Low v. Trump University, LLC et al

Filing 506

ORDER Denying Defendants' #482 Motion for Leave to File Renewed Motion for Decertification; and Denying #489 Plaintiffs' Motion to Modify Scheduling Order to File a Motion to Clarify or Amend the Court's Class Certification. Signed by Judge Gonzalo P. Curiel on 8/29/16. (dlg)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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SONNY LOW, J.R. EVERETT and
JOHN BROWN, on Behalf of Themselves
and All Others Similarly Situated,

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Case No.: 3:10-cv-0940-GPC-WVG
ORDER:

Plaintiffs,

DENYING DEFENDANTS’ MOTION
FOR LEAVE TO FILE RENEWED
MOTION FOR DECERTIFICATION

v.
TRUMP UNIVERSITY, LLC, a New
York Limited Liability Company, and
DONALD J. TRUMP,

DENYING PLAINTIFFS’ MOTION
TO MODIFY SCHEDULING ORDER
TO FILE A MOTION TO CLARIFY
OR AMEND THE COURT’S CLASS
CERTIFICATION ORDERS

Defendants.

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[ECF Nos. 482, 489]

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Before the Court is Defendants Trump University LLC and Donald J. Trump’s

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(“Defendants”) June 3, 2016 Motion for Leave to File Renewed Motion for

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Decertification (“Def. Mot.”), ECF No. 482, as well as Plaintiffs Sonny Low, J.R.

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Everett, and John Brown’s (“Plaintiffs”) June 17, 2016 Motion to Modify Scheduling

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Order to File a Motion to Clarify or Amend the Court’s Class Certification Orders (“Pl.

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Mot.”), ECF No. 489. The motions have been fully briefed. See Plaintiffs’ Opposition to

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Defendants’ Motion for Leave to File Renewed Motion for Decertification (“Pl. Resp.”),
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ECF No. 488; Defendants’ Reply in Support of Motion for Leave to File Renewed

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Motion for Decertification (“Def. Reply”), ECF No. 493; Defendants’ Opposition to

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Plaintiffs’ Motion to Amend the Court’s Class Certification Order (“Def. Resp.”), ECF

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No. 495; Plaintiffs’ Reply in Support of Motion to Modify Scheduling Order to File a

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Motion to Clarify or Amend the Court’s Class Certification Orders (“Pl. Reply”), ECF

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No. 496. A hearing was conducted on July 22, 2016. ECF No. 499.

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Upon consideration of the moving papers, parties’ oral arguments, and the

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applicable law, and for the following reasons, the Court DENIES both motions.

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BACKGROUND

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On February 21, 2014, the Court granted in part and denied in part Plaintiffs’

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motion for class certification (“Initial Cert. Order”). ECF No. 298. The Court noted that

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Plaintiffs alleged that Defendants made the following “core” misrepresentations: “(1)

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Trump University was an accredited university; (2) students would be taught by real

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estate experts, professors and mentors hand-selected by Mr. Trump; and (3) students

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would receive one year of expert support and mentoring.” Id. at 4.

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On September 18, 2015, the Court granted in part and denied in part Defendants’

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motion for decertification of the class action (“Decert. Order”). ECF No. 418. The Court

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denied the motion to decertify on liability issues as to all causes of action, but granted the

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motion on damages issues as to all causes of action, and bifurcated the damages issues to

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follow trial on the liability phase. Id. at 21. The Court also granted Plaintiffs’ motion to

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clarify the Court’s class certification order, and clarified that the class definition going

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forward would be:

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All persons who purchased a Trump University three-day live “Fulfillment”
workshop and/or a “Elite” program (“Live Events”) in California, New York
and Florida, and have not received a full refund, divided into the following
five subclasses:
(1) a California UCL/CLRA/Misleading Advertisement subclass of
purchasers of the Trump University Fulfillment and Elite Seminars who
purchased the program in California within the applicable statute of
limitations;

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(2) a California Financial Elder Abuse subclass of purchasers of the Trump
University Fulfillment and Elite Seminars who were over the age of 65 years
of age when they purchased the program in California within the applicable
statute of limitations;
(3) a New York General Business Law § 349 subclass of purchasers of the
Trump University Fulfillment and Elite Seminars who purchased the
program in New York within the applicable statute of limitations;
(4) a Florida Deceptive and Unfair Trade Practices Act
(FDUTPA)/Misleading Advertising Law subclass of purchasers of the
Trump University Fulfillment and Elite Seminars who purchased the
program in Florida within the applicable statute of limitations; and
(5) a Florida Financial Elder Abuse subclass of purchasers of the Trump
University Fulfillment and Elite Seminars who were over the age of 60 years
of age when they purchased the program in Florida within the applicable
statute of limitations.1

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Id. at 22.

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On September 21, 2015, the Court granted in part and denied in part Plaintiffs’

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motion for approval of class notice and directing class notice procedures. ECF No. 419.

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On November 15, 2015, the opt-out period expired. See id. at 11.

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On November 18, 2015, the Court granted in part and denied in part Defendants’

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motion for summary judgment. ECF No. 423. The Court granted Defendants’ motion for

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summary judgment with respect to Plaintiffs’ claims for injunctive relief under California

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law, and denied summary judgment as to all other claims. Id. at 44.

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On April 20, 2016, the Court granted in part and denied in part Plaintiff Tarla

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Makaeff’s motion to withdraw. ECF No. 475. The Court permitted Plaintiff Makaeff to

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withdraw, but on the condition that Defendants were entitled to depose Plaintiff Low, the

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other California class representative, again. Id. at 2.2

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A pretrial conference was held on May 6, 2016. ECF No. 478. A trial is set for

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Excluded from the class are Defendants, their officers and directors, families and legal representatives,
heirs, successors, or assigns and any entity in which Defendants have a controlling interest, any Judge
assigned to this case and their immediate families. Decert. Order 22.
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On April 15, 2026, the parties notified the Court telephonically that the deposition of Low was
completed pursuant to the Court’s order. ECF No. 475 at 2.
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November 28, 2016. Id.

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LEGAL STANDARD

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“An order that grants or denies class certification may be altered or amended before

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final judgment.” Fed. R. Civ. P. 23(c)(1)(C); Rodriguez v. West Publ’g Corp., 563 F.3d

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948, 966 (9th Cir. 2009) (“A district court may decertify a class at any time”). In deciding

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whether to decertify a class, a court may consider “subsequent developments in the

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litigation.” Gen. Tel. Co. of S.W. v. Falcon, 457 U.S. 147, 160 (1982).

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DISCUSSION
I.

Defendants’ Motion for Leave to File Renewed Motion for
Decertification

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Defendants make several arguments as to why the Court should consider a

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renewed decertification motion following the pretrial conference. Namely, Defendants

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argue that: (1) class members were not uniformly exposed to the alleged “core”

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misrepresentations; (2) individual issues of reliance, causation, and materiality

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predominate; (3) Low’s recent testimony establishes that he lacks standing; and (4) the

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Court’s reliance on FTC cases “violates binding Ninth Circuit law.” See Def. Mot. 13–25.

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However, none of Defendants’ arguments are persuasive.

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First, as to Defendants’ first two arguments, both arguments were extensively

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considered by the Court in its previous certification orders. See Initial Cert. Order 14–26.

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Almost all of the evidence proffered by Defendants here was available to Defendants at

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the time of the earlier certification orders, see Pl. Resp., Ex. A, which is unsurprising

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considering that discovery closed more than a year and a half ago on December 19, 2014,

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see ECF No. 349. The Court “declines to revisit these previously resolved issues . . .

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especially where no intervening events have led to changed circumstances.” See In re

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Apple iPod iTunes Antitrust Litig., 2014 U.S. Dist. LEXIS 165254 (N.D. Cal. Nov. 25,

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2014) (rejecting motion for decertification where “Apple presented many of these

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arguments while opposing earlier certification motions”).

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Second, the Court finds Defendants’ third argument that Plaintiff Low’s new
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testimony establishes that he lacks standing unpersuasive. Defendants argues that Low’s

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new testimony demonstrates that he did not actually rely on Defendants’ representations

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in purchasing TU programs. Def. Mot. 21. However, Defendants’ arguments rely on a

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selective interpretation of Low’s new testimony.

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First, Defendants argue that Low was not concerned with whether TU was an

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accredited university. Id. Defendants point to deposition testimony where Low stated that

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he did not recall ever seeing the word “accredited” used in TU materials, Low Dep.

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109:19–21, Def. Mot., Ex. 11, and where Low stated that whether TU was an accredited

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university “was not even a consideration for me. I went there because it was Trump

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University, that he created.” Id. at 116:11–15.

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However, Low also testified:

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Donald J. Trump, besides being a multi-billionaire in real estate, he set up
Trump University, which I would presume that he took all the steps
necessary to set up a proper institution that he could call a university, with
his name next to it. And when he sent out the special invitation, signed by
Donald J. Trump himself, “Come to one of my free seminars and learn
through my handpicked instructors and mentors the secrets to become rich,
be a success in real estate,[”] that was very important to me.

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Low Dep. 32:7–17, Pl. Resp., Ex. F. Similarly, when Low was asked,
Q. [For your declaration in support of class certification,] where did
you get the words “legitimate academic institution”?
A. I got that - - Donald J. Trump created this institution. He went
through the process, just like any university would go through, that - - that’s
why he called it a university. And it has certain, you know, standards and
qualifications, which I don’t know about, which I - - he knows.
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Q. . . . What do you mean by the word “legitimate”?
A. Donald J. Trump went to the Wharton School of the University of
Pennsylvania. I went to University of California. These are legitimate
institutions. Trump University was created by Donald J. Trump, and,
therefore, presumably, he went through all of the same process as those
schools did, to be called a legitimate university.
Q. Sir, is it your testimony that you believed that Trump University

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was like the University of California at Berkley and the University of
Washington?
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[A.] It better be, because Donald J. Trump is a multi-millionaire, a
major success in real estate, and he created this institution, and that which
costs all of us a lot of money to attend. So it better be.

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Low Dep. 101:5–12; 101:19–102:10. Low’s testimony demonstrates that, even if Low

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was unfamiliar with the technical term “accredited,” Low understood TU to have

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undergone the same “processes . . . to be called a legitimate university” involving

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“standards and qualifications” as other accredited universities, such as the University of

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Pennsylvania and the University of California. Moreover, Low’s testimony demonstrates

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that this understanding was an important factor to Low in purchasing in TU programs.

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Second, Defendants argue that Low’s definition of handpicked to mean “whatever

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Donald J. Trump used with his determination, that he would pick the people,” Low Dep.

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157:7–9, is imprecise, and that Low’s testimony that he believed his TU instructors “had

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not spoken with Mr. Trump,” id. at 129:20–23, demonstrates that he did not rely on

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Defendants’ representation that TU instructors would be “handpicked” by Defendant

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Trump. Def. Mot. 21.

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However, whether Low believed that his TU instructors had “spoken” with

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Defendant Trump is quite obviously a separate matter from whether Low believed that

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Defendant Trump had “handpicked” his TU instructors. Moreover, Low also testified,

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Q. At that time, as you walk out of that seminar and you purchased the
three-day seminar, did you believe that Donald J. Trump had personally
handpicked James Harris?
A. Yes.
Q. And then you went to the three-day seminar and then you heard
Steven Goff, correct?
A. Yes.
Q. And you heard him for three days?
A. Yes.
Q. And after hearing him for three days, did you believe that he had
been personally selected by Donald J. Trump?

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...
[A.] At that time, I was thinking not just the final day, all three days,
that he was handpicked by Donald J. Trump.

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Low. Dep. 144:14–145:7. In this testimony, Low demonstrates that he understood his TU

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instructors to have been “handpicked” by Defendant Trump, and implicitly equates the

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term “handpicked” with “personally selected.” Moreover, as pointed out earlier, Low also

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testified that “when he sent out the special invitation, signed by Donald J. Trump himself,

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‘Come to one of my free seminars and learn through my handpicked instructors and

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mentors the secrets to become rich, be a success in real estate,[’] that was very important

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to me.” Low Dep. 32:12–17. Thus, Low both seems to have a commonsense

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understanding of what the term “handpicked” means, and to have relied upon

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Defendants’ representation that Defendant Trump “handpicked” TU instructors in

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deciding to purchase TU programs.

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Finally, the Court finds unpersuasive Defendants’ fourth argument that “[t]he

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Court’s reliance on FTC cases violates binding Ninth Circuit law.” Def. Mot. 22.

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Defendant argues that under Lozano v. AT & T Wireless Servs., Inc., 504 F.3d 718 (9th

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Cir. 2007), the Court erred in analogizing to Federal Trade Commission (FTC) Act cases

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where a full-refund damages theory was found appropriate, such as FTC v. Figgie Int’l,

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Inc., 994 F.2d 595 (9th Cir. 1993), in order to conclude that Plaintiffs’ full-refund

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damages theory was consistent with their theory of liability in the instant case.

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Lozano, however, found that, in a situation where the California courts had not yet

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determined how to define the “unfair” prong of California’s Unfair Competition Law

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(“UCL”), the Ninth Circuit would decline to apply the three-pronged FTC Act test “in the

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absence of a clear holding from the California Supreme Court.” 504 F.3d at 736. It is

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unclear how this 2007 case “bind[s]” the Court from analogizing to FTC Act cases in

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order to uphold the viability of a damages theory under Comcast.3
Accordingly, the Court DENIES Defendants’ motion for leave to file a renewed

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motion for decertification.

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II.

Plaintiffs’ Motion to Modify Scheduling Order to File a Motion to
Clarify or Amend the Court’s Class Certification Orders

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The Court addressed the first component of Plaintiffs’ motion at the July 22, 2016

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hearing, where the Court set forth a possible procedure by which Plaintiffs’ counsel could

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retain their involvement in the case following the conclusion of the liability stage. See

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Hr’g Tr. 4–5, ECF No. 500.4 In the second component, Plaintiffs argue that the core

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misrepresentation certified by the Court that “Trump University was an accredited

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university,” Decert. Order 2, should be “clarified” because “Defendants purport

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beguilement over the variety of adjectives that [P]laintiffs have used over the years to

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modify university . . . [including] ‘legitimate,’ ‘accredited,’ ‘elite,’ ‘actual,’ and ‘real,’”

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Pl. Mot. 5. Plaintiffs are not explicit on how exactly they wish the class certification

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Order to be “clarified,” except insofar as they suggest that “the class notice in this case

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Similarly, in Jones v. ConAgra Foods, Inc., a district court simply stated that there was “no reason” to
import remedies from the FTC Act into a UCL or False Advertising Law (“FAL”) case concerning
natural foods, and that the Plaintiffs had pointed to “no authority that does so,” not that doing so would
be impermissible. 2014 WL 2702726, at *19 n.37 (N.D. Cal. June 13, 2014).
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“[The Court:] . . . In addition, within the motion, there is an issue raised which the Court believes
is a legitimate issue that has to be addressed and that relates to what will happen in the event that the
plaintiffs prevail at trial on the issue of liability to the extent that the Court has decertified the damages
class or the class as it relates to damages.
This is how I see it, and to the extent that the parties have any additional views, I am happy to
entertain them. In the event that the defendants prevail, then obviously it is a moot point. To the extent
that the plaintiffs prevail, then what I would anticipate is that we would issue, provide notices to the
class members advising them of the fact that liability has been determined in this case against the
defendants and that they will be given a certain period of time to provide a notice to the Court of their
intention to pursue damages in the case. And then it would be my expectation, to the extent that there's
someone who seeks to recover damages, that they will retain counsel.
One of them could retain Robbins Geller or one of the other firms representing the plaintiffs, and
at that point, then, Robbins Geller can return into the case. Theoretically, it's possible that none of the
class members would, but I can't believe that that would happen given the plaintiffs' counsel's
involvement in the case. So at that point, we won’t have this question about who is going to proceed
representing the interests of the now-successful class members.” Hr’g Tr. 4–5.
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accurately conveys the ‘university’ aspect of [P]laintiffs’ class claims.” Id. at 6.
The Court rejects Plaintiffs’ effort as untimely. This Court first certified the core

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misrepresentations (that “(1) Trump University was an accredited university; (2) students

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would be taught by real estate experts, professors and mentors hand-selected by Mr.

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Trump; and (3) students would receive one year of expert support and mentoring”) over

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two and a half years ago, and neither party challenged those core misrepresentations in

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the ensuing period of time. See Initial Cert. Order 4; Decert. Order 2. Moreover, Plaintiffs

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offer no authority for the proposition that the scope of the certified claims in a class

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action should be determined in accordance with the class notice, rather than the Court’s

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class certification order.
Accordingly, Plaintiffs’ motion to modify scheduling order to file a motion to
clarify or amend the Court’s class certification orders is DENIED.

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CONCLUSION

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For the foregoing reasons, IT IS HEREBY ORDERED that:

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1.

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Defendants’ Motion for Leave to File Renewed Motion for Decertification,
ECF No. 482, is DENIED.

2.

Plaintiffs’ Motion to Modify Scheduling Order to File a Motion to Clarify or
Amend the Court’s Class Certification Orders, ECF No. 489, is DENIED.

IT IS SO ORDERED.
Dated: August 29, 2016

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