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The First Amendment Threat in the Trump Civil Case

Philip Hamburger
Chief Executive Officer

November 1, 2023

Can the government penalize someone for an inaccurate statement that wasn’t made with bad intent, recklessness or negligence, and that didn’t cause concrete harm to an identifiable third party? That’s the First Amendment question underlying the civil-fraud suit against Donald Trump. The stakes are high for the former president—and for the rest of us.

New York’s Attorney Gen. Letitia James has charged Mr. Trump under the state’s Executive Law for allegedly overstating his business’s real-estate assets. The statute, however, has long been constitutionally suspect. Although historically only courts or their grand juries could issue subpoenas, the law grants the state’s attorney general a subpoena power to fish through private documents. Worse, the statute authorizes Ms. James to bring a civil-fraud suit for inaccurate statements discovered in the process.

Common-law fraud doesn’t punish mere inaccuracy. It requires the plaintiff to prove the defendant knowingly made a false statement of material fact with intent to deceive, and that the victim was injured by his reliance on the false statement.

The Executive Law, by contrast, defines fraud to include something as slight as a “false pretense” in the course of business—adding only that the statement be “repeated” or otherwise “persistent.” Whereas the degree of culpability typically required for fraud is intent to deceive, the Executive Law requires neither intent, recklessness or negligence. This means the law can punish mere untruth without any prior culpability or subsequent concrete harm.

As Judge Arthur Engoron explained in Mr. Trump’s case in September, a “lack of fraudulent intent” and a “failure to allege losses” aren’t relevant under the Executive Law. He even imposed sanctions on Mr. Trump’s lawyers, fining them $7,500 each for questioning these points and declaring their doubts “frivolous.” Judge Engoron didn’t pause to consider that in targeting mere inaccuracy—let alone on the basis of a nonjudicial fishing expedition—the Executive Law might be profoundly dangerous, even unconstitutional.

The statute is utterly disproportionate, authorizing the court to shut down a defendant’s entire business—simply for inaccuracy. The law is so draconian that few have challenged it. What defendant would want to dispute the attorney general’s authority given the risk of retaliation?

Mr. Trump’s case could therefore become an important precedent. In U.S. v. Alvarez (2012), the Supreme Court emphatically declared that the Constitution “rejects the notion that false speech should be in a general category that is presumptively unprotected.” The court now needs to clarify that laws against mere inaccuracy are fully protected, even when regulating business speech. This is especially necessary in New York, where attorneys general have interpreted the Executive Law to reach dissenting scientific and political opinion, notably in their proceedings against  ExxonMobil for its climate research.

To understand the Executive Law’s threat to free speech, consider that even perjury isn’t defined simply in terms of falsity. The government must prove that a defendant willfully recited under oath what he didn’t believe to be true. The crime isn’t merely the falsity of his statement but also his intent to tell a falsehood.

The subsequent harm is generic—i.e., damage to society, not a concrete injury to a specific person—but the government must show, beyond a reasonable doubt, that the defendant acted with bad intent. Moreover, perjury’s domain is confined. Rather than generally regulate private speech, perjury is limited to sworn court testimony and, by extension, statements made to officials.

Strict liability offers another contrast. This is liability without culpability—that is, without intent, recklessness or mere negligence. It ordinarily is reserved for especially dangerous conduct, not words alone, and requires proof that the hazardous conduct caused actual harm. The Executive Law imposes strict liability simply for words, without proof of tangible damage to any individual.

Although Ms. James’s case against Mr. Trump concerns his real-estate valuations, much more is at stake. Progress depends on the willingness of scientists and the rest of us to try out conclusions that may be wrong. By targeting merely inaccurate speech, the Executive Law thus undermines the foundations of scientific inquiry and intellectual exploration. As evidenced by the state’s proceedings against ExxonMobil, the statute endangers the commercial exploration of scientific ideas and threatens the progressive improvement of the human condition.

Rarely has there been a better opportunity to challenge the Executive Law for its assault on our freedom of speech. Whatever New York’s attorney general may say, we have a right to be wrong. Mr. Trump should ask the courts to vindicate that right, for his sake and ours.

Originally Published in The Wall Street Journal