NEW YORK (AP) 鈥� Some judges in a New York appeals court appeared receptive Thursday to possibly reversing or reducing a civil fraud judgment that stands to cost Donald Trump nearly $500 million. One judge called the former president鈥檚 penalty 鈥渢roubling鈥� and wondered if the state鈥檚 policing of private business transactions was 鈥渄eterrence鈥� or 鈥渕ission creep.鈥�
A five-judge panel in the state鈥檚 intermediate appeals court in Manhattan quizzed lawyers representing Trump and the New York attorney general's office during oral arguments in the Republican presidential nominee's fight to get the Feb. 16 verdict overturned.
At times the judges appeared dubious of Trump鈥檚 side, too. Appeals court judges often ask pointed questions of both sides to test their arguments.
Trump is asking the court to reverse that Trump on paperwork given to to make deals and secure loans. The verdict cut to the core of Trump鈥檚 wealthy, businessman persona. Three of the five judges who heard Thursday鈥檚 arguments must agree in order to alter the outcome.
Trump did not attend the hearing, which was held in an 鈥� a far cry from the sterile courthouse where he spent weeks as a criminal defendant in his hush-money felony case earlier this year.
A ruling could come before Election Day
In the past, Trump has decried the lawsuit's outcome as 鈥渆lection interference鈥� and accused Engoron of punishing him for 鈥渉aving built a perfect company.鈥�
The appeals court, known as the Appellate Division, typically rules about a month after arguments, meaning a decision could come before Election Day, Nov. 5. It could uphold the trial verdict, reduce or overturn it.
Trump lawyer D. John Sauer argued that the lawsuit brought by Attorney General Letitia James, a Democrat, stretched the state's consumer protection laws, insinuating the government into transactions where there were 鈥渘o victims" and 鈥渘o complaints.鈥�
Trump did business with 鈥渟ophisticated counterparties" that performed their own due diligence rather than relying solely on Trump's financial statements 鈥� documents that Engoron ruled wildly inflated his net worth.
The case, Sauer said, 鈥渋nvolves a clear cut violation of the statute of limitations." Judge Llin茅t Rosado noted that the case involved some 鈥渓oans which closed long ago.鈥�
If the verdict is allowed to stand, he argued, "people can鈥檛 do business in real estate" without fearing they'll face similar scrutiny, Sauer said.
Lawyers and the judges volley over consequences
The state's deputy solicitor general, Judith Vale, countered that 鈥渢here was absolutely a public impact and a public interest here,鈥� noting that lenders including Deutsche Bank incurred undue risk based on Trump's representations.
But Judge Peter H. Moulton questioned if James' office was engaging in 鈥渕ission creep,鈥� and whether the law she sued Trump under had "morphed into something that it was not meant to do.鈥� At the same time, Moulton suggested the lawsuit and actions like it may deter similar actions going forward, reasoning that 鈥渋n the future, some deal might not go down well and someone would be harmed by that.鈥�
Judge David Friedman drew a distinction between Trump's case and others that were brought under the law in which corporate actions harmed large groups of people. One stemmed from the 2008 collapse of investment firm Lehman Brothers and another involved consumers taking out home loans they could not afford.
鈥淚t hardly seems that justifies bringing an action鈥� against Trump, Friedman said. 鈥淵ou don't have anything like that here.鈥�
Judge John Higgitt asked if the appeals court should consider 鈥済uardrails鈥� to prevent James from 鈥済oing into an area that wasn鈥檛 intended for her jurisdiction.鈥�
Later, Moulton questioned Vale about Engoron's hefty punishment, observing that 鈥渢he immense penalty in this case is troubling.鈥�
Vale explained that, under the law, the judge was permitted to essentially take away whatever Trump gained from transactions based on his inflated financial statements. The gains included profits from selling properties like his Washington, D.C. hotel and savings from lower loan interest rates.
鈥淭hat is an enormous benefit that they got from the misconduct, and it is not an excuse to say, 鈥榳ell, our fraud was really successful, so we should get some of the money,鈥欌�� Vale argued.
The state argues there is ample evidence backing the verdict and that Trump鈥檚 appeal is based in part on arguments that Engoron and the Appellate Division have rejected before.
Both values and penalties ballooned
Sauer, a former Missouri solicitor general, previously argued Trump鈥檚 successful presidential immunity case before the U.S. Supreme Court.
Ruling after a 2 1/2-month trial, had padded his net worth by several billion dollars on annual financial statements by overvaluing assets including his golf courses and hotels, his Mar-a-Lago estate in Florida and his Trump Tower penthouse in Manhattan.
Trump and his co-defendants are also challenging Engoron鈥檚 decision to rule, even before testimony had begun, that the state had proven that Trump had fraudulently inflated his financial statements. The judge Trump and the other defendants to pay $363.9 million in penalties 鈥� a sum that has now grown with interest to more than $489 million.
Trump posted a to halt collection of the judgment and prevent the state from seizing his assets while he appeals. The bond guarantees payment if the judgment is upheld. If Trump wins he鈥檒l get the money back.
If either side doesn鈥檛 like the outcome, it can ask the state鈥檚 highest court, the Court of Appeals, to consider taking the case. Trump has vowed to fight the verdict 鈥渁ll the way up to the U.S. Supreme Court if necessary.鈥�
Jill Colvin And Michael R. Sisak, The Associated Press
