If you watched last night’s GOP debate, you no doubt heard Marco Rubio bring up Donald Trump‘s lawsuit over Trump University. As it turns out, there are three lawsuits over Trump’s school that launched in 2005 and shuttered in 2011.
Two are simultaneous class action claims. The lead plaintiff of one is Tarla Makaeff, a yoga instructor who Yahoo News reports felt pressure to back out of the suit out of fear of being bankrupted by Trump during the process. Trump counter-sued Makaeff for defamation, but a judge rejected his claim and ordered him to pay her $800,000 in legal bills. Her case covers a class of Trump University customers from California, Florida, and New York. What makes this case particularly interesting is that Trump is on the witness list, meaning that could force him to take a break from his campaign to testify in the case.
That class action claims that Makaeff and others paid up to $60,000, some maxing out their credit cards, to pay for what ended up being seminars in hotel ballrooms. Ads promised training from expert instructors handpicked by Trump to teach methods that he developed. “Just copy exactly what I’ve done and get rich,” Trump said in advertising materials, according to Crain’s New York. But instead of Trump’s methods taught by experts, the students claim they sat through what amounted to a glorified infomercial that lacked any practical advice.
That case is headed towards trial, after a judge denied Trump’s motion for summary judgment on November 18, 2015, as reported on the website of Co-Lead Class Counsel Zeldes Haeggquist & Eck, LLP . The judge also dismissed the plaintiffs’ claim for injunctive relief, but allowed the claims against Trump for violating California’s Unfair Competition Law, False Advertising Law, and Legal Remedies Act, as well as committing financial elder abuse under California law, and violating New York’s consumer protection statute and and the Florida Deceptive and Unfair Trade Practices Act and Misleading Advertising Law.
The other class action, representing a nationwide class of plaintiffs, claims that Trump University violated the Racketeer Influenced and Corrupt Organizations (“RICO”) Act.
Alan Garten, general counsel for The Trump Organization, the holding company that directly managed the day-to-day operations of Trump University, said, “None of it is true. No one was defrauded.” He claimed that many people enjoyed the school and did well, and implied that those who didn’t failed to put in the effort.
Students have a different story. CNN reported that Michele Cintron, a participant said in an affidavit that a “non-existent power team” was unable to be reached, even though she paid $25,000 to have special access to them.
Another student, Kathleen Meese said she had “not been able to get in touch with anyone after I signed up for the Trump Gold Elite Program.”
The second case, a $40 million suit, was brought by New York Attorney General Eric Schneiderman, claiming that the school operated without a license, and kept its name for years, despite warnings since 2005 from the New York State Education Department that it was against the law to refer to the program as a “university,” since it was not chartered. The program referred to staff members as “faculty,” participants as “students” and then “graduates,” the coursework as a “curriculum,” and payments as “tuition.” Some instructors said that it was “a bit of a college degree,” and that the program offered graduate, post-graduate, and doctorate programs. Trump University materials often bore a university-like seal. The claim also says that the program never even applied to be licensed as an educational institution by New York State. It was not until 2010 that Trump changed the name from Trump University to Trump Entrepreneur Initiative.
Schneiderman alleges that Trump University engaged in “persistent fraudulent, illegal and deceptive conduct” towards participants, many of whom went into debt in order to pay for the classes. The “experts” who taught the classes? Schneiderman claims many of them came from previous jobs which had little connection with real estate investment, and others had recently gone into bankruptcy due to their real estate investments.
Schneiderman’s claim alleges that Trump University brought in over $40 million in revenue, and Donald Trump himself pocketed roughly $5 million in profit from the endeavor, even though it was billed as being “solely for philanthropic purposes.”
A judge in this case has already ruled that Trump is personally liable for the unlicensed school, and that he must pay restitution to 800 participants who paid for classes after May 31, 2010. The other issues of the case have yet to be resolved.
As far as the actual seminar experience? The Atlantic obtained a copy of a 2009 playbook for Trump University employees that listed sales goals for seminars and detailed instructions for how to set up the room, from positioning of chairs to bring people close, but still “out of their comfort zones,” to temperature. Registration tables were also positioned so that attendees had to pass them on their way out. Trump U staff members were told to “Welcome attendees and build a Trump-esque atmosphere,” “Disarm any uncertainty,” and “Set the hook.” The goal was to get people to sign up for three-day seminars for $1,495, and ultimately, a year-long “Trump Gold Elite” course for $34,995.
Introductory videos featured a message from Donald Trump, but that was the closest thing to contact participants had with the boss, except for photo-ops with a life-size cardboard cutout. Donald himself never appeared, despite vague claims from the program that he “is going to be in town,” “often drops by,” or “might show up.”
Of course, should either of these cases go to trial, he’ll be there.
[Image via Christopher Halloran/Shutterstock]