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2017-03-31 11:48:02
Judge Signals He Will Approve Trump University Settlement Despite a Challenge

SAN DIEGO — After years of pursuing fraud claims against Donald J. Trump, lawyers representing former students of his defunct for-profit education venture, Trump University, appeared in federal court on Thursday to try to fend off one last challenge: an objection to the $25 million settlement that would bring the case to a close.

Lawyers for Sherri Simpson, a former student from Fort Lauderdale, Fla., called on the federal judge, Gonzalo P. Curiel, to reject the settlement unless former students are given a chance to opt out so they can pursue fraud claims against President Trump on their own. The settlement is not enough for Ms. Simpson. She wants to see Mr. Trump tried and convicted of criminal racketeering and for him to apologize, too.

Judge Curiel suggested that he would probably approve the settlement and dismiss the objection, but he did not issue a ruling during the hearing, which lasted about an hour. He is likely to issue a written order on the settlement. If he did allow the objection, it could disrupt the settlement because it could expose Mr. Trump to individual lawsuits from former students like Ms. Simpson.

The amount of money the plaintiffs would recover in the settlement is “extraordinary,” said Judge Curiel, who has overseen the case for the last four years, adding that there would be significant hurdles in reaching a similar settlement during a trial.

If the settlement is approved, Thursday’s courtroom hearing could turn out to be the final one in a yearslong case that garnered outsize national attention in Mr. Trump’s victorious 2016 presidential campaign, during which he faced a pair of class-action lawsuits. The lawsuits, one in California and a separate one brought by Eric T. Schneiderman, the New York attorney general, alleged that Trump University students had been cheated out of thousands of dollars in tuition through high-pressure sales techniques and false claims about what they would learn.

The class-action plaintiffs’ lawyers said the $25 million deal was the best possible outcome for roughly 3,730 students, who they predicted could recoup more than 90 cents on the dollar of what they spent at Trump University. If students like Ms. Simpson are allowed to opt out, the lawyers said they feared it could jeopardize the deal or lead to delays in settlement checks’ being sent out.

“What she is looking for is an apology, and you can’t get that,” Patrick Coughlin, one of the plaintiff’s lawyers, said in court.

Daniel Petrocelli, a lawyer for Mr. Trump, declined to speak during Thursday’s hearing. In a court filing last week, the president’s lawyers asked Judge Curiel to give final approval to the settlement.

“To come to the point of settlement and say we’re not giving you the chance to opt out, that is not fair,” said Gary Friedman, a lawyer for Ms. Simpson. After Judge Curiel reiterated that a jury trial could lead to less favorable results, Mr. Friedman said, “That is a risk analysis that Sherri Simpson has the right to make.”

Mr. Trump publicly rebutted the fraud claims during his presidential bid, at one point questioning Judge Curiel’s impartiality based on his Mexican heritage. He pointed to the program’s positive reviews and vowed to reopen the university after a victory at trial. But his political opponents seized on the allegations, and angry former students spoke out, painting Mr. Trump as a huckster willing to rip off ordinary people in the name of personal profits.

But after his election in November, Mr. Trump reversed course and agreed to pay $25 million to resolve the litigation. He did not admit fault, and he said on Twitter after the settlement announcement that he “did not have the time to go through a long but winning trial on Trump U.”

The case was scheduled to go to trial late last year, meaning Mr. Trump would most likely have had to testify during his transition to the White House. At trial, he would have faced reams of evidence about the business practices of Trump University. Dozens of students and instructors wrote sworn statements describing their experiences, with some calling the school a fraud or describing how they were scammed. Other materials, like sales playbooks, explained a technique that used “the roller coaster of emotions” to persuade students to pay for courses costing up to $35,000.

Even before Thursday’s hearing, the plaintiffs’ lawyers — who said they would waive their fees after years of litigating the case — were surprised and disappointed that Ms. Simpson had objected to the settlement, fearing that it would delay payments to other students for months, if not years.

Ms. Simpson’s lawyers argued that a 2015 notice to students about the class-action case gave the impression that they would have an opportunity to be excluded from a settlement at a later date. The class-action lawyers say that it was abundantly clear students were required to opt out in 2015, and that Ms. Simpson’s lawyers are mischaracterizing the notice.

Mr. Trump was motivated to agree to the sweeping deal because it would resolve the claims and avoid a trial.

In 2010, Ms. Simpson, a lawyer herself, spent about $19,000 on Trump University programs. After the deal was announced, she submitted a claim to partake in the settlement, before objecting.

In a phone interview before Thursday’s hearing, Ms. Simpson said that she hoped her objection would not “blow up the settlement,” but that she believed she could fare better at trial and possibly even win a guilty verdict against Mr. Trump.

“For him to go out there and say, well, ‘I didn’t do anything wrong,’ it’s disgusting,” she said. “I want an apology.”