A New York appellate court has overturned the $500 million civil fraud penalty imposed on former President Donald Trump in a case brought by Attorney General Letitia James. The court ruled the fine violated the Eighth Amendment’s prohibition against excessive penalties, delivering a major legal victory to Trump.

The penalty stemmed from James’s 2022 lawsuit, which accused Trump and his company of inflating property values to secure favorable loans and insurance. While a trial court found Trump liable and imposed the massive fine, the appellate court left the fraud finding intact but wiped away the financial judgment. Trump’s legal team had argued the penalty was unconstitutional and disproportionate.

Trump celebrated the ruling as a victory over political persecution, calling the lawsuit part of a broader “lawfare” campaign. Supporters praised the decision as proof of prosecutorial overreach, while critics noted that the fraud finding remains and Trump’s conduct was clearly established in court.

The ruling eases pressure on Trump’s business empire. Analysts said the original penalty could have forced property sales or business restructuring. The reversal now gives the Trump Organization more financial flexibility amid ongoing legal challenges. This decision also fits into a pattern of courtroom wins for Trump, including a Supreme Court ruling expanding executive power and loosened legal restrictions on his businesses.

Meanwhile, Attorney General James now faces scrutiny of her own. A federal investigation is examining potential mortgage fraud involving her personal properties. A Justice Department working group has urged her to resign as a gesture of good faith to help bring the probe to an end.