SAN DIEGO (CN) — A federal judge heard arguments Friday from attorneys on both sides of a class action claiming Trump University tricked students into paying for bogus real estate tips, as the lawyers tried to convince the judge that a host of experts should be excluded from testifying.
U.S. District Judge Gonzalo Curiel issued a tentative order Thursday granting in part and denying in part motions from lead class-action plaintiff Art Cohen and Republican presidential nominee Donald Trump asking to bar witnesses retained for the 3-year-old case.
Cohen and the other plaintiffs sued Trump in 2013 under the Racketeer Influenced and Corrupt Organizations, or RICO, Act, claiming he knowingly defrauded students out of thousands of dollars when they paid for Trump University seminars based on the claim that they would learn insider real estate secrets from instructors “handpicked” by Trump himself.
The experts at issue at Friday’s hearing were retained to determine the educational value of a Trump University education.
Cohen’s expert Paul Habibi found that a real estate education from Trump University was worth nothing, while Trump’s expert Alan Wallace found a Trump University education did, in fact, have value.
Both sides requested Curiel bar the other’s expert from testifying.
Also at issue were surveys created by Cohen’s expert Michael Kamins and economics expert DeForest McDuff, who is retained by Trump.
Cohen attorney Jay Alvarez argued McDuff brought a new affirmative economic analysis of damages that he called “untimely.” Alvarez said the plaintiffs have not retained an expert who can rebut the “charts upon charts and graphs upon graphs” filed in relation to McDuff’s expert opinion on Trump University.
He asked Curiel to allow the plaintiffs to retain an economics expert with the same education and background as McDuff to challenge the methodology he used.
“This is something out of left field. [McDuff] is examining all these different documents and surveys Mr. Habibi did not,” Alvarez said.
Trump’s attorney David Kirman countered Alvarez’s characterization of McDuff’s testimony and expertise, saying he is being used as a “classic rebuttal” to Habibi finding a Trump University education had zero value.
“If Mr. Habibi does not testify, neither will Dr. McDuff because there will be nothing for him to rebut,” Kirman pointed out.
Kirman also said Trump’s experts — Wallace and McDuff — served “completely different functions,” as Wallace was not “equipped” to prove the value of a Trump University education.
“Plaintiffs have only themselves to blame based on the quality of the opinion they’re giving,” Kirman said.
Cohen attorney Daniel Pfefferbaum addressed Trump’s motion to exclude a survey conducted by Kamins, which he noted was being used to support a finding of misrepresentation as to the importance of Trump’s celebrity in getting many of his “number one fans” to attend and pay for Trump University.
Kirman claimed the survey goes beyond the class certification, which was based on the alleged misrepresentation made through the “university” title as well as the misrepresentation Trump “handpicked” the seminar’s real estate experts and mentors.
“We believe the court should exercise protecting the jury from getting this ‘junk science,'” Kirman said about the survey at issue.
Pfefferbaum said Trump had an issue with a control group not being used in the survey since Kamins only allowed those people interested in attending Trump University participate. But that was done on purpose, Pfefferbaum said, since Trump University spent $6 million a year on their marketing department and arguably directed most of their efforts at getting Trump’s fans to invest in the real estate seminar.
“Defendants haven’t identified any ‘noise’ that needed to be controlled for. They don’t have a concern about this study other than they found case law excluding experts in other surveys who didn’t use a control,” Pfefferbaum said.
Kirman countered that the plaintiffs’ survey would be a “gross expansion” of the terms of the class certification and would require more trial time, which Curiel did not dispute.
“In a RICO case, you look at the scheme which relied on mail or wire fraud. It seems it would become sterile if you excluded some of the context, but I do think there is a line to be drawn between context and backing up a dump truck of evidence in the case. My question is: isn’t that a proper outgrowth of the case certification?” Curiel said.
Kirman disagreed and further reiterated he thought the “new facts injected into the case” by plaintiffs’ experts’ testimony would open Pandora’s box.
Curiel said he would likely issue a written order on the matter Monday or Tuesday.
Sketch by Krentz Johnson.
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