In a San Diego courtroom on Friday afternoon, lawyers for President-elect Donald J. Trump will make their case for postponing the trial in a federal class action fraud lawsuit involving now-defunct Trump University.
The trial is currently scheduled to begin on Nov. 28, and Trump’s lawyers are asking that it be delayed until after his inauguration as President of the United States on Jan. 20, 2017.
Here’s what you need to know:
What was Trump University?
For starters, it wasn’t a “university” in the conventional sense, but a real-estate seminar business that charged students a reported $1,495 to $34,995 to supposedly learn the Manhattan mogul’s insider success secrets. Launched in 2005, the business changed its name to The Trump Entrepreneur Initiative in 2010, after the New York State Education Department pressured it to stop calling itself a university. That was also the year the current class action suit was filed. According to the Better Business Bureau of Metropolitan New York, the school is now "believed to be out of business."
Who is suing Trump and what are they alleging?
Trump University (along with Trump himself) is actually the defendant in three different lawsuits: a federal class-action suit alleging consumer violations, a federal class-action racketeering case, and a New York state civil suit brought by New York Attorney General Eric Schneiderman.
All three stem from similar complaints from former students who said they were pushed into enrolling in real estate and business programs through high-pressure sales tactics and scammed out of thousands of dollars. The cases are working their way through the court systems, but the one that’s furthest along is the subject of today’s hearing. That’s Low v. Trump, the class-action suit alleging deceptive sales practices.
Former customers say they were misled by advertisements that said Donald Trump had hand-picked instructors for the program and that they would learn tricks to be successful that were used by Trump himself.
In an interview with NPR, former student Bob Guillo said those "tricks" included using the real estate website Trulia.com to search for properties and learning about tax deductions on the Internal Revenue Service's website. Guillo took out nearly $35,000 from his retirement account to pay for the program.
Based on depositions from former employees, Guillo’s experience wasn’t unique. Corinne Sommer, who worked as manager of events department at the organization for six months, said the focus was more on making sales than providing quality educational services. Staff members were trained, for example, to encourage customers to max out their credit cards and even push them to call their credit card companies to ask for a credit-limit increase. Ronald Schnackenberg, who worked as a sales manager, says he quit after refusing to push a couple to buy the $35,000 seminar because they couldn’t afford it. They would have had to pay for it with disability income and a loan on their apartment. After Schnackenberg refused and was reprimanded, another salesperson closed the deal, he said.
What is Trump's response?
Trump has repeatedly denied the accusations, saying that the program received mostly positive reviews. While campaigning, he said he’d win in court and then restart the program, which largely shut down in 2010. And at a debate during the Republican primary contest, Trump said he could settle the case but wouldn't out of principle.
“Usually if people have problems with something that I have, I will be inundated with letters and phone calls and other things," Trump said in a deposition. "I received almost nothing for years from Trump University.”
Trump and his team also promoted a website that aims to discredit some of the former customers’ complaints by displaying positive reviews they gave the company back in 2008. Guilo, the former customer, told NPR that he did indeed give the program high marks at the time, but that, too, was forced.
What are the issues at stake on Friday?
Trump's attorneys argue that the trial should be delayed because Trump is busy preparing for the transition to the presidency. The attorneys for the alleged victims have argued that Trump is less busy now than he will be as President, and some of the plaintiffs are old or ill, so they shouldn't be kept waiting for a trial.
What happens next?
Whatever federal district judge Gonzalo P. Curiel decides will probably be appealed. If he rejects the delay request, Trump's attorneys have said they will appeal to a higher court. And the plaintiffs would probably appeal a delay.
How could the suits against Trump University affect a Trump presidency?
Legal experts interviewed by Money said they thought there would be little to no impact on Trump's presidency. First, there is growing pressure— including from Judge Curiel—on the parties to settle the cases, which could neutralize just about any negative effect. "If the settlement is managed so that there is no admission of guilt and it is made clear that the cases are being settled as a means of compensating lawyers for the work they have done and avoiding the expense of going to trial, it's possible that there will be virtually no impact," on Trump's presidency, Stephen B. Presser, an emeritus professor at the Northwestern University School of Law, said in an email.
Even if the case does go to trial, and Trump is found liable, there is little likelihood it would affect President Trump, says Michael J. Gerhardt, director of the program of law and government at the University of North Carolina. In theory, civil fraud charges such as those Trump faces could possibly qualify as "high crimes" or "misdemeanors" mentioned in the Constitution as grounds for impeachment, he said. But Gerhardt doubted a Republican Congress would make that interpretation in Trump's case, since the allegations are about events that happened many years ago, and the voting public elected Trump despite widespread news coverage about them. He noted that Andrew Jackson, who killed a man in an illegal duel, was not impeached, in part because the duel was public knowledge for many years before Jackson was elected President.
There is one wild card, however, Gerhardt says. Trump's presidency could be affected if a trial turns up new evidence that he recently—such as during the campaign—took illegal actions that might reflect on his fitness to serve, Gerhardt says.
UPDATE: The New York Daily News reported Friday morning that Trump's lawyers are nearing a settlement with Schneiderman's office and with the law firm that brought the class-action case in California. Under the agreement, Trump reportedly wouldn't have to admit guilt but would have to pay between $20 million and $25 million.