People of NY V Trump (2023-00717)
People of NY V Trump (2023-00717)
553 PEOPLE OF THE STATE OF NEW YORK, by LETITIA Index No. 452564/22
JAMES, ATTORNEY GENERAL OF THE STATE OF Case No. 2023-00717
NEW YORK,
Plaintiff-Respondent,
-against-
Habba Madaio & Associates, New York (Alina Habba of counsel), and Continental PLLC,
Tallahassee, FL (Christopher M. Kise of the bar of the State of Florida, admitted pro hac
vice, of counsel), for Donald J. Trump, Allen Weisselberg, Jeffrey McConney, Donald
Trump, Jr., Eric Trump, The Trump Organization, Inc., Trump Organization LLC, The
Donald J. Trump Revocable Trust, DJT Holdings LLC, DJT Holdings Managing
Member LLC, Trump Endeavour 12 LLC, 401 North Wabash Venture LLC, Trump Old
Post Office LLC, 40 Wall Street LLC and Seven Springs LLC, appellants.
Troutman Pepper Hamilton Sanders LLP, New York (Bennet J. Moskowitz of counsel),
for Ivanka Trump, appellant.
Letitia James, Attorney General, New York (Judith N. Vale of counsel), for respondent.
Order, Supreme Court, New York County (Arthur F. Engoron, J.), entered
January 9, 2023, which denied defendants’ respective motions to dismiss the complaint,
defendant Ivanka Trump and the claims against the remaining defendants to the extent
they accrued prior to July 2014 (with respect to those defendants subject to the August
2021 tolling agreement) and February 2016 (with respect to those defendants not
subject to the August 2021 tolling agreement), and to modify the caption to reflect that
Donald J. Trump, Jr., is sued both personally and in his capacity as trustee for the
fraudulent and illegal commercial conduct in New York. Under this provision,
“[w]henever any person shall engage in repeated fraudulent or illegal acts or otherwise
of business, the attorney general may apply, in the name of the people of the state of
New York, to the supreme court of the state of New York” for disgorgement and other
equitable relief (Executive Law § 63[12]). The Attorney General is not suing on behalf of
a private individual, but is vindicating the state’s sovereign interest in enforcing its legal
code – including its civil legal code – within its jurisdiction (see Alfred L. Snapp & Son,
Inc. v Puerto Rico ex rel. Barez, 458 US 592, 601 [1982]; see also People v Coventry
First LLC, 52 AD3d 345, 346 [1st Dept 2008] [finding that claims including a claim
under Executive Law § 63(12) “constituted proper exercises of the State’s regulation of
businesses within its borders in the interest of securing an honest marketplace”], affd 13
NY3d 108 [2009]). We have already held that the failure to allege losses does not
require dismissal of a claim for disgorgement under Executive Law § 63(12) (see People
v Ernst & Young LLP, 114 AD3d 569, 569-570 [1st Dept 2014]). Finally, in authorizing
the Attorney General to sue for any repeated or persistent fraud or illegality, the
Legislature necessarily “invested that party with authority to seek relief in court”
(Matter of World Trade Ctr. Lower Manhattan Disaster Site Litig, 30 NY3d 377, 384
Defendants’ arguments that the Executive Law § 63(12) claims are governed by a
three-year limitations period are unavailing (see CPLR 213[9]). We have already found
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that CPLR 213(9) applies retroactively (Matter of People v JUUL Labs, Inc., 212 AD3d
414, 416-417 [1st Dept 2023]). We reject defendants’ invitation to reconsider our
decision that retroactive application is inconsistent with certain decisions of the Court of
Appeals (see id. at 416; People v Allen, 198 AD3d 531, 532 [1st Dept 2021], lv dismissed
38 NY3d 996 [2022], lv denied, appeal dismissed 39 NY3d 928 [2022]). We also find
that retroactive application of CPLR 213(9) – enabling the Attorney General to continue
lengthy and complex investigations, which often cannot begin until years after the
conduct at issue, and which may have been extended in reliance on the six-year statute
of limitations – was a reasonable measure to address an injustice (see World Trade Ctr.,
30 NY3d at 399-400; PB-36 Doe v Niagara Falls City Sch. Dist., 213 AD3d 82, 84-85
[4th Dept 2023]; cf. Brothers v Florence, 95 NY2d 290, 299-300 [2000] [describing
orders tolled statutes of limitations during the pandemic (see Murphy v Harris, 210
AD3d 410, 411 [1st Dept 2022]), and that this toll was properly authorized (Brash v
Applying the proper statute of limitations and the appropriate tolling, claims are
time barred if they accrued – that is, the transactions were completed – before February
6, 2016 (see Boesky v Levine, 193 AD3d 403, 405 [1st Dept 2021]; Rogal v Wechsler,
135 AD2d 384, 385 [1st Dept 1987]). For defendants bound by the tolling agreement,
claims are untimely if they accrued before July 13, 2014. The continuing wrong doctrine
does not delay or extend these periods (see CWCapital Cobalt VR Ltd. v CWCapital
Invs. LLC, 195 AD3d 12, 19-20 [1st Dept 2021]; Henry v Bank of Am., 147 AD3d 599,
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601-602 [1st Dept 2017]). We leave Supreme Court to determine, if necessary, the full
range of defendants bound by the tolling agreement. The record before us, however,
indicates that defendant Ivanka Trump was no longer within the agreement’s definition
of “Trump Organization” by the date the tolling agreement was executed (see Johnson v
Proskauer Rose, LLP, 2014 NY Slip Op 30262[U], *19-22 [Sup Ct, NY County 2014],
affd 129 AD3d 59 [1st Dept 2015]). The allegations against defendant Ivanka Trump do
not support any claims that accrued after February 6, 2016. Thus, all claims against her
Trust, DJT Holding, Managing Member, Trump Endeavor 12 LLC, and 401 North
Wabash Venture LLC have their principal place of business in New York (see Cruz v City
of New York, 210 AD3d 523, 524 [1st Dept 2022] [“General jurisdiction exists over a
corporate entity only in the state(s) in which it is incorporated and has its principal
place of business”]; see also Ford Motor Co. v Montana Eighth Jud. Dist. Ct., 141 S Ct
1017, 1024 [2021]; compare Chufen Chen v Dunkin’ Brands, Inc., 954 F3d 492, 500 [2d
Cir 2020]). Thus, plaintiff has made a “sufficient start” in demonstrating personal
jurisdiction over these defendants (see Matter of James v iFinex Inc., 185 AD3d 22, 30
[1st Dept 2020]). Although the Trust should have been sued through its trustees (see
e.g. Liveo v Hausman, 61 Misc 3d 1043, 1044-1045 [Sup Ct, Kings County 2018]), the
record indicates that the sole trustee is a defendant in this case and has been fully able
to represent the Trust’s interests. Thus, relief for this error should be limited to
amending the caption (see Harlem 2201 Group LLC v Ahmad, 2018 NY Slip Op
30588[U], *44 [Sup Ct, New York County 2018]; see also Matter of People v Leasing
Expenses Co. LLC, 199 AD3d 521, 522 [1st Dept 2021] [affirming relief under Executive
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Law § 63(12) against family trusts and trustees, where the defendants were trustees in