Originally a comment by Screechy Monkey on When fraudulently inflating goes wrong.

It depends how you look at it, I suppose. Disgorgement is a funny remedy in some ways.

Usually civil damages are compensatory — the court is attempting to make the plaintiff whole for a loss it suffered. That’s not what this is, of course. As the Trump defense team insisted repeatedly, the plaintiff in this case (the state of New York) didn’t suffer any monetary loss here. The state can say it was “harmed” in the sense that it has a general interest in promoting fair and honest business practices in its jurisdiction, but that’s a rather amorphous type of harm. The banks who loaned the money all got paid back. Arguably they were “harmed” in the sense that they could have charged a higher interest rate had they known the true facts, but in any event they didn’t sue. We can hypothesize that, but for Trump’s fraud, some other buyer would have purchased these buildings and sold them for a profit, but there’s no way to say who that would have been or what profit they would have made.

A lot of media accounts are referring to the judgment as a “penalty,” and while I wouldn’t say that’s inaccurate, it’s also not the kind of “punitive damages” that people are used to, as in what E. Jean Carroll got.

Did the Trump defendants simply get put back to where they would have been without the fraud? Arguably. But arguably not. The injunctive relief — the restrictions on defendants’ ability to run their business, or any business in NY — certainly put them in a worse position. The monetary component maybe does, because it’s not necessarily true that Trump couldn’t have purchased the properties honestly and still made some or all of the same profits. Or at a minimum, they could have put their funds and collateral to use on other projects where they might have made at least some profit. That’s not unusual in disgorgement cases — essentially, the defendant often loses a lot of the “benefit of the doubt” about what would have happened in the alternative world where defendant behaved properly.

The prejudgment interest is not insignificant, either. And of course there’s the attorneys’ fees and reputational loss (though at this point, Trump’s business reputation may be as low as it can go, and/or a fraud judgment against Trump may help by rallying MAGA donors as much at it hurts). Finally, there’s the timing issue: getting whacked with a judgment of this size all at once, which the Trump defendants apparently lack the liquidity to pay or bond, is worse than simply getting less profits over a period of years.

So, I wouldn’t say that the Trump defendants can just brush this off as a “heads we win, tails we draw, oh well, it came out tails, no big deal, we’d do it all over again if we could” situation. But I wouldn’t blame anyone for feeling this isn’t a big punishment.