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Class actions for consumer fraud vs Trump School going to trial

| Dec 21, 2015 | Consumer Fraud |

Some people may not remember the ill-fated Trump University that halted operations in 2010 when students in several states joined in two class-action lawsuits in federal court, claiming that the online, unlicensed school was a sham of false promises and false advertisements. The cases are now inching toward trial in a federal court in California where the judge ruled that the students have a right to have the allegations heard by a jury. The case has been an albatross of consumer fraud allegations that has trailed the presidential candidate throughout his appearances in the past several months.

The litigation pressure was so intense that the university nomenclature was later changed to an “entrepreneurial initiative.” The enterprise has since stopped operating completely. Trump, in characteristic bravado, has reportedly threatened plaintiffs that after he wins the litigation and counter-sues the lawyers involved, the project may reopen and resume its original purposes. One of the charges against it is that the advertising promoted the idea that Trump would personally appear in the videos or other teaching sessions.

Instead, many reported that the sessions for which they paid thousands of dollars were nothing more than infomercials asking for more money from them to enroll them in more advanced courses. The so-called university was sued also by the attorney general of New York for $40 million, with claims of false advertising and consumer fraud. That suit led to the dropping of the title “university” in the name, but it is unclear if the case has been resolved.

The consumer fraud lawsuits claim also that the advertising promised that the students would make money back as they progressed, inferring lucrative incomes of tens of thousands each month. Trump and his attorneys have leveled charges that the students’ attorneys were “greedy” and were trying to extort the real estate magnate. They have also argued that the advertising was not misleading and that the program was valuable. Trump sued the plaintiffs in the two cases, alleging defamation; however, that claim was thrown out by both courts, including by the federal judge in the California case.

Source: sandiegouniontribune.com, “Trump University lawsuit closer to trial“, Kristina Davis, Dec. 17, 2015

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