Trump University Settlement Filed With Judge

SAN DIEGO (CN) – A class of about 7,000 former Trump University students who sued President-elect Donald Trump and his now-defunct real estate school nearly seven years ago are one step closer to getting back at least half of what they invested now that a $25 million federal settlement agreement has been filed in the Southern District of California.

Trump’s attorney Daniel Petrocelli and class attorney Rachel Jensen requested Monday that U. S. District Judge Gonzalo Curiel grant preliminary approval of the global settlement, which applies to two class actions filed in San Diego federal court and a third filed in New York by Attorney General Eric Schneiderman.

Under the settlement, $21 million will go to the two San Diego class actions, while $4 million will go to the New York case. Trump must pay the $25 million into an escrow account to fund the settlement by Jan. 18 – two days before he will be sworn in as president.

The estimated class of 7,000 spent about $40 million on their enrollment in Trump University.

The former students first sued Trump and his real estate school in 2010 and 2013, saying the business mogul 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 his name.

In a surprise move announced alongside the settlement agreement Nov. 18, the plaintiffs’ attorneys said they decided to litigate the case on a pro bono basis, in order to “maximize the recoveries for former TU students.”

The attorneys spent hundreds of hours talking to students, deposing witnesses, filing court documents and litigating the case.

While the plaintiffs’ attorneys and Trump himself had indicated they were “never close to settling,” the president-elect changed his tune after his surprising presidential win.

The settlement filing acknowledges that if Low v. Trump University had in fact gone to trial, the outcome and aftermath were uncertain.

The trial, set for Nov. 28, was scheduled for two phases. In the first phase, a jury would determine whether Trump was liable for misrepresenting that he had handpicked instructors and whether the university title led students to believe it was an accredited business school. If Trump was found liable, phase two would determine what each individual plaintiff should recover in damages, which could have taken years.

“This settlement provides immediate relief to class members, who will not have to deal with uncertainty and wait through lengthy trials and appeals,” the attorneys wrote in the agreement.

According to the 25-page motion for preliminary approval of the settlement, which includes an 81-page exhibit attachment, the attorneys for both sides met multiple times over the course of the nearly seven-year case to try to reach a settlement agreement. They also met with U.S. District Magistrate Judge William Gallo four times in addition to engaging in informal settlement discussions this spring before retired San Francisco Judge Daniel Weinstein.

But it wasn’t until U.S. District Judge Jeffrey Miller oversaw an “extended day of settlement negotiations” Nov. 16 – two days before the settlement was announced – that the parties came to an agreement.

Trump’s attorneys and the class attorneys drafted seven versions of the settlement terms before finally agreeing on the global settlement, according to court documents.

The president-elect admits no wrongdoing, liability or fault per the terms of the settlement agreement.

Curiel granted preliminary approval of the settlement late Tuesday, allowing notices to go out to the 7,000 class members with instructions on how to file a claim to recover damages. A hearing for final approval of the settlement has been set for March 30.

Class attorney Amber Eck said in an interview that while 6,000 of the students purchased the $1,495, three-day Trump University seminar, about 1,000 students invested in “elite” packages costing up to $35,000.

The claim form will be a “one-page, simple questionnaire” that class members can submit via mail, fax, email or through the settlement website.

All students will recover at least half, if not more, of what they paid.

Still, Eck does not expect the students to get their checks in the mail before next summer.

Eck is with Zeldes Haeggquist & Eck in San Diego.

The class representatives, including San Diegan Sonny Low, are requesting awards of up to $15,000 each for their work on the case.

The settlement notice will also be published in the national edition of USA Today, according to court documents.

Curiel will approve the settlement after class members and others have had time to file claims for monetary relief or to object to the settlement.

Curiel is expected to set a court hearing for final approval of the agreement in 2017.

 

 

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