Donald Trump Claims He Wanted a Jury in His Civil Fraud Case. Was He Entitled to One?
By Emily Saul October 03, 2023 at 06:12 PM
Donald Trump claims he was unfairly denied a jury trial in his business fraud case, and his lawyers never filed a jury demand. But observers think the law is murky enough to warrant litigation.
In the wake of statements made in court Monday by an attorney for Donald Trump, observers ask: did his defense team forget to ask for a jury?
The former president is facing a bench trial on business fraud claims that New York Attorney General Letitia James brought under Executive Law § 63(12)—specifically that Trump and his family of businesses inflated the value of various properties in New York City and other locales.
James’ office filed a note of issue in the case in July 2023, and indicated they sought a nonjury trial. The defense never filed any objection or response.
A source with knowledge of the defense team’s decision said they never filed a notice of issue because they believed they were precluded from that relief under § 63(12).
But during her opening statements, Trump attorney Alina Habba told Manhattan Supreme Court Justice Arthur Engoron, who is overseeing the case, “I know my client did want a jury.”
Trump echoed the sentiment, telling reporters as he left the courtroom Monday, that it was “very unfair” he didn’t have a jury.
Yet observers are divided on whether the defendants were entitled to a jury, as the AG’s office seeks to bar Trump from conducting business in New York and disgorgement of $250 million for allegedly misrepresenting his assets in order to secure better loans.
Engoron already found the defendants liable for persistent and repeated fraud, though the defense has vowed an appeal.
“It’s always been my understanding that if you get equitable relief you don’t get a jury trial,” said Michael Scotto of the Scotto Law Office. “It doesn’t matter what box you check.”
Others thought there was some wiggle room that could have been litigated.
“The common law rule in New York is that if the plaintiff combines equitable relief with a request for damages, then usually under the common law rule they are not entitled to a jury trial,” said Daniel Kornstein, a partner at Emery Celli Brinckerhoff Abady Ward & Maazel. “As for the $250 million in disgorgement, I’m not sure if that precludes the defendant from requesting a jury.”
Paul Golden, a partner at New York-based Coffey Modica, said it really came down to whether the case is a legal action to recover damages or if the underlying relief sought is equitable.
“Trying to bar someone from the right to operate a corporation, I would call that equitable relief,” Golden said. “But with disgorgement, that’s less clear to me…if disgorgement would be considered legal damages or equitable relief.”
Another lawyer with knowledge of the AG’s jurisdiction asked that his name not be used, but said litigators at his firm spent Tuesday debating over email whether or not Executive Law § 63(12) would have entitled the defense to a jury at all.
Regardless, Kornstein, Golden and others told the New York Law Journal that proper civil procedure would have been to file a jury demand and litigate whether the money sought was more like damages than restitution.
“Sounds like they’re trying to backpedal,” said John McDonough, vice chairman of strategic risk and complex litigation at London Fischer. “They had an opportunity to file…if they didn’t know what the appropriate civil procedure was, that’s not the AG’s fault, that’s the fault of the attorneys for the defendants. They’re the ones that are charged with knowing the rules.”
Meanwhile, the trial against Trump, his eldest sons, and various Trump entities and staff proceeded Tuesday with direct and cross-examination of Donald Bender, a former Mazars partner who discussed the preparation of the statements of financial condition at issue in the case.
Trump attended court Tuesday, as did his son Eric. Tuesday morning, Trump on social media posted a photo of a member of Engoron’s staff—claiming the staffer was romantically involved with U.S. Senate Majority Leader Charles Schumer of New York.
The Law Journal is declining to name the staffer or post the image. The posting was taken down, and Engoron issued a gag order Tuesday afternoon in response.
“This morning, one of the defendants posted from a social media account a disparaging, untrue and personally-identifying post of a member of my staff,” the judge said. “Personal attacks on members of my court staff are unacceptable, inappropriate, and I will not tolerate them in any circumstance.”
“Consider this statement a gag order forbidding all parties from posting, emailing or speaking publicly about any of my staff,” he warned. “Failure to abide by this order will result in serious sanctions.”
As he left court Tuesday, Trump told the press he would return to court Wednesday. He did not respond to questions about the gag order.