A New York Appeals court decided on Tuesday that a lawsuit brought by the State's Attorney General claiming that Donald J. Trump’s defunct for-profit school defrauded consumers can go forward.
The Attorney General, Eric T. Schneiderman, filed the lawsuit in 2013 asserting that Trump University, later known as the Trump Entrepreneur Initiative, misrepresented itself and bilked students individually of thousands of dollars and collectively of $40 million.
A panel of justices from the State Supreme Court’s Appellate Division ruled in Manhattan against dismissing the lawsuit. The justices found that Mr. Schneiderman was authorized to pursue the case and disagreed with the claim raised by Mr. Trump’s lawyers that the statute of limitations for the claim had run out.
In a statement on Tuesday, Mr. Schneiderman, a Democrat, hailed the decision as a “clear victory in our effort to hold Donald Trump and Trump University accountable for defrauding thousands of students.” “We look forward to demonstrating in a court of law that Donald Trump and his sham for-profit college defrauded more than 5,000 consumers out of millions of dollars,” Mr. Schneiderman added.
Jeffrey L. Goldman, a lawyer for Mr. Trump, called the court’s decision “intellectually dishonest.” Citing previous cases handled by the court, Mr. Goldman argued that the case should have had a three-year statute of limitations. “For some unexplained reason,” he said, “the Appellate Division says, ‘No, now it should be a six-year statute.’”
Trump University, which the lawsuit says lacked the credentials to call itself a university in New York, has been a source of criticism of Mr. Trump in his campaign for the Republican Presidential nomination. Last week, the American Future Fund, a conservative nonprofit, said that it was pursuing a multi-million dollar advertising campaign featuring students of the program who felt that they had been cheated.
Mr. Trump has defended himself and the program. A website was set up to highlight positive reviews from participants, including those who are now critics. The site’s name, 98percentapproval.com, is a nod to the percentage of students, based on 11,000 evaluations, who rated themselves “extremely satisfied,” Mr. Trump has said. In a statement this week responding to the television ads, Mr. Trump dismissed the lawsuit as frivolous and Mr. Schneiderman as a “typical politician.”
Mr. Schneiderman “continues to waste taxpayer money trying to smear me, but the fact is that the overwhelming majority of students had a great experience,” Mr. Trump said, adding, “It’s a minor civil case I have not settled out of principle.”
The program, according to the lawsuit, was a series of seminars held in hotels across the country, billed as an opportunity to learn about how to invest in real estate from instructors “handpicked” by Mr. Trump. The program attracted prospective students with a free seminar, widely advertised in newspapers and through direct mail, that was effectively “a sales pitch for a three-day seminar costing $1,495,” the suit says. That, in turn, was an opportunity to pitch students to subscribe to Trump Elite mentorship packages, which cost up to $35,000.
But the lawsuit claimed the program failed to live up to what it advertised. Mr. Trump did not pick instructors and had little involvement in devising curriculum, the suit says. Some participants were led to expect a personal appearance by Mr. Trump, the suit says; instead, they had their photograph taken with a life-size cutout. And it has been determined, the course work was copied from previous courses given in the past by other real estate experts.
NYC Wins When Everyone Can Vote! Michael H. Drucker
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