U.S. judge views $25 million Trump University settlement favorably

Reuters News
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Posted: Mar 30, 2017 6:26 PM

By Karen Freifeld and Marty Graham

SAN DIEGO/NEW YORK (Reuters) - A federal judge on Thursday said he was leaning toward approving a $25 million settlement of fraud claims against President Donald Trump and his Trump University real estate seminars but deferred a final decision to a later date.

At a hearing in San Diego, Judge Gonzalo Curiel noted that, under the class action settlement, former Trump University students were expected to recover 80 percent of the money they spent on courses and mentoring programs.

"That is an extraordinary amount," the judge said, noting the recovery rate in similar lawsuits is usually closer to between 11 and 20 percent. He did not specify when he would rule.

A Florida woman objected to the settlement, saying she should have the opportunity to opt out and take Trump to court herself.

Patrick Coughlin, a class action lawyer for the students, said the students would actually receive over 90 percent of their money back. Some 3,730 students submitted claim forms in the class action that dates to 2010, according to court papers.

The students, who paid as much as $35,000 for the seminars, claimed they were lured by false promises that they would learn Trump’s investing “secrets” from his “hand-picked” instructors.

Trump vowed to continue fighting the fraud claims during the presidential election campaign but agreed to the settlement soon after. He has admitted he did not personally select the instructors, but his lawyers have described the claim as mere sales "puffery."

Trump accused Curiel of bias last year based on the Indiana-born judge's Mexican ancestry.

Sherri Simpson, of Fort Lauderdale, Florida, who paid $19,000, objected to the settlement provision blocking students from opting out of the deal. She has said in court papers she would like to seek full recovery from Trump, plus punitive damages and other relief.

Gary Friedman, a lawyer for Simpson, argued in court the notices were defective. Curiel questioned Friedman and said he would consider the objection.

(Reporting By Karen Freifeld; Editing by Anthony Lin and Cynthia Osterman)