Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Cal.: Decertification denied in class action over Trump University advertising, (Sep 1, 2016)

By Michael Menzhuber, J.D., LL.M.

A motion to decertify, on liability issues arising from alleged misrepresentations that Trump University was accredited and that Donald Trump handpicked the instructors, was denied by the federal district court in San Diego. After dismissing the defendants’ first two arguments because they had previously been considered, the court determined that the named plaintiff had standing and that the court’s reliance on FTC cases was not error (Low v. Trump University, LLC, August 29, 2016, Curiel, G.).

Tarla Makaeff and other individuals who purchased a Trump University "Fulfillment" workshop and/or a "Elite" program filed a purported class action against Trump University and Donald Trump. The action alleged that the defendants made the following core misrepresentations: (1) Trump University was an accredited university; (2) students would be taught by real estate experts, professors, and mentors hand-selected by Mr. Trump; and (3) students would receive one year of expert support and mentoring.

A motion by the defendants for decertification on liability issues as to all causes of action was denied by the court. Makaeff subsequently withdrew and the defendants were permitted to depose Sonny Low, the other California class representative. After deposing Low, the defendants filed a renewed decertification motion. The basis for the motion was that: (1) the class members were not uniformly exposed to the alleged "core" misrepresentations; (2) individual issues of reliance, causation, and materiality predominated; (3) Lowe’s testimony established the he lacked standing; and (4) the court’s reliance on FTC cases "violates binding Ninth Circuit law."

The court dismissed the defendants’ first two arguments because they had both been extensively considered in its previous certification orders.

The court found the defendant’s third argument, that Lowe’s new testimony established that he lacked standing, unpersuasive because: (1) even if did not recall seeing the word "accredited" in Trump University materials, it was his understanding that Trump University had gone through the same processes to be a called a legitimate university as other accredited universities; and (2) Low’s testimony showed that he had a common sense understanding of what the term "handpicked" meant and that he relied on the defendants’ representation that Trump "handpicked" Trump University instructors in deciding to purchase Trump University’s programs.

The court found also found the defendants’ fourth argument unpersuasive because it was unclear how the Ninth Circuit case relied upon by the defendants bound the court from analogizing to FTC Act cases in order to uphold the viability of a damages theory.

The case is No. 3:10-cv-0940-GPC-WVG.

Attorneys: Aaron M. Olsen (Zeldes Haeggquist & Eck, LLP) for Sonny Low. Daniel M. Petrocelli (O'Melveny & Myers LLP) and Jeffrey L. Goldman (Belkin Burden Wenig & Goldman, LLP) for Trump University, LLC a/k/a Trump Entrepreneur Initiative.

Companies: Trump University, LLC a/k/a Trump Entrepreneur Initiative

Cases: Advertising StateUnfairTradePractices CaliforniaNews