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Lawsuits against Trump University claim students paid thousands for nothing

Donald Trump’s bid for the 2016 Republican presidential nomination and three lawsuits over his defunct Trump University are on a collision course.

The legal troubles emerged as a common theme in Thursday night’s televised Republican debate, as Trump’s top rivals repeatedly needled him over the allegations of fraud surrounding his real estate school.

And as one of the cases nears trial, it appears more likely than ever that Trump, the GOP front-runner, will be called to testify in a courtroom here, quite possibly during the home stretch of the campaign later this year.

The San Diego lawsuits

A handful of students sued the real estate mogul in 2010, alleging his Trump University was a sham full of misleading promises. The students said in a class-action lawsuit that they had paid as much as $35,000 to learn Trump’s secrets to real estate success.

According to the complaint filed in San Diego federal court, they were encouraged to sign up for more expensive levels of instruction, which were to include personal mentoring by experts “handpicked” by Trump. But instead, they say, the seminars were more like infomercials.

The lawsuit alleges that the for-profit university’s promises that advanced students could make tens of thousands of dollars each month were bogus, and that the school instead left many in debt.

Trump has argued that he can’t be held personally liable because he didn’t run daily operations at the university — although he says he did handpick the instructors. He also disagreed with allegations that the program was worthless.

In a television interview, one of Trump’s lawyers said the students failed to reap any benefits because of their own ineptitude, not because of the program.

Trump reacted to the lawsuit by countersuing for defamation, but that suit was dismissed.

A second, similar class-action lawsuit against Trump was filed in San Diego in 2013 by Art Cohen, a California businessman who attended seminars in Silicon Valley.

T.j. Thompson, a real estate agent in Baltimore, said in an interview Friday that she just wants her money back. She said she and her partner got upsold on the Elite $35,000 membership, excited for what it could do for their careers.

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For the Record

Feb. 29, 12:10 p.m.: An earlier version of this article misstated the amount T.j. Thompson paid for an Elite membership. It was $35,000, not $3,500. 

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“I liken it to if I was a 6-foot-6 senior in college and Michael Jordan told me, ‘If you come to my university I can get you in the NBA,’” said Thompson, 58. But, she said, as they attended multiple seminars and continued to get upsold to put down more money, they got little in return.

“We’ve been asking for our money back for five years now,” she said.

The New York case

New York’s state attorney general filed a $40-million lawsuit in 2013 on similar grounds. He says many students expected to meet Trump during seminars but instead got a picture on a life-size cardboard cutout.

“While consumers were encouraged to call their credit card companies during breaks to increase their credit limits to have access to funds to do real estate deals, the real reason Trump University asked consumers to request higher credit limits was so they could use the credit to pay for the expensive Elite programs,” the attorney general’s office said.

Trump again fired back with a defamation complaint, this time against New York Atty. Gen. Eric Schneiderman, but it was dismissed.

That lawsuit, and several warnings from the state’s Education Department, prompted the unlicensed online school to drop “University” from its title. Trump renamed it the Trump Entrepreneur Initiative, although the school has not operated since 2010.

Debate fodder

Trump’s legal troubles hit the prime-time spotlight Thursday in what was arguably the most combative of the Republican debates so far.

Sen. Marco Rubio of Florida more than once referred to Trump’s real estate academy as a fake university, while Sen. Ted Cruz of Texas relished the implications of a presidential candidate being put on the witness stand.

“I want you to think about — if this man is the nominee — having the Republican nominee on the stand in court, being cross-examined about whether he committed fraud,” Cruz said. “You don’t think the mainstream media will go crazy on that?”

And Rubio alleged: “There are people who borrowed $36,000 to go to Trump University, and they’re suing now — $36,000 to go to a university that’s a fake school. And you know what they got? They got to take a picture with a cardboard cutout of Donald Trump. That’s what they got for $36,000.”

When Trump was able to finally respond without interruption, he appeared confident.

“It’s something I could have settled many times. I could settle it right now for very little money, but I don’t want to do it, out of principle,” he said. “The people that took the course all signed — most, many — many signed report cards saying it was fantastic, it was wonderful, it was beautiful....

“And believe me, I’ll win that case. That’s an easy case.”

Thompson, the Maryland real estate agent, said she didn’t catch the debate live but tuned in to online clips the next day.

“I wanted to high-five Rubio,” she said.

What’s next

The case closest to trial is the 2010 San Diego suit. Of the four representative plaintiffs named in the suit, there are two from California and one each from Florida and New York.

But now the lead plaintiff, Corona del Mar resident Tarla Makaeff, wants out.

In a motion to the judge, Makaeff’s lawyer says her client has endured health problems, family loss and financial troubles since the case began, and she is ready to let the other three class representatives — including Chula Vista resident Sonny Low — carry the case forward.

“Subjecting herself to the intense media attention and likely barbs from Trump and his agents and followers simply would not be healthy for her,” the motion argues.

Her lawyer goes on to say that although Trump was famous before the lawsuit was filed, no one could have anticipated he’d be the focus of such intense media scrutiny as a political figure.

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Makaeff’s lawyer said that even after Trump’s defamation suit was dismissed, her client has lived in fear of financial ruin, and that “she still has great trepidation about retaliation.”

A hearing on her potential exit is set for March 11.

A trial date has not been confirmed for the San Diego suit, but August is being considered — close to the November general election. A pretrial hearing is set for May 6.

Last week, each side submitted witness lists for the trial. Trump was on both, with a footnote on the plaintiff’s list that there was an understanding he would be testifying live. If for whatever reason he ends up not getting to court, his deposition testimony could be used instead.

kristina.davis@utsandiego.com

Twitter: @kristinadavis

Davis writes for the San Diego Union-Tribune.

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Copyright © 2016, Los Angeles Times

UPDATE

9:55 p.m.: This story was been updated with more information 

This story was originally published Feb. 26, 7:42 a.m.

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