MANHATTAN (CN) — A federal judge on Friday tossed out a case against former President Donald Trump and the Trump Organization over a multilevel marketing scheme involving the American Communications Network.
In a 2018 federal class action, four investors claimed they lost hundreds of thousands of dollars investing with ACN because they were duped by the Trump family’s promotion of the telecommunications pyramid scheme through their appearance in promotional videos, headlined conferences boosting the company and hosting ACN executives on Trump’s show “The Celebrity Apprentice.”
U.S. District Judge Lorna G. Schofield, a Barack Obama appointee, previously rejected the plaintiffs’ request to certify a nationwide class and three more classes of people with claims in California, Pennsylvania and Maryland.
Schofield also dismissed Trump’s adult children Ivanka, Don Jr. and Eric from the case this past May. And in July, Schofield dismissed claims under the federal racketeering law because of a lack of evidence that Trump’s conduct was directly related to the investors’ losses.
In Friday’s decision, Schofield tossed the case out of federal court and kicked it over to the three individual states.
“The only remaining claims are the common law and statutory claims of three plaintiffs arising respectively under the laws of California, Maryland and Pennsylvania where they respectively reside, with total out-of-pocket losses said to be roughly $7,000,” Schofield wrote in her order.
At a November hearing, the plaintiffs argued against severance and transfer to the state courts, claiming three appellate courts would have to review the dismissal of the racketeering claims and the denial of class certification.
Though the federal court can exercise jurisdiction over the remaining states’ claims, Schofield said that doing so “would not serve economy or convenience.”
“Because this case now involves only three individual plaintiffs asserting claims under their respective states’ laws, it is not better suited for adjudication in this court than in state court,” Schofield said.
Roberta Ann Kaplan, an attorney for the plaintiffs, said they look forward to continuing the case in state courts.
“Today’s decision addresses only where — not if — plaintiffs’ claims should be brought to trial,” Kaplan said. “We intend to continue the fight, and our brave clients look forward to their day in court.”
Represented by attorneys at Emery Celli and Kaplan Hecker, the plaintiffs refuted Trump’s claims that he didn’t receive endorsements from the company, recounting 10 years of endorsements the former reality star made for ACN. Trump began distancing himself from the company in 2015 as he emerged as the Republican presidential frontrunner and claimed to “know nothing about the company.”
“Not a word of this is true,” they said in their complaint.
The plaintiffs said ties between ACN and Trump remained after 2015. In 2017, ACN sponsored a hole at the Eric Trump Foundation’s annual golf tournament, Curetivity, and held a celebrity golf tournament of its own at Trump National Golf Club in Moorseville.
The dismissal comes one day after the former president appeared at closing arguments in the New York civil fraud trial against him and the Trump Organization. Meanwhile, E. Jean Carroll’s civil defamation trial against the former president is scheduled to begin after Martin Luther King Jr. Day when courts resume business.
Trump’s attorneys did not respond for comment in time for publication.
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