“So, ladies and gentlemen,” the business magnate told a crowd gathered at one of his gleaming, eponymous towers on New York City’s Fifth Avenue Tuesday, “I am officially running for president of the United States, and we are going to make our country great again,” said Trump, whose net worth is valued around $9 billion, according to some reports.
Trump brings to his candidacy an extensive backlog of business ventures, some of which are troubling. In August, 2013, New York’s Attorney General Eric Schneiderman announced the he was filing a lawsuit against Trump for the dubious promises of his higher education endeavor, Trump University. Schneiderman’s lawsuit alleged that the school’s real estate program, which was unlicensed as an actual university, was complicit in “persistent fraudulent, illegal and deceptive conduct” towards its students, who were often saddled with debt from expensive seminars in lieu of brimming with the promised insider secrets from “Donald Trump’s handpicked instructor[s],” most of whom turned out to have emerged from real estate-derived bankruptcy, or have little background in real estate at all.
Schneiderman claimed that more than 5,000 people paid around $40 million to Trump U, a quarter of which was funneled directly into Trump’s pockets, going against claims that Trump U was founded “solely for philanthropic purposes“––Trump netted around $5 million in profit, according to the suit. Many of the allegations read like a pyramid scheme pamphlet, such as the multiple claims that Trump himself would make an appearance (“‘he is going to be in town’ or ‘often drops by’ and ‘might show up’ or had just left,” the suit reads), and student evaluations required for getting a certificate that “‘pleaded for a favorable rating so that ‘Mr. Trump would invite [them] back to do other retreats.” On top of Schneiderman’scase, a class-action lawsuit in California was filed against the university, which now lists itself as the Trump Entrepreneur Initiative.
Trump himself pushed back hard against the allegations, calling Schneiderman a publicity seeking “lightweight” with “gross incompetence,” and filed ethics complaints against him, according to reports at the time. What the Trump University scandal says about Trump the candidate isn’t necessarily obvious or clear––many candidates often have blighted pasts. But it should also be considered instructive when it comes to how Trump might look at some of the most important issues for young voters––particularly student debt. In that realm, anyone with a mind to run a de facto for-profit college would be a tough sell for debt-saddled millennials.
The Donald says he did nothing wrong the court obviously sees it a little differently:
Court Grants Class Certification of Nationwide Class of Trump University Students in RICO Class Action Lawsuit Against Defendant Donald Trump
San Diego (October 28, 2014) – On October 27, 2014, the Court in a RICO class action against Donald Trump issued an Order granting class certification of a nationwide class of all students who purchased live event seminars from Trump University from January 1, 2007 to the present. In October 2013, Zeldes Haeggquist & Eck, LLP and Robbins Geller Rudman & Dowd, LLP filed a class action lawsuit in the United States District Court for the Southern District of California, alleging mail and wire fraud against Donald Trump, in violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO class action”).
As stated in the Order, Plaintiff’s Complaint alleges that Trump University CEO and founder Donald Trump and President Michael Sexton “‘devised and executed a scheme to make tens of millions of dollars’ by falsely marketing Trump University as an institution with which Donald Trump was integrally involved as well as an actual university with a faculty of professors and adjunct professors.” Order at 3. Plaintiff alleges that the “‘scheme was fueled by a ‘national advertising campaign with an annual budget at one time of $6 million dollars,’ which included YouTube, email, website, and traditional postal mail solicitations.” Id. “Specifically, Plaintiff alleges the following ‘uniform’ misrepresentations were made: that the programs would give access to Donald Trump’s real estate investing secrets; that Donald Trump had a meaningful role in selecting the instructors for Trump University programs; and that Trump University was a “university.” Id.
In the Court’s 23-page Order granting class certification of a nationwide class in the RICO class action, Judge Gonzalo Curiel found that “common questions exist as to all members of the putative class” regarding whether Defendant misrepresented that Donald Trump was integrally involved in Trump University and that Trump University was an “actual University.” Order at 7. The Court also held that Plaintiff’s claims and defenses were “typical” of those of the class, because his experience with Trump University “matches the allegations alleged on behalf of the putative class in his Complaint, regarding a common fraudulent ‘scheme’ to which all class members were allegedly exposed.” Order at 9. The Court noted that although Defendant “may yet raise the statute of limitations and causation as defenses to the claims of the putative class, these defenses are not unique to Plaintiff’s claim and do not defeat a finding that Plaintiff Art Cohen’s claims are typical of the claims of the class.” Id.
The Court concluded that Plaintiff Art Cohen, and his counsel would adequately represent the class, and appointed Art Cohen as a class representative and Zeldes Haeggquist & Eck, LLP and Robbins Geller Rudman & Dowd, LLP as class counsel. Order at 10-11, 23.
The Court also found that, under F.R.C.P. Rule 23(b), common questions of law and fact predominated over individual issues, and that a class action was superior to other available methods for fairly and efficiently adjudicating this controversy. The Court rejected Defendant’s “causation” argument, noting that “Plaintiff’s theory of liability under RICO is that Defendant schemed to misrepresent the Trump University Live Event programs, which caused the putative class members to make Live Event purchases.” Order at 12. The Court held that because Plaintiff introduced evidence that Defendant’s “alleged misrepresentations of a ‘university’ and of Donald Trump participation in the Trump University Live Events were prominently featured in all Trump University marketing materials; and that a ‘Playbook,’ PowerPoint presentations, and scripts encouraged if not required Trump University representatives to continue these representations,” the evidence provides “a method for Plaintiff to establish proximate causation on a classwide basis without resort to individualized inquiries.” Order at 13.
The Court also rejected Defendant’s contention that individual issues of proof predominated in regard to its statute of limitations defense, finding that the facts did “not prove that Cohen uniquely discovered the injury resulting from the concealed fraud as of October 2009.” Order at 17. The Court was thus “satisfied that determination of Defendant’s statute of limitations defense in this case will not defeat the predominance of common issues in this case.” Order at 19.
Finally, the Court rejected Defendant’s argument that “individual inquiries into entitlement and amount of damages precludes predominance.” Order at 19-20. The Court found that Plaintiff’s “full-refund” damages model matched Plaintiff’s theory of liability. Order at 21. The Court also noted that “Plaintiff brings this claim under RICO, which provides for statutory trebled damages, attorney’s fees, and cost of suit .… Damages under RICO do not depend on subjective valuations, but rather on objective losses.” Id. Accordingly, the Court held that although Plaintiff “must still prove its damages case, his theory of damage recovery does not conflict with his theory of liability under Comcast,” and thus “individualized questions as to damages do not defeat predominance in this case.” Id.
Finally, the Court held that the superiority requirement of Rule 23(b) was satisfied because “class-wide litigation of Plaintiff’s claims here will reduce litigation costs and promote greater efficiency in a single nation-wide class alleging one cause of action.” Order at 22....................................
On June 17, 2014, the Southern District Court issued an Order granting Plaintiff Tarla Makaeff’s Anti-SLAPP motion against Trump University, LLC (“Trump”), thereby dismissing Trump’s specious $1 million defamation counter-claim against Makaeff. While the victory came more than four years after Trump filed its counterclaim, Makaeff’s case resulted in an important reaffirmation of the applicability of the anti-SLAPP law in federal court. Because Makeaff’s statements arose from protected activity and Trump could not show a probability of prevailing on its defamation claim, the court granted Makaeff’s anti-SLAPP motion. The California Anti-SLAPP Project, a leader in protecting First Amendment Rights, published a thorough article discussing Makaeff’s Anti-SLAPP motion, which can be found by visiting their website here.
On February 21, 2014, the Southern District Court issued an Order granting in part Plaintiffs’ Motion to Certify a class action against Trump University, LLC and Donald J. Trump. The Court certified a class on behalf of all persons who purchased a Trump University three-day live “Fulfillment” workshop and/or “Elite” program (“Live Events”) in California, New York and Florida. The Court appointed Zeldes Haeggquist & Eck, LLP and Robbins Geller Rudman & Down, LLP as class counsel.
Also on February 21, 2014, the Southern District Court issued an Order denying Donald J. Trump’s motion to dismiss Plaintiff Art Cohen’s RICO complaint against Trump asserting violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO Statute”), 18 U.S.C. § 1962(c).
On November 27, 2013, the Ninth Circuit Court of Appeal issued an Order denying Trump University’s petition for re-hearing en banc in regard to the Ninth Circuit’s Order reversing the dismissal of Plaintiff’s Anti-SLAPP motion.
On October 18, 2013, Plaintiff Art Cohen filed a RICO complaint against Donald Trump, asserting violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO Statute”), 18 U.S.C. § 1962(c).
On April 17, 2013, the Ninth Circuit Court of Appeal issued an Order reversing the district court’s denial of Plaintiff Tarla Makaeff’s Anti-SLAPP motion. The Court held that Trump University is considered a “limited public figure,” due to its extensive advertising campaign, and thus would have to prove that Makaeff acted with actual malice when she accused it of fraud, in order to prevail on its defamation claim.
On October 12, 2010, the Southern District of California issued an Order upholding our first amended class action complaint against Trump University as to nearly all claims, including claims for breach of contract, false advertising, violation of California’s Unfair Competition Law (finding Plaintiffs stated a claim that Trump University’s conduct was unlawful, unfair and… fraudulent) and Consumer Legal Remedies Act (CLRA), with leave to amend as to the other claims.
Trump University has also been named “Rogue of the Week” by the Willamette Week.
On October 12, 2010, the Southern District of California issued an Order upholding our first amended class action complaint against Trump University as to nearly all claims, including claims for breach of contract, false advertising, violation of California’s Unfair Competition Law and Consumer Legal Remedies Act (CLRA), with leave to amend as to the other claims.