from Ohio]

"directionally correct"

New term for "wrong". 3 judges did not "affirm" the fraud judgment.

No judge "affirmed" the fine either.

It might serve you to be a little less arrogant.

[David Nieporent]

New term for "wrong". 3 judges did not "affirm" the fraud judgment.

You're right; 4 did.

No judge "affirmed" the fine either.

Which is in fact what I predicted.

[Bob from Ohio]

"You're right; 4 did."

1 judge would dismiss, 2 said the decision on the merits was wrong so remand. So 3 ruled in Trump's favor on the merit question. Not an "affirmation" in any way.

[David Nieporent]

1. We assess judges based on what they actually do, not what they suggest they'd like to do but don't do.

2. No, the other 2 judges (note that they're actually justices, not judges; this is NY) did not "rule in Trump's favor on the merit question." "There should be a new trial" is not a ruling that his position is correct. Only Friedman ruled that his position was correct.

[Mr. Bumble]

Quite a law you've got there, when five learned? judges can't decide if and how it was applied was proper.

[jb]

Presumably if the law was so straightforward that 5 judges would always agree on its application, you wouldn't need appeals courts at all.

[Mr. Bumble]

Shouldn't laws be as clear and straightforword as possible?

[David Nieporent]

Everything should be as simple as possible… and no simpler.

But the issue isn't whether the law is clear, but the application of the law to messy real world facts.

[Stupid Government Tricks]

The Rule of Law is a myth. Men interpret laws, not Robo Cop.

It shouldn't have taken this "decision" to open your eyes. Split decisions are common as corruption in appeals courts.

[denizen]

I skimmed most of the decision. At least as I'm reading it, everybody except for Friedman would leave intact § 63(12) as a tool for the AG to get involved in private transactions that concern supposed "fraud"—but without scienter, materiality of the false statement, or detrimental reliance—and with no clear nexus to the public interest. It's not a good day to be doing business in NY if the AG doesn't like you.

[KevinP]

Also an unwritten opinion: if you’re a business owner thinking of setting up a business in the state of New York, make sure that you are not a political opponent of the attorney general Letitia James, or have any political opinions that she doesn’t like.

[JasonT20]

Also an unwritten opinion: if you’re a business owner thinking of setting up a business in the state of New York, make sure that you are not a political opponent of the attorney general Letitia James, or have any political opinions that she doesn’t like.

I think, that if you are a business owner thinking of setting up a business in the U.S., you might want to make sure that you aren't a political opponent of the President of the United States, Donald Trump, or have political opinions that he doesn't like.

[M L]

323 pages . . . dang.

I'm in the minority of readers in that I will at least skim some parts. But that's because the business issue is relevant to my interests generally, and because I happened to follow the lower court decisions (of all the stuff going on in the world, the best you can do is pick and choose a few things to pay attention to in any appreciable depth).

[JasonT20]

Oh, whom am I kidding? I'm surely not going to slog through the 323 pages; I can't imagine many of our readers would, either.

Who would be fooled into thinking that a 20 page opinion would be read by more than a few percent of your readers?

[loki13]

Well, for everyone complaining (without cause) about why the opinion was taking so long (it really wasn't) ... now we know why.

Damn. I'm not mad, I'm impressed.

I'm not going to claim reading the whole thing. And I'm not planning on it. But based on a very BRIEF skim.

1. The Friedman opinion just doesn't seem right. It appears to ignore the law of the case and binding prior case law. Now, one judge can certainly argue for that (it's called a HO!) but I can understand why he couldn't get a single other vote.

2. The opinion on disgorgement (that's what people are talking about re: reduction in damages) ... while it garnered a lot of support, I have a lot of questions. It's based on the constitutional protections vis-a-vis the Eighth Amendment. I'm not saying that it's wrong, I'm just saying that this is an evolving area given disgorgement is equitable, this is a civil case, and it's not a fine or punitive. That's not the end of the analysis (see, e.g., civil forfeiture) but I'm not sure I agree.

It starts on p. 115 if you're curious. But the entirety of the legal analysis if 118-19. I mean ... I can't say that it's definitively wrong, but I'm not sure I agree with it either. If the disgorgement is measured purely using equitable principles (the amount of ill-gotten gains), then it isn't punitive. IMO. Again, not saying it's wrong, but I'm not convinced. (I would agree that if the "it's punitive, not equitable, therefore a fine" part if met, then the second prong is met (both in terms of excessive, and lacking foundation). However, I would then note that disgorgement isn't prohibited, simply that there was an issue with EXCESSIVE and evidence.

3. There is a factual dispute (because summary judgment) between the four judges, and it appears that there is a colorable difference between the approach of, "Send it back for a trial," and "You're kidding, right? There's not enough there, there, to send it back for a trial. And also? There will never be a trial if it's sent back." Which ... okay, I get it. But it's weird that this was such a major hangup that you couldn't get a single judge from either two-judge block to join an opinion. Oh well.

4. Sanctions were reversed. That's life, man. No comment on that other than, "Welcome to litigation. Hard to get sanctions, harder to get an appellate court to uphold them. Just don't kill opposing counsel with a trident in the courtroom and you should be okay."

I am 100% sure that people will have productive conversations about the legal issues, instead of ignoring them and just shouting at each other. HA! I kid.

I'll check back when the Court of Appeals tells us what the law is.

[MollyGodiva]

This was not unexpected. The fine was too big. Now let's use this same logic and apply it to Trump demanding hundreds of millions of dollars from Universities who have not been adjudicated about anything.

[jimc5499]

Molly,
Trump isn't a Court and he's not fining anybody. Apples and oranges here.

It's pretty simple why the Judges left the verdict intact. They fear for their physical safety and want to keep their property intact.

[Sarcastr0]

They fear for their physical safety

Incredible reporting work, jimc.

[MollyGodiva]

Since MAGAs are violent shits, they assume leftists are also.

[Stupid Government Tricks]

Yeah, MAGA was sure Burning Looting Murdering all summer of 2020, weren't they?

[LawTalkingGuy]

The most recent (like a few months ago recent) political assassination was committed by a right-wing nut.

[MaddogEngineer]

I'll do it...I'm against both. Next question!

[Aubrey LaVentana]

I hear that lawyers can turn any question of law into a question of procedure.

If so, is there not a procedure that determines first, then second, and so on findings in an appeal, can't determine second step until all agree on first, and so on, so we don't have to make sense of a ruling that goes 3 different ways?

Like, does court have jurisdiction over law and defendant, is prosecutor duly appointed and acting in good faith, does offense meet elements of law, and so forth before setting penalties?

Or is every trial a spaghetti toss?

[MaddogEngineer]

I'm confused by this part of the quoted ABC News summary:

Two of the judges said the trial court was wrong to decide Trump committed fraud and the case should be retried—nonetheless, those two judges said they joined the decision "with great reluctance" to allow the case to proceed on appeal to the state's highest court.

Not confused because I want Trump to win. Confused because I don't understand their "great reluctance", because I thought this case was going to be appealed either way. Is there any reason to fear the state's highest court would not accept the appeal if Trump prevailed at this intermediate level? Is there something in NY state law that would make the decision final or unappealable?

UPDATE: is it that deciding for Trump here means specifically sending it back to the trial court, and that would preempt any chance of appeal to the highest court? AKA that decision not appealable by the AG?

[Bored Lawyer]

I think it's the opposite. The intermediate appellate courts in NY accept appeals that are not final. The Court of Appeals, NY's highest court, does not.
As I understand it, the idea was to make this a final decision that can be reviewed by the higher court.

[pdshaw]

I think the middle justices believed that one of the other justices should have compromised and joined their opinion since they were the swing justices.

I don't think that the "new trial" option preempted any chance to appeal to the highest court, but it probably would delay any further appeal until after the new trial was held. Appeals are discretionary, and the highest court would be least likely to accept an appeal from a new trial order because they could have another bite of the apple after the new trial.

So the other justices didn't compromise because their first order preference was their own opinions and their second order preference was whatever improved the likelihood that the highest court would accept the case.

[M L]

"James and Engoron had abandoned the legal foundations of civil law and assessed a fine that imitates a criminal penalty and is, I believe, a fundamentally cruel and unusual one. Nearly half a billion dollars in a zero-damages situation is an excessive amount that is seemingly chosen at random.

None of this should have been surprising. After all, James had famously campaigned to get Donald Trump. She had said that she looked forward to suing him and that she would be a “pain in his ass.” After the verdict came down, James began to taunt Trump by posting daily updates to the X social media platform on the gargantuan interest payment he was required to make. All of this violates his right to due process and equal protection under the law.

If Tish James is allowed to continue to practice law in this country, it means that our judicial system is nothing more than a tool of Democrat political power, whereby political operators have a mechanism to harass, fine, and jail their opponents.

This cannot stand.

We must make an example out of James. She must be disbarred.

Two weeks ago, the Justice Department opened an investigation into James for depriving Trump of rights. It represents a historic opportunity to restore equal justice under the law in our country.

https://www.breitbart.com/politics/2025/08/21/marlow-the-eighth-amendment-takes-down-letitia-jamess-trump-case-now-she-should-be-disbarred/

[David Nieporent]

Every time one reads Breitbart, one should be forced to re-watch Billy Madison: What you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.

[LawTalkingGuy]

The best arguments for disbarment contain zero references to the relevant professional conduct rules.

[thesafesurfer]

Are you capable of expressing a thought without hyperbole?