Ex-Trump University Students to Share $21M From President-Elect

SAN DIEGO (CN) – President-elect Donald Trump will pay the bulk of a $25 million class action settlement – $21 million – to students who sued the businessman-turned-world leader nearly seven years ago in California, just days before the first San Diego case was set to go to trial.

The class attorneys told U.S. District Judge Gonzalo Curiel at a hearing in San Diego federal court Friday afternoon that all 7,000 class members in the two San Diego cases – Low v. Trump University and Cohen v. Trump – would get at least half if not all of what they spent on a Trump University real estate education. Attorney Jason Forge said they were able to “maximize recovery” for Trump University students by waiving their attorney’s fees and litigating the case on behalf of the students for free.

“This is a real resolution, people are going to get real money back,” Forge said.

L to R: Judge Gonzalo Curiel, David Lee Kirman, David Marroso, Jill Ann Martin, Daniel M. Petrocelli, Jason Forge, Rachel Jensen, Patrick Coughlin, U.S. Marshals. (Krentz Johnson).
L to R: Judge Gonzalo Curiel, David Lee Kirman, David Marroso, Jill Ann Martin, Daniel M. Petrocelli, Jason Forge, Rachel Jensen, Patrick Coughlin, U.S. Marshals. (Krentz Johnson)

Class attorney Rachel Jensen said the students can finally “pay off their credit cards and move on with their lives.” She told reporters at a news conference outside the courthouse that lead plaintiff Sonny Low still has $9,000 in credit card debt and had to get a job at Home Depot to pay back what he invested in now-defunct real estate school.

The Low case included Trump University students in California, New York and Florida, who sued Trump in 2010 over claims he defrauded them when they invested up to $35,000 to learn insider real estate secrets from instructors purportedly handpicked by Trump. The president-elect turned out to have little involvement in the school and his attorneys said he relied on “sales puffery” common in advertising to capitalize on Trump’s name.

New York’s Attorney General followed suit, suing Trump University in 2013. At the heart of that case was the title “university,” which New York’s Department of Education had warned the real estate school it could not use because it was not an accredited institution.

The Cohen case out of San Diego was also filed in 2013, and relied on essentially the same fraud claims as Low. However, it also included a racketeering claim that Trump violated the Racketeer Influenced and Corrupt Organizations Act and knowingly defrauded students.

The $25 million settlement will cover all three cases in California and New York and will be made public. New York Attorney General Eric Schneiderman announced the settlement before the hearing in San Diego – something the class attorneys took issue with.

“The attorney general was quick to get a press release out to claim credit, but it was really this case [Low] that moved the litigation forward,” attorney Patrick Coughlin said. Schneiderman’s statement didn’t mention the San Diego cases at all.

U.S. District Judge Jeffrey Miller of the Southern District of California presided over the settlement negotiations.

While the settlement vacates a Nov. 28 trial date for the Low case, Curiel will have the final say on whether the settlement is “fair, adequate, and reasonable.”

Since the election, Trump’s attorneys had been scrambling to get the trial postponed until after Trump’s Jan. 20 inauguration – citing the “momentous task” of assembling a cabinet and preparing for the presidency. The hearing Friday was originally scheduled to address Trump’s motion to delay the trial, but obviously was not discussed in light of the settlement.

Class attorney Jason Forge. (Bianca Bruno)
Class attorney Jason Forge. (Bianca Bruno)

Forge said once the settlement is approved, the Trump University students could get paid back within a few months.

Trump’s attorney Daniel Petrocelli reminded the packed courtroom that Trump acknowledges no fault or liability in the class actions. He thanked Curiel for his work on the cases and said the settlement was something “we can all be happy about.” He also said the president-elect is happy to put the case behind him and is “keenly interested in tackling the problems facing the country.”

Forge said the class actions were “something we all believe in.”

“Outside the court, things have been pretty ugly and that didn’t affect your honor,” he told Curiel while thanking him for presiding over one of the oldest cases on the judge’s docket.

“President-elect Trump could have dragged this out for years and he didn’t.”

Curiel, who Trump famously called a “hater of Donald Trump” who could not preside over the case fairly because of his Mexican heritage, broke his radio silence on the political landscape outside his courtroom to share a message of moving forward.

“This does represent an important development, stage, day not just in this litigation but with respect to the country and getting the healing process started that it so sorely needs,” Curiel said

Trump attorney Daniel Petrocelli. (Bianca Bruno)
Trump attorney Daniel Petrocelli. (Bianca Bruno)

Outside the courthouse, Forge told reporters that he detected a “change of the tone and approach” in Trump regarding the case, and his willingness to settle it in the days following his election win. He called the talks “surprisingly cordial” and said the attorneys worked on the settlement “up until an hour” before Friday’s hearing.

Petrocelli told reporters while Trump “likes to fight and thinks he’s right,” he pushed aside personal feelings about the case to get it resolved.

“He has laser focus on moving forward. It’s time to move on,” Petrocelli said.

He laughed when a reporter asked if he’d also vacate attorney’s fees, and said he doesn’t “work on a pro bono basis.” And he added that while they “didn’t always agree with the court’s rulings” he thought the settlement was a win for everyone involved.

“This is a good one all around. It’s a victory for everybody,” Petrocelli said.