Trump Fraud Accusers Can Stay Anonymous, Judge Says

Published on:
December 21st, 2018

Law360, New York (December 20, 2018, 8:59 PM EST) -- Alluding to President Donald Trump's tendency to tweet about lawsuits, a Manhattan federal judge on Thursday said four people can remain anonymous for now in their suit against the president for allegedly endorsing a multilevel marketing company without disclosing that he was paid.

U.S. District Judge Lorna Schofield said the president's tendency to draw attention to individual cases was "without precedent" in letting the proposed class action against Trump and three of his children move forward. The suit accuses the Trumps of fraudulently touting ACN, a telecommunications company, and similar businesses without disclosing that they were paid millions for their plugs.

While the Trumps' lawyers argued that it would be difficult to investigate the allegations without using the plaintiffs' names, the judge said there was "ample evidence" the four of them — a hospice worker, a food deliveryman, a retail worker and a self-employed man — may face threats if their identities are revealed.

"At this early stage in the litigation, I cannot conclude that those risks are unfounded," the judge said. "The public interest in knowing the specific identity of the named plaintiffs ... is minimal."

The judge tempered that decision by putting discovery on hold until she decided whether the case should be dismissed, which will happen no earlier than March. For now, she said, only subpoenas that instruct potentially relevant parties like ACN to preserve evidence should be issued.

Judge Schofield didn't specifically mention Trump's Twitter feed and only said he has been known to draw attention to court cases. One of the primary ways he has done that has been via tweet, however, praising judges who rule in favor of his policies and condemning those he disagrees with.

The unnamed plaintiffs said they lost everything by buying into ACN and said endorsements by Trump and his people were the decisive factors in their decisions to pay $499 to get started with the company. The future president plugged ACN, which tasks its "independent business owners" with selling phone and internet services, on stage and on his show "The Apprentice," chatting up the prospect of making a solid income as an affiliate.

The suit says Trump, his children Eric, Donald Jr. and Ivanka and The Trump Corp. amounted to a criminal enterprise that raked in millions from defrauding consumers with ACN and other alleged scams like Trump University. It claimed their actions violated the Racketeer Influenced and Corrupt Organizations Act and various state laws.

David Spears, a lawyer for the Trumps, outlined his defenses in court on Thursday. He said the president made clear he was being paid for his work for ACN, and his endorsements were simply salesmanship or puffery.

The judge called for a full motion to dismiss to be filed Jan. 14. Briefing will conclude March 8.

Robbie Kaplan of Kaplan Hecker & Fink LLP, who represents the plaintiffs, said he was satisfied with the conference's outcome.

"We're very pleased that Judge Schofield granted our motion to proceed pseudonymously given the unique situation this country is in today and the very well-founded fears of the plaintiffs," she said. "We look forward to litigating this case and to achieving justice for the many thousands of people who were harmed by the Trump RICO enterprise."

ACN in a statement to Law360 defended its business model and reputation, saying Trump worked as a paid keynote speaker and his views on issues didn't necessarily reflect its own.

Counsel for the defendants didn't respond to a request for comment.

The plaintiffs are represented by Roberta A. Kaplan and John C. Quinn of Kaplan Hecker & Fink LLP and Andrew G. Celli Jr. and Matthew D. Brinckerhoff of Emery Celli Brinckerhoff & Abady LLP.

The defendants are represented by David Spears, Cynthia Chen and Bradley Pollina of Spears & Imes LLP.

The case is Doe et al. v. The Trump Corp. et al., case number 1:18-cv-09936, in U.S. District Court for the Southern District of New York.


Read this at Law360.