N.Y. Court: Fraud Lawsuit Against Trump University May Proceed
ALBANY, N.Y. (CBSNewYork/AP) -- A New York state court on Tuesday refused to throw out a fraud lawsuit against Donald Trump over his former school for real estate investors.
The Appellate Division unanimously rejected Trump's request to dismiss the 2013 suit over Trump University, ruling that a six-year statute of limitations applies. The four justices also denied state Attorney General Eric Schneiderman's request for an immediate judgment, saying there are material issues of fact that should be decided at trial.
"This reinstates all of our fraud and deceptive business practices claims, which would enable us to get further injunctive relief, and recover students who were duped by this fraudulent university and spent up to $35,000 for seminars and mentoring that they didn't get," Schneiderman told WCBS 880.
Schneiderman alleged that Trump University was unlicensed since it began operating in 2005 and promised lessons with real estate experts hand-picked by Trump, only one of whom had ever met him. The attorney general said the school used "bait-and-switch" tactics, inducing students to enroll in increasingly expensive seminars.
"You can't just call yourself a university in New York," Schneiderman said. "The state Education Department was chasing Mr. Trump and his sidekicks around saying, 'You ought to go out of business and New York and move or something; you can't call yourself a university. They continued to operate."
Trump, now seeking the Republican nomination for president and far ahead as Super Tuesday voting began, has denied any wrongdoing. He has said it was "a terrific school" with 98 percent approval ratings by its students. His attorney Jeffrey Goldman said the midlevel court failed to explain why it reversed previous rulings and said they intend to appeal to New York's highest court.
Schneiderman, a Democrat, sued Trump and the school, which changed its name to the Trump Entrepreneur Initiative before it closed in 2010, for $40 million. The lawsuit seeks restitution and damages for more than 5,000 students nationwide, including 600 New Yorkers, who paid up to $35,000 each.
"Today's decision means our entire fraud case can move forward," Schneiderman said. "We look forward to demonstrating in a court of law that Donald Trump and his sham for-profit college defrauded more than 5,000 consumers out of millions of dollars."
Trump filed complaints with the state's ethics commission in 2013, four months after the lawsuit was filed, alleging Schneiderman pursued it to wring out campaign contributions from Trump's daughter Ivanka. The commission dropped the complaint after a review. Schneiderman denied it, and his campaign returned the $500 donation Ivanka Trump had made in 2012.
The Republican candidate also noted that the judge in the case is Hispanic, and hinted that he might request the judge to remove himself from the case.
"There is a hostility toward me by the judge, tremendous hostility, beyond belief," Trump was quoted Saturday by The Washington Post. "I believe he happens to be Spanish, which is fine. He's Hispanic, which is fine. And we haven't asked for a recusal, which we may do. But we have a judge who's very hostile."
The attorney general responded to the remarks, calling it "racial demagoguery."
"There is no place in this process for racial demagoguery directed at respected members of the judiciary. The State Supreme Court has already ruled that Trump University operated illegally in New York as an unlicensed educational institution, and we look forward to prevailing on the rest of our claims as the legal process moves forward," Schneiderman said in a statement Saturday.
Trump's fellow Republican candidates have attacked him over litigation against the school, including a class-action suit in California. Trump also criticized the judge in that case.
Tuesday's ruling coincided with Super Tuesday Republican primaries in 11 states.
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