Trump University Trial
The Trump University Trial refers to a series of legal disputes involving Donald Trump's controversial real estate seminar program, Trump University, which operated from 2005 to 2010. The program, which was unaccredited, attracted criticism and legal scrutiny for allegedly misleading students about its educational offerings and the success of its real estate strategies. Key lawsuits emerged from former students claiming fraud and misrepresentation, prompting the New York Attorney General to file a civil suit accusing Trump University of violating consumer protection laws. Throughout the legal proceedings, the court examined claims of illegal business practices and false advertising, with significant rulings made by Judge Gonzalo Curiel concerning Trump's personal liability.
In 2016, after a lengthy legal battle, Trump agreed to settle all cases for $25 million, although he maintained that he would have won if the trials had proceeded. The trial highlighted issues of accountability in for-profit education and raised questions about the business practices of high-profile entrepreneurs. The resolution of these cases has had lasting implications for Trump’s public image and raised awareness about consumer rights in the educational sector.
Subject Terms
Trump University Trial
Date: Final settlement reached in early 2018
Place: San Diego, California; New York
Summary
The Trump University trial is the name used in the media to refer to three separate legal disputes involving presidential candidate and business mogul Donald Trump’s role in the now defunct Trump University LLC real estate training business. Trump University was a controversial, unaccredited seminar program operating from 2005 to 2010 and purporting to teach Trump’s real estate investment strategies to those who paid to enroll. Former students filed two class-action suits (in 2010 and 2013) alleging that Trump was guilty of defrauding students, and New York Attorney General Eric Schneiderman filed a third lawsuit in 2013 accusing Trump and Trump University of violating consumer protection laws.
Key Events
- 2005—New York Education Department accuses Trump University of operating without a license and violating state law with the use of the term "university."
- April 2010—Tarla Makaeff and other former students file a class-action suit against Trump University for breach of contract, fraud, and negligent misrepresentation of services.
- August 2013—New York attorney general’s office files a $40 million civil suit against Trump University alleging illegal business practices and false advertising.
- October 2013—Former student Art Cohen files a class-action lawsuit on behalf of individuals who purchased access to "live events" through Trump University.
- March 1, 2016—New York appellate court denies a motion to dismiss the New York State suit against Trump University on the grounds of statute of limitations.
- August 2016—Judge Gonzalo Curiel officially rules against Trump’s move to dismiss the charges of the Cohen suit and rules that former students have enough evidence to bring Trump to trial.
- November 2016—Trump initially agrees to settle all three cases after winning the 2016 Presidential election.
- Early 2018—Federal court approves $25 million settlement to be paid to victims.
Status
From 2010 through 2018, Donald Trump stands accused of taking part in a scheme to defraud customers through the Trump University seminar program and of participating in the operation of an illegal for-profit business. On July 22, 2016, San Diego district judge Gonzalo Curiel tentatively rejected Trump’s attorneys’ request to have the charges against him in the Cohen case dismissed on the basis that Trump had no personal knowledge of Trump University’s operations. In his ruling, which he made official in a written statement by early August, Curiel noted that sufficient evidence had been presented to indicate that Trump had been misleading about his involvement, warranting a trial. No trial was necessary for the case due to Trump’s decision to execute a plea bargain.
In-Depth Overview
Trump University was a real estate training program started by Trump, Michael Sexton, and Jonathan Spitalny in 2005, with Trump reportedly owning 93 percent of the company. Trump University offered students the opportunity to purchase educational programs ranging from a basic $1,495 seminar to a Gold Elite program that cost $34,995. A 2015 Time magazine article claimed that more than seven thousand consumers had purchased seminars from the business. In 2005, the New York State Department of Education began sending letters to Trump University warning the business that it was in violation of state law by using the term "university" and by operating as an educational institution without a license. In June 2010, Trump University officially changed its name to the Trump Entrepreneur Initiative, shortly before the business ceased operations.
The first lawsuit filed against Trump University was filed in California in April of 2010 in the name of former student Tarla Makaeff, who claimed to have paid Trump University almost $60,000. The suit argues that Trump University used false advertising to defraud students. On May 26, 2010, Trump University filed a $1 million counterclaim against Makaeff for defamation, which was later dismissed. In March 2016, Makaeff withdrew as lead plaintiff in the case, citing the emotional abuse she had suffered from Trump and his attorneys in the press as Trump became a presidential candidate. The case continued, however, with fellow former student Sonny Low as the new lead plaintiff.
On August 24, 2013, New York Attorney General Eric Schneiderman filed a $40 million civil suit against Trump University, claiming that the business had engaged in consumer fraud in violation of New York law. In a connected case, New York State Supreme Court justice Cynthia S. Kern ruled that Trump was personally liable for operating a for-profit investment school without the required licenses. The ruling left Schneiderman free to pursue the New York State fraud case against Trump.
A third suit was brought against Trump on October 18, 2013, by California resident and former student Art Cohen. Cohen’s suit alleges that Trump and the company were in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), which applies to the operation of criminal organizations. On October 24, 2014, Curiel ruled that Cohen had presented sufficient evidence to warrant a civil trial. In May 2016, Curiel granted a request from the Washington Post for access to internal Trump University documents and testimony revealed in the pretrial hearing. The released documents included testimony made by former employees and students of Trump University and served as evidence to support the claim that Trump failed to personally select instructors as had been advertised. During his presidential campaign, Trump suggested that Curiel ruled against him because he was "Mexican" (Curiel was born in Indiana to parents of Mexican descent) and angered by Trump’s proposal to build a wall between the United States and Mexico. Widely criticized for his comments, Trump said in a later press release that his statements about Curiel had been misconstrued.
Following his victory in the 2016 US Presidential election, Trump agreed to settle all three cases instead of going to trial. Although funds for victims were placed in escrow in 2017, it was not until 2018 that a final $25 million settlement was reached, though Trump continued to claim that he would have emerged victorious should the case had gone to trial.
Key Figures
Art Cohen: Former Trump University student and plaintiff in one of the lawsuits against Trump and the company.
Gonzalo Curiel: California district judge who ruled that two pending lawsuits against Donald Trump should be allowed to go to trial.
Tarla Makaeff: Former Trump University student and original plaintiff in one of the lawsuits against Trump and the company.
Eric Schneiderman: New York State attorney general who filed a 2013 lawsuit against Trump and Trump University.
Donald Trump: Entrepreneur who owned 93 percent of Trump University.
Bibliography
Cassidy, J. (2016, June 2). Trump University: It’s worse than you think. The New Yorker. Retrieved from http://www.newyorker.com/news/john-cassidy/trump-university-its-worse-than-you-think
Eder, S. (2016, August 2). Federal judge allows suit against Trump University to proceed. The New York Times. Retrieved from http://www.nytimes.com/2016/08/03/us/politics/trump-university-case.html
Ford, M. (2016, June 3). Why is Donald Trump so angry at Judge Gonzalo Curiel? The Atlantic. Retrieved from http://www.theatlantic.com/politics/archive/2016/06/donald-trump-gonzalo-curiel/485636/
Hamburger, H. (2016, May 28). Judge bashed by Trump orders release of company records. The Washington Post. Retrieved from https://www.washingtonpost.com/politics/judge-orders-release-of-internal-trump-university-documents/2016/05/28/2e960e5e-24f9-11e6-8690-f14ca9de2972‗story.html
Katersky, A. (2018, Apr. 9). Judge finalizes $25 million settlement for 'victims of Donald Trump's fraudulent university.' ABC News. Retrieved Sept. 24, 2023, from https://abcnews.go.com/US/judge-finalizes-25-million-settlement-victims-donald-trumps/story?id=54347237
Tuttle, I. (2016, February 26). Yes, Trump University was a massive scam. National Review. Retrieved from http://www.nationalreview.com/corner/432010/trump-university-scam