Donald Trump has said he’s “won much of” or “most of” the lawsuits against him in connection with Trump University.
In fairness, “part of” or “some of” that is true; all three lawsuits are still pending, but Trump and his ex-University have succeeded in getting some claims dismissed.
The billionaire and GOP presidential frontrunner also said, “It’s a case that is nonsense. 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. The people that took the course all signed — most, many, signed — report cards saying it was fantastic, it was wonderful, it was beautiful.”
Yet on Tuesday — the “Super” one — New York’s appellate court handed down a decision which reinstated some of the state attorney general’s claims against Trump and Trump University.
Attorney General Eric Schneiderman’s office alleges Trump University, which is no longer operating, drew students into sham seminars which pretended to teach the techniques of real-estate investing, but instead “defrauded more than 5,000 consumers out of millions of dollars.”
For example, it is alleged that Trump University’s “handpicked” instructors “in fact had little or no experience in real estate investing, instead having prior work experience such as food service management.” The attorney general also alleges Donald Trump never participated in the creation of any instructional content or academic curricula.
‘Bait and switch’?
The AG also alleges that the free seminars were merely a trick to induce students to enroll in increasingly expensive seminars, starting with a three-day $1,495 seminar. The three-day seminar would supposedly teach students all the methods of real estate investing. But the instructors at those three-day seminars then allegedly engaged in a “bait and switch,” telling students that they needed to attend yet another seminar for an additional $5,000 in order to learn more.
Instructors at the three-day seminars are also alleged to have engaged in a bait-and-switch by urging students to sign up for “Trump mentorship packages, which ranged anywhere from $10,000 to $35,000” and supposedly provided “the only way to succeed in real estate investment.”
The New York attorney general promptly celebrated this week’s ruling online, calling it “a clear victory in [the] effort to combat fraud.”
If nothing else, this election season has taught us: Don’t ever declare victory too early — especially when that “victory” might not be as big a deal legally as it may sound in the news.
You have to take a step back and get a docket’s-eye view of the case. Originally, the attorney general commenced this special proceeding under state law for injunctive relief and other civil penalties. The AG alleged the Trump defendants operated an unlicensed, illegal educational institution, and intentionally misled scores of students nationwide into taking seminars and programs believed to be part of a licensed university.
Trump and his eponymous university moved to dismiss the case, asking a court to toss it before it went any further in the court process. The court treated this decision as if it was considering a “summary judgment” motion. That’s key to understanding the decision. The appellate court decision really doesn’t say whether one side or the other will win at trial — just whether the attorney general has fleshed his complaint out enough to even get to trial.
Summary judgment motions are always long shots. Defendants seeking to have a case summarily tossed often feel as though the rules are slanted against them … because the rules are, in fact, slanted against them. Here’s why: Summary judgment is considered a drastic remedy — one that denies a plaintiff’s access to the courts. That’s why it’s often requested, but rarely granted. A defendant has to satisfy a heavy burden.
A defendant must prove that there should be no trial because it’s already a sure thing that a plaintiff won’t be able to prove his case — even assuming each of the plaintiff’s allegations are true. The rules are stacked against these defendants, so these motions are routinely denied — which means only that the case moves on.
In the federal case in California, the court has both granted Trump’s motions to dismiss in part, and also denied them in part.
In that case, plaintiffs allege fraud, misrepresentation, and false promise allegations, similar to those in the New York case. The California motions were evaluated under an even stricter test, one even more slanted against the defendants, and Trump still had some counts dismissed. In that sense, even a partial victory is a significant one.
What real victory is about
From that vantage point then, the New York attorney general’s case against the Trump defendants takes on a different hue. Generally, summary judgment motions are not expected to succeed, so it’s always a pleasant surprise for a defendant when they do. Here, even though the appellate court “revived” some of the claims, all the appellate court is doing is allowing those claims to move forward.
The decision doesn’t mean that the AG ultimately wins at all — it really just means that they were able to articulate a recognizable claim. In fact, even after having its fraud claims resurrected, that any claims were ever dismissed at all suggests that the defendants made effective arguments — enough to satisfy a test that is designed to be prejudiced against people being sued like Trump.
To win their case, the plaintiffs or the attorney general would have to demonstrate that Trump’s venture was a fraud — defined in New York law as “any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, suppression, false pretense, false promise or unconscionable contractual provisions”
Ultimately, is there at least a civil case against Trump University in one of these courts? Possibly, according to the courts — enough to survive motions to dismiss. But the more you read about Trump University, you come to two conclusions: First, the seminars may have led students to believe they could get rich quick if they paid for the program. But there’s lots of that going around: the lottery fills you with visions of sugarplums, while offering a .00001% chance of winning.
Nearly every real university is built on an implicit promise of financial success with a four-year tuition bill that is greatly in excess of even the most expensive Trump U. tuition.
Second, and more important: Who would be so irresponsible as to believe a three-day seminar with Trump U. would make them as rich as Donald Trump? At some point a court or jury will have to make a determination as to the reasonableness of the expectations of these plaintiffs — whether they were defrauded, or whether they got exactly what they paid for.
At the end of the day, the mere fact that a case survives summary judgment or a motion to dismiss doesn’t mean the defendant will lose at trial. While the appellate court’s Tuesday decision was surely disappointing to the Trump defendants, the real test of the Trump University case is yet to come.
