Appeals court judges expose flaws in Tish James’ ambitious case against Trump

Consumer protection law is created to safeguard the public from unethical business practices. Its purpose isn’t to give state bureaucrats control over every private transaction, especially among experienced financial players.

This message was evident during last week’s appeals court hearing in the state Attorney General Letitia James’s heavily politicized civil-fraud case against Donald Trump.

Judge Arthur Engoron, an elected Democratic official, ordered Trump to pay almost half a billion dollars in fraud damages despite the absence of any fraud victims.

James, seeking to use her powers against Trump, invoked a consumer protection statute — Executive Law §63(12) — meant to combat “persistent fraud” practices that harm the public in a broad sense without targeting individual victims.

However, the law was not designed for the AG to become the ultimate regulator of all business activities in New York.

Trump’s case reveals the misuse of §63(12) when stretched too far.

Despite allegations of persistent fraud, Trump’s counterparts, such as banks and insurers, did not suffer any loss. In fact, they profited from the transactions.

James’ pursuit of damages without actual victims showcased the arbitrary nature of her case.

At a recent oral argument, a panel of judges expressed concerns about James overstepping her jurisdiction and meddling in private transactions between knowledgeable financial entities.

While an outcome is uncertain, there is a possibility of a reduction in the excessive penalty imposed on Trump.

Ultimately, the outcome of this case could have broader implications for New York City as a global business hub.

Andrew C. McCarthy is a former federal prosecutor.