The
good
news
for
Donald
Trump
is
that
a
New
York
appellate
nixed
the
nearly
half-billion
dollar
disgorgement
judgment
the
Trump
Organization
owed
for
consistently
defrauding
financial
institutions.
The
bad
news
is
that
the
fractured
court
still
agreed
with
the
underlying
judgment
and
his
business
operations
are
rightly
enjoined.
Trump’s
camp
is
declaring
total
vindication
even
though,
as
opinions
go,
it’s
a
lot
like
being
told
you
aren’t
going
to
die,
but
they
are
going
to
have
to
remove
a
testicle.
The
five
justices
—
as
a
reminder
for
non-lawyer
readers,
New
York’s
lower
courts
are
called
“Supreme
Court”
and
its
judges
are
“justices,”
I
don’t
make
the
rules
—
didn’t
agree
on
much,
but
the
crux
of
it
is
that
Trump’s
business
empire
is
no
longer
on
the
hook
for
the
roughly
$350
million
(just
a
shade
under
$500
million
including
interest)
the
trial
court
demanded.
The
appellate
opinion
struck
down
that
award,
ruling
that
it
amounted
to
an
unconstitutionally
excessive
fine
as
opposed
to
mere
disgorgement
of
ill-gotten
gains.
The
court
affirmed
that
Trump
lied,
cheated,
and
cooked
the
books
to
inflate
his
wealth,
and
it
left
intact
the
structural
injunctions
effectively
barring
his
family
from
running
a
business
in
New
York.
But,
pop
the
champagne,
Donny!
You
“won.”
Or
sparkling
wine
as
the
case
may
be…
don’t
want
to
have
to
cough
up
for
that
new
tariff
price
for
the
genuine
champagne
region.
Today’s
posture
reads
like
a
procedure
exam
drafted
by
the
cruelest
law
professor
moments
after
learning
their
spouse
has
been
secretly
sleeping
with
the
dean.
All
but
one
of
the
justices
agreed
that
Attorney
General
Letitia
James
was
well
within
her
rights
to
bring
this
case.
Justice
Moulton,
joined
by
Presiding
Justice
Renwick,
upheld
the
finding
of
fraud
and
the
injunctive
relief,
but
struck
the
disgorgement
as
an
Eighth
Amendment
“excessive
fine.”
Justice
Higgitt,
with
Justice
Rosado,
thought
the
trial
court
made
errors
requiring
a
new
trial.
Then
there’s
Justice
Friedman,
who
seems
to
reside
in
a
fantasy
world.
Without
any
path
to
a
three-justice
majority
and
desperately
in
need
of
getting
this
opinion
out
the
door,
Higgitt
and
Rosado
conceded
to
join
Moulton
and
Renwick
in
the
decretal
alone.
Now
the
basketcase
of
an
opinion
can
be
appealed
to
the
New
York
Court
of
Appeals
(which
is
the
actual
NY
“supreme
court”
where
they
are
“judges,”
just
roll
with
it).
So
why
can’t
New
York
collect
on
the
disgorgement?
A
few
reasons
from
Justice
Peter
Moulton’s
opinion,
which
serves
as
the
closest
to
a
clear
majority
opinion
in
this
matter
(we’re
going
to
omit
citations
in
all
these
quotes
for
ease
of
reading):
However,
the
disgorgement
order
here
departs
from
the
traditional
equitable
limitations
identified
in
Liu
in
two
ways:
first,
it
does
not
provide
recompense
to
any
victims,
and
second,
it
imposes
joint
and
several
liability.
Accordingly,
the
instant
disgorgement
order
constituted
a
fine.
One
of
the
longstanding
issues
with
this
case
—
which
Trump’s
people
have,
inaccurately,
claimed
as
fatal
—
is
the
lack
of
a
victim
who
lost
any
money.
At
the
risk
of
oversimplification,
the
theory
of
the
case
is
that
the
Trump
Organization
routinely
lied
about
value
to
secure
favorable
terms,
financial
institutions
went
along
with
this
either
because
they
were
genuinely
duped
or
didn’t
care,
and
ultimately
the
bets
paid
off.
The
state’s
argument
is
that
it
doesn’t
matter
if
a
bank
called
on
a
3-7
offsuit
and
managed
to
hit
a
straight,
it’s
still
fraudulent
for
a
New
York
business
to
conduct
business
this
way
because,
eventually,
the
cards
aren’t
going
to
fall
and
the
state
is
going
to
end
up
holding
the
bag.
But
can
you
actually
have
“disgorgement”
when
no
one
lost
anything?
The
appellate
court
said
no.
Likewise,
it’s
hard
to
call
it
disgorgement
when
it’s
joint
and
severable
because
how
can
an
individual
party
be
liable
for
returning
assets
they
personally
didn’t
pocket?
And
if
it’s
a
punitive
fine,
the
Eighth
Amendment
requires
it
not
be
unduly
excessive.
The
opinion
also
questioned
whether
the
award,
even
as
a
fine,
accurately
reflected
the
losses.
Additionally,
a
fine
cannot
be
proportionate
to
the
offense
unless
it
is
reasonably
calculated
to
encompass
only
the
actual
proceeds
that
defendants
realized
from
their
fraud.
To
obtain
disgorgement,
the
Attorney
General
bears
the
initial
burden
of
establishing
“a
reasonable
approximation
of
profits
causally
connected”
to
defendants’
violations.
Where
both
legal
and
illegal
conduct
is
implicated,
the
Attorney
General
“must
distinguish
between
the
legally
and
illegally
derived
profits.”
These
assets
were
worth
something,
so
the
deals
were
likely
going
to
happen
on
some
terms.
Assuming
this
opinion
ends
up
carrying
the
day
on
appeal,
the
Trump
Organization
will
end
up
coughing
up
some
amount
of
money
—
as
a
fine
—
but
nowhere
near
the
current
figure.
End
of
good
news
for
Trump.
On
the
record
before
us,
we
find
that
Supreme
Court
properly
exercised
its
discretion
in
awarding
injunctive
relief.
Defendants
persistently
and
intentionally
inflated
the
asset
values
reported
in
their
SFCs
from
2014
to
2021,
for
numerous
assets
per
each
SFC.
Despite
the
wrongfulness
of
their
conduct,
Supreme
Court
believed
that
defendants
lacked
remorse.
Indeed,
when
asked
at
trial
whether
he
still
approved
of
McConney
and
Weisselberg’s
work
in
preparing
the
SFCs,
President
Trump
stated
“[y]ou
haven’t
shown
me
anything
that
would
change
my
mind.”….
Additionally,
the
independent
monitor
noted
in
her
most
recent
report
to
Supreme
Court
that,
among
other
things,
the
Trump
Organization
lacked
sufficient
internal
controls
over
financial
reporting.
Without
adequate
internal
controls,
Supreme
Court
reasoned
that
the
Trump
Organization
“does
not
have
the
ability
to
.
.
.
protect
against
fraud
in
the
future.”
Considering
these
factors,
Supreme
Court
had
ample
bases
to
find
that
defendants
would
continue
to
engage
in
fraudulent
and
illegal
activity.
It’s
rarely
a
win
when
the
opinion
repeatedly
cites
your
“fraudulent
and
illegal
activity.”
But
then
again,
this
is
the
guy
who
claims
the
Mueller
Report
was
an
exoneration,
a
claim
specifically
disproven
by…
the
Mueller
Report.
Trump
has
never
actually
lost
in
his
own
mind,
he
just
wins
at
varying
levels
of
catastrophic.
While
the
two
justices
seeking
a
new
trial
were
willing
to
drop
their
fight
for
the
sake
of
moving
the
case
along
to
a
higher
court,
Justice
Friedman
wanted
to
give
Trump
the
total
victory
he
craved,
by
denying
that
the
law
as
written
even
applies
to
the
Trump
Organization’s
dealing
with
banks.
This
action
essentially
turns
section
63(12)
on
its
head.
The
leniency
with
which
the
courts
have
construed
the
requirements
for
pleading
and
proving
fraud
under
section
63(12)
–
a
leniency
that
has
been
extended
for
the
purpose
of
facilitating
the
use
of
the
provision
to
prevent
the
exploitation
of
unsophisticated
consumers,
investors
and
small
businesses
–
is
here
being
used
by
Attorney
General
Letitia
James
to
apply
section
63(12)
to
a
scenario
to
which
that
provision
has
never
before
been
applied,
or
even
thought
to
apply.
Specifically,
the
Attorney
General
in
this
case
has
utilized
the
flexibility
afforded
her
under
section
63(12)
to
unwind
complex
financial
transactions
that
were
negotiated,
face-to-face
and
at
arm’s
length,
between
a
privately
held
real
estate
organization
–
that
of
defendant
Donald
J.
Trump,
the
former
president
and
current
president
–
and
ultra-sophisticated
banks,
insurance
companies
and
government
entities,
which
were
advised
by
equally
sophisticated
lawyers,
accountants,
and
other
business
professionals.
What
happened
to
textualism?
There’s
nothing
in
63(12)
that
magically
limits
it
to
“only
if
the
victim
is
unsophisticated.”
There
are
good
policy
reasons
for
the
government
to,
generally
speaking,
not
use
taxpayer
funds
to
vindicate
rich
businesses
that
could
fight
their
own
fraud
battles.
But
the
threat
to
the
state
isn’t
necessarily
that
the
Trump
Organization
took
advantage
of
banks,
it’s
that
an
organization
routinely
pursuing
fraudulent
business
practices
screws
the
whole
business
environment.
Friedman’s
interpretation
is
the
sort
of
deregulatory
fan
fiction
that
weaponizes
complexity
by
removing
any
avenue
to
combat
a
fraud
that
isn’t
obvious
enough
for
Deutsche
Bank
to
understand
or
care
enough
about
to
challenge.
Fraud
that
happens
to
work
out
to
the
benefit
of
both
sides
can
still
be
fraud
and
can
still
have
external
impacts
on
the
market.
Liquidity,
pensions,
insurance
reserves…
there
are
a
lot
of
reasons
why
a
state
would
authorize
an
Attorney
General
to
step
in
there.
Nothing
in
63(12)
precludes
such
a
case.
It’s
all
just
vibes
Friedman
reads
into
the
plain
text
of
the
statute.
You’d
think
Trump
would
at
least
tacitly
understand
the
argument
that
the
government
can
pursue
fraudulent
real
estate
representations
even
if
the
lenders
don’t
care
since
that’s
THE
SAME
LOGIC
AS
THE
PROBE
HE’S
LODGED
AGAINST
LETITIA
JAMES.
That
case
seems,
at
this
point,
to
be
such
garbage
that
his
prosecutor
is
begging
James
not
to
force
him
to
go
to
a
trial,
but
it’s
comical
hypocrisy
to
act
like
this
is
an
unheard
of
theory.
He
also
challenges
the
facts
of
the
case:
…the
one
objective
error
of
fact
that
the
Attorney
General
has
identified
that
was
used
as
a
basis
for
a
valuation
in
the
SFCs
–
the
multiplication
of
the
actual
size
of
the
Triplex
by
three
–
has
not
been
shown
by
the
Attorney
General
to
have
been
anything
other
than
an
unintentional
error…
If
Justice
Friedman
is
out
there,
I’m
currently
selling
the
Brooklyn
Bridge
and
can
get
him
a
good
deal!
Who
amongst
us
hasn’t
accidentally
added
20,000
square
feet
to
our
paperwork?
It’s
just
too
easy
to
overlook
something
as
trivial
as…
the
size
of
a
fucking
car
dealership
when
describing
our
homes.
These
are
just
not
serious
people.
(Opinion
on
the
next
page…)
Joe
Patrice is
a
senior
editor
at
Above
the
Law
and
co-host
of
Thinking
Like
A
Lawyer.
Feel
free
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Follow
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