Trump University $25M Class Action Settlement Upheld by Appeals Court

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Trump University
Credits: AP Photo/Bebeto Matthews,File

A federal appeals court upheld the $25 million settlement agreement in the class action lawsuit against Trump University.  Students accused the now defunct for-profit education company of fraud for using misleading marketing practices.

On Tuesday, the 9th Circuit Court of Appeals ruled that Trump University can now move forward with the settlement agreement. The appeals court denied the petition of Sherri Simpson, the lone objector to the deal.

Simpson, a bankruptcy lawyer in Florida, wanted to opt out of the agreement and pursue her own lawsuit against President Donald Trump. Simpson paid $19,000 for classes and a mentorship program offered by Trump University.

The lawyers representing Simpson argued that the earlier notice sent to Trump University participants indicated that they have the right to drop out of the class action lawsuits immediately or after any settlement proposal.

The court of appeals disagreed and stated that the notice to class action participants promised only one opportunity to opt out. The district court did not abuse its discretion in approving the settlement.

District court acted well by approving Trump University settlement

In its ruling, the court of appeals stated, “Both classes of plaintiffs would have faced significant hurdles had they proceeded to trial, including the difficulty of prevailing in a jury trial against either the president-elect (if the trial had proceeded as scheduled) or the sitting president. Under these challenging circumstances, the district court acted well within its discretion by approving the settlement.”

During the 2016 presidential election, New York Attorney General Eric Schneiderman filed a lawsuit against Trump University and Mr. Trump.  Two class action lawsuits were also filed against them in the Southern District of California.

On December 19, 2016, the defendants reached a settlement agreement with the plaintiffs, but did admit wrongdoing. Trump University agreed to pay $21 million to class action participants and $4 million to New York Attorney General’s Office.

At the time, a spokesperson for The Trump Organization explained that settling the lawsuits was necessary to allow the president to focus on the needs of the country.

New York AG’s comment

In a statement, New York AG Eric Schneiderman said, the court of appeal’s approval of the settlement “means that victims of Donald Trump’s fraudulent university will soon receive the $25 million in relief they deserve.”

He added that the final settlement ensures that class members “will receive an even higher settlement than anyone originally anticipated.”

Furthermore, Schneiderman said, “For years, President Trump refused to compensate the victims of his sham university. His reversal in 2016—and the large-scale settlement that resulted—opened the door for student victims to finally obtain the restitution they deserve.”