Professional Documents
Culture Documents
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v.
DONALD J. TRUMP,
Defendant.
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DEF.S REPLY ISO DEF.S MOT.
FOR DECERTIFICATION
13-CV-2519-GPC (WVG)
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I.
INTRODUCTION
Unable to address the many individualized factual issues that now
The frailty of Plaintiffs arguments, however, only highlights the many reasons this
from 2007 until June 2010, but Plaintiffs inexcusable three-year delay in filing this
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Court in Low, Defendant has a Constitutional right in this case to litigate damages
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II.
LEGAL STANDARD
As a threshold matter, Plaintiff misstates the legal standard on decertification.
Oppn at 24. The Ninth Circuit has made clear that, on a motion for
requirements of Rules 23(a) and (b) are met. Marlo v. United Parcel Serv., Inc.,
639 F.3d 942, 947 (9th Cir. 2011). Pre-Marlo, courts had held that a party seeking
decertification of a class should bear the burden of demonstrating that the elements
of Rule 23 have not been established. Given the Ninth Circuits unequivocal
holding in Marlo, however, . . . to the extent courts have found that on a motion to
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have not been established, these cases are no longer good law. Parra v. Bashas,
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Inc., 291 F.R.D. 360, 400 n.46 (D. Ariz. 2013); accord Lindell v. Synthes U.S.,
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2016 U.S. Dist. LEXIS 1949, at *14 (E.D. Cal. Jan. 6, 2016); Hahn v. Massage
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Envy Franchising, LLC, 2014 U.S. Dist. LEXIS 147899, at *51 (S.D. Cal. Sept. 25,
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motion to decertify a class . . . does not depend on a showing of new law, new facts,
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III.
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related Low case. In his opposition, Plaintiff seeks to exclude the testimony of five
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Plaintiff first argues the testimony of these former TU students is not relevant
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All citations, quotation marks, and modifications omitted. All references to Ex.
refer to exhibits to the Declaration of David L. Kirman (Dkt. 192-2).
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because these students either have opted out of the class, intend to opt out of the
class, or somehow were never even members of the class. Oppn at 78. Only
Mohan and Gunn officially opted out of the class. Dkts. 154, 16566. Should
Colic and Nielsen seek to exercise their opt-out rights after the November 16, 2015
opt-out deadline, the Court would need to determine both whether their deposition
testimony suffices to demonstrate manifest intent to be excluded from the class and
whether their failure to previously opt out was due to excusable neglect.2 And
Plaintiff does not cite any evidence that Canup has also indicated that he wishes to
opt out of the Class. Oppn at 8 n.3. Nor does Plaintiff cite any support for his
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curious assertion that Gunn was never a class member. Id. at 8. In fact, Plaintiff
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filed a joint motion specifically requesting that the Court allow absent class
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member Michelle Gunn to opt-out of the class. Dkt. 165 at 2 (emphasis added).
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More fundamentally, Plaintiff provides no support for his position that the
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are removed from the litigation entirely. Oppn at 7. But percipient witnesses
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need not be members of the class to testify in a class action, just as witnesses in any
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case need not be parties for their testimony to be relevant and admissible. See Fed.
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R. Evid. 401, 602. That class members who have opted out of a class lack standing
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See In re Cathode Ray Tube (CRT) Antitrust Litig., 2014 WL 4181732, at *45
(N.D. Cal. Aug. 20, 2014); In re Static Random Access Memory (SRAM) Antitrust
Litig., 2009 WL 2447802, at *2 (N.D. Cal. Aug. 7, 2009); Newberg 9:46.
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The only case Plaintiff cites for the proposition that the Court should preclude optout testimony is a 20-year-old Florida district court case discussing admissibility of
opt-out testimony at trial, not on a motion for decertification. See Waters v. Intl
Precious Metals Corp., 172 F.R.D. 479, 489 (S.D. Fla. 1996). The court in Waters
found that defendants were entitled to rebut the presumption of reliance on an
individual basis, but that the action would proceed as a class action on the
common issues, i.e., all issues except reliance, and subsequent to the jurys verdict,
the Court will confer with the parties to develop an appropriate, manageable and
lawful procedure to allow the Defendants to present proof of non-reliance on an
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Rules of Evidence.4
IV.
reliance is still appropriate. Quoting from the Courts certification order, Plaintiff
argues that the Court has already considered and rejected this argument by
World, Inc., 379 F.3d 654 (9th Cir. 2004), and In re Countrywide Fin. Corp. Mortg.
Mktg. & Sales Practices Litig., 277 F.R.D. 586 (S.D. Cal. 2011)each of which
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held that a common sense inference does not apply where there is more than one
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logical explanation for participation in the conduct at issue. Yet Defendant is not
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arguing that this is new law, but rather that there are new facts that render these
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Poulos and Countrywide make clear that the Court cannot apply a common
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sense inference of reliance if Defendant presents evidence that at least some class
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certification, the Court only found a common sense inference appropriate because
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Defendant had by that point failed to demonstrate that it may be inferred that
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individual basis. Id. at 487 (emphasis added); accord McPhail v. First Command
Fin. Planning, Inc., 251 F.R.D. 514, 520 (S.D. Cal. 2008) (distinguishing Waters).
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Plaintiffs other arguments as to why the testimony of these witnesses should be
excluded are similarly meritless. For example, Plaintiffs unwarranted personal
attacks on these witnessesasserting that Colic was committed to a psych[]
ward and implicitly accusing Gunn of lying under oath because she appears to be
a professional testimonial-giver, Oppn at 8constitute no basis to exclude their
testimony. Plaintiffs argument concerning the statistical significance of individual
students and their aberrant views is equally applicable to Plaintiffs witnesses.
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Plaintiffs assertion that the common sense inference of reliance can only be
rebutted by evidence that can be properly generalized to the class as a whole is
immaterial. Defendant is not rebutting the class-wide inference of reliance but
rather demonstrating that Plaintiff is not entitled to the inference at all.
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putative class members had knowledge of the alleged misrepresentations yet chose,
for other reasons, to purchase Trump University Live Events. Dkt. 53 at 14.
From the depositions of eight former TU students that have been conducted
since the Court granted certification, there is now abundant evidence that many
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Students also testified that they did not expect Mr. Trump to be
integrally involved. See Ex. 19 at 107:8108:14; Ex. 20 at 68:1725,
110:1118, 162:20163:2; Ex. 6 at 33:1619, 43:212, 99:521, 100:8
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These same students and others testified that they chose to enroll in TU for other
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reasons than the alleged misrepresentations, including: (1) students were attracted
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to the Trump Brand;6 (2) students wanted to gain real estate knowledge; (3) TU
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offered the opportunity to network with other real estate investors; (4) TU appeared
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to be of a higher quality than similar programs; (5) students wanted to learn subject
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matter referenced at a Preview event; (6) students believed that real estate was a
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dangerous market to enter without sufficient knowledge; and (7) students wanted
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to use real estate investment to generate income. Mot. at 1820. That at least
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some class memberslet alone nearly half of the students who have been
Plaintiff argues that Defendant has no evidence that any class members
or the university moniker. But Poulos and Countrywide do not require that class
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members purchased the products at issue despite what the representations promised;
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these cases hold that the common sense inference of reliance is not appropriate
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when class members chose to purchase the products despite their knowledge of the
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record now that many students enrolled in TU despite believing that TU was not an
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actual university and that Mr. Trump would not be integrally involved.7
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V.
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A.
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statute-of-limitations issues, and that the facts here do not present the rare
would make classwide adjudication problematic. Iorio v. Allianz Life Ins. Co. of
N. Am., 2008 U.S. Dist. LEXIS 118344, at *97 (S.D. Cal. July 8, 2008); accord In
re N. Dist. of Cal., Dalkon Shield IUD Prods. Liability Litig., 693 F.2d 847, 853
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collected during discovery demonstrates that individual issues related to the statute
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Third, there is now ample evidence in the record that many TU students
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TU was not an actual university and that Mr. Trump would not be integrally
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involved in TU.8 Much of this evidence establishes direct knowledge about the
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has compiled all this direct evidence of knowledge despite only being able to
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conduct discovery on a small number of former TU students (less than 1%). There
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are undoubtedly many more students who held similar understandings about the
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TU students believed, at the time they were attending TU courses (often prior to
October 2009), that TU was not an actual university and that Mr. Trump was not
integrally involved in TU. For example, most TU students already had a college
degree, Ex. 1 at TU 145238; many were familiar with other non-academic business
seminars like TU, Ex. 38 at 59:1560:18; Ex. 10 at 32:24; students were told
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about the facts underlying Plaintiffs RICO claim, Ex. 27 37, Ex. 28 66.
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class member had knowledge of the basis for Plaintiffs RICO claim before October
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individualized, fact-intensive nature of the necessary inquiry in this case, the statute
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B.
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Plaintiff also argues that no class members claims are barred by the statute
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of limitations because they were all tolled by the filing of the Low action under the
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doctrine of American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974). This
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argument is contrary to binding Ninth Circuit law that Plaintiff fails to bring to this
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Courts attention.9 See Williams v. Boeing Co., 517 F.3d 1120, 113536 (9th Cir.
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2008). Plaintiff relies on the Ninth Circuits 1985 case Tosti v. Los Angeles, 754
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F.2d 1485, 1489 (9th Cir. 1985), which held that an individual suit [need not] be
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identical in every respect to the class suit for the statute to be tolled. Tosti is no
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See also Low Dkt. 482-2 at 2223 (Low Plaintiffswho have the same
attorneysfailed to raise binding Ninth Circuit authority to the Courts attention).
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longer good law. In 2008, in the Williams case, the Ninth Circuit was again
confronted with the issue of whether American Pipe tolling could apply to non-
identical claims. 517 F.3d at 113536. After acknowledging that [t]olling is fair
[when] defendants have notice of the substantive claims being brought against
them, the court made clear that the tolling rule does not leave a plaintiff free to
raise different or peripheral claims following denial of class status. Id. at 1136
(emphasis added). The court then rejected plaintiffs argument that their
compensation discrimination claims were tolled under American Pipe by the filing
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environment, and retaliation claims because neither the Original nor the First
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American Pipe as allowing tolling for claims that were not asserted in the class
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action, and any cases suggesting otherwise conflict with the Ninth Circuits view
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Litig., 2013 WL 254873, at *2 (N.D. Cal. Jan. 23, 2013); accord In re Cathode Ray
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Tube (CRT) Antitrust Litig., 27 F. Supp. 3d 1015, 102021 (N.D. Cal. 2014).11 And
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because no class member asserted a civil RICO claimthe sole claim at issue
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herein the pending Low matter, the filing of the Low class action cannot serve to
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The Ninth Circuit also rejected this ruling from Tosti in an unpublished decision
in 2005. See Card v. Duker, 122 F. Appx 347, 349 (9th Cir. 2005) (The Supreme
Court has . . . not extended tolling due to class litigation beyond American Pipes
narrow allowance for identical causes of action brought where the class was
decertified. This court in Tosti v. City of Los Angeles, 754 F.2d 1485, 1487 (9th
Cir. 1985), apparently expanded American Pipe to apply where the class was not
decertified but the plaintiff opted out. . . . American Pipes narrow holding does
not require tolling under these circumstances.); see also Wells v. FedEx Ground
Package Sys., Inc., 2011 WL 1769665, at *6 (E.D. Mo. May 9, 2011) (noting that
Card severely limited, if not rejected, Tostis holding).
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See also Zarecor v. Morgan Keegan & Co., 801 F.3d 882, 888 (8th Cir. 2015);
Scott v. Ill. Bell Tel. Co., 2016 WL 910507, at *56 (N.D. Ill. Mar. 10, 2016);
Vertrue Mktg. & Sales Practices Litig., 712 F. Supp. 2d 703, 71819 (N.D. Ohio
2010).
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toll the statute of limitations under American Pipe. See Derry v. Jackson Natl Life
VI.
Low, involves a civil RICO claim. But the statute under which Plaintiff seeks relief
which have already been recognized by the Court. Low Dkt. 418 at 18.12
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that holding, however, Plaintiff has clarified that his damages theory depends on
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proving that TU live events were valueless because TU fell short of providing
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students with any quality of instruction compared to top-tier real estate higher
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theory is inconsistent with the theory of liability that the Court certifiedthat TU
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events were valueless because Mr. Trump was not integrally involved and
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VII. CONCLUSION
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For the foregoing reasons, Defendant respectfully requests that the Court
grant his motion for decertification in its entirety.
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Respectfully submitted,
OMELVENY & MYERS LLP
DANIEL M. PETROCELLI
DAVID L. KIRMAN
By:
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