Trump Says Hype Isn’t Racketeering in Bid to Toss Ex-Student Suit

  • Ex-students claim Trump University was a scheme to cheat them
  • Trump argues real estate seminar puffery can’t be called fraud

Classic “sales puffery” isn’t racketeering.

That’s the core argument Donald Trump is making the day after accepting the Republican Party’s nomination for president as he tries to persuade a federal judge to throw out a lawsuit by ex-students of his namesake university.

The candidate’s lawyers are trying to end one of two class-action lawsuits by former Trump University enrollees who claim they were cheated with false promises into paying as much as $35,000 for real-estate seminars and workshops.

Both cases are before U.S. District Judge Gonzalo Curiel in San Diego, who is also considering separately whether videos of Trump’s sworn testimony in the case should be made public over the billionaire’s objection. Trump has already injected politics into the case, claiming earlier rulings by the Mexican-American judge, who was born and raised in Indiana, were retribution for the candidate’s pledge to build a wall between the U.S. and Mexico.

The plaintiffs in the case before Curiel on Friday are seeking compensation for ex-students throughout the U.S. under the federal Racketeer Influenced and Corrupt Organizations Act, or RICO. A victory for Trump would still leave him facing the potentially less costly case on behalf of a smaller group of former students in three states based on consumer protection laws.

“This case epitomizes the pervasive abuse of civil RICO,” Trump’s lawyers said in their written arguments for throwing out the lawsuit. “There are longstanding and well-established consumer laws that provide full redress for legitimate grievances” and accusing Trump of racketeering is just an effort to extract punitive damages and force a settlement, they said.

Triple Damages

The RICO statute was created in 1970 to prosecute organized crime bosses, but it also allows for private civil lawsuits that can hold defendants liable for triple damages and attorney fees. Cohen filed the racketeering case in 2013 after Curiel had denied a request to add the RICO claim to the consumer-fraud lawsuit against Trump and his school that was filed three years earlier. That case also accuses Trump University of elder abuse because many of the alleged victims were senior citizens.

The racketeering lawsuit alleges that Trump University was part of a four-year scheme by Trump to make tens of millions of dollars by falsely telling prospective students that they would be taught his real estate secrets by handpicked instructors at an “elite” university equivalent to Wharton Business School, where he graduated in 1968.

Trump didn’t personally run the for-profit school and phrases such as “secrets” and “handpicked instructors,” his lawyers contend, are mere “puffery” common to advertising that can’t be used to argue there was fraud. In addition, Trump believed the students were receiving a high-quality education and there’s no evidence he intended to defraud them, they said.

The plaintiffs said in response that Trump not only starred in the marketing materials, he also signed, corrected and approved them. They said his request to throw out the case was written for a court in “Bizarro World.”

The racketeering case is Cohen v. Trump, 13-cv-02519, U.S. District Court, Southern District of California (San Diego). The consumer fraud case is Low v. Trump University LLC, 10-cv-00940, U.S. District Court, Southern District of California (San Diego).

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