Donald Trump Settles Trump University Lawsuits for $25M | NBC Southern California
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Donald Trump Settles Trump University Lawsuits for $25M

Trump has strongly denied the allegations and said during the campaign that he wouldn't settle

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    NBC 7's Mari Payton reports from San Diego on the settlement announced both in New York and San Diego Friday. His attorney said the president-elect was pleased with the agreement. (Published Friday, Nov. 18, 2016)

    President-elect Donald Trump agreed Friday to pay $25 million to settle several lawsuits against his now-defunct school for real estate investors, averting a trial in a potentially embarrassing case that he had vowed during the campaign to keep fighting.

    The deal announced Friday by New York state Attorney General Eric Schneiderman, and confirmed by Judge Gonzalo Curiel in San Diego, would settle a lawsuit filed in New York three years ago, plus two class-action lawsuits in California filed on behalf of former Trump University students.

    The suits allege that Trump University failed to deliver on its promise to teach success in real estate through programs that cost up to $35,000. They say the program misled students by calling itself a university when it wasn't an accredited school and by saying that Trump "hand-picked" instructors.

    Trump has strongly denied the allegations and said during the campaign that he wouldn't settle. He told supporters at a May rally that he would come to San Diego to testify after winning the presidency.

    "I could have settled this case numerous times, but I don't want to settle cases when we're right. I don't believe in it. And when you start settling cases, you know what happens? Everybody sues you because you get known as a settler. One thing about me, I am not known as a settler," Trump said at the time.

    But on Saturday morning Trump defended his decision on Twitter, bragging that he agreed to settle "for a small fraction of the potential award because as president I need to focus on the country." Trump did not make clear what the amount of the "potentional award" could be.

    "The ONLY bad thing about winning the Presidency is that I did not have the time to go through a long but winning trial on Trump U. Too bad!" Trump said on Twitter.

    The deal does not require Trump to acknowledge wrongdoing.

    “We thought it more important to get the money back for our class members,” said plaintiffs attorney Patrick Coughlin.

    Jason Forge, an attorney representing the plaintiffs, said $4 million of the $25 million settlement will be paid to the New York Attorney General's office. One million dollars will go toward penalties and the rest to people not represented in the class action lawsuits.

    Forge also said Sonny Low, the named party in one of the lawsuits based in San Diego, is $9,000 in debt and expects to wipe that clean after the settlement.

    Some of the payments to individual class members could be $35,000, Forge said. The plaintiffs attorney's expect that each class member should receive more than half of their money back, with some seeing a full recovery.

    "Donald Trump fought us every step of the way, filing baseless charges and fruitless appeals and refusing to settle for even modest amounts of compensation for the victims of his phony university. Today, that all changes," Schneiderman said in a statement. He called the settlement "a stunning reversal by Donald Trump and a major victory for the over 6,000 victims of his fraudulent university."

    Daniel Petrocelli, an attorney for Trump, said "we were happy to avoid this unnecessary trial."

    "We felt strong and confident in our position, but if we had a reasonable compromise where we could satisfy some of the students and give them some redress, he was pleased to be able to do so," he said.

    Plaintiffs agreed to waive attorney fees so more money could go to the class-action lawsuit members.

    A settlement motion must be filed by Dec. 19. Once that is done, there will be a hearing on preliminary approval by the court. Plaintiffs could have their money back in three or four months.

    Forge said he detected a change of tone from Trump's attorney's since Trump was elected.

    Forge, Petrocelli and Judge Curiel all referenced this as settlement as a chance to allow the country to heal after a heated presidential race.

    In court Friday, Judge Curiel said he hopes this begins the healing process the country needs right now.

    After court Petrocelli and Forge offered similar sentiments.

    "President-elect Trump set aside his personal interests and focused on the monumental task that he faces in bringing this country together," Petrocelli said.

    "It's shocking to me that people who are at each others throat on November 7 are friends on November 9," Forge said. "This is somewhat consistent with that we were at each other's throats for six and half years we were able to find common ground and do something good here."

    Those comments were made outside the courthouse at a news conference held after the hearing. Protestors were also present outside, some with signs saying "very unfair" and "we won't be your next bankruptcy."

    During the news conference one journalist asked Petrocelli who he voted for. He declined to answer but did confirm he had donated to Hilary Clinton in the past.

    The Trump Organization is a party to numerous lawsuits that threaten to prove a distraction in his administration.

    The settlement comes a day after watchdog groups and ethics experts who served in both Republican and Democratic administrations sent a letter to Trump urging him to make a clean break from his business to avoid "embroiling the presidency in litigation."

    One of the authors, Richard Painter, an ethics lawyer at the White House under George W. Bush , said he thinks the Trump University settlement might backfire if lawyers think Trump is eager to settle to avoid court cases while president.

    "The plaintiffs' lawyers are going to smell blood in the water," he said.