President-elect Donald Trump, who has repeatedly bragged that he never settles lawsuits despite a long history of doing so, has agreed to a $25 million settlement to end the fraud cases pending against his defunct real estate seminar program, Trump University.
The settlement eliminates the possibility that Trump will be called to testify in court in the midst of his presidential transition. It ends three separate lawsuits that made claims against Trump University, including a California class action case that was scheduled to go to trial later this month, as well as a second suit in that state and an action filed by New York Attorney General Eric Schneiderman.
In a statement, Trump Organization General Counsel Alan Garten said he thought Trump would have prevailed at trial but settled so Trump could “devote his full attention to the important issues facing our great nation” during his presidential transition.
Schneiderman, a Democrat who had faced harsh attacks from Trump since filing the 2013 suit, said in a statement that his office had sued Trump for “swindling thousands of innocent Americans out of millions of dollars” and that the settlement had come despite significant resistance from Trump for years.
“Today, that all changes,” Schneiderman said. “Today’s $25 million settlement agreement is a stunning reversal by Donald Trump and a major victory for the over 6,000 victims of his fraudulent university.”
Schneiderman said the settlement includes a $1 million penalty paid to New York state for violating the state’s education laws by calling the program a “university” despite offering no degrees or traditional education. Trump did not, however, admit fault regarding the claims that customers were cheated.
A lawyer representing former customers in the two California cases also confirmed the settlement at a hearing in San Diego.
[Donald Trump said his ‘university’ was about education. Actually, it was about ‘sell, sell, sell!’]
The Trump University settlement appears to fit a pattern in which lawyers for the president-elect are working to reduce the number of his legal entanglements before he takes office.
On Wednesday, Trump’s attorneys dropped an unrelated lawsuit he was pursuing in Florida against Palm Beach County, in which he had complained about commercial air traffic over his Mar-a-Lago estate.
Trump has fought the county for years over flight patterns from the county airport, which he has complained causes too much noise at his club. New airspace restrictions likely to be imposed with Trump’s election could mean that Trump will win the long fight without legal action.
Negotiations over the Trump University deal were handled in part by lawyers for Schneiderman, who had filed suit against Trump University in 2013. Schneiderman has called the real estate program “a fraud from beginning to end.”
The fates of the New York case and the two California suits were closely linked because they were all brought on behalf of an overlapping pool of former Trump University customers, said a person familiar with the situation, who spoke on condition of anonymity because of the sensitivity of the ongoing negotiations.
Lawyers for customers who sued in California said the settlement must still be approved by the court, but that some customers would see full refunds of the money they spent on Trump University, potentially as much as $35,000 in some cases.
An administrator is expected to be appointed to disburse the funds, but attorney Jason Forge said many could see refunds in three to four months. Forge called the settlement an “unprecedented recovery” for such a case.
Charles Spada, an attorney for former Trump University president Michael Sexton, said in a statement that the one-time Trump business partner remained “proud of the work done at Trump U.” and is “grateful for the unwavering support he received” from Trump.
Trump is known for aggressively pursuing his business interests in court. Still, he has settled lawsuits many times, despite arguing that doing so only invites further litigation.
“I don’t settle cases. You know what happens? When you start settling lawsuits, everybody sues you,” he said on MSNBC in March, responding to a question about Trump University. “I don’t get sued, because I don’t settle cases. I win in court.”
The Trump University case emerged as a political issue during the presidential campaign. And even as he rose in the polls, won primaries and emerged as the Republican nominee, Trump at times seemed deeply engrossed in the litigation and repeatedly defended the business from the stump.
At a rally in San Diego in May, Trump dissected the matter at length, insisting that most customers who had spent money on the real estate program had been pleased. He attacked particular plaintiffs by name, including one who later dropped out of the case, citing the publicity.
Trump’s San Diego statements included an attack on U.S. District Judge Gonzalo Curiel, who was overseeing the California cases, and a promise: “If we have a trial, we’ll go all the way,” he said then. “Watch how we win it.”
In subsequent interviews in June, Trump continued to press complaints against Curiel, alleging that the Indiana-born judge was biased because of his Mexican heritage.
Those comments sparked an uproar that swallowed days of Trump’s campaign and subsided only when his campaign released a lengthy statement in June claiming his comments had been “misconstrued as a categorical attack against people of Mexican heritage.”
The cases against Trump University were based on complaints from customers who described their experiences in programs that could cost more than $30,000.
The former customers said they were taken in by false promises including advertisements in which Trump promised seminar attendees would learn his personal tricks for succeeding in real estate from instructors he had personally hand-picked. In depositions, Trump has acknowledged he did not pick seminar leaders.
Trump argued in a written statement that, “with all of the thousands of people who have given the courses such high marks and accolades, we will win this case!”
Curiel had strongly urged a settlement in the cases pending in his courtroom, where Trump’s lawyers had recently asked for a delay, citing the burdens of the presidential transition. They suggested the trial, which was scheduled to open Nov. 28, would be easier in February or March, after Trump takes office.
Roxana Popescu in San Diego contributed to this report.