Donald Trump loves to brag about the number of people he has sued over the years, but he doesn’t say much about his losing legal battle with disgruntled former students of Trump University.
The former students sued for refunds under California’s consumer protection laws, but Trump retaliated by filing a Strategic Lawsuit Against Public Participation (SLAPP) claim, a countersuit “intended to censor, intimidate, and silence critics by burdening them with the cost of a legal defense until they abandon their criticism or opposition.”
But he still ended up losing on appeal and remand.
However, the republican presidential candidate had managed to keep that defeat from becoming a campaign issue until one of his opponents, Marco Rubio, brought it up in a debate last week.
“There are people who borrowed $36,000 to go to Trump University, and they’re suing now,” Rubio said. “And you know what they got? They got to take a picture with a cardboard cutout of Donald Trump.”
Trump’s namesake university operated without licensing, and collapsed under a mountain of state investigations, class action lawsuits and “cease & desist” orders in his home state of New York amongst many complaints.
Tara Marakieff filed a 34-page class action lawsuit in 2010 at California’s southern district federal court, accusing Trump University of numerous violations under her state’s consumer protection laws.
But before Marakieff filed her complaints, she first wrote to the Better Business Bureau and to her bank about the high pressure, low delivery tactics employed by Trump’s “instructors” to extract cash from “students”, often by coaching them to increase their credit card limits during session breaks.
She continued to speak out to the the Fair Trade Commission, and other consumer review websites with statements like this:
I am contacting the Better Business Bureau (BBB), the Federal Trade Commission (FTC), Bureau of Consumer Protection and the FDIC as well as posting the facts of my highly negative experience on a wide variety of Internet sites to ensure that this organization at some point is stopped from defrauding others with its predatory behavior. I am also contacting the media to give them a statement of facts so that they can expose this scam and am willing to go to whatever lengths necessary to obtain my money back including taking legal action at the state and federal levels for this crime that has been committed to [sic] thousands of students nationwide who have been preyed on and victimized as I know I am one of many.
Trump’s lawyers pounced on her warnings to other potential victims, and claimed defamation.
The lower court ruling tossed Marakieff’s anti-SLAPP motion to strike, ruling inexplicably that Trump University LLC wasn’t a public figure at all under the standard set in New York Times Co. vs. Sullivan, which makes it virtually impossible for a public figure to win a defamation or libel lawsuit by establishing the standard of “actual malice” as the plaintiff’s burden of proof.
An appeals court properly ruled that Trump University was in fact a “limited public figure” based on the high profile advertising employed to reel students in for pitch sessions ie. the free advice from a billionaire.
Trump U even held copyrights on the Trump 101 series of books with names like Trump 101: The Way to Success and Wealth Building 101: Your First 90 Days on the Path to Prosperity.
It only took four years, but Marakieff prevailed in her anti-SLAPP claim.
The court awarded her attorney’s fees too, which must’ve been pretty extensive that long a fight.
Sadly, Marakieff could’ve avoided a nearly decade long legal and financial nightmare had she read the LA Times’ 2007 report on Trump University.
That report revealed Trump’s instructor wasn’t a multi-millionaire as advertised, but rather a previously bankrupt, multiply divorced, non-millionaire who’d lost his own home to foreclosure and had no experience in California realty to boot.
Naturally, Trump himself called that reporter and his editors to slam him as “3rd rate” which became a follow up column, and to demand that his own letter be published clarifying that he was “the hottest name in real estate” and not just known for hosting NBC’s “The Apprentice” and how much he loved the photo of the story.
Trump University LLC started in 2004 with a $6 million dollar investment by the real estate mogul, whose sales material proclaimed that, “Trump University is owned, lock, stock and barrel by Mr. Trump — it’s his `baby,’ his company, designed to help him accomplish his goal of leaving a legacy.”
The New York State Education Department wrote the billionaire “educator” almost immediately after Trump University was founded in 2005, warning that using the name “university” without a license was illegal, as Trump University did not confer degrees or have any certifications or license to operate.
Trump University LLC responded by creating a mail-drop office in Dover, Delaware and kept operating out of the Trump Offices at 40 Wall Street for five more years.
Trump’s offices were even central to the pitch, telling prospective ‘students’ that, “other people don’t have anyone to call, but you’ve got Trump. You’ll call 40 Wall Street and they’ll walk you through it.”
For $1495, a student could buy access to Trump University’s “fulfillment” seminar, which was supposedly a one year apprenticeship which would teach Trump’s “business strategies” and everything they needed to know to get rich quick.
Instead, the 3 day seminars mainly consisted of Trump’s instructors who were paid on a commission basis badgering unsuspecting ‘students’ to divulge their financial information, raise their credit limits or empty their 401ks in anticipation of becoming a real estate tycoon, promising that “you’ll learn how to finance your deals using other people’s money.”
The Trump University Elite mentoring package cost $35,000, but provided little more than opportunity for more sales pitches.
The beginning of the end came in June 2010 when the New York State Education Department nailed Trump U. with a cease and desist order, demanding that “all current students should be refunded.”
Instead of stopping, Trump’s ‘baby’ was renamed the “Trump Enterprise Institute” but scaled back its activities rapidly as 11 states investigated the scam.
Meanwhile, former Trump University students haven’t gotten back much if at all, and many are still to this day suing in court to try and reclaim their “tuition” which bought little more than time with Trump’s predatory salesmen masquerading as hand picked instructors and offering courses created by companies that produce materials for an “array of motivational speakers and seminar and time-share rental companies” – scam factories for shysters, grifters, and con artists..
Not long afterwards, California resident Art Cohen filed another class action lawsuit in federal court, seeking damages under the Racketeering Influenced and Corrupt Organizations Act aka RICO, which was enacted first to fight the Mafia, but expanded to fight other forms of organized crime and criminal enterprises.
The suit is still ongoing and names Donald J. Trump personally as defendant, with updates being posted to Zeldes, Haeggquist & Eck as court appointed counsel for the classes.
Trump recently announced his intention to seek a change in defamation laws to make it easier to sue news agencies, presumably because so many journals write stories about the billionaire’s bad behavior.
Despite Trump’s demagoguery, business bankruptcies and now this latest high profile disaster as a real estate educator, his message still resonates with supporters like David Duke and New Jersey Governor Chris Christie, both of whom endorsed him this week.
One thing is clear, Donald J. Trump is all for free speech when he’s selling dreams, but against the First Amendment when people write truthful reviews about his companies.