One of the claimants in the Trump University case—herself a Florida lawyer—has asked a federal appeals court to unravel the $25 million agreement that settled the matter shortly after the election of President Donald Trump—and she’s brought in noted appellate attorney Deepak Gupta to do it.
Gupta, who is already spearheading a case against Trump brought under the emoluments clauses of the Constitution, adds legal firepower to the claims of Sherri Simpson, who unsuccessfully objected to the Trump University settlement in March.
“Trump University promised its students an ‘Ivy League quality’ education in real estate. Donald Trump, the ‘most celebrated entrepreneur on earth,’ was ‘ready to share – with Americans like you – the Trump process for investing in today’s once-in-a-lifetime real estate market,’” Simpson’s lawyers wrote in her opening brief. “But it didn’t take long for her to realize that it was all a scam.”
But Simpson and Trump agree on one thing: The settlement resolved fraud claims over Trump University for a “small fraction” of the potential award, she wrote. The “small fraction” language is drawn straight from a tweet Trump sent announcing the settlement on Nov. 16 of last year.
Gupta’s addition to Simpson’s case fueled class counsel’s insistence that the objection — and now the appeal — is politically motivated.
“It’s just another indication that it’s politically motivated,” said Patrick Coughlin, of San Diego’s Robbins Geller Rudman & Dowd. Coughlin has previously called Simpson’s objection politically motivated, noting that she appeared in campaign ads against Trump during the election. “A couple of attorneys who don’t like Trump have decided to pursue it on her behalf, but it’s really on behalf of the attorneys and their own political agenda.”
Gupta, of Washington, D.C.’s Gupta Wessler, said politics have nothing to do with his involvement in the case.
“That’s not my motivation,” he said. “Most people thought the case was settled and that’s the end of it. That’s actually quite wrong. It’s a pretty serious set of legal problems with this settlement.”
Daniel Petrocelli, a partner at O’Melveny & Myers in Los Angeles who represents Trump and Trump University, did not respond to a request for comment.
The settlement, reached in November shortly after Trump was elected, resolved two class actions and a case brought by New York Attorney General Eric Schneiderman that alleged Trump University falsely promised Trump personally handpicked the instructors and that the program was an “accredited university.” Plaintiffs attorneys waived their legal fees.
Simpson, a personal bankruptcy attorney in Fort Lauderdale, Florida, objected to the deal. She is represented by Gary Friedman, a solo practitioner in New York.
Lawyers at Robbins Geller have accused Friedman of ethics violations in soliciting clients on the phone. Gupta said he joined the appellate team after Simpson’s lawyers, which also include lawyers at Markun Zusman Freniere Compton in San Francisco, reached out to him.
The crux of the appeal is that the settlement failed to give Simpson and other class members the opportunity to opt out of the deal. A 2015 class notice, Simpson has argued, guaranteed that right. Not offering a second chance to opt out, she contends, violated her due process rights and Federal Rule of Civil Procedure 23.
“The logical inference here was they were trying to discourage people from objecting or opting out,” Gupta said. “There’s a strong constitutional argument that where you have valid claims for monetary damages you can never have a class action that denies the right to opt out of a settlement. But certainly, you can’t do so when you tell people they have that right.”
Simpson’s brief also insisted she had standing to object even though she filled out a claim form under which she waived her right to sue. She had to submit her claim by the March 6 deadline in order to preserve her right to get compensated as a class member should her objection fail, her brief says.
Gupta called the standing issue a “constitutional Catch-22″
“As far as we are aware, no other federal court has permitted a class-action-settlement process that runs roughshod over class members’ due process rights in this manner,” Gupta argued to the Ninth Circuit in the brief. “This court should not become the first.”
Coughlin said her appeal raised all the same arguments that Curiel rejected.
“Everyone was given an opt-out opportunity, and she chose not to do that at that time,” he said.
He also emphasized that the settlement provides up to 90 percent reimbursement for class members. Curiel, when granting final approval of the settlement on March 31, also praised the deal’s “extraordinary amount of recovery” for thousands of class members.
Simpson’s appeal now holds up those payments, many of whom are elderly, Coughlin said.
“These people were old when they signed up, and now they’re dying,” Coughlin said. “A lot of them still have credit card debt on their books.”