ALBANY, N.Y. -- A New York court on Tuesday refused to throw out a fraud lawsuit against Donald Trump over his former school for real estate investors.
The Appellate Division unanimously rejected Trump's request to dismiss the 2013 suit, ruling that a six-year statute of limitations applies. The four justices also denied New York Attorney General Eric Schneiderman's request for an immediate judgment, saying there are material issues of fact that should be decided at trial.
Schneiderman alleges that Trump University was unlicensed since it began operating in 2005 and promised lessons with real estate experts hand-picked by Trump, only one of whom had ever met him. The attorney general said the school used "bait-and-switch" tactics, inducing students to enroll in increasingly expensive seminars.
Trump, now seeking the Republican nomination for president, has denied any wrongdoing. He has said it was "a terrific school" with 98 percent approval ratings by its students. His attorney Jeffrey Goldman said the midlevel court failed to explain why it reversed previous rulings and said they intend to appeal to New York's highest court.
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Schneiderman, a Democrat, sued Trump and the school, which changed its name to the Trump Entrepreneur Initiative before it closed in 2010, for $40 million. The lawsuit seeks restitution and damages for more than 5,000 students nationwide, including 600 New Yorkers, who paid up to $35,000 each.
"Today's decision means our entire fraud case can move forward," Schneiderman said. "We look forward to demonstrating in a court of law that Donald Trump and his sham for-profit college defrauded more than 5,000 consumers out of millions of dollars."
Trump filed complaints with the state's ethics commission in 2013, four months after the lawsuit was filed, alleging Schneiderman pursued it to wring out campaign contributions from Trump's daughter Ivanka. The commission dropped the complaint after a review. Schneiderman denied it, and his campaign returned the $500 donation Ivanka Trump had made in 2012.
Trump's fellow Republican candidates have attacked him over litigation against the school, including a class-action suit in California. Trump criticized the judge in that case. A call to his attorney was not immediately returned.
Tuesday's ruling coincided with Republican primaries in 11 states.