New York’s financial appeal requirements mean that filing appeals could destroy Trump *UPDATED*
Last week, an uber-partisan judge in New York imposed an unprecedented judgment against Trump that, with punitive damages, fees, and costs, equals almost $450,000,000. Adding insult to injury, New York’s extreme bonding laws for taking appeals mean that Trump may be financially destroyed challenging a judgment outside of all norms, as well as the extremist judgment for E. Jean Carroll.
To recap, what makes the judgment so outrageous is that:
- Trump’s loan applications were entirely consistent with ordinary and reasonable property developer practices in New York;
- The banks, which were conversant with these practices, conducted their due diligence so they were not the victims of any misleading statements and, indeed, loved having Trump as a debtor;
- Trump repaid the loans in full;
- As an example of his bias, the judge relied upon a tax assessor’s appraisal of $18-27.6 million for Mar-a-Lago’s value, without regard to its value both as a moneymaking concern or a prime piece of beachfront property;
- The judgment was inconsistent in an outsized way with any previous New York judgments.
Naturally, given Judge Engoron’s open bias, not to mention his peculiar definition of “fraud,” which didn’t require any actual fraud, Trump intends to exercise his right to file an appeal—and it is a right, not a privilege, in New York.
Appeals as of right. An appeal may be taken to the appellate division as of right in an action, originating in the supreme court or a county court:
1. from any final or interlocutory judgment except one entered subsequent to an order of the appellate division which disposes of all the issues in the action…
Trump’s problem is that New York is one of a handful of states that requires posting the full amount of the judgment to appeal. I found a surety website that lists the laws in every single state when it comes to the amount that someone appealing a judgment must lodge with the court, whether from his assets or by getting a surety bond.
Donald Trump (edited) by Gage Skidmore. CC BY-SA 2.0.
The point of a bond is to ensure that the person who has lost a civil case doesn’t use a lengthy appeal process to dissipate or hide assets, depriving the prevailing party of money that a court has determined is legally his. However, as with everything, there’s a balance, or at least there should be.
In Connecticut, Maine, Massachusetts, New Hampshire, and Vermont, the appellant does not need to file any bond. These states place the entire risk of the appeal on the prevailing party. If the judgment is affirmed, the judgment debtor may be already broke or have vanished.
However, most states recognize that, when judgments are incredibly large, the trial court system may be broken. We know that juries, which are playing with other people’s money, will go off the reservation and impose loopy actual or punitive damages. As Judge Engoron shows, leftist judges will also go off the reservation. These states have imposed caps on bonds, ranging from $25 million (the most common) to $100 million (the second most common) to $250 million (an outlier in Illinois).
A handful of states have no caps, but most of these states grant judges the discretion to lower bonds when it’s manifest that the requirement is unfair, given the relative position of the parties to the case.
California is an exceptional outlier, for it requires a bond of double the amount of the judgment (although surety companies need to post only one-and-a-half of the judgment’s amount). There are also no statutory provisions for judicial discretion.
New York isn’t as bad as California, but it’s also an outlier. It has no cap and no statutory provisions for judicial discretion. There is no way out of the bond requirement if you want to appeal.
Jonathan Turley explains that New York’s law means that Trump may be financially destroyed if he appeals:
For Donald Trump, the demand for $355 million plus $100 million in interest could force a fire sale on properties to pony up just the deposit.
[snip]
Putting aside the merits of this judgment, the threshold deposit rule magnifies the unfairness of this New York law that does not require that anyone actually lose money to claim hundreds of millions from a company.
One can argue that, if upheld, any insolvency is the fault of the company. However, this rule can force insolvency just to seek review of a judgment.
[snip]
So, by making the fine so large, Engoron not only makes an appeal difficult, but could guarantee that Trump will lose tens of millions even if his judgment is dramatically reduced or tossed out.
Turley notes that Trump is also dealing with the unprecedented and obscene judgment in favor of E. Jean Carroll. Trump has only 30 days to raise the money for these appeals, which may mean liquidating his properties at fire sale prices. In other words, if you’re the victim of a grotesquely wrongful judgment, the very nature of that wrongful judgment may make it impossible for you to exercise your right to appeal.
However, the glee with which New York’s pols view Trump’s dilemma may prove their undoing. Not only are truckers threatening a New York boycott, but businesses have now realized nothing can stop them from being next on the chopping block. Standard business practices for real estate developers in New York have just been turned into fraud. The risk of doing business there, especially in a collapsing commercial real estate market, isn’t worth it. That doesn’t even count all the individual Americans who decide to stop doing business with New York.
A friend did have a fun suggestion, though. If every one of the 74,223,975 people whose vote for Trump managed to get counted in the 2020 election sends him $5, that’ll be $371,119,875, which should go a long way to helping out the man who put it all on the line for America.
UPDATE: A gal named Elena Cardona has set up a GoFundMe to help with the judgment against Trump. It’s raised over $800,000. My only question is how long it will be before GoFundMe shuts it down. Also, Trump intends to fight.