NEW YORK — Lawyers for former President Donald Trump told a New York City appeals court Thursday that the nearly $500 million civil fraud judgment against the former president stemmed from a “clear-cut” violation of the statute of limitations and that the costly judgment should be overturned.
Trump lawyer D. John Sauer told a five-judge panel that Attorney General Letitia James’s case was not brought in a timely manner and that the “crippling” penalty over the Trump Organization’s decades-old financial statements was not justified. In response, the panel appeared sympathetic to the possibility of lowering or reversing the costly judgment.
“This case involves a clear-cut violation of the statute of limitations and relevant case law,” Sauer said.
Trump was not in attendance for the proceeding.
At one point during the first 15 minutes of the roughly one-hour hearing, a judge asked Sauer what his strongest argument was for dismissing the parts of the case that involved more recent claims, which did not fall outside the statute of limitations. Trump’s lawyer said there was a “critical failure of proof” at the trial level, as well as in the summary judgment from last September.
Judge Peter H. Moulton later presented the question of whether James’ lawsuit turned into “something it was not meant to do,” saying that the $454 million judgment was “troubling” to him.
Alton Harmon, a Manhattan-based attorney, told the Washington Examiner that the arguments appeared to tilt slightly against the attorney general’s case, although he was not certain about how the panel will decide the appeal.
“The use of ‘troubling,’ or ‘it gives me pause,’ is a bad signal for Ms. James,” Harmon said, adding that the panel has a variety of options for ruling on the case if they side with Trump.
“They could perhaps reduce the amount of the judgment or even order a retrial with overturned findings as to the admissibility of older evidence and revised instructions limiting the scope of the fraud applicable statutes,” Harmon added.
James’s interest in Trump has lasted longer than her five-year tenure in office. In 2017, she campaigned for the attorney general position on Trump being a “con man” and vowed to shine a “bright light into every dark corner of his real estate dealings.”
During civil fraud trial, Trump brought in his own experts who testified that the business statements he gave to banks were actually “undervalued” and that there were no victims.
New York Deputy Solicitor General Judith Vale on Thursday pushed back against the notion that there were no harmed parties.
“This does have harm to the public and the market. The Deutsche Bank did complain. … They asked for more information, and when they didn’t get more information, they ended the relationship with the Trumps,” Vale said, adding that the Trump Organization’s relationship with the bank ended around the time of James’s allegations in 2020.
One of the core matters disputed Thursday involved the application of New York Executive Law Section 63(12), which the state attorney general’s office uses to bring fraud cases. The section has been criticized for being overly broad and vague.
Enacted in 1956, the law was originally designed as a powerful tool to combat fraud against the public. However, it has been heavily criticized since its inception, particularly for its departure from traditional elements of common law fraud, such as requiring an intent to defraud.
In February, Justice Arthur Engoron ordered Trump, who is running for a second term in the presidential election, to pay upward of $454.2 million in penalties and interest for inflating the value of his assets to gain favorable loans and insurance premiums years earlier. This civil fraud case is only one of the legal entanglements Trump faces as he campaigns for another shot at the presidency.
Trump already owes nearly $90 million in federal civil penalties for defaming a writer who accused him of sexual abuse decades ago, and he was convicted in May on 34 felony counts stemming from hush money paid to a pornography star.
Trump put down a $175 million bond following the massive civil penalties levied after the trial in Engoron’s court. At this point, Trump owes $24 million more today than he did in February due to a 9% interest rate.
Outside the courthouse near Madison Square Park, a handful of anti-Trump protesters held signs calling the former president a “grifter” while encouraging the Democratic attorney general’s case.
Within the pristine intermediate appellate courtroom, several of Trump’s star attorneys listened intently to the arguments, including recognizable faces such as Will Scharf, former Missouri attorney general candidate, and Alina Habba, one of Trump’s lawyers.
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The intermediate appellate court hearing Thursday could result in a ruling by next month, or potentially after the election between Trump and Vice President Kamala Harris. A RealClearPolitics polling average showed Harris with a nearly 2-point lead over Trump, with other polls suggesting an even tighter race in battleground states.
If Trump receives an unfavorable ruling on appeal, he has one more shot to appeal his hefty fine to the New York Court of Appeals, the highest court in the state.
