Monday, March 06, 2017

Trump University Lawsuits May Not Be Closed After All

President Trump’s postelection agreement to pay $25 million appeared to settle the fraud claims arising from his defunct for-profit education venture, Trump University. But a former student is now asking to opt out of the settlement, a move that, if permitted, could put the deal in jeopardy.
Lawyers for the student, Sherri Simpson of Fort Lauderdale, on Monday asked a federal judge in San Diego to reject the settlement unless former students are given an opportunity to be excluded from the deal so they can sue Mr. Trump individually.
If the judge, Gonzalo Curiel, decides that Ms. Simpson and potentially others should have that chance, legal experts say it could disrupt the settlement because Mr. Trump and his lawyers saw the deal as a way to resolve all of the claims, once and for all, to avoid a trial and distractions to his presidency.
“If even one person could opt out of the settlement and force a trial, that might, in fact, crater the deal,” said Shaun Martin, a professor at the University of San Diego School of Law. “I’m sure Judge Curiel will be aware of that.”
The agreement, announced in November, appeared to resolve years of hotly contested litigation, including two federal class-action cases in San Diego and a separate suit by Eric T. Schneiderman, the New York attorney general. Students maintained that they were cheated out of tuition through high-pressure sales tactics and misleading claims about what they would learn. At one point during the contentious case, Mr. Trump questioned Judge Curiel’s impartiality based on his Mexican heritage.
Mr. Trump, who has rejected the claims and did not acknowledge fault in the settlement, posted on Twitter after the settlement announcement that the only downside of his winning the presidency was that it meant he “did not have the time to go through a long but winning trial on Trump U.”
The class-action lawyers declined to comment, and lawyers for Mr. Trump did not immediately respond to messages seeking comment.
Monday is the deadline for students to file claims to participate in the settlement, or object to it — as in the case of Ms. Simpson.
Her lawyers argue that a notice sent to students about the class-action lawsuits in 2015 left the impression that they could later request to be excluded from a settlement, but that opportunity was not afforded to them in the agreement.
“There was precious little reason to exercise the right to opt out at that juncture” in 2015, wrote one of Ms. Simpson’s lawyers, Gary Friedman of New York, in the objection filed on Monday. “The case was barreling towards trial, by all accounts.”
Carl Tobias, a professor at the University of Richmond School of Law, said that Judge Curiel would probably give the objection serious consideration, but that he would have to weigh it against “substantial pressure to hold the deal together.”
“A lot of work has gone into this, and people are generally satisfied all around,” Mr. Tobias said.
Plaintiffs’ lawyers have said that they would waive their fees and that they expected roughly 7,000 former students to recover half to all of what they spent on courses.
It they are allowed, it is not clear how many former students may seek to opt out.
In 2010, Ms. Simpson — a lawyer who spoke out about her Trump University experience during last year’s campaign — paid $1,495 for a three-day seminar, in which she said instructors pressured her to sign up for the $35,000 “Gold Elite” program under the premise that she would have access to the “resources of Mr. Trump and his real estate organization,” she wrote in a sworn statement. She split the fee with another student, spending about $19,000 in total, Mr. Friedman said.
But she soon grew dissatisfied when promises went unfulfilled. She wrote, “The Gold Elite program was a scam.”
NYT

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