Business​ ​Law​ ​Research​ ​Paper
Ever​ ​since​ ​the​ ​beginning​ ​of​ ​Donald​ ​Trump’s​ ​presidential​ ​campaign​ ​back​ ​in​ ​June​ ​16,
2015,​ ​he​ ​has​ ​been​ ​highly​ ​criticized​ ​for​ ​his​ ​comments​ ​regarding​ ​minorities,​ ​women,​ ​and​ ​just
about​ ​the​ ​public​ ​in​ ​general.​ ​However,​ ​he​ ​has​ ​pushed​ ​onward​ ​and​ ​is​ ​now​ ​the​ ​president-elect​ ​of​ ​the
United​ ​States.​ ​He​ ​has​ ​held​ ​no​ ​elected​ ​office​ ​and​ ​doesn’t​ ​have​ ​any​ ​political​ ​background;​ ​however,
he​ ​maintains​ ​that​ ​his​ ​business​ ​acumen​ ​and​ ​experience​ ​is​ ​what​ ​will​ ​‘Make​ ​America​ ​Great​ ​Again’.
However,​ ​even​ ​that​ ​has​ ​been​ ​called​ ​into​ ​question​ ​during​ ​the​ ​past​ ​year.​ ​So,​ ​given​ ​the​ ​mystery
surrounding​ ​his​ ​business​ ​dealings,​ ​Trump​ ​University​ ​seems​ ​like​ ​a​ ​good​ ​place​ ​to​ ​start​ ​and​ ​to
further​ ​determine​ ​whether​ ​his​ ​business​ ​experience​ ​really​ ​does​ ​live​ ​up​ ​to​ ​the​ ​hype​ ​or​ ​if​ ​it​ ​has​ ​led
him​ ​down​ ​the​ ​wrong​ ​path.
Trump​ ​University​ ​(formerly​ ​the​ ​Trump​ ​Wealth​ ​Institute,​ ​later​ ​named​ ​Trump
Entrepreneur​ ​Initiative​ ​LLC)​ ​was​ ​a​ ​for-profit​ ​education​ ​company,​ ​operating​ ​from​ ​2005​ ​to​ ​2010.
It​ ​housed​ ​a​ ​training​ ​program​ ​with​ ​courses​ ​focusing​ ​on​ ​real​ ​estate,​ ​asset​ ​management,
entrepreneurship​ ​and​ ​wealth​ ​creation.​1​​ ​The​ ​courses​ ​varied​ ​in​ ​price,​ ​from​ ​$1,495​ ​to​ ​$34,995,​ ​all​ ​to
learn​ ​the​ ​real​ ​estate​ ​mogul’s​ ​secrets​ ​to​ ​success.​ ​It​ ​was​ ​originally​ ​founded​ ​by​ ​Donald​ ​Trump​ ​and
two​ ​of​ ​his​ ​associates.​2​​ ​After​ ​various​ ​lawsuits,​ ​it​ ​is​ ​now​ ​out​ ​of​ ​operation.​ ​Despite​ ​the​ ​company
being​ ​briefly​ ​named​ ​a​ ​‘university’,​ ​it​ ​was​ ​not​ ​an​ ​accredited​ ​university​ ​or​ ​college,​ ​bestow​ ​degrees,
give​ ​grades,​ ​or​ ​even​ ​grant​ ​college​ ​credit.​3,​ ​22​​ ​This​ ​and​ ​many​ ​other​ ​issues​ ​regarding​ ​the​ ​company’s
business​ ​practices​ ​have​ ​been​ ​the​ ​center​ ​of​ ​allegations​ ​and​ ​multiple​ ​lawsuits,​ ​flaring​ ​up​ ​even​ ​more
so​ ​since​ ​Trump​ ​announced​ ​his​ ​presidential​ ​campaign.
Three​ ​lawsuits​ ​were​ ​filed​ ​against​ ​Trump​ ​University​ ​during​ ​its​ ​lifetime.​ ​Two​ ​of​ ​those
were​ ​federal​ ​class-action​ ​lawsuits​ ​and​ ​a​ ​third​ ​was​ ​filed​ ​in​ ​New​ ​York​ ​state​ ​court.​ ​The​ ​latter​ ​was
filed​ ​by​ ​the​ ​New​ ​York​ ​State​ ​Department​ ​on​ ​August​ ​24,​ ​2013​ ​alleging​ ​that​ ​Trump​ ​University​ ​was
participating​ ​in​ ​illegal​ ​business​ ​practices​ ​and​ ​had​ ​made​ ​false​ ​claims.​4​​ ​But,​ ​even​ ​before​ ​these
accusations,​ ​the​ ​New​ ​York​ ​State​ ​Department​ ​of​ ​Education​ ​had​ ​sent​ ​two​ ​notices​ ​to​ ​Donald​ ​Trump
and​ ​his​ ​associates​ ​that​ ​they​ ​were​ ​violating​ ​state​ ​law​ ​by​ ​using​ ​the​ ​word​ ​“university”​ ​but​ ​did​ ​not
have​ ​the​ ​proper​ ​licensing​ ​to​ ​instruct​ ​students.​5​​ ​It​ ​was​ ​only​ ​after​ ​the​ ​second​ ​letter​ ​that​ ​the​ ​name
was​ ​changed​ ​to​ ​“The​ ​Trump​ ​Entrepreneur​ ​Initiative”.​6​​ ​They​ ​then​ ​also​ ​responded​ ​to​ ​the​ ​letter​ ​by
stating​ ​that​ ​they​ ​would​ ​create​ ​a​ ​new​ ​limited-liability​ ​corporation​ ​(LLC)​ ​in​ ​the​ ​state​ ​of​ ​Delaware
and​ ​would​ ​hold​ ​programs​ ​outside​ ​of​ ​New​ ​York.​ ​However,​ ​both​ ​of​ ​these​ ​claims​ ​turned​ ​out​ ​to​ ​be
false.​ ​They​ ​did​ ​create​ ​a​ ​new​ ​Delaware​ ​LLC​ ​but​ ​did​ ​not​ ​merge​ ​it​ ​with​ ​the​ ​New​ ​York​ ​LLC​ ​and
continued​ ​operations​ ​within​ ​the​ ​same​ ​state.​7​​ ​The​ ​damage​ ​was​ ​obviously​ ​too​ ​far​ ​gone.​ ​On​ ​top​ ​of
not​ ​following​ ​these​ ​set​ ​conditions,​ ​there​ ​were​ ​an​ ​array​ ​of​ ​other​ ​violations​ ​that​ ​occurred​ ​during
the​ ​business’s​ ​operations.​ ​New​ ​York​ ​Attorney​ ​General,​ ​Eric​ ​Schneiderman,​ ​went​ ​as​ ​far​ ​as​ ​to
claim​ ​on​ ​CNN​ ​that​ ​Trump​ ​University​ ​was​ ​a​ ​“bait-and-switch”​ ​scheme.​​ ​​People​ ​were​ ​invited​ ​into​ ​a
free​ ​seminar​ ​that​ ​was​ ​meant​ ​to​ ​give​ ​them​ ​some​ ​instruction​ ​but​ ​were​ ​then​ ​lured​ ​into​ ​paid
programs​ ​and​ ​sessions​ ​that​ ​cost​ ​up​ ​to​ ​$35,000.​ ​The​ ​faculty​ ​were​ ​also​ ​supposed​ ​to​ ​be
“handpicked”​ ​by​ ​Donald​ ​Trump​ ​and​ ​meant​ ​to​ ​be​ ​experts,​ ​but​ ​it​ ​was​ ​later​ ​discovered​ ​that​ ​both​ ​of
these​ ​claims​ ​were​ ​false​ ​as​ ​well.​ ​Most​ ​of​ ​the​ ​faculty​ ​were​ ​not​ ​picked​ ​directly​ ​by​ ​Mr.​ ​Trump​ ​and
some​ ​had​ ​just​ ​gotten​ ​out​ ​of​ ​bankruptcy​ ​as​ ​a​ ​result​ ​of​ ​their​ ​poor​ ​real​ ​estate​ ​ventures.​ ​Mr.​ ​Trump
only​ ​responded​ ​by​ ​saying​ ​that​ ​Schneiderman​ ​was​ ​only​ ​coming​ ​after​ ​him​ ​because​ ​Trump​ ​refused
to​ ​donate​ ​to​ ​his​ ​campaign.​8​​ ​Trump​ ​was​ ​also​ ​not​ ​involved​ ​in​ ​the​ ​development​ ​of​ ​any​ ​of​ ​the
curriculum​ ​or​ ​reviewed​ ​any​ ​of​ ​it​ ​prior​ ​to​ ​instruction.​ ​In​ ​2014,​ ​a​ ​New​ ​York​ ​judge​ ​found​ ​Donald
Trump​ ​personally​ ​liable​ ​for​ ​the​ ​unlicensed​ ​school​ ​and​ ​any​ ​damages​ ​caused​ ​by​ ​it.​9​​ ​However,​ ​this
was​ ​just​ ​one​ ​case​ ​brought​ ​against​ ​Trump​ ​University​ ​by​ ​the​ ​government.​ ​Alumni​ ​from​ ​the​ ​school
also​ ​bared​ ​their​ ​grievances​ ​against​ ​Mr.​ ​Trump​ ​and​ ​the​ ​damages​ ​his​ ​business​ ​caused​ ​them,​ ​all​ ​in​ ​a
very​ ​public​ ​manner..
Tarla​ ​Makaeff​ ​was​ ​the​ ​catalyst​ ​for​ ​the​ ​first​ ​federal​ ​lawsuit​ ​brought​ ​against​ ​Mr.​ ​Trump​ ​in
2010.​ ​Makaeff​ ​paid​ ​close​ ​to​ ​$60,000​ ​to​ ​Trump​ ​University​ ​and​ ​was​ ​seeking​ ​refunds​ ​for​ ​her​ ​and
other​ ​past​ ​clients​ ​as​ ​well​ ​as​ ​punitive​ ​damages​ ​for​ ​a​ ​variety​ ​of​ ​wrongdoings,​ ​including​ ​fraud,​ ​bad
faith​ ​and​ ​negligent​ ​misrepresentation.​10​ ​​Trump​ ​University​ ​responded​ ​with​ ​a​ ​counterclaim​ ​stating
that​ ​Makaeff’s​ ​defamation​ ​claims​ ​had​ ​caused​ ​losses​ ​over​ ​$1​ ​million​ ​to​ ​the​ ​company.​ ​However,
Makaeff​ ​invoked​ ​California’s​ ​anti-SLAPP​ ​statute,​ ​which​ ​claims​ ​that​ ​the​ ​University’s
counterclaim​ ​was​ ​a​ ​strategic​ ​lawsuit​ ​against​ ​public​ ​participation​ ​and​ ​sped​ ​up​ ​the​ ​processing​ ​of
the​ ​defamation​ ​claim.​11​​ ​It​ ​halts​ ​any​ ​further​ ​discovery​ ​and​ ​also​ ​placed​ ​the​ ​burden​ ​on​ ​the​ ​defendant