Looking Closer at Trump’s Attacks on Judge Curiel

Posted in: Criminal Law

Republican presumptive presidential nominee Donald Trump has grown increasingly vocal with his race-based criticisms of U.S. District Court Judge Gonzalo Curiel, who is presiding over two class action lawsuits relating to Trump University. Trump has been publicly complaining about Judge Curiel since February of this year but he became increasingly obstreperous this week which resulted in more media blowback than normal for Trump. As Trump became blunt so did his racism.

On June 3, 2016, during his Wall Street Journal interview, Trump flat-out claimed Judge Curiel had “an absolute conflict” in presiding over the Trump University litigation because he was “of Mexican heritage” and a member of a Latino lawyers’ association. Trump claimed that Judge Curiel’s background was important because of the Trump campaign’s positions against illegal immigration and his pledge to seal the U.S./Mexican border. “I’m building a wall. It’s an inherent conflict of interest,” Trump told the Journal. Trump further noted Judge Curiel’s former colleague and friend was one of the attorneys representing the plaintiffs against Trump University.

Fact checking shows it is true that Judge Curiel was born in Indiana of parents who had immigrated from Mexico (reportedly before Trump’s grandmother so the judge is more American than Trump). Contrary to Trump’s suggestion, however, the judge is not a member of a radical Latino lawyers’ association. While the judge does have a prior relationship with one of the attorneys in the Trump U case, this often happens with federal judges who find former colleagues from the U.S. Attorney’s Office appearing in their courtrooms, but no one has ever charged that was a conflict of interest. And here that former colleague of the judge told the Journal he had never seen the judge socially. Thus, the heart of Trump’s conflict claim was the judge’s Mexican heritage.

As most observers noted, Trump’s charge is pure racism. This fact, in turn, resulted in a few high-ranking Republicans pulling back from Trump, and criticizing him, at a time he needs to be consolidating the support of his party behind his presidential bid. To stem this blowback, on June 7, 2016, Trump issued a written statement saying his remarks were “misconstrued as a categorical attack against people of Mexican heritage,” when, in fact, he loved Mexicans and has hired thousands of them in his organization.

After self-confirming that he was not a racist, Trump’s statement returns to the litigation before Judge Curiel, whom he never mentions by name while he again attacks him. Trump writes, “The American justice system relies on fair and impartial judges. All judges should be held to that standard. I do not feel that one’s heritage makes them incapable of being impartial, but, based on the rulings that I have received in the Trump University civil case, I feel justified in questioning whether I am receiving a fair trial.”

Then Trump pivots to address the rest of the world: “I have watched as the media has reported one inaccuracy after another concerning the ongoing litigation involving Trump University,” so the remainder of the statement seeks to set the media and world straight on his defense of the Trump University litigation. In brief, Trump reiterates that during a “five-year period [of Trump U’s operations], more than 10,000 paying students filled out surveys giving the courses high marks and expressing their overwhelming satisfaction with Trump University’s programs.” There is only one way to determine if this defense is valid and that is by looking at the facts of the situation. The pleadings are available behind the PACER paywall, although a few key documents have been publicly posted because of class action status. While it will take a couple days to read everything, I have paused after reading most of the pleadings to report it is far worse than I thought based on news reports.

The pleadings and rulings reveal a potentially far direr situation for Donald Trump than I believe is understood. They also indicate that Trump may be on the attack because he is fighting for his financial and political life in this lawsuit. This litigation was commenced long before anyone, probably including Trump himself, knew that he was going to run for president, not to mention obtain the Republican nomination. The fact that he has not settled is not because as a businessman he does not settle lawsuits out of concern settlement will encourage more lawsuits (he has, according to USA Today, settled not fewer than 175 lawsuits); rather it is doubtful he can financially afford to settle. Damages could reach billions of dollars. For Trump’s fiscal health these lawsuits are as serious as a heart attack combined with Stage IV cancer. As for Trump’s political future, if he is elected president and loses these cases while in office, it would result in his impeachment because all these civil actions are predicated on criminal behavior. Let’s look at each briefly, and then his defenses.

Schneiderman v. Trump

New York Attorney General Eric Schneiderman filed a civil action in August 2013 on behalf of the People of New York against Trump and others involved in Trump University, charging them with operating an unlicensed, illegal educational institution to purportedly “teach students Donald Trump’s real estate strategies and techniques.” More specifically, Trump and others (Respondents) are charged with engaging

… in a widespread marketing campaign for Trump University both in New York and across the country to lure prospective students to a free 90-minute seminar that served as a sales pitch for a three-day seminar costing $1495 — but this three-day seminar was itself an upsell to increasingly costly “Trump Elite” packages starting at around $10,000 and ending with what was supposed to be year-long personal mentorship programs at a cost of $35,000. To induce students to enroll in their paid courses, respondents engaged in numerous deceptive practices. Respondents repeatedly claimed that prospective students would be taught by successful real estate “experts” who were “hand-picked” by Donald Trump. In fact, respondents lacked substantiation for the claims that their instructors and mentors were successful real estate entrepreneurs. Not a single one was “hand-picked” by Donald Trump. Many came to Trump University from jobs having little to do with real estate investments, and some came to Trump University shortly after their real estate investing caused them to go into bankruptcy. Respondents also assured prospective students that they would recoup the cost of the courses in a few months, with “insider” access to special financing and close mentoring by Trump instructors who would coach students through their first real estate deal. Relying on these representations, individuals spent thousands of dollars of their savings and took on thousands of dollars in debt – while Trump University brought in over $40 million in revenue.

This action alleges Trump and company using deceptive and unlawful practices misled over 5,000 people nationwide, including 600 New Yorkers, in violation of New York laws. (The scheme broadly outlined in the New York action occurred throughout the country, drawing in an estimated 80,000 people to the free seminar, from which the 5,000 takers emerged. The Washington Post, which went to court in the cases outlined below to obtain sealed records of these scripted activities, explained how these “sell, sell, sell” seminars operated virtually identically across the country.

Cohen v. Trump

On October 18, 2013, Art Cohen filed an action on his own behalf and those similarly situated based on a single cause of action in violation of the Racketeer Influenced and Corrupt Organizations [“RICO”] Act. Cohen, in alleging fraud and racketeering on behalf of a nationwide class, is relying on the civil remedy for criminal behavior, more specifically showing “a pattern of racketeering activity,” which in this instance alleges activities indictable under provisions of federal law, namely mail and wire fraud. The complaint charges that the scheme to defraud employed by Trump used both U.S. Postal Service and interstate radio and telephone services, which made the frauds federal crimes. (Needless to say, while this RICO action is civil in nature these are serious underlying federal crimes with each punishable by up to $1 million in fines and 30 years in prison.)

Cohen (and similarly situated parties) alleged the following misrepresentations: “that the programs would give access to Donald Trump’s real estate investing secrets; that Donald Trump had a meaningful role in selecting the instructors for Trump University programs; and that Trump University was a University.” In fact, as the discovery evidence shows, none of Trump’s representations were true.

Low v. Trump

This case was originally titled Tarla Makaeff et al v. Trump University and Donald Trump, and it was transferred to Judge Curiel as a related case on October 22, 2013. Trump makes much of the fact the Ms. Makaeff withdrew as the lead plaintiff in the case. For example, most recently, in his June 7 statement he less than accurately notes: “Once the plaintiffs’ lawyers realized how disastrous a witness she was, they asked to have her removed from the case. Over my lawyers’ objections, the judge granted the plaintiffs’ motion, but allowed the case to continue.” The record, however, shows that Trump drove her from the case. He filed a counterclaim against her for defamation based on less than flattering statements she had made about her experience with the Trump Organization. But Trump lost this action which was dismissed on a motion that cost him $800,000. Not everyone thrives on litigation, and Ms. Makaeff, after disposing of Trump’s defamation lawsuit against her, requested the judge remove her as lead plaintiff for the sake of her health, as she did not wish to be attacked further by Trump. The judge agreed and Plaintiff Sonny Low, a 70-year-old, took Ms. Makaeff’s place as lead plaintiff.

This class action addresses persons in California, New York, and Florida who purchased a Trump University three-day live workshop for $1,500 and/or an “Elite” program for $35,000 (dollar numbers rounded) and did not receive a full refund. The causes of action (depending on the residence of the plaintiff) are based, broadly speaking, on unlawful, fraudulent and unfair business practices, and deceptive advertising, in violation of California, New York, and Florida laws; as well as financial elder abuse in violation of California and Florida laws. Some of these statutes call for special fines and treble damages.

The Trump Defense

Trump’s legal defense to these lawsuits has been much like his public defense that something was terribly amiss at Trump University: How could anything be wrong when 98 percent of the students gave the courses favorable reviews. This defense has been raised again and again by Trump in the lawsuits, but no judge is buying it because the defense was part of the scheme to defraud.

Buried in the pleadings I found a 229-page ethics complaint filed by Donald Trump against New York Attorney General Eric Schneiderman with the New York State Joint Commission on Public Ethics in January 2014. It was dismissed without any action, seen for what it was. In talking about the New York case against Trump, Schneiderman was often confronted with Trump’s defense. His answer cuts right to the bottom-line. For example, on “Good Morning America,” Schneiderman responded to Trump’s claim of student satisfaction with the following comment: “If you talk to any of the investors with Madoff before they learned that their money was gone, they thought he was the greatest thing that ever happened to them. The same thing with Mr. Trump.” More recently, Schneiderman compared Trump with an infamous snake oil salesman.

The record shows the approvals and praise for the seminars were all but extorted from the students, who were told by instructors, falsely, they would lose their jobs if they did not get the highest ratings. In short, when this matter comes to trial, Donald Trump’s defense is only going to establish the care with which this fraudulent scheme was prepared. It is nice to see that more and more media outlets are digging into these pleadings and putting the lie to Trump’s bogus characterizing of Trump University. Here is a nice analysis of Trump’s phony defenses by Slate.

What’s Next?

The New York action will not proceed until after the election. Nor will the California-based actions. Notwithstanding Trump’s claim that Judge Curiel is treating him unfairly, at Trump’s request the judge postponed the trial of the two class-action cases before him until after the election. At that time Trump will be either (1) the defeated former Republican candidate for president (in Trump-talk “another loser”); or (2) the president-elect. It is the latter that raises interesting questions to which I will return. In the meantime, I will be contemplating how people just like those who have been defrauded by Trump—for they are the core of his following—could elect as President of the United States a man who has cheated thousands of similar people out of their savings, or given them credit card debt with which they continue to deal. And if you think Trump’s actions at Trump University were isolated conduct, read the reports of USA Today and the Wall Street Journal on his normal business conduct.