A New York appeals court has indeed thrown out the $454 million civil fraud penalty against Donald Trump, his family, and his company, which had been imposed by a lower court.

The ruling, issued on August 21, 2025, deemed the penalty excessive and in violation of the Eighth Amendment of the U.S. Constitution, which prohibits excessive fines.

Key Details of the Ruling
The court criticized the monetary penalty, stating that while harm occurred, it was not severe enough to justify such a large fine.

Manhattan Judge Arthur Engoron in February 2024 ordered Trump to pay around $454 million in total penalties after holding him liable for business fraud.

The total penalty had grown to over $515 million due to interest since the original ruling in February 2024, which had ordered Trump to pay around $355 million.

Implications of the Decision
The court's decision allows for the possibility of further appeals to the New York Court of Appeals, the state's highest court.

Non-monetary penalties, such as restrictions on Trump and his sons from leading certain New York-based companies, remain in place for now.

This ruling is a significant victory for Trump, who has consistently claimed that the case was politically motivated by the Democrat Letitia James now under investigation for her own real estate misdeeds. His legal team has argued that the financial statements included disclaimers and that the alleged fraud did not cause material harm.

Eric Trump, also a defendant in the lawsuit, posted:

“Total victory in the sham NY Attorney General case!!! After 5 years of hell, justice prevailed!” wrote Eric Trump, who, with his brother Donald Trump Jr., operates the Trump Organization.

In a concurring opinion with the decision, Appellate Division Judge Peter Moulton wrote that James “did not carry her initial burden” of establishing the rough total of the profits “causally connected” to the defendants’ violations.

“Indeed, the calculation of the disgorgement in this case was far from a reasonable approximation,” Moulton wrote.