Former Trump University Customers Settle with President-Elect
Posted By Derek Johnson on November 18, 2016 at 3:12 pm
To our readers: This article has been updated with the settlement announced Saturday. The nation’s still piecing together what a Donald Trump victory in the presidential election means for for-profit regulation, student loans, student debt and a range of other policies. However, one outcome is the end of the fraud case brought forth by thousands of former customers against Trump University. Trump has reached a $25 million settlement killing the case.
With testimony by Trump and others originally scheduled to take place this month, Judge Gonzalo Curiel had been considering whether to postpone the trial to allow the president-elect to focus on the transition process and filling out his administration. Along the way, Curiel reportedly advised the plaintiffs that, given the results of the election, they would be “wise” to settle the lawsuit out of court.
That settlement was announced over the weekend. The agreement compensates more than 6,000 victims in three lawsuits in two states. Trump did not have to acknowledge any wrongdoing in the process and maintained in tweets that he would have won a trial.
Trump University and the campaign
The alleged fraud cases made up one of the most powerful attacks against Trump on the campaign trail, particularly during the Republican primary, as opponents used the fraud allegations as a metaphor for the candidate’s political intentions. Primary opponents such as Florida Sen. Marco Rubio said the case revealed Trump as “a con man” while Texas Sen. Ted Cruz warned that a Republican nominee testifying in a fraud trial during a presidential election would be devastating to the party’s chances in November.
After securing the nomination, Trump lawyers successfully argued to have the trial pushed back until after the election.
The lawsuits were notable not only for the allegations made by former customers, but also for the way the Trump legal team responded to those allegations. Despite multiple written and televised advertisements claiming that students would receive direct personal access to Trump and his handpicked advisers, lawyers for Trump University repeatedly made the case in court filings that Trump was barely involved in the venture, had little to no input into who was hired and thus wasn’t responsible or even aware of the allegations at the heart of the lawsuits.
The response from Trump’s lawyers
Of the 52 specific allegations made by lawyers representing thousands of customers in the class-action lawsuit, Trump’s lawyers responded to 30 by stating that their client was “without knowledge or information sufficient to form a belief as to the truth of the allegations, and on that basis, denies those allegations.”
Some of those allegations include hiring salesman to pose as professors; using high-pressure sales tactics to encourage customers to max out their credit cards in order to pay for Trump real estate seminars that cost as much as $35,000; promising Trump’s real estate secrets would be revealed at lower priced events that were primarily dedicated to upselling customers on even higher-priced seminars; using a sales playbook that taught Trump U employees how to shut down questions from skeptical or even inquisitive customers and warning them not to answer any questions from law enforcement or regulators should they arrive at a seminar.
Trump repeatedly pointed to internal surveys that appear to show high levels of satisfaction from former students. Lawyers for the plaintiff have argued that Trump University employees pressured customers to provide positive reviews regardless of their experience and monitored them as they filled out the surveys.