The Fix Is In: The $455M 'Poison Pill' in Trump Judgment

AP Photo/Rebecca Blackwelli

Earlier today, I wondered why Republicans in Florida wanted to risk new avenues of lawfare that could boomerang on conservatives. After all, as radio host Trey Radel told Fox News Digital, all they need to do is look at how prosecutors and courts are manipulating the law to punish Donald Trump for deciding to run for another term as president. 

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And if you want to see how it gets played to the hilt, look no further than the massive penalty Judge Arthur Engoron levied on Trump -- and its implications. Engoron hit Trump with $354 million in penalties for 'fraud' that never cost anyone a dime, and added $100 million in interest to boot. And thanks to state law, Trump will have to put up the entire amount before he can appeal the verdict and judgment, Jonathan Turley explains this morning:

In the wake of the massive judgment against Donald Trump, many in New York are celebrating the prospect that the former president could be forced to sell off his property just to be able to appeal the $355 million judgment against him. While Trump has good grounds to object to this excessive fine, he still has to come up with close to a half billion dollars just to make his arguments to the New York Court of Appeals.

In order to file an appeal, the courts require a deposit for the full amount of the damages or a bond covering the full amount. Even with escrow options, the call for cash or collateral can be enough to put some executives in a fetal position.

It can be challenging enough for many companies drained from years of litigation. For Donald Trump, the demand for $355 million plus $100 interest could force a fire sale on properties to pony up just the deposit.

When Engoron announced the judgment, many wondered where Engoron came up with such a massive figure. After all, as even the trial made clear, no one lost any money in the deals under scrutiny in the case. At all. The lenders got repaid on time after having done their own due diligence on property valuation; no bank is just going to take a borrower's word for the value of the collateral. Even normal homeowners have to get an independent appraisal before selling or buying a house that will require a mortgage. The banks in this case all expressed eagerness to do more business with Trump, in fact, and now cannot under the terms of the deal (although they can with the Trump Organization if Trump steps away from his own business).

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So why impose such massive fines when there are no victims to compensate? Hey, don't take my word for that either -- take Engoron's:

So this is a pre-emptive penalty because no actual fraud occurred?

This quirk in New York's appellate procedure certainly offers one explanation. Engoron and AG Letitia James want to use the process as the punishment, and want to denude Trump of his legitimate wealth right in the middle of a political campaign they oppose. The massive fine will force Trump to either leverage these properties -- and with banks outside of New York, thanks to Engoron -- or to sell them off and put a large chunk of his wealth into the hands of New York for years

Did Engoron deliberately scale up the judgment to put Trump in this position? Let's just say that New York's system incentivizes it -- and based on his deportment in the trial, it's a reasonable conclusion.

It's tough to overstate the absurdity of this situation. Appellate courts exist to allow citizens to seek redress for injustices in trials, both criminal and civil, that would result in ruination otherwise. This stands that process on its head. To seek redress for an injustice in a New York courtroom, the citizen must participate in his ruination just to knock on the door -- even if an injustice has truly occurred. 

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Trump might have a better chance in federal court. This judgment flies in the face of the Eighth Amendment to the US Constitution, which explicitly foresaw governments attempting to do what Engoron and Letitia James did in this case. (If Trump didn't waive a jury trial, it violated the Seventh Amendment as well, egregiously so for the scope of the damages involved.) The Eighth Amendment states simply and clearly: "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted." 

How else can one view a $355 million judgment for fraud in which no one was defrauded? How else can one view a bond demand for $455 million just to ask the appellate court to address these and other myriad issues from the trial?

And if they can do this with Trump, who could possibly be exempted -- other than allies of the Attorney General, judges, and politicians?

Mark Steyn, another recent victim of a demonstrably unjust verdict, argues today that the US Supreme Court should reach down immediately and take up this case:

The manifest perversion of justice represented by this New York decision is so brazen that the US Supreme Court really should step in and end it now. But they won't, will they? For the last three decades, the American "right" has abandoned every other societal lever in order to focus on getting one more rock-ribbed "originalist" onto the big bench - to the point where we have a six-three so-called "conservative majority". At which point, we're suddenly assured that Chief Justice John Roberts' priority is to avoid the court being dragged into "controversy".

Which is odd. Because the purpose (indeed, the definition) of a court is to adjudicate "controversies". Look it up: it's in your Constitooti-tootin'-tution.

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The Supreme Court doesn't have jurisdiction in a state-court case -- yet. Presumably they will have jurisdiction shortly when Trump's team sues in federal court to have the bond (at least) quashed on Eighth Amendment grounds, and possibly the judgment as well. They can at least apply for a stay to freeze the situation in place so that time doesn't run out on the 30-day deadline for filing the appeal and bond, not to mention the daily interest on the judgment ticking upward of $90,000 or so. At that point, the Supreme Court will likely have to take it up as Letitia James and Trump push it up the chain quickly. 

Regardless of how one feels about Trump, Engoron's judgment and its implications for politicized lawfare are dangerous. And as Duane Patterson argued yesterday, the business community is watching -- and they're not going to trust Kathy Hochul's claim that Trump will be the last target of that politicized lawfare.  

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David Strom 11:20 AM | November 21, 2024
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