The civil lawsuit Catherine McKoy, Marcus Frazier and Lynn Chadwick v. The Trump Corporation and Donald J. Trump has been dismissed. This lawsuit accused the Trump crime family of defrauding the 4 litigants, along with potentially thousands of others, out of their life savings by investing in a sham company called ACN, which marketed handheld videophones.
In my diary last year, I mentioned this suit as one of the 10 lawsuits — 5 criminal and 5 civil — that TFG was currently wrangling. The suit was scheduled to go to trial a week ago, but when I checked on its status, it seems the suit was dismissed on January 11 of this year. However, it also seems we may not have heard the last of it.
The original lawsuit was filed in federal court in the Southern District of New York in October 2018. The suit claimed that
2. For more than a decade, Defendants The Trump Corporation, Donald J. Trump, Donald Trump, Jr., Eric Trump, and Ivanka Trump (the latter four, collectively, the “Individual Defendants”) have operated a large and complex enterprise with a singular goal: to enrich themselves by systematically defrauding economically marginalized people looking to invest in their educations, start their own small businesses, and pursue the American Dream.
3. Central to Defendants’ fraudulent scheme was a company called ACN, a multi- level marketing company (“MLM”) that offers a business opportunity to individual participants. From 2005 to at least 2015, Defendants received millions of dollars in secret payments to promote and endorse ACN. In return, Donald J. Trump (“Trump”) told prospective investors that “[y]ou have a great opportunity before you at ACN without any of the risks most entrepreneurs have to take,” and that ACN’s flagship videophone was doing “half-a-billion dollars’ worth of sales a year.” Trump also told investors that he had “experienced the opportunity” and “done a lot of research,” and that his endorsement was “not for any money.” Not a word of this was true.
Slogging through the 691 court filings listed at the above link over the past 5 years (IANAL), I learned that the original filing was a class action lawsuit brought by 4 litigants as a RICO violation. The original anonymous litigants evolved into 3 named filers. Lawyers changed, the case was reassigned, rulings were ordered. I learned that the RICO causes of action were dismissed on July 24, 2019, and on October 17, 2023, class certification was also denied.
I finally found item 682, Order of Dismissal, dated January 11, 2024.
The only remaining claims are the common law and statutory claims of three Plaintiffs arising respectively under the laws of California, Maryland and Pennsylvania where they respectively reside, with total out-of-pocket losses said to be roughly $7,000.
Ouch!
. . . at the Court’s invitation, Defendants moved in substance to have this case litigated in another forum -- either in state court by means of the Court’s dismissing and declining to exercise supplemental jurisdiction over the state law claims, or by severing the case into three cases and transferring each case to federal court in each Plaintiff’s home state.
So, over the past 5 years, this lawsuit was whittled down from a monster class action RICO suit to essentially a small claims filing by 3 litigants for losses totaling $7000. Finally,
ORDERED that Plaintiffs’ claims are DISMISSED without prejudice to refiling in state court.
Again, IANAL, so I can only hope that some of our DKos experts will weigh in and let us know if there is still hope for any kind of significant judgment if the 3 remaining litigants decide to file individual suits against the New York crime family.