FRANCO FURMANSKI—As the Presidential Primaries reach their deciding stages, this year’s drama-filled election process will only get more chaotic—especially on the Republican side. A particularly interesting political ploy used by trailing GOP candidates against the current leader—Donald Trump—involves a class action suit (well, actually two class action suits) filed by individuals who signed up for Trump University, but who were disappointed to find that the programs offered did not live up to what they were advertised to be.
There are two separate cases against Mr. Trump, both stemming from the real-estate mogul’s program, which was advertised to individuals as a way for the “student” to develop entrepreneurial skills by attending lectures taught by professors “hand-picked” by Mr. Trump and lectures by the now-leading candidate himself. Although the program is now widely referred to as “Trump University,” the name was later changed to the “Trump Entrepreneur Initiative,” due to the New York State Education Department’s warning that the program was in violation of state law for operating what was advertised as a university without a NYSED-granted license.
The first class action, “The Cohen Action,” alleges a violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) for falsely or misleadingly promising access to certain entrepreneurial techniques, which were not ultimately provided to members of the program. The second class action against Trump University alleges a violation of state consumer protection laws, false advertising, and elder financial abuse laws. On February 21, 2014, and October 24, 2014, both classes of plaintiffs were “certified,” thereby allowing the suits to go forward. The fact that the classes were “certified” does not necessarily mean that the classes’ claims have any validity; the certification requirement is only procedural in nature, and does not go to the substance of the claims themselves. What does give the plaintiffs—and trailing GOP candidates—some hope that the claims against Trump University will prevail, is that a four-judge panel in Manhattan reinstated a fraud claim that had been dropped by a lower court, allowing the plaintiffs to proceed against the “University.”
Trump University is accused of using the Candidate’s celebrity status to prey on certain individuals’ desires to acquire entrepreneurial and real estate skills that would help them turn a profit in today’s difficult economy. Although there was no set tuition for enrolling in the University, the plaintiffs allege that Mr. Trump induced students into signing up for various costly packages, seminars, events, and products, which were—in effect—useless. Tarla Makaeff, the lead plaintiff in one of the two class action suits, claims she spent nearly $60,000 on Trump University-related expenses through the course of a year.
What the outcome of this litigation will be is very difficult to predict. Because the cases are in their very early stages, not much factual information is available to the public. What is clear, however, is that due to Mr. Trump’s self-proclaimed tendency of not being a “settler,” the case against Trump University figures to loom around the leading GOP candidate during the general elections in November, as well as during a potential Trump presidency in February of 2017. Fasten your seatbelts, folks! We may be in for a bumpy ride.
