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

Crown Equity Holdings

28/07/2021 17:30

By Jonathan Stempel
    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.  urn:newsml:reuters.com:*:nL1N2IG1QV
    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.

 (Reporting by Jonathan Stempel in New York; editing by Diane
Craft)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))