SLAPP Down: Trump University

Trump you're firedA federal appeals court this week taught Trump University and its founder,  Donald “You’re Fired” Trump, an important lesson about bullying.

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit in California reinstated a motion to strike a defamation claim filed by Trump University against a former student, Tarla Makaeff,  in a class action lawsuit that accuses Trump University of being an elaborate scam.

Makaeff said the defamation claim violated California’s Anti-SLAPP (Strategic Lawsuits Against Public Participation) statute and was intended to deter her from pursuing her right to free speech. SLAPP refers to lawsuits that masquerade as ordinary lawsuits  but are intended to deter ordinary people from exercising their political or legal rights or to punish them for doing so.

The appeals court also revered a lower court ruling that held Trump University is not a public figure. The appeals court said Trump University, is a “limited public figure” that is subject to a heightened burden of proof in a defamation case.  Trump University must show by clear and convincing evidence that Makaeff’s alleged defamatory statements were made with “actual malice”  –  with knowledge of their falsity or reckless disregard for the truth.

This ruling makes it very unlikely that the university can prevail in the defamation claim.

Trump, a real estate magnate who stars in the TV show, The Apprentice, founded Trump University as a private, for-profit entity, to teach his “insider success secrets.”    Makaeff  attended university seminars that encouraged members of the public to participate in the market for foreclosed properties, which had grown substantially in the wake of the 2007 financial and mortgage crisis.  After paying more than $5,000 to the university, Makaeff, in 2009, began accusing the university in letters and Internet postings of deceptive business practices.

Makaeff said she  wrote her bank and the Better Business Bureau and posted statements on the Internet  “to alert other consumers of my opinions and experience with Trump University,” and to “inform other consumers of my opinion that Trump University did not deliver what it  promised.”   

The appellate panel said Trump University became a “limited purpose public figure” when it conducted an aggressive advertising campaign in which it made controversial claims about its products and services. This campaign included online, social media, local and national newspaper, and radio advertisements for free introductory seminars. Furthermore, Donald Trump denied the university engaged in the practices that were the subject of Makaeff’s alleged discriminatory statements in the forward of  his book, Wealth Building 101.

The appeals court  panel said it had “little difficulty” concluding that a public controversy existed over Trump University’s educational and business practices when Makaeff made her statements about them.  “ By 2007 and 2008, disgruntled Trump University customers were posting complaints on public Internet message boards,”  the panel notes.

“To be clear: Trump University is not a public figure because Donald Trump is famous and controversial … Trump University is a limited public figure because a public debate existed regarding its aggressively advertised educational practices,” the court ruled.  “[H]aving traded heavily on the name and fame of its founder and chairman, Trump University was in no position to complain if the public’s interest in Trump fueled the flames of the legitimate controversy that its business practices engendered.