Case 3:10-cv-00940-GPC-WVG Document 532 Filed 10/20/16 Page 1 of 8 1 2 3 4 5 6 7 8 9 10 11 DANIEL M. PETROCELLI (S.B. #97802) dpetrocelli@omm.com DAVID L. KIRMAN (S.B. #235175) dkirman@omm.com O’MELVENY & MYERS LLP 1999 Avenue of the Stars Los Angeles, California 90067-6035 Telephone: (310) 553-6700 JILL A. MARTIN (S.B. #245626) jmartin@trumpnational.com TRUMP NATIONAL GOLF CLUB One Trump National Drive Rancho Palos Verdes, CA 90275 Telephone: (310) 202-3225 Attorneys for Defendants Trump University, LLC and Donald J. Trump 12 13 UNITED STATES DISTRICT COURT 14 SOUTHERN DISTRICT OF CALIFORNIA 15 16 17 SONNY LOW et al., on Behalf of Themselves and All Others Similarly Situated, Plaintiffs, 18 19 v. 20 TRUMP UNIVERSITY, LLC et al., 21 22 Defendants. Case No. 10-CV-0940-GPC(WVG) Judge: Hon. Gonzalo P. Curiel CLASS ACTION DEFENDANTS’ NOTICE OF MOTION AND MOTION TO EXCLUDE EVIDENCE RELATED TO TU INSTRUCTORS’ BANKRUPTCY PROCEEDINGS 23 MOTION IN LIMINE NO. 8. 24 Hearing: November 10, 2016 Time: 1:30 p.m. Courtroom: 2d Judge: Hon. Gonzalo P. Curiel 25 26 27 28 DEFS.’ NOT OF MOT. IN LIMINE TO PRECLUDE INSTRUCTORS’ BANKRUPTCY PROCEEDINGS 10-CV-0940-GPC (WVG) Case 3:10-cv-00940-GPC-WVG Document 532 Filed 10/20/16 Page 2 of 8 1 PLEASE TAKE NOTICE THAT ON NOVEMBER 10, 2016 AT 1:30 2 p.m., Defendants Trump University, LLC (“TU”) and Donald J. Trump 3 (“Defendants”) will and hereby do move for the exclusion of evidence based on 4 Federal Rules of Evidence Nos. 401, 402, 403, 801, 802, and 803. Plaintiffs intend 5 to offer into evidence during Phase One of the trial set to begin on November 28, 6 2016, evidence and argument that certain former instructors of TU had filed for 7 bankruptcy protection. 8 9 10 This Motion is made on the grounds that evidence related to instructors’ bankruptcy proceedings is irrelevant and unduly prejudicial and misleading. This Motion is based on the Notice of Motion, the Memorandum of Points 11 and Authorities thereto, the files in this action, and additional submissions and 12 argument as may be presented at or before the hearing on this Motion. Defendants 13 ask this Court for an order directing plaintiffs’ counsel to caution, warn, and 14 instruct their witnesses to follow the same order. 15 16 17 Dated: October 20, 2016 O’MELVENY & MYERS LLP DANIEL M. PETROCELLI DAVID L. KIRMAN 18 19 20 21 22 By: /s/ Daniel M. Petrocelli Attorneys for Defendants TRUMP UNIVERSITY, LLC and DONALD J. TRUMP 23 24 25 26 27 28 DEFS.’ NOT OF MOT. IN LIMINE TO PRECLUDE INSTRUCTORS’ BANKRUPTCY PROCEEDINGS 10-CV-0940-GPC (WVG) Case 3:10-cv-00940-GPC-WVG Document 532 Filed 10/20/16 Page 3 of 8 1 I. INTRODUCTION In prior pleadings and in the media, plaintiffs have made arguments about 2 3 bankruptcy filings by certain instructors retained by Trump University (“TU”). 4 Any such evidence and arguments have nothing to do with the two certified 5 representations. Whether an instructor had filed for bankruptcy does not tend to 6 prove or disprove whether TU was an “accredited university” or whether TU 7 students received business education from Donald Trump’s “handpicked” experts. 8 Dkt. 298 at 4. Such irrelevant and highly prejudicial evidence must be excluded 9 under Rules 401 and 403. 10 II. EVIDENCE IN DISPUTE The inadmissible evidence related to individual instructors’ bankruptcy 11 12 filings consists of statements within instructors’ applications for employment (see, 13 e.g., Ex. 97 (PX 385)), legal and administrative records related to bankruptcy (see, 14 e.g., Ex. 96 (PX 180)), and testimony regarding individual instructors’ bankruptcy 15 filings and proceedings. See Appendix A.1 For example, Exhibit 97 (PX 385) is an 16 application for employment signed on September 15, 2009 by Troy Peterson, a 17 former TU instructor and mentor, in which he indicated that he had “during the 18 fifteen year period immediately preceding the date of [his application]” filed for 19 bankruptcy or reorganized due to insolvency. On the attached addendum to his 20 application, Mr. Peterson wrote the number of his bankruptcy case and indicated 21 that it was filed in Florida and was “necessary to fully shut down retail real estate 22 and mortgage operations and related debts that were incurred due to the collapse of 23 local market.” Each of these exhibit excerpts and any argument based on an 24 1 25 26 27 28 Unless noted, “Ex.” refers to exhibits attached to the Kirman Declaration. The Plaintiffs Exhibits offered in Appendix A are examples of irrelevant and prejudicial bankruptcy related documents that should be excluded. There may be similar exhibits among plaintiff’s other exhibits that fit the parameters of the motion. Defendants reserve the right to object and move to exclude those exhibits and instructor bankruptcy related testimony at the time of trial. -1- DEFS.’ MOT. IN LIMINE TO PRECLUDE INSTRUCTORS’ BANKRUPTCY PROCEEDINGS 10-CV-0940-GPC (WVG) Case 3:10-cv-00940-GPC-WVG Document 532 Filed 10/20/16 Page 4 of 8 1 instructor’s past bankruptcy filing must be excluded on grounds of relevance and 2 undue prejudice, as explained below. 3 III. 4 ARGUMENT Pursuant to this Court’s certification order, plaintiffs allege consumer fraud 5 based on two “core” alleged misrepresentations: that TU “was an accredited 6 university” and “students would be taught by real estate experts, professors and 7 mentors hand-selected by Mr. Trump.” Dkt. 298 at 4. The trial concerns whether 8 the two certified alleged representations were made uniformly to the class and 9 throughout the class period; actionable; false; relied upon; material; and caused 10 injury. See, e.g., Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008) 11 (UCL, FAL, CLRA); Wurtz v. Rawlings Co., LLC, 2014 WL 4961422, at *8 12 (E.D.N.Y. Oct. 3, 2014) (N.Y. Gen. Bus. L. § 349); Cold Stone Creamery, Inc. v. 13 Lenora Foods I, LLC, 332 Fed. App’x 565, 567 (11th Cir. 2009) (FDUTPA); 14 Joseph v. Liberty Nat’l Bank, 873 So. 2d 384, 388 (2004) (Florida MLA). 15 Evidence related to former TU instructors’ applications for bankruptcy protection 16 and those proceedings does not tend to prove or disprove any fact pertinent to 17 whether class members were reasonably misled regarding alleged “handpicked” and 18 “accredited university” representations. 19 A. 20 Irrelevant to “Accredited University.” Whether a TU instructor previously Irrelevant (FRE 401) 21 sought or obtained protection from bankruptcy has no bearing whatsoever on 22 whether TU represented itself as an “accredited university” or whether it was, in 23 fact, accredited. Plaintiffs do not appear to claim otherwise, nor does such a 24 connection make sense. People from all walks of life have sought protection from 25 bankruptcy. There are professors at accredited universities who have filed for 26 bankruptcy. Simply put, there is no logical connection between proof of an 27 instructor’s or mentor’s prior bankruptcy and the question of whether TU 28 -2- DEFS.’ MOT. IN LIMINE TO PRECLUDE INSTRUCTORS’ BANKRUPTCY PROCEEDINGS 10-CV-0940-GPC (WVG) Case 3:10-cv-00940-GPC-WVG Document 532 Filed 10/20/16 Page 5 of 8 1 2 represented itself as accredited or whether it was, in fact, accredited. Irrelevant to “Handpicked.” Instead, plaintiffs appear to argue that an 3 instructor’s prior bankruptcy is relevant to the so-called “handpicked” 4 representation. The theory appears to be that: [a] defendants represented instructors 5 had been handpicked by Donald Trump; [b] Donald Trump would not have 6 handpicked someone who had gone through a bankruptcy; therefore [c] a prior 7 bankruptcy of an instructor tends to prove the handpicked representation is false. 8 9 This is demonstrably wrong. Defendants did not represent—and never would have represented—that none of its instructors had been through a 10 bankruptcy. To the contrary, some instructors were hired, in part, because they had 11 been through a bankruptcy and achieved success through real estate investing. 12 These instructors could relate with students by sharing personal inspirational stories 13 about how they “pulled themselves up by the bootstraps” and reached financial 14 stability through real estate investing. Their personal “pulled myself by the 15 bootstraps” through real estate investing stories are compelling and motivating. Put 16 simply, plaintiffs’ argument that “handpicked” and prior bankruptcy are mutually 17 exclusive is flatly wrong. Defendants never claimed otherwise and no plaintiff— 18 named representative or otherwise—says he or she was misled about an instructor’s 19 prior bankruptcy history. 20 B. 21 Even if instructors’ personal bankruptcy history had some tangential Prejudice Substantially Outweighs Probative Value (FRE 403) 22 relevance (it does not), the confusion and prejudicial effect of introducing it is 23 great. See FED. R. EVID. 403. 24 Arguments regarding instructors’ bankruptcy proceedings are prejudicial in 25 that they are intended only to portray the defendants in a generally poor light, and 26 by suggesting that TU retained unqualified instructors just because they had a 27 bankruptcy filing. See, e.g., E.E.O.C. v. New Breed Logistics, 2013 WL 10129246, 28 -3- DEFS.’ MOT. IN LIMINE TO PRECLUDE INSTRUCTORS’ BANKRUPTCY PROCEEDINGS 10-CV-0940-GPC (WVG) Case 3:10-cv-00940-GPC-WVG Document 532 Filed 10/20/16 Page 6 of 8 1 at *1-2 (W.D. Tenn. Apr. 26, 2013) (granting motion in limine to exclude irrelevant 2 evidence of a person’s bankruptcy filings and finding the argument of relevance 3 “tenuous at best, and disingenuous at worst”). Plaintiffs presumably want to 4 capitalize on the social stigma of bankruptcy and suggest to the jury that TU 5 instructors were generally unreliable or unqualified people. See, e.g., Jarrett v. 6 McDowell Trucking, Inc., 2006 WL 908032 (N. D. Ill. Apr. 5, 2006) (granting 7 motion in limine to exclude evidence as to plaintiff’s bankruptcy filing that 8 defendants sought to introduce as evidence regarding plaintiff’s character for 9 truthfulness). Courts have recognized the personal stigma associated with filing for 10 bankruptcy—which is why plaintiffs want to introduce the evidence in the first 11 place. See, e.g., In re Hudson, 859 F.2d 1418, 1427 (9th Cir. 1988) 12 (acknowledging the “stigma of bankruptcy”); In re Cummings, 595 Fed. Appx. 707, 13 709 (9th Cir. 2015) (same). 14 Admission of such evidence will require defendants to explain what the 15 instructor did to get his life on track, how he became successful, and how he 16 intended to utilize his personal experience to energize and motivate TU students, 17 thereby causing needless time and risking juror confusion, to defendants’ prejudice. 18 See, e.g., Freeman v. Astrue, 405 Fed. Appx. 148, 151-152 (9th Cir. 2010) 19 (affirming trial court’s decision to avoid a “series of mini-trials”). 20 IV. 21 CONCLUSION Since TU instructors’ bankruptcy has no impact on the certified issues in this 22 case and merely serves to bias the jury against TU, defendants respectfully request 23 that the Court exclude irrelevant, misleading, and highly prejudicial documents and 24 testimony related to individual instructors’ and mentors’ bankruptcy filings. 25 26 27 28 -4- DEFS.’ MOT. IN LIMINE TO PRECLUDE INSTRUCTORS’ BANKRUPTCY PROCEEDINGS 10-CV-0940-GPC (WVG) Case 3:10-cv-00940-GPC-WVG Document 532 Filed 10/20/16 Page 7 of 8 1 2 3 Dated: October 20, 2016 O’MELVENY & MYERS LLP DANIEL M. PETROCELLI DAVID L. KIRMAN 4 5 6 7 By: /s/ Daniel M. Petrocelli Attorneys for Defendants TRUMP UNIVERSITY, LLC and DONALD J. TRUMP 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5- DEFS.’ MOT. IN LIMINE TO PRECLUDE INSTRUCTORS’ BANKRUPTCY PROCEEDINGS 10-CV-0940-GPC (WVG) Case 3:10-cv-00940-GPC-WVG Document 532 Filed 10/20/16 Page 8 of 8 1 2 3 APPENDIX A 1. Exs. 97-98 (PX 385, 386) (Trump University Questionnaire filled-out by Troy Peterson) 4 2. Ex. 95 (PX 131) at 00003 (Trump University Questionnaire for Steve Goff) 5 3. Ex. 96 (PX 180) (Voluntary Petition for Bankruptcy for Stephen Goff, filed 6 in the U.S. Bankruptcy Court for the Southern District of Texas, Case No. 7 07-32579 with Exhibit D, Schedules A-J, Statements and Disclosure thereto 8 (S. Goff 14)) 9 4. Ex. 99 (PX 897) (Voluntary Petition for Bankruptcy for Geoffrey Barnard 10 Nowlin filed in United State Bankruptcy Court District of Arizona, No. 2:13- 11 bk-20593-EPB (Dkt. No. 1) (Nowlin P-2)) 12 5. Ex. 100 (PX 910) (Certified Copies from National Archives and Records 13 Administration of documents from In re Troy L. Peterson, No. 96-15056 14 (E.D. Cal. Bankr.)) 15 6. Ex. 93 (PX 917) (Certified Copies from National Archives and Records 16 Administration of documents from In re Robert L. Steenson, No. 97-01646- 17 6J3 (M.D. Fla. Bankr.)) 18 19 7. Ex. 94 (PX 1038) (Docket for Robert L. Steenson and Kathleen V. Steenson Bankruptcy, No. 6:97bk01646 (M.D. Fla. Bankr.)) 20 21 22 23 24 25 26 27 28 -6- DEFS.’ MOT. IN LIMINE TO PRECLUDE INSTRUCTORS’ BANKRUPTCY PROCEEDINGS 10-CV-0940-GPC (WVG) Case 3:10-cv-00940-GPC-WVG Document 532-1 Filed 10/20/16 Page 1 of 1 CERTIFICATE OF SERVICE 1 I hereby certify that on October 20, 2016, I caused the foregoing to be 2 3 electronically filed with the clerk of the court using the CM/ECF system which will send 4 notification of such filing to the e-mail addresses denoted on the electronic Mail Notice 5 List. 6 I certify under penalty of perjury under the laws of the United States of America 7 that the foregoing is true and correct. 8 Executed on October 20, 2016, at Los Angeles, California 9 10 11 12 /s/Daniel M. Petrocelli DANIEL M. PETROCELLI 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE CASE NUMBER: 10-CV-940-GPC(WVG)