Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Cal.: Class certification granted in action over advertising for Trump University, (Feb 25, 2014)

By Linda O’Brien, J.D., LL.M.

The federal district court in San Diego has granted class certification to a class of purchasers of seminars and programs from Trump University in their misleading advertising and deceptive business practices claims against the University and its founder (Makaeff v. Trump University, LLC, February 21, 2014, Curiel. G.). Thus, the plaintiffs’ proposed class sufficiently satisfied the prerequisites of Federal Rule of Civil Procedure 23(a) and (b).

Several individuals who were interested in real estate investments, learned about Trump University from news advertisements. After attending free preview events, the individuals paid $1,495 to Trump University to attend a three-day real estate workshop and purchased “Trump Gold Elite” programs for up to $35,000. The individuals—residents of California, New York or Florida—filed a class action suit against Trump University, LLC (TU) and its chairman and founder, Donald J. Trump, alleging misleading advertisements and unfair and deceptive business practices regarding Trump’s involvement in Trump University in violation of California’s Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA), among other claims. Specifically, the plaintiffs alleged that the defendants made the following misrepresentations in advertisements, mailings, promotions, and the free preview events: (1) Trump University was an accredited university; (2) the students would be taught by real estate experts, professors, and mentors personally selected by Trump; and (3) students would receive one year of expert support and mentoring. The plaintiffs moved for class certification, and appointment of class representatives and class counsel.

Rule 23(a). In granting the plaintiffs’ motion, the court certified a class of persons who purchased the three-day workshop and /or an “Elite” program in California, New York, and Florida, and have not received a full refund. To justify class certification, the plaintiffs’ proposed classes were sufficiently numerous to make joinder impractical based on the parties’ estimates of potential class size, according to the court. Also, the plaintiffs’ contention that all class members suffered financial loss resulting from the purchase of TU programs following exposure to deceptive and misleading and promotional statements was a question of fact common to the class. Although the specific TU program, benefit, or price of each TU product may vary, the nature of the claims and purchases of TU programs were typical of the proposed class members.

Rule 23(b). The court also determined that common questions of law or fact predominated over any questions affecting only individual members. The plaintiffs provided substantial evidence that common misrepresentations were made to all putative class members. They also presented evidence that TU was not an accredited university, the seminars were taught by individuals not personally selected by Trump, and the mentoring claims were false. Individualized determinations as to reliance and causation were not required since the putative class members were exposed to the same alleged misrepresentations. In this case, there was substantial evidence that TU had a uniform and highly-orchestrated strategy to advertise the seminars in each market.

Additionally, with respect to damages, the predominance standard was satisfied even if post-judgment determinations of individual damages will be required. Finally, the plaintiffs showed that class litigation was superior to other methods for the fair and efficient adjudication of the action since there would be little interest by class members in individual actions based on the potential amount in damages, the court concluded.

The case is No. 10-cv-0940-GPC-WVG.

Attorneys: Aaron M. Olsen (Zeldes Haeggquist & Eck, LLP) for Tarla Makaeff. Stephen F. Yunker (Yunker and Schneider) for Trump University, LLC.

Companies: Trump University, LLC

Cases: Advertising StateUnfairTradePractices CaliforniaNews