A New York appeals court has overturned a nearly $500 million civil fraud penalty against former President Donald Trump. The ruling, issued on Thursday, allows the case to proceed while maintaining Trump's liability for fraud.

The court's decision was not unanimous. The judges agreed that the penalty, which was described as a disgorgement order, was excessive and violated the Eighth Amendment of the United States Constitution. In their opinion, the judges stated, "While the injunctive relief ordered by the court is well crafted to curb defendants’ business culture, the court’s disgorgement order, which directs that defendants pay nearly half a billion dollars to the State of New York, is an excessive fine that violates the Eighth Amendment."

In February 2024, a New York judge had ordered Trump, along with two of his sons and other executives, to pay approximately $364 million in what was termed "ill-gotten gains," with the total amount including interest rising to about $527 million. The original judgment placed nearly 98% of the financial burden on Trump.

The New York attorney general now has the option to appeal this latest decision to the state's highest court. This development marks a significant moment in the ongoing legal battles surrounding Trump and his business practices.