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Trump University Class Action Lawsuit

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On Tuesday, federal District Judge Gonzalo Curiel refused to issue summary judgment for, and instead sent toward trial, a class-action suit against 2016 Republican presidential nominee Donald Trump. Plaintiffs’ claims rest on theories of liability including fraud and violations of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), and allege that Trump is personally responsible for defrauding plaintiffs who spent money on degrees from Trump University.

Plaintiffs contend that Trump personally committed fraud and racketeering by knowingly participating in a fraudulent scheme. They support their contention with allegations that 1) Trump personally reviewed the University’s fraudulent marketing materials, 2) calling Trump University (TU) a “University” constituted fraud in itself, 3) Trump personally exercised control over the University and 4) Trump, despite claiming otherwise, did not actually personally select the instructors at TU.

RICO defendants, if found liable, face treble damages. This means that if Trump is found to have derived income from a “pattern of racketeering activity”, he will be liable for triple the amount of money he collected by allegedly defrauding students at Trump University. That would likely be tens of millions of dollars, and the resulting negative publicity could prove disastrous for an already-turbulent campaign.

Legal Rights of Those Defrauded

In California, a plaintiff can recover for fraud if 1)  a defendant knowingly issued a false statement or omitted an important fact, 2) intended that the plaintiff rely on such false statement or omission, and 3) plaintiff’s reliance on such false statement or important omission caused the plaintiff harm. Entities who engage in this sort of deceit en masse may be found liable under the federal RICO act as well, as such mass fraud may be considered a “pattern of racketeering activity” under the statute.

If you or someone close to you knows of an entity that is causing harm by knowingly making misrepresentations of fact, contact our office.

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