Trump University Files Motion to Compel Depositions of Allegedly Defrauded Consumers

trumpuOn September 16, 2016, Trump University filed a motion to compel the New York State Attorney General to produce the names of the consumers who were allegedly defrauded by Trump University and to produce those witnesses to testify at depositions.

By way of background, the case, People of the State of New York v. Trump Entrepreneur Initiative LLC, et al., relates to an entity formerly known as “Trump University LLC” that Donald Trump, with others, incorporated as a New York limited liability company in 2004.  Trump University purported, by way of seminars and mentoring programs, to instruct small business owners and individual entrepreneurs in real estate investing.

In August 2013, the Attorney General commenced a special court proceeding, alleging that between 2005 and 2011, Trump University operated an unlicensed, illegal educational institution. The Attorney General further alleged that Trump University intentionally misled more than 5,000 students, including over 600 New York residents, into paying as much as $35,000 each to participate in live seminars and mentor programs that the students thought were part of a licensed university.

The case was on appeal until earlier this year for a determination of the proper statute of limitations for this action.  The Appellate Division held that the applicable statute of limitations for the Attorney General’s fraud claim against Trump University is six years, which is the limitations period which corresponds to common law fraud, rather than the three-year statute of limitations provided by the specific statute at issue, Executive Law § 63 (12). 137 A.D.3d 409, 412, 26 N.Y.S.3d 66 (1st Dep’t 2016).

Now that the appeal is over, Trump University seeks to enforce a ruling of the trial court that “to the extent the AG seeks to assert a claim for common law fraud against respondents … it must prove individual justifiable reliance on behalf of each student consumer.”  Trump University argues, therefore, that it is entitled to depose “each and every consumer on behalf of whom” the Attorney General seeks damages for common law fraud.   The Attorney General’s response to Trump University’s motion to compel is due October 20, 2016.

Lenders, loan servicers, and others in the consumer finance industry in New York should be mindful of the court’s pending decision on Trump University’s motion.

David Scheffel

David Scheffel

David has extensive experience in consumer financial services litigation and co-chairs Dorsey’s Consumer Financial Services practice. He defends financial institutions against individual and class action claims alleging discrimination, predatory lending, violations of the Truth in Lending Act, the Real Estate Settlement Procedures Act, the Fair Housing Act, the Equal Credit Opportunity Act, and disputes between lenders and securitization trusts.

Amanda Prentice

Amanda Prentice

Amanda represents a variety of commercial and financial institutions in complex litigation in both state and federal fora. Amanda practices in the area of commercial litigation and has represented clients who have won at trial in both arbitration and in the Southern District of New York. Amanda represents a wide variety of clients, from large financial institutions and insurance companies to smaller, privately held companies. Amanda has had eight months’ worth of experience on a secondment to the litigation department of a Fortune 500 company involved in a variety of complex litigation, as well as many smaller matters. In addition, she has a substantial pro bono practice, including helping a client obtain an order of protection against an abusive ex-partner, and helping a Honduran client and her three children obtain asylum.

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