Doe et al. v. Trump Corp. et al.

Last updated
Patel v. Trump Corp et al.
CourtSupreme Court of the United States, No. 20 - 1513
Case history
Appealed from2nd U.S. Circuit Court of Appeals, No. 20-1706
Doe et al v. Trump Corp et al.
Court2nd U.S. Circuit Court of Appeals, Nos. 20-1228, 20-1278, 20-1706 [1]
Doe et al v. Trump Corp et al.
CourtU.S. District Court, Southern District of New York, No. 18-cv-09936 [2]

Doe et al. v. Trump Corporation et al. is an ongoing case commenced in the U.S. District Court for Southern District of New York in October 2018, [3] [4] in which plaintiffs Lynn Chadwick, Markus Frazier, Catherine McKoy and Millard Williams [5] filed a previously anonymous lawsuit against the Trump Corporation, Donald Trump and three of his adult children — Donald Jr., Eric, and Ivanka — alleging racketeering and of fraudulently encouraging unsophisticated investors to give large amounts of money to organizations connected to the Trumps. [2] [6] [7] [8] [9] It is alleged that the defendants promoted the multi-level marketing company ACN Inc. in exchange for millions of dollars in secret payments from 2005 to 2015. [10] The lawsuit says that Trump "told investors that he had 'experienced the opportunity' and 'done a lot of research,' and that his endorsement was 'not for any money.'" [11] However, it subsequently emerged that Trump was a paid spokesman for at least one of the companies whose products and services he was promoting to investors. [11] [12]

Contents

The Trumps have repeatedly sought to compel the case going to arbitration, which is held behind closed doors, [13] [14] based on contracts between ACN and each of the plaintiffs, which includes a clause mandating the resolution of all disputes via binding arbitration. However, the Trumps are not parties to the ACN contracts, nor is ACN a party to the lawsuit. [15] The companies named in the lawsuit, but which are not parties, are: ACN, a seller of videophones; the Trump Network, a vitamin marketing company; and the Trump Institute, which ran real estate marketing seminars. [16] Multiple judges in multiple courts have rejected the Trumps' motion for arbitration, saying it was unfair for the Trumps to demand arbitration. The plaintiffs' lawyer has repeatedly argued that the case was not based on the ACN contract, but on the Trumps' fraud. [17] The Trumps' attempt to compel arbitration was again rejected on 28 July 2021, in a decision which also rejected ACN's effort to use the arbitration clause to refuse to turn over documents to the plaintiffs. [18]

The case was dismissed from federal court on January 12, 2024.

Timeline

2018

On 29 October 2018, four anonymous plaintiffs filed a lawsuit in the District Court for Southern District of New York alleging racketeering by the defendants and of fraudulently encouraging unsophisticated investors to give large amounts of money to organizations connected to the Trumps. [6] [19] In December 2018, a New York federal court upheld the plaintiffs' right to anonymity. [20]

2019

On 14 January 2019, the Trump defendants sought to have charges under the Racketeer Influenced and Corrupt Organizations (RICO) Act dropped from the lawsuit. [21]

On 21 February 2019, by which time the plaintiffs had amended their claim, the Trumps sought to have the remaining claims thrown out. [22]

On 19 July 2019, the Trumps notified the court that they intended to compel arbitration, [13] [14] based on contracts between ACN and each of the plaintiffs, which includes a clause mandating the resolution of all disputes via binding arbitration. The Trumps are not parties to the ACN contracts, nor is ACN a party to the lawsuit. [15]

On 24 July 2019, Judge Lorna Schofield rejected the plaintiffs' RICO claims, but kept alive many or all of the remaining claims in the lawsuit. [23] [24] [25] She rejected the motion, and rebuked the Trumps' behavior which she denounced as "substantively prejudicial towards Plaintiffs and seeks to use the [Federal Arbitration Act] as a vehicle to manipulate the rules of procedure to the Defendants' benefit and Plaintiffs' harm." [26] [15]

On 29 August 2019, the Trumps again requested that the court send the case to arbitration. [27]

2020

On 13 March, as part of the discovery process, Judge Schofield ordered the Trumps to provide business records from The Trump Organization for 15 years, back to 2005. [28] It was alleged that the Trumps had promoted ACN in exchange for millions of dollars in secret payments from 2005 to 2015. [6]

On 8 April, Judge Schofield refused to compel arbitration, saying the plaintiffs had no reason to believe their arbitration agreements with ACN covered the Trumps and saying that it was unfair for the Trumps to demand arbitration only after she had dismissed the racketeering claim. [14] [29]

On 9 April, unaired footage from The Celebrity Apprentice was ruled admissible as evidence. [30] [31] [32]

On 21 April, the plaintiffs accused the Trumps of attempting to stall the lawsuit. [33]

In May, the Trumps requested a pause in proceedings, to allow them to appeal Schofield's 8 April decision not to compel arbitration, which on 18 May Judge Schofield denied. [34] [35]

On 26 May, the Trumps filed an appeal in the Second Circuit Court, and on 29 May that court granted an administration stay on proceedings until the appeal was heard. [36]

On 1 December, the Second Circuit Court, comprising Judges Raymond J. Lohier, Jr., Denny Chin and Robert D. Sack, heard oral argument on the merits. The Trumps again attempted to halt the lawsuit and compel arbitration, while the plaintiffs' lawyer repeated the argument that the case was not based on the ACN contract, but on the Trumps' fraud. [17] The three-judge panel dismissed the Trumps' application and agreed with Schofield's conclusion that it was unfair for the Trumps to demand arbitration. [37] [38] The appellate panel extended the stay until its decision is issued. [39]

2021–2023

On 28 July 2021, the Second Circuit Court of Appeals issued its decision. In a 3-0 decision, the court rejected the Trumps' attempt to force arbitration and also rejected ACN's effort to use the arbitration clause to refuse to turn over documents to the plaintiffs. [18] In August, the plaintiffs agreed to reveal their names, and on 14 September they filed a second amended complaint with their actual names. [5]

Trump and his children were deposed in 2022. [40] [41] In May 2023, the plaintiffs withdrew their claims against the children in order to "streamline the dispute ahead of a trial". [42]

2024

The trial was scheduled for January 29, 2024, [43] but on January 12, U.S. District Judge Lorna G. Schofield dismissed the case from federal court, recommending plaintiffs file their cases in state courts. [44]

See also

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References

  1. ↑ "Trumps Want Court to Approve Arbitration for Marketing Fraud Lawsuit". Insurance Journal. December 2, 2020.
  2. 1 2 Stempel, Jonathan (February 21, 2019). "Trump, adult children urge dismissal of marketing scam lawsuit". Reuters . Retrieved February 24, 2019.
  3. ↑ https://www.classaction.org/media/doe-et-al-v-the-trump-corporation-et-al.pdf [ bare URL PDF ]
  4. ↑ "Docket for Doe v. The Trump Corporation, 1:18-cv-09936 - CourtListener.com". CourtListener. Retrieved 2021-03-05.
  5. 1 2 ACN Trump lawsuit anonymous Plaintiffs revealed
  6. 1 2 3 Orden, Erica (October 19, 2018). "New lawsuit claims Trump, children made millions off investment scams". CNN . Retrieved February 24, 2019.
  7. ↑ Haberman, Maggie; Weiser, Benjamin (October 29, 2018). "Trump Persuaded Struggling People to Invest in Scams, Lawsuit Says". The New York Times . Retrieved February 24, 2019.
  8. ↑ Larson, Erik; Nasiripour, Shahien (October 29, 2018). "Trump and His Children Accused of Investment Scams in Lawsuit". Bloomberg . Retrieved February 24, 2019.
  9. ↑ Larson, Erik (December 3, 2018). "Trump Twitter Tirades Prompt Litigants to Seek Anonymity in Suit". Bloomberg . Retrieved February 24, 2019.
  10. ↑ Trumps Want Court to Approve Arbitration for Marketing Fraud Lawsuit
  11. 1 2 Dzhanova, Yelena. "Inside Trump's ties to the multi-level marketing company that gave him $8.8 million when he was approaching financial ruin". Business Insider .
  12. ↑ Maremont, James V. Grimaldi and Mark (August 13, 2015). "Donald Trump Made Millions From Multilevel Marketing Firm". The Wall Street Journal – via www.wsj.com.
  13. 1 2 "How Trump Has Used A Secretive Justice System To Keep Lawsuits Against Him Quiet". BuzzFeed News . 9 August 2019.
  14. 1 2 3 Staff, C. P. R. (April 23, 2020). "NY Federal Judge Rejects Trumps' Motion to Compel Arbitration".
  15. 1 2 3 NY Federal Judge Rejects Trumps' Motion to Compel Arbitration
  16. ↑ Levin, Bess (29 October 2018). "Of Course Trump Hawked Get-Rich-Quick Schemes to Poor People". Vanity Fair .
  17. 1 2 "Trump lawyer asks federal appeals court to send lawsuit over alleged pyramid scheme to arbitration". www.msn.com.
  18. 1 2 "Appeals court deals setback to Trump in fraud suit". Politico . 28 July 2021. Archived from the original on 2023-04-02.
  19. ↑ "Trump Accused Of Conning Thousands Into Bogus Deals - Law360". www.law360.com.
  20. ↑ "Trump Fraud Accusers Can Stay Anonymous, Judge Says - Law360". www.law360.com.
  21. ↑ "Trump Looks To Kill Racketeering Fraud Suit Against Kids, Co. - Law360". www.law360.com.
  22. ↑ "Trump, Kids Say Changes To Racketeering Suit Don't Fix It - Law360". www.law360.com.
  23. ↑ "Trump, Kids Must Face Fraud Suit Trimmed Of RICO Claims - Law360". www.law360.com.
  24. ↑ Stempel, Jonathan (July 25, 2019). "Trump must face marketing scam lawsuit, escapes racketeering claims: NY judge". Reuters – via www.reuters.com.
  25. ↑ Voytko, Lisette. "Judge Rules Trump Can Be Sued For Marketing Scheme Fraud". Forbes .
  26. ↑ Jane Doe, et al. v. Trump Corp., et al., 18 Civ. 9936 (LGS) at 15.
  27. ↑ "Trump Seeks to Move Video Phone Fraud Suit Into Arbitration". Bloomberg . August 30, 2019 – via www.bloomberg.com.
  28. ↑ Jacobs, Shayna (March 14, 2020). "Trump ordered to expand document search in suit alleging he endorsed pyramid scam". The Washington Post . Retrieved March 14, 2020.
  29. ↑ Stempel, Jonathan (April 9, 2020). "Trump family loses bid to move marketing scam lawsuit to arbitration". Reuters – via www.reuters.com.
  30. ↑ "'Apprentice' Outtakes Relevant In Fraud Suit Against Trump - Law360". www.law360.com.
  31. ↑ "MGM Ordered to Deliver Unaired 'Apprentice' Footage in Marketing Scam Lawsuit Against Trumps | Hollywood Reporter". www.hollywoodreporter.com. 9 April 2020.
  32. ↑ Patten, Dominic (April 10, 2020). "Donald Trump & MGM Strike Out Blocking Release Of 'Apprentice' Tapes; Ordered By Judge In Scam Suit".
  33. ↑ "Trumps' Latest 'Stall Tactic' Should Be Rejected, Investors Say - Law360". www.law360.com.
  34. ↑ "Pyramid scheme fraud suit against Trump and his family to go ahead". The Independent . May 19, 2020.
  35. ↑ http://cdn.cnn.com/cnn/2020/images/05/19/opinion.trump.corporation.lawsuit.pdf [ bare URL PDF ]
  36. ↑ ACN Trump lawsuit stayed till outcome of arbitration appeal
  37. ↑ Stempel, Jonathan (December 2, 2020). "Trump family urges U.S. appeals court to move marketing scam lawsuit to arbitration". Reuters – via www.reuters.com.
  38. ↑ "Trump Lawyers Accused of Legal 'Gamesmanship' in Attempts to Keep Alleged Pyramid Scheme from Public Trial". www.msn.com.
  39. ↑ Joint letter to Judge Schofield
  40. ↑ Scannell, Kara (March 25, 2022). "Donald Trump and his children agree to be deposed in fraudulent marketing lawsuit". CNN . Retrieved August 8, 2023.
  41. ↑ Larson, Eric (March 25, 2022). "Trump deposed in suit by investors claiming fraud in 'Apprentice' videophone pitches". Bloomberg News . Retrieved August 8, 2023– via Portland Press Herald.
  42. ↑ Larson, Eric (June 15, 2023). "Trump Children Dropped From Suit Over 'Apprentice' Pitches". Bloomberg News . Archived from the original on May 25, 2023. Retrieved August 8, 2023– via BNN Bloomberg.
  43. ↑ Orden, Erica (June 15, 2023). "Trump now faces four trials over six-month span during critical phase of 2024 campaign". Politico . Retrieved August 8, 2023.
  44. ↑ Schoonover, Nika. "Federal judge dumps pyramid scheme lawsuit against Trump," Courthouse News Service, Jan. 12, 2024. Retrieved Jan. 23, 2024.
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