Trump U has obscure Canadian precedent

George Brown College fielded class-action suit

T O R O N T O • The Trump University class-action lawsuit isn’t over yet, at least not officially. Although a US$25-million settlement agreement keeps U.S. president-elect Donald Trump out of court, it still remains subject to the approval of U.S. District Judge Gonzalo Curiel.

The lawsuit, which had otherwise been scheduled to go to trial in San Diego this week, was filed on behalf of more than 6,000 students who had signed up for real estate seminars offered by Trump University LLC between 2005 and 2010. Students argued they were misled because the company claimed it was a university and that Trump personally hand-picked instructors.

But if you think the case seems like a typical product of the litigation-centric U.S. legal system, you’re mistaken. There is precedent for a similar, hard-fought class action that resulted in a judgment against an educational institution — and that case, Ramdath vs. George Brown College, is from the arguably quieter litigation realm of Ontario.

A group of 108 students in 2008 filed a class action that argued they were duped into signing up for a business program based on a false course description in the George Brown College catalogue. Justice Edward Belobaba of the Ontario Superior Court last May approved a $2.725-million settlement ending the eight-year case.

Both cases are examples of what lawyers would call misrepresentation or deceptive marketing claims.

The legal concept is straightforward: Across the common law world — and that includes most of Canada and the U.S. — you can sue for misrepresentation if a company makes false claims in a sales pitch and you rely on that to your detriment. A class action can result if you’re not alone and those false claims entice a large group of people to buy in.

“The types of claims at issue in the Trump University case are ones that Canadian courts can and frequently do tackle in the class proceedings context,” said Michael Eizenga, head of the class actions practice at Canadian business law firm Bennett Jones LLP. He’s been writing blogs about the case over the past year.

Class action lawsuits can be powerful tools for consumers who feel they’ve been hoodwinked. They pool together the aggrieved parties into a single class that is represented by the experience of a representative plaintiff. All members of the class can benefit and share in the damages if those representative plaintiffs can prove the claim at trial.

This is why both the Trump U and George Brown cases are notable from a legal point of view. A misrepresentation class action requires all members of the class to have heard the same false statements and reacted in the same way. This can be tricky, particularly when it comes to education. People attend college or sign up for educational seminars for numerous personal reasons.

“Misrepresentation class actions have been very hard to certify unless they’ve been very small with a very limited number of core representations,” Eizenga said. “You need to have this core commonality.”

Still, both education cases overcame the common issues hurdle and were “certified” to proceed as class actions.

In the Trump U case, the plaintiffs alleged that salespeople repeated the alleged misrepresentations so consistently that it was like they were operating from the same playbook.

The plaintiffs boiled the case down to three alleged misrepresentations: that Trump U was an accredited university; that its teachers were experts personally hired by Donald Trump; and that graduates would receive one year of expert support and mentoring.

The George Brown case was much simpler. The college’s course calendars for 2007-08 and 2008-09 offered an eight-month certificate program in International Business Management. The calendars stated that in addition to their graduate certificates, those successfully completing the program would also obtain three industry designations.

Justice Belobaba ruled in 2012 found that this claim was false. Still, the case would continue for four more years until last May due to appeals and subsequent litigation over the calculation of damages.

The case was ultimately settled, with Justice Belobaba approving the $2.725-million agreement as “fairly, indeed generously” compensating the students. Domestic students can claim up to $16,427 and international students up to $22,484 in compensation for a variety of items, including tuition, public transportation costs, living expenses and even employment income lost due to their eight months in school.

An Ontario case is obviously never going to be the mirror image of a U.S. lawsuit. The U.S. matter would have been a jury trial, and that’s something that hardly ever happens in a Canadian civil lawsuit. The U.S. case would also have been quite a circus, perhaps even with Donald Trump personally appearing as a witness.

The Canadian case, by contrast, was argued by lawyers off a “paper record” with no live witnesses. Judge Belobaba said the Canadian lawyers deserved “special commendation for their legal acumen.”

Another important distinction is that the George Brown case was brought under Ontario’s Consumer Protection Act, which states that a successful Ontario plaintiff is entitled to damages after proving that a defendant engaged in an “unfair practice.” In other words, there is no need to provide additional proof that the plaintiff relied on the defendant’s statements.

“That’s a very helpful thing for people pursuing class actions under the Consumer Protection Act on the basis of an unfair practice,” Eizenga said.

The Trump U settlement wraps up two federal lawsuits and another case brought by the state of New York. Judge Curiel has asked that the formal settlement be filed in court by Dec. 19.

The president-elect admits no wrongdoing in the settlement, but he said on Twitter that Trump U would have won the case at trial: “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!”