• An appeals court has overturned the half-billion-dollar civil fraud penalty against President Donald Trump, reshaping the high-stakes case.
• The ruling upheld Trump’s liability but struck down the financial judgment, citing excessive punishment under the Eighth Amendment.
• Attorney General Letitia James vowed to appeal, while Trump declared “total victory” over what he called a political witch hunt.

NEW YORK, N.Y. (TDR) — A New York appeals court on Thursday tossed out the nearly half-billion-dollar judgment against President Donald Trump in the civil fraud case brought by Attorney General Letitia James, dealing a major blow to the state’s effort to cripple Trump financially. While the decision upholds Trump’s liability for fraud, it rejected the staggering financial penalty, calling it unconstitutional and sending the case deeper into appellate review.

In a sharply worded opinion, the majority found the penalty imposed by trial judge Arthur Engoron to be a violation of the Eighth Amendment’s prohibition on excessive fines. “While the injunctive relief ordered by the court is well crafted to curb defendants’ business culture, the disgorgement order…is an excessive fine that violates the Eighth Amendment,” the ruling read.

The decision is part of a broader pattern in which legal challenges against Trump have faltered or been reduced. Trump’s four criminal indictments in 2023 largely collapsed, with federal prosecutors dropping cases tied to the 2020 election and classified documents. A Georgia election case stalled, and his 2024 hush money conviction ultimately carried no penalty after his return to the White House.

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CNN’s Elie Honig called the ruling “monumental,” noting it was unusual for the court to take nearly a year to issue its findings. Trump quickly took to Truth Social to proclaim “TOTAL VICTORY,” blasting the case as a “political witch hunt” designed to undermine business in New York. Former Trump lawyer Alina Habba hailed the ruling as “a resounding victory,” calling James’ pursuit “politically motivated, legally baseless, and grossly excessive.”

James, however, vowed to continue the fight. “The First Department today affirmed…the president violated the law, and our case has merit,” she said in a statement, emphasizing that injunctive measures restricting Trump’s ability to conduct business in New York remain in place.

A Blow to James, a Lifeline for Trump

The ruling spares Trump the crushing financial burden of satisfying what had grown to roughly $500 million in penalties with interest. The court noted that while Engoron correctly found Trump and his sons liable for inflating property values to deceive lenders and insurers, the fine itself exceeded constitutional limits.

The appeals panel, however, was split. Two judges argued for a retrial, citing judicial errors, while Justice David Friedman went further, suggesting the entire case should have been dismissed. In a biting separate opinion, Friedman accused James of political motivations, saying her true goal was “political hygiene…ending with the derailment of President Trump’s political career.”

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The appellate battle underscores how state-level cases against Trump continue to collide with his presidency, raising questions about the balance of law and politics.

Parallel DOJ Investigations

The ruling comes as the Justice Department intensifies scrutiny of James herself. The DOJ’s Weaponization Working Group, led by special prosecutor Ed Martin, is probing James over alleged mortgage fraud related to properties in Brooklyn and Virginia. Martin has openly urged James to resign, even posing outside her home in a dramatic moment last week.

James’ attorney, Abbe Lowell, slammed the probe as naked political retaliation. “Investigating the fraud case Attorney General James won against President Trump has to be the most blatant and desperate example of political retribution,” he wrote in response.

Broader Implications for 2026

For Trump, the appeals court victory marks another instance where legal clouds are thinning just as his administration gears up for midterm battles. Supporters argue the ruling vindicates claims of weaponized justice, while critics warn it emboldens a president who has already evaded multiple courtroom reckonings.

The convergence of appellate rulings, DOJ probes into James, and the political narrative of Trump’s resilience is sure to dominate the landscape heading into the 2026 midterms, where Republicans hope to consolidate power in Congress.

Is the legal tide turning permanently in Trump’s favor — or is this victory only temporary in a larger judicial war?

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