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Trump, children cannot arbitrate marketing scam case -U.S. appeals court

Reuters
Reuters
 2021-07-28
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Former U.S. President Donald Trump visits an unfinished section of the wall along the U.S.-Mexico border in Pharr, Texas, U.S. June 30, 2021. REUTERS/Callaghan O'Hare

NEW YORK, July 28 (Reuters) - A federal appeals court said former U.S. President Donald Trump and his adult children cannot move into arbitration a fraud lawsuit accusing them of exploiting their family name to promote a marketing scam targeting the poor and working class.

The 2nd U.S. Circuit Court of Appeals in Manhattan said the plaintiffs' agreements to arbitrate claims against the multi-level marketing company American Communications Network did not extend to the Trumps, who had not signed those agreements.

Lawyers for the Trump family did not immediately respond to requests for comment on Wednesday's 3-0 decision.

Four plaintiffs in the proposed class action accused Trump, his children Donald Jr., Eric and Ivanka, and an affiliate of the Trump Organization of promoting ACN in exchange for millions of dollars in secret payments from 2005 to 2015.

The plaintiffs said Donald's Trump's endorsement, including on episodes of his TV show "The Celebrity Apprentice," conned them into thinking their investments would pay off.

ACN would charge $499 to clients to sell videophones and other goods, the plaintiffs alleged.

In Wednesday's decision, Circuit Judge Robert Sack said the lack of a "close relationship" between ACN and the Trumps meant the plaintiffs had no reason to believe they agreed to arbitrate with the Trumps.

He also said "there is no unfairness" in requiring the Trumps to litigate over alleged wrongful business practices, given the plaintiffs' claim they were defrauded into thinking Donald Trump told the truth by endorsing ACN.

The Trumps claimed they had no control over ACN, that Trump's endorsement was simply his opinion and that the civil lawsuit - one of many they face - was politically motivated.

Some defendants prefer arbitration to litigation because arbitration can cost less and remain confidential, and obtaining evidence can be more difficult.

Roberta Kaplan, a lawyer for the plaintiffs, said her clients were pleased, and looked forward to gathering more evidence and beginning depositions.

The decision upheld an April 2020 ruling by U.S. District Judge Lorna Schofield in Manhattan.

The case is Doe et al v Trump Corp et al, 2nd U.S. Circuit Court of Appeals, Nos. 20-1228, 20-1278.

Our Standards: The Thomson Reuters Trust Principles.

Comments / 407

Mike Smith
07-28

Trumpism must be stopped so just don't donate any money to trump or anything associated with trump. Instead donate to your local food bank!!!

Reply(68)
305
Easy Times
07-28

As time goes on the circle they’re in gets smaller and smaller. Soon. Soon they’ll be sucking for air like through a cocktail straw at a full gallop. Then. Wham! Criminal charges and federal jail cells!

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Hardworking1
07-28

to all you Trump supporters investigations take time especially if you do it the right way. So all you trumpsters out there saying you haven't found anything in the past 5 years in the past 4 years well look again they are finding things especially now that he's not in office and using his power to cover his tracks he has nothing to hide behind now so that's why things are starting to come up now that's why we the American people are being told about it because he doesn't have hide behind it's going to be a great and wonderful day Wenham and his dumbass kids finally get what's coming to them and what I mean by that is jail

Reply(12)
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