By now, you have undoubtedly heard the news that a divided New York intermediate appellate court has thrown out the massive damages award in the New York Attorney General’s civil fraud lawsuit against the Trump Organization and several of its current or former executives (including the President and two of his sons). However, at the same time, the appellate court also held that the trial court had correctly found the defendants liable and correctly awarded injunctive relief. This summary of the case is technically accurate, at least in a way. However, the reality is that what happened at the intermediate appellate court is also technically much more complicated than that. In any event, the appellate court’s rulings virtually ensure that the case will now go to New York’s highest court, the New York Court of Appeals.

Background

As discussed at length here, in 2022, Letita James, New York’s attorney general filed a civil fraud action against the defendants, essentially alleging that the defendants had fraudulently misrepresented the Organization’s and Trump’s financial condition to banks, insurance companies, and public officials, in order to obtain loans, insurance, and other benefits. On February 16, 2024, New York (New York County) Supreme Court Justice Arthur F. Engoron entered his ruling in the case, here, finding against the defendants, including against Donald Trump.

Justice Engoron also awarded damages in the form of disgorgement, finding that Trump and his businesses owed $354.9 million, his sons owed $4 million each, the CFO, Allen Weisselberg,  also owed $1 million. With interest the judgment totaled $489 million.

Justice Engeron also granted injunctive relief, among other things banning Trump from serving as a top corporate officer in New York for three years. His sons were barred for two years, while other Trump Organization executives were banned for three years. The defendants appealed the judgment.

The Intermediate Appellate Court Ruling

On August 21, 2025, the New York Supreme Court Appellate Division, First Judicial Department, an intermediate court in the New York state judicial system, entered its ruling in the case. The five judge panel presiding over the appeal was badly divided. As a result of the division, the court’s decision, which can be found here, consists of three separate opinions, no one of which  commanded a majority.

Here’s what happened. (Pay attention, the details are important, but they are also complicated.) Justice Moulton wrote an opinion, in which only one other justice joined, saying that the trial court had correctly found the defendants liable and correctly granted injunctive relief; but also saying that the damages awarded were “excessive.” Justice Friedman, on the other hand, in a separate opinion, argued that the NYAG lacked power to bring the case, and that the complaint should be dismissed outright. Justice Higgitt wrote yet another opinion saying that while the NYAG had the authority to bring the suit, errors at the trial court should dictate a new trial.

As Justice Moulton wrote in his opinion about this three-way split, “because none of the three decisions garners a majority, Justices Higgins 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.” (For the benefit of those readers who wonder what “the decretal” is, it is, according to a recent scholarly article, “the portion of a court’s judgment or order that officially states (‘decrees’) what the court is ordering. In a judgment or order, decretal language usually begins with the formula ‘It is hereby ordered, adjudged, and decreed that . . . .’”) The upshot is that the decretal rulings in Justice Moulton’s opinion represent the decision of the Court, though only one other Justice joined in for the findings and determinations in the opinion.

One practical consequence of the fact that there were three separate opinions is that the decision itself is massive. The .pdf of the decision is 323 pages long. Two factors contributed to the length. One is that each of the opinions extensively reviews the factual record. The other is that each opinion seeks to rebut the others.  

Though enough of the justices came together to issue a decision, basically so that the case can proceed to the Court of Appeals, the only issue on which a majority of justices actually agreed was on the issue of whether the NYAG had the authority to bring the case in the first place. Four justices found she did, with one justice dissenting.

While there was no majority ruling on the other key issues, because a majority joined the decretal, the consequence of the court’s decision is that the trial court’s finding of fraud remain in place, while the remedies the trial court entered were modified. The massive damages award was vacated, while the injunctive relief remained in place.

In commenting on the relief the trial court entered, Justice Moulton said: “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.” Justice Moulton also wrote that “while harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award to the state.”

Discussion

As one commentator quoted in the appellate court’s decision said, “There is something for everyone in this decision. Attorney General James is vindicated for bringing the lawsuit and the findings of widespread fraud are affirmed. President Trump is vindicated in that the disgorgement penalty is deemed excessive.”

The Wall Street Journal’s article about the ruling quotes a social media post in which President Trump said  about the case that “It was a Political Witch Hunt, in a business sense, the likes of which no one has seen before.”

But as the Journal itself also put it, “Because the members of the appeals panel struggled to reach a consensus on many other issues in the case, they acknowledged that Thursday’s decision all but ensures that New York’s top court will have to get involved.” As the Journal also noted, the justices said that the Trumps could seek to continue a pause on the business restrictions while the appeal proceeds.

So while the appellate court’s decision garnered headlines, it is at most a way station what has all ready been a long march toward a final conclusion. While it would be foolhardy at this point to try to prognosticate what the state’s highest court might do, it does seem likely that the division over the case that was reflected in the multiplicity of opinion at the intermediate appellate court are likely to continue at the state’s highest court, as well.