Advertisement

Trump, who doesn't settle lawsuits, gets OK to settle Trump U lawsuit

Trump, who doesn't settle lawsuits, gets OK to settle Trump U lawsuit
President-elect Donald Trump, seen here at the Republican convention, has received a judge's permission to settle a lawsuit he said he'd never settle. (Getty Images)

Mr. I-Don’t-Settle-Lawsuits received the go-ahead this week to settle his lawsuits over alleged fraudulent practices by Trump University.

U.S. District Court Judge Gonzalo Curiel in San Diego issued an order giving preliminary approval to a settlement agreed to by Trump's lawyers last month. According to the deal, Trump University now has to pony up $25 million to fund the settlement by Jan. 18.

Advertisement

If Trump's namesake house of learning fails to come across with the cash — it's said by the Better Business Bureau to be "no longer in business" — Trump himself will have to make good. Two days later, he'll be sworn in as the 45th president of the United States.

"In light of the multiple risks of continued litigation, the complexity of individualized damages determinations and the likelihood of delay of any recovery, the court preliminarily finds that the estimated amount of recovery that eligible class members will receive is fair, adequate and reasonable," Curiel said in his order.

Trump's lawyers have said the president-elect chose to settle so he can focus on running the country. He's admitted no wrongdoing.

But let's not kid ourselves. There's nothing more sacrosanct to Trump's reputation as a businessman than the perception that he's second to none when it comes to wheeling and dealing in the property market.

He was alleged in two California class-action lawsuits and one civil case filed by the New York attorney general to have defrauded Trump University students by offering "secrets" to real estate riches that seldom materialized.

Trump settled because the last thing he wanted was weeks of testimony claiming he was defrauding people. (Full disclosure: I was on the witness list because of columns I'd written about Trump University; Trump's lawyers filed a motion to block me from taking the witness stand.)

Trump insisted during a campaign debate that even though he could have settled the cases on any number of occasions, he refused to do so "out of principle."

"The people that took the course all signed — most — many — many signed report cards saying it was fantastic, it was wonderful, it was beautiful," he declared.

I got a distinctly different impression when I attended a Trump University seminar at the Pasadena Hilton in 2007 and spoke with prospective and former students.

The event turned out to be nothing more than a two-hour sales pitch for a three-day workshop costing nearly $1,500. The "priceless information" on making millions from real estate promised in an ad could be boiled down to this: Buy low, sell high.

After I wrote about my seminar experience, Trump called to say he was going to sue me for the "inaccurate and libelous" things I'd written. He also contacted my editor to say that I'm a "nasty guy" and that the Los Angeles Times should fire me.

He never sued. I'm still employed.

If Trump had gone to trial, he'd have to explain hundreds of pages of Trump University "playbooks" that had been introduced by plaintiffs' lawyers as evidence in the case.

The playbooks were intended to guide university employees in closing sales with seminar participants.

Advertisement

"When you introduce the price, don't make it sound like you think it's a lot of money," one playbook advised. "If you don't make a big deal out of it, they won't."

It emphasized that salespeople need to size up prospective students for how big a payout they'd be good for — "Are they a single parent of three children that may need money for food?" — and identify those "most likely to buy."

In one document released by the court, Ronald Schnackenberg, a witness for the plaintiffs who worked as a Trump University sales manager in 2007, said he believed that the school was a "fraudulent scheme" that "preyed on the elderly and uneducated."

I spoke with Trump by phone before attending the Pasadena event. He told me the foreclosure market represented almost limitless opportunity for a real go-getter.

Trump seemed unfazed that millions of people with subprime mortgages nationwide were struggling to remain in their homes. "These are great times," he said. "There are unbelievable opportunities for making money."

In their motion seeking to block me from testifying, Trump's lawyers argued that anything I had to say could "poison the jury by introducing as 'evidence' the negative opinions of a business columnist."

But I wasn't alone in my wariness of Trump University's sales pitch.

In announcing the proposed settlements last month, New York Atty. Gen. Eric T. Schneiderman said that "Donald Trump fought us every step of the way, filing baseless charges and fruitless appeal​s​ and refusing to settle for even modest amounts of compensation for the victims of his phony university."

Trump tweeted at the time that "the ONLY bad thing about winning the presidency is that I did not have the time to go through a long but winning trial on Trump U. Too bad!"

Yeah, I think we all see this as a missed opportunity.

David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.

MORE FROM LAZARUS

Advertisement
Advertisement