Ninth Circuit OKs $25 Million Trump University Settlement | Courthouse News Service
Saturday, December 2, 2023
Courthouse News Service
Saturday, December 2, 2023 | Back issues
Courthouse News Service Courthouse News Service

Ninth Circuit OKs $25 Million Trump University Settlement

Trump University students will finally see their payday, after a Ninth Circuit panel on Tuesday found a federal judge did not abuse his discretion in approving the $25 million settlement and rejecting a single opt-out request made by a Florida attorney.

(CN) – Trump University students will finally see their payday, after a Ninth Circuit panel on Tuesday found a federal judge did not abuse his discretion in approving the $25 million settlement and rejecting a single opt-out request made by a Florida attorney.

The historic settlement was reached days after President Donald Trump was elected, just before the first class action was scheduled to go to trial. It was expected to reimburse students nearly 90 percent of what they paid for supposed real estate secrets taught by Trump University.

But Trump U. student Sherri Simpson objected to the settlement this past March, claiming students were not given a second opportunity to opt out as promised by a class notice sent to students in 2015.

When Curiel rejected Simpson’s objection and granted final approval of the settlement, she took her plea to opt out to the Ninth Circuit in Pasadena, California, which expedited hearing of the case.

That setback derailed settlement payments to students, some of whom died while waiting to get reimbursed for investing in Trump’s now-defunct real estate school.

In the 21-page opinion written by Circuit Judge Jacqueline Nguyen, who heard the case with Circuit Judge Andrew Hurwitz and U.S. District Judge Steven Logan of Arizona, Nguyen noted the class notices sent to students suing Trump University “conformed, almost verbatim, to model class action notices developed by the Federal Judicial Center.”

The notice gave students a binary choice: to remain class members or opt out. For those who “did nothing” they were included in the lawsuit and could benefit from any potential settlement, but they were also notified “doing nothing” meant they gave up the right to sue Trump University and its founder individually.

Nguyen’s opinion included excerpts of the class notice that were sent to students which explicitly told class members what they were to do to maintain their rights to sue Trump individually. Only 13 class members exercised their option to opt out of the case.

Simpson relied on a 10-word sentence in the 2015 class notice which notified class members they would be instructed on how to obtain a share of a settlement or trial money award or “how to ask to be excluded from any settlement.” But the panel found read in context of the entire class notice students were only promised one opportunity to opt out.

“The mailed notice stated repeatedly that class members’ ‘legal rights are affected’ and that they had ‘a choice to make now’ about their class membership,” Nguyen wrote.

“The notice contains no other language supporting Simpson’s theory from exclusion from the settlement would resurrect a class member’s right to litigate separately,” Nguyen continued. “On the contrary, the notice clearly states that by failing to act by Nov. 16, 2015, class members would ‘give up any rights to sue Trump University and Trump separately about the same legal claims.’”

Simpson’s interpretation ran counter to class members’ “reasonable reading” of the notice, the panel found, pointing out among over 8,000 class members she was the only one who interpreted the notice that way.

“The absence of more voices to corroborate Simpson’s reading supports our conclusion that no reasonable class member would have understood the notice to guarantee a second opt-out opportunity at the settlement stage,” Nguyen wrote for the panel.

The panel also rejected Simpson’s argument due process required she be given a second opt-out opportunity, pointing out a similar Ninth Circuit decision which rejected that very argument set legal precedent to make the same call on Simpson’s appeal.

U.S. District Judge Gonzalo Curiel did not abuse his discretion in approving the settlement, the panel found, and “acted well” in considering the “significant hurdles” both parties faced had the class actions gone to trial, including “the difficulty of prevailing in a jury trial against either the president-elect or the sitting president.”

All three members of the Ninth Circuit panel and Curiel are Barack Obama appointees.

Class attorney Amber Eck with San Diego firm Haeggquist & Eck said she was “obviously thrilled” with today’s decision.

“The Ninth Circuit panel’s decision was unanimous and unequivocal in affirming the district court’s approval of the settlement – and for that reason, we don’t believe Ms. Simpson has any legitimate options available to her at this time to further stall disbursement of the settlement to the thousands of class members anxiously awaiting recovery in this case,” Eck said in an emailed statement.

“This has been an incredibly long, hard fight -- and today's ruling brings thousands of Americans one step closer to finally putting Trump University behind them.”

Simpson’s attorney Gary Friedman said his client would not appeal the decision to the U.S. Supreme Court, despite being “disappointed there will never be a public trial that can shine a public light on the fraud.”

He added: “If there’s a silver lining here it’s that the victims of the fraud will now get paid without further delay.”

Friedman said the appeal was always about seeking public accountability through a trial and treble damages through a RICO claim.

Simpson will also get a settlement disbursement since she had filed a claim prior to objecting to the settlement.

Follow @@BiancaDBruno
Categories / Appeals, Consumers

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.