Judge Expected to Allow Suit Against Trump University to Proceed

By and | July 25, 2016

Just hours after Donald Trump accepted the Republican presidential nomination in Cleveland, a federal judge in San Diego said he plans to allow former students who claim to have been cheated by Trump University to take the billionaire candidate to trial.

Trump’s lawyers argue that sales “puffery” doesn’t amount to racketeering in an attempt to end one of two class-action lawsuits by former Trump University enrollees who claim they were cheated with false promises into paying as much as $35,000 for real-estate seminars and workshops.

U.S. District Judge Gonzalo Curiel said at the start of Friday’s hearing that his tentative ruling is to reject Trump’s request and let the case go forward. Curiel said he will issue a final ruling later. He’s set a Nov. 28 start date for the other trial.

Trump has already injected politics into the case, claiming earlier rulings by the judge, born in Indiana to Mexican immigrants, were retribution for the candidate’s pledge to build a wall between the U.S. and Mexico. Separately, Curiel is also considering whether videos of Trump’s sworn testimony should be made public over the billionaire’s objection.

The former students, who enrolled to learn Trump’s real estate secrets, are seeking compensation under federal racketeering laws that have been used successfully to prosecute organized crime bosses. The federal Racketeer Influenced and Corrupt Organizations Act, or RICO, also allows for damages to be tripled.

A lawyer for Trump argued Friday that there’s no precedent for making the candidate face RICO claims over how the real estate seminars were marketed when he wasn’t even in charge.

“Mr. Trump was acting more as a shareholder of the company. He did not run Trump University,” attorney Daniel Petrocelli said. “This was just like any celebrity endorsement” and the lawsuit “is a gross overreach.”

Consumer Fraud

The racketeering case was filed in 2013 after Curiel had denied a request to add the RICO claim to the earlier consumer-fraud lawsuit against Trump and his school. That case also accuses Trump University of elder abuse because many of the alleged victims were senior citizens.

The racketeering lawsuit alleges that Trump University was part of a four-year scheme by Trump to make tens of millions of dollars by falsely telling prospective students that they would be taught his real estate secrets by handpicked instructors at an “elite” university equivalent to Wharton Business School, where he graduated in 1968.

Trump University sales pitches touting “secrets” and “handpicked instructors,” his lawyers contend, are mere “puffery” common to advertising that can’t be used to argue there was fraud. In addition, Trump believed the students were receiving a high-quality education and there’s no evidence he intended to defraud them, they said.

The plaintiffs said in response that Trump not only starred in the marketing materials, he also signed, corrected and approved them. They said his request to throw out the case was written for a court in “Bizarro World.”

Jason Forge, a lawyer for the students, told the judge Friday there’s “overwhelming evidence” of Trump’s involvement with how the school was promoted.

“It’s abundantly clear that he was the top man and he exercised that authority and had that authority in the issue here,” Forge said.

The racketeering case is Cohen v. Trump, 13-cv-02519, U.S. District Court, Southern District of California (San Diego). The consumer fraud case is Low v. Trump University LLC, 10-cv-00940, U.S. District Court, Southern District of California (San Diego).

Topics Lawsuits Legislation USA Fraud Education Universities

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