9th Circuit Questions Motives of Lone Holdout in Trump U Deal

PASADENA, Calif. (CN) – A Ninth Circuit panel focused Wednesday on what’s at stake for a class of 4,000 former Trump University students if the $25 million settlement paid by President Donald Trump is reversed to allow one unhappy student to opt out.

Sherri Simpson, a Florida attorney and Trump University student who paid $19,000 to learn “insider real estate secrets” from instructors purportedly “handpicked” by the businessman-turned-world leader, objected to the $25 million settlement this past March.

Simpson claimed the thousands of class members were not given a second opportunity to opt out after the settlement was reached days after Trump was elected president. She says they were promised a second opt out opportunity in the class notice sent to Trump U. students in 2015.

U.S. District Judge Gonzalo Curiel rejected Simpson’s objection, finding when she filed a settlement claim to recover money she also “accepted the financial settlement offered by defendants as complete redress for her injuries.” Simpson appealed that decision to the Ninth Circuit in May, and the appellate court agreed to expedite the case.

Even though students are recovering nearly all of what they paid for Trump University classes – over 90 percent – Simpson is unhappy with the settlement. Her attorney Deepak Gupta with Gupta Wessler in Washington told Courthouse News following the hearing she wants to file her own lawsuit under the Racketeering Influenced and Corrupt Organizations, or RICO, Act which would triple her damages – upping them from the $19,000 she paid for the real estate courses to a little over $60,000 with interest.

Simpson also wants Trump to be held accountable for the damages he caused to thousands of Trump University students, according to Gupta.

“She thinks he got off too easy and that there should be public accountability for this,” Gupta said.

As part of the settlement approved by U.S. District Judge Gonzalo Curiel, Trump did not acknowledge any wrongdoing.

Simpson was not present at the hearing Wednesday; Gupta said she had a family emergency and could not attend.

At issue before the Ninth Circuit was whether Simpson relied on a clause in the class notices sent to students in 2015 which indicated students would have a second opportunity to opt out if and when a settlement was reached.

The class notice also informed students if they did not opt out at the time they’d be giving up their right to sue Trump and Trump University individually.

Gupta said “that language means something” and that Simpson relied on the clause in expecting to be able to opt out.

But Circuit Judge Andrew Hurwitz said he had concerns about vacating an “exceptional” settlement so one person could file their own lawsuit against Trump.

“It looks like a heck of a good settlement … You’re asking us to unravel a settlement that’s fair for thousands of people. When I think of this case in real world terms, that’s what troubles me,” Hurwitz said.

Class attorney Steve Hubachek with Robbins Geller in San Diego asked the panel to read the class notice “the way a reasonable class member would read it.”

He called Simpson’s objection “attorney-manufactured,” saying she never identified the clause in the class notice as “important” until she was “cold-called” by her attorney and decided to file an objection to the settlement.

“It is completely clear if you remain in the class, either for trial or settlement, you lose the right to sue,” Hubachek said.

Hubacheck suggested Simpson’s objection was politically motivated, saying: “I believe there’s a political aspect.”

Trump attorney David Kirman with O’Melveny in Los Angeles suggested the then-president-elect may not have agreed to the settlement if he knew an additional person wanted to opt out with the intent to sue individually.

Kirman noted Trump believed none of 13 people who had opted out would file their own lawsuits due to the statute of limitations.

On rebuttal, Gupta called the class notice clause “boilerplate language” and said in other class actions where the exact same opt-out clause was printed in the class notice, those class members were afforded a second opportunity to opt out when a settlement was reached.

Gupta said the objection was about a procedure that was promised to class members and later denied.

But when asked by U.S. District Judge Steven Logan of Arizona, sitting with the Ninth Circuit panel by designation, what the settlement would look like “in a perfect world” from Simpson’s perspective, Gupta said she wanted treble damages and an admission of liability by Trump.

“So she’s against the settlement, period?” Hurwitz asked.

“No settlement gives you treble damages; no settlement gives you everything you want.”

Attorneys for the class members and Trump did not comment on the case following the hearing.

 

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