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New York Appeals Court Tosses Trump's $500 Million Fraud Judgment; Erik Menendez Appears Before Parole Board; California Democrats Poised to Pass Redistricting Plan. Aired 2-2:30p ET

Aired August 21, 2025 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[14:00:09]

BORIS SANCHEZ, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": A nearly half billion dollar judgment against President Donald Trump just thrown out on appeal. Details on what's next in New York civil fraud case. And happening right now, a California parole board considering whether to recommend Erik Menendez's release years after he and his brother Lyle were convicted of murdering their parents

BRIANNA KEILAR, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": And no swim warnings up and down the East coast were Hurricane Erin is sideswiping several states causing dangerous rip currents, flooding and beach erosion. We're following these major developing stories and many more, all coming in right here to "CNN New Central."

SANCHEZ: Today, President Donald Trump is claiming "total victory" after a New York Appeals Court threw out the half billion dollar civil fraud judgment against him, his family, and his company. Last year, a New York judge found that Trump and others engaged in years of business fraud by inflating the value of his properties to secure better lending and insurance deals. Let's go now live with CNN's Kara Scannell, who's in New York for us tracking this. Kara, the Appeals Court decision is leaving Trump liable for fraud, though now he doesn't have to pay the half billion dollars. Is that how this is going to work?

KARA SCANNELL, CNN CORRESPONDENT: That's correct, Boris. I mean, this is a big win for Trump because the financial penalty in this was immense. He had to ask an Appeals Court to initially lower it because he was having trouble raising enough money to post the bond. So now, this $500 million judgment is wiped out. Although the court did agree that Trump is liable for fraud. Now, this decision is more than 300 pages. There were five judges and there are three different decisions. And in the words of one of those opinions, there were profound disagreements among the judges who were hearing this case.

But what it comes down to is that they have thrown out the $500 million judgment, but Trump is still liable for fraud. And four of the judges also found that the New York Attorney General did have the authority to bring this case. That was a key point of contention within this, that saying that she had overreached and overstepped in her authority, while the judges is here saying that she didn't. And in the prevailing opinion, the judge's write, while the injunctive relief ordered by the court is well crafted to curb defendant's business culture, the court's discouragement order, which directs that defendants pay nearly half a billion dollars to the State of New York is an excessive fine that violates the Eighth Amendment of the United States Constitution.

Now, the New York Attorney General's office said that they will appeal this. And in a statement from the New York Attorney General Letitia James, she said it should not be lost to history. Yet another court has ruled that the president violated the law and that our case has merits. You know, this though again, a huge win for Donald Trump. The main thing here was that this huge penalty hanging over him and the Appellate Court wiping that away. But he still does remain liable for fraud, liable for inflating the value of Mar-a-Lago, of many of his assets. And so that will stand as a civil judgment for now.

The New York Attorney General said they will appeal. Now, one thing you have to remember in the context of all of this is that Trump's Justice Department has launched a criminal investigation into the New York Attorney General looking at a couple of things, including this very lawsuit and investigation. So, the story on this is not yet over. James' lawyer has said that the investigations here are, if nothing, they show that this is a desperate example of political retribution. Boris?

SANCHEZ: Kara Scannell, thanks so much for the update there. Brianna?

KEILAR: We're joined now by Legal Analyst and Trial Attorney Mercedes Colwin. Mercedes, did this surprise you?

MERCEDES COLWIN, LEGAL ANALYST AND TRIAL ATTORNEY: It was very surprising. I mean, obviously the magnitude of the fine was tremendous, but it was surprising to see that the Eighth Amendment was used as the legal framework in which to actually eliminate that fine. But if you look at the actual statute itself, the Eighth Amendment says that it will question fines of this magnitude if it's considered excessive. So, that was one thing. But one thing that I would caution Attorney General James, because obviously she will appeal, is that once she appeals to the Court of Appeals, they -- the Court of Appeals can look at the legal framework, meaning the law that she used, which many criticized that the law she was using is really for consumer protection, not for the fraud that she had obviously prosecuted against Donald Trump, the company and his children.

But when you talk about the Court of Appeals, and we already saw that one of the judges at the appellate division questioned whether Attorney General James actually had the right to bring this type of case, only one judge out of the five judges. So I would caution Attorney General to make that -- what that argument is, something that will obviously be considered by the Court of Appeals.

[14:05:00]

The look as to whether or not she had the legal framework to actually prosecute President Trump and the company and his children, and whether or not that fine was excessive. So it's a two-part analysis and once she goes to the Court of Appeals, it's up for de novo review, which means that the Court of Appeals can review both.

KEILAR: That's really interesting. The outcome could actually be worse from her point of view, if she proceeds with that appeal. The original decision was perceived at the time as a potential kill shot towards the Trump Organization's very existence. This decision says that just finding Trump liable, without costing him all that money, may be enough to curb the business culture, the bad behavior of the Trump Org. Do you agree with that?

COLWIN: I mean, certainly the injunction state remains, which obviously he's not going to be able to manage. He has a three-year moratorium, but he's in office. So obviously, that's sort of null and void. That's not really an issue or penalty for him to consider as the president. His children do have a two-year moratorium and others that were implicated in the case also have a moratorium with respect to having any management positions within the company, and hold and actually managing businesses within the New York state. So there is that type of disincentive, obviously, if there's going to be any continuing bad behavior in the future where properties are inflated for favorable insurance or favorable bank lending, bank loans and whatnot.

But yes, I mean, certainly injunctive relief is sufficient. But let's be honest, Brianna, we're talking about this enormous penalty. If there's anything that can really dissuade people from doing any -- taking any fraudulent measures in their businesses or in their personal lives, it would be a fine of a significant magnitude and certainly $500 million with $100,000 accrual every day that that is not paid because there is a not -- there is a multiplier in terms of the type that that's subject to, it's about 9 percent.

KEILAR: Yeah.

COLWIN: So yes, there's a lot of disincentive with injunction alone, but frankly, fines really do speak volumes.

KEILAR: James is now in the crosshairs of the Trump DOJ. They've opened grand jury -- a grand jury investigation into her over the civil actions that she brought against Trump. And this Appeals Court decision actually says that the AG was acting well within her lawful power in bringing this action and that she vindicated a public interest pursuing the Trump Org. I wonder how that works for her, if that's something that she could use in her defense.

COLWIN: That's a great question, Brianna. Certainly, she will -- especially if she's being impugned and her integrity is at issue and that she's being challenged to have weaponized her office against the president. I -- certainly, she will be able to use that as some protection for any further challenges about whether or not she had the authority to take on this case. You already have the Appellate -- you had the underlying court, obviously, and then the Appellate division. Now, it's all in the hands of the Court of Appeals as she continues in the process of appealing this decision. Ultimately, she will be vindicated -- either vindicated or it'll be called into question.

KEILAR: Mercedes Colwin, thank you so much. COLWIN: My pleasure. Thanks for having me,

KEILAR: Boris?

SANCHEZ: Right now in California, the Menendez brothers are fighting for freedom and facing a critical test. At this moment, Erik Menendez is appearing before the state's parole board. The brothers has spent nearly three decades in prison for the 1989 murder of their parents. Earlier this year, a judge reduced their sentences, opening the door to their possible release. Lyle Menendez's parole hearing is set for tomorrow, and both brothers have acknowledged that they committed the murders, but they argue it was self-defense after years of abuse by their father. CNN's Jean Casarez joins us now. So Jean, if the parole board does recommend Erik's release, he still has to go through Governor Gavin Newsom before actually potentially seeing freedom.

JEAN CASAREZ, CNN CORRESPONDENT: Yes. And there's a lot that takes place because even before that, there is a review, a review legally and a review of the facts. And that has to take place first and then it goes to the governor. And the governor makes his assessment based on the law, based on the facts. You know, what is interesting? We do know that they both went through psychological testing individually based on the clemency review, because that has always been a possibility. The governor has not acted. He wanted the other aspects to come first, but we don't know what the results actually were of the psychology testing, but we do know that both of them rated as a moderate risk to the community if they were released and there's a low risk, moderate risk, and high risk. So, it was determined through that testing they would be a moderate risk.

[14:10:00]

Now, one of the foremost questions today is will the offender, Erik Menendez, today, will he be a risk to the community if he is released? So that is part of all of this. But Erik has so much going for him also because there are at least 12 family members that will be testifying. It'll be under oath of why they should believe that he is -- should be released. Also, they have started so many programs in prison, programs for rehabilitation of other inmates. They've been leading seminars. Erik is currently enrolled at UC Irvine. Lyle actually got his degree, his bachelor's degree at UC Irvine. So there's so many positive things too.

But then that takes you to the crime, the premeditated double murder. And it wasn't like it was just shooting them and that's it. It was very premeditated. They had to travel 120 miles away to San Diego to get their bolt action, pump action shotgun. And then they had to make sure they had the right shots for it. And they went into their -- the bedroom of their parents, den actually, and this would've been 36 years yesterday, believe it or not, August 20, 1989, and over 12 shots. And they wanted to make it look like it was a mob hitting. So they hit both parents in their knees, father in the back of the head, mother ultimately in the face.

They had to reload because she was moaning. She wasn't dead. They went out and reloaded and came back in. Another thing they're going to look at is self-control at the time of the offense, the parole board's going to look at that, self-control at the time of the offense. Now we don't know how they interpret that, but to go out and reload and come back in and keep shooting could be a fact that is not in favor of their release.

SANCHEZ: Jean Casarez, thank you so much for watching that story for us.

Still to come, as Texas nears its final hurdle to redraw districts to gain more Republican seats in Congress, California Democrats are looking to cancel that out. We're going to speak to Congressman Kevin Kiley, a Republican who potentially is facing a tough test at re- election. Also, we used to think that drinking alcohol is healthy in moderation, but new studies are revealing it might not be as beneficial as once thought. We'll discuss with Dr. Sanjay Gupta in just moments. Stay with us.

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KEILAR: New developments today in the political slug fest over redistricting in both Texas and California. A short time ago in Austin, a key State Senate Committee approved redrawn congressional maps that passed through the House yesterday. The full Senate could vote on that new map as early as tonight. And in response, lawmakers in California are debating a series of proposals that could put a new map in the hands of voters this November. If all goes to plan, Democrats could pick up another five house seats on Capitol Hill, matching what Republicans are hoping to do with Texas. CNN's Steve Contorno is at the California State House in Sacramento. Steve, how soon could lawmakers actually vote on this?

STEVE CONTORNO, CNN SENIOR REPORTER: Imminently, Brianna. We expect that they will be voting on this within the next few hours. They have already been having intense debate, as you can imagine, over this redistricting plan. Republicans saying, look, we didn't -- we don't approve of what Texas is doing and if we could stop it, if we could, but two wrongs do not make a right and voters in California have repeatedly said that they want an independent redistricting commission drawing their boundaries, not politicians. Democrats meanwhile have been saying, we didn't ask for this fight, but our voters expect us to counter what Donald Trump is trying to do in Texas and elsewhere. Take a listen to what State Assembly Member Marc Berman said earlier today.

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MARC BERMAN, MEMBER OF THE CALIFORNIA STATE ASSEMBLY: There is currently no re no check on Donald Trump in Washington, D.C. Only people who do whatever he demands that they do. But not here, not in California. California is responding to this emergency by empowering our voters with transparency, with respect for our independent commission, but with an unwavering will to act.

(END VIDEO CLIP) CONTORNO: Now, Democrats have an overwhelming majority in both chambers of the California legislature. So we expect these bills to pass without issue and Governor Gavin Newsom would sign them later today. But really then, the fight just begins. There are 75 days until the November 4th election, and Newsom and Democrats will spend that time trying to convince voters to override this very popular independent redistricting commission in the name of beating Donald Trump. There is already significant opposition forming, also well- funded opposition.

House speaker -- former House Speaker Kevin McCarthy, one of the people helping to raise money to beat this. They also have one very notable opponent who is already signaling he intends to fight Democrats on this. And that is former Governor Arnold Schwarzenegger.

[14:20:00]

This is just going to be a very high-profile contest because the stakes are so high and we actually expect -- organizers that I've spoken to actually expect this could be the most expensive political fight on the ballot in any state. That is quite remarkable, Brianna, given that just a few months ago, no one expected this to even be an issue.

KEILAR: Yeah, that really says something. Steve Contorno, thank you so much for the live report from Sacramento. Boris?

SANCHEZ: Let's discuss with one lawmaker who could be impacted by California's redistricting push on this new proposed map. Republican Congressman Kevin Kiley is with us. He represents California's third district. It would see a significant shift under these new maps. Congressman, thanks so much for being with us. It's notable that you are proposing a bill in Congress that would nullify new maps adopted by states after the November 2024 election. Our Dana Bash actually asked former Speaker McCarthy about it last hour, and he effectively brushed it off. He called the bill wonderful, but he said that ultimately states get to determine their maps. I wonder what your response is.

REP. KEVIN KILEY, (R-CA): Yeah, well, I think what Speaker McCarthy was saying is that we need to be prepared to win this battle in California. I think a national solution is what we need here, but we definitely cannot rely on that. And Gavin Newsom is moving forward with this redistricting plan that would obliterate the map that we have right now, that would abolish our independent commission, that would override the will of voters. And it would take our state backwards to the era of partisan gerrymandering. And so, we need to be prepared to make sure that the truth is conveyed in the course of this very rushed snap election that they're setting for November 4th.

Because if the truth gets out, we're going to win, two-thirds of voters in a poll just a couple days ago by Politico, Democrats, Republicans, independents overwhelmingly said that they favor keeping the independent commission to draw district declines in California. And they oppose the governor's plan to put this power back in the hands of politicians and take our state back to the era of partisan gerrymandering. So I believe a national solution --

SANCHEZ: Sure.

KILEY: -- is the right thing for our state and for the country right now. But if it comes to it, we need to make sure that we get out the truth and that we win this battle at the ballot box as well.

SANCHEZ: A number of things I want to ask you about in that response, you have called on Speaker Mike Johnson to take action on this. He does not appear to back the nationwide solution as you put it. What is your message to him?

KILEY: Well, I don't know that he is public -- commented on this publicly one way or the other. But I have urged him both directly and publicly, to bring this bill to the floor for a vote. And my message would be that this is supported, I believe, by the overwhelming majority of members of Congress. I've had Democrats and Republicans reach out to me to support the bill. This might be the one thing that Democrats and Republicans in Congress can agree on these days, is that blowing up everyone's district in the middle of the decade, arbitrarily, taking the communities that we represent away from us, depriving our voters of the opportunity to have us to vote for us as their representative again, just leading to this total chaos, which by the way, we could have no end in sight.

We could just have rolling redistricting where the ground beneath our feet is constantly shifting. And by the way, creating a huge distraction for the entire country at a time when we have so many more important things to worry about. I think that that is -- just saying enough is enough, taking a deep breath, saying, let's not go further down this road. That's something that has widespread agreement in the House. And if we can get it to the floor, I think that we would win that vote.

SANCHEZ: You've argued that it has widespread bipartisan agreement in the House, that a majority of voters, through polling ostensibly, support the idea that we should get rid of gerrymandering. And that puts you at odds with the White House because this directive for Texas to redraw its maps, it's coming directly from President Trump, is it not?

KILEY: Well, I would hope that the president has been fully briefed on what's playing out in California because I've been raising the alarm on this for quite some time. That we have a governor in California who is willing to trample on our state's constitution, who is willing to completely disregard the will of voters in order to bring us backwards to this era of partisan gerrymandering. And so, if we see this happening in Texas and California and then other states retaliate, and we see it cascade across the entire country, it's not even clear if one party is going to come out ahead.

I mean, I think that at the end of the day, we should be focused on winning the House based on the issues. Let's have a vigorous debate about our respective visions for the country. I happen to think that my party, which just won the House based on the current maps, could do the same again in 2026, if for no other reason than looking at the border. We've gone from having the worst border in history to having the best border in history, but also focusing on the ways we're delivering major tax relief and economic growth across the country.

[14:25:00]

The Democrats, it is not my job to advise them on what to do.

SANCHEZ: Sure.

KILEY: But I think it'd be a lot better for them if they reject the socialism of (inaudible) rather than trying to gerrymander their weight to the majority. I think Americans -- across all parties, Democrats, Republicans, independents, are tired of the political division in this country. And if we can't agree on the basic rules of the game, the basic parameters of our politics --

SANCHEZ: Yeah.

KILEY: Then I think we're in big trouble.

SANCHEZ: Congressman, I just want to point out, you've made a fair pitch to voters on why they should vote to reelect your party to Congress. It sounds like you're campaigning for reelection already, and yet, you know that the White House doesn't view it that way. You are arguing that Democrats are gerrymandering, Republicans obviously gerrymandering in Texas, the president is pushing for this and your view is that he hasn't been briefed on what's happening in California?

KILEY: Well, I know for having talked to folks, all around D.C. for several weeks about this, that the situation in California has only kind of slowly come into focus. And right now, today is actually the day that they're going to vote to put it on the ballot. But, I also have called upon the speaker specifically to take action because this really is his wheelhouse. I mean, we're talking about the House of Representatives, represent elections for the House, the House as an institution, and we see this unprecedented redistricting war that's about to break out across the country. And I also think, by the way, the onus is on Speaker Jefferies. I mean, members of his conference as well as our conference do not like what is going on. So there should be an opportunity for the Speaker and the Minority Leader to come together --

SANCHEZ: Yeah.

KILEY: -- and just say enough is enough, let's bring this to an end.

SANCHEZ: I candidly would be surprised if Speaker Johnson went against the White House because again, the calls for this kind of redistricting are coming from the president. I'd want to get clarity on something you mentioned a moment ago, the idea that Gavin Newsom would trample the constitution, the state's constitution. It's pretty clear that you think that this is illegal and you're saying that he's doing this against the will of voters. Ultimately, if California voters get to weigh in on this redistricting plan though, and they vote for it, isn't their will being heard? KILEY: So here's the problem with that. And again, it's very unusual just to call a snap special election in the middle of an odd number year on one particular topic. But what they're doing is they're twisting the language on the ballot. So it's not going to be presented to voters in a fair way and there's proof of that. Just look at the poll governor just released yesterday. So I mentioned earlier, Politico did its own poll. Two-thirds of Californians are against the governor's plan. They want to keep our independent citizens redistricting commission.

They don't want to go back to partisan gerrymandering. But then the governor puts out his own poll saying, oh look, 57 percent are for it and 35 percent are against it. So, what is the difference there? Well, the difference is that the governor actually gets to choose how the issue is presented to voters on the ballot. And they've already come up with their own ballot language that is specifically designed not just to mislead voters, but to get them to think that the yes vote is actually no, and that no is actually yes.

The draft language they've come up with, the first sentence of it says this. It says, retains Citizens Redistricting Commission. So you can understand how a voter would say, OK, that's what I want. I'm for the commission and they'd vote yes. And so that's what they're banking on, is that they can actually get voters to go back on the very thing that they said repeatedly. Our voters have voted several times now that they want to have independent redistricting. It's a tall order to get voters to reverse themselves.

The way they're planning to do it is through tricking people, fooling people as far as what it is it they're actually voting for. So that's why I say that our job in defeating this thing, the broad bipartisan coalition is come together to defeat it. Our main task is just going to be to get out the tricks.

SANCHEZ: Congressman Kevin Kiley, we have to leave the conversation there. Appreciate you sharing your point of view.

KILEY: Of course. Thanks for having me.

SANCHEZ: Yeah. When we come back, the latest update on Hurricane Erin's strength as the massive storm moves north, still staying largely offshore. You're watching "CNN News Central." We'll be right back.

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