Orin Kerr has published a thought-provoking response to my post several days ago critiquing the New York State $450 million civil fraud verdict against Donald Trump. Orin pointed out that New York State Attorney General Letitia James has brought other civil fraud actions against businesses, as well as the action that she brought against Donald Trump, which is helpful to know. But, in my view, the action civil fraud action brought against former President Donald Trump was a case of selective prosecution of a victimless crime brought because of Trump's political views, and because he is the de facto nominee of the Republican Party in the 2024 presidential election. Selective prosecution raises both due process and equal protection clause issues of the kind that led the Framers to ban Bills of Attainder and Ex Post Facto laws, which clauses are also relevant here.
Orin takes issue with my claim that New York Banks do not rely on borrowers' claims as to the amount of wealth that they own, but they do their own independent assessment of a borrowers' wealth so Trump's alleged fraud was a victimless crime. No harm no foul. Orin gives as a hypothetical the example of a person who drives home, legally drunk, arrives safely at his house, and then is arrested, and deprived of his driving license because he endangered the public. Orin argues this is perfectly appropriate behavior by the police because the drunk driver endangered the general public in violation of the law. By analogy, Orin argues that Trump endangered the New York real estate market by borrowing money while offering inflated valuations of his real estate assets, even though lenders were discounting his valuations and making their own independent valuations before issuing him loans all of which he repaid.
First, there is a fundamental difference between Orin's hypothetical and what Donald Trump actually did in this civil fraud case with no victim. Donald Trump signed contracts to borrow money from particular lenders who then did their own due diligence about the value of his real estate assets. There was privity of contract between Trump and the wealthy banks he borrowed from. Trump paid back all the money he borrowed, and there was no victim in the New York State civil fraud case who claimed he had been defrauded. But, when a person drives home legally drunk and makes it safely to his house and living room, there is no consent to his action by the other drivers and pedestrians on the road who the drunk driver endangered. There is no privity of contract to undertake the risk in Orin's hypothetical, whereas there was privity of contract between Trump and those who loaned him money. Witnesses testified that they would gladly lend Trump money in the future, and no one appeared who accused Trump of fraud except for the politically ambitious New York State Attorney General who was probably seeking to win over Democratic primary voters who pathologically hate Trump in a future gubernatorial or senatorial primary.
