FILE PHOTO: (L-R) Eric Trump, Donald Trump Jr., and Ivanka Trump and Donald Trump attend the ground breaking of the Trump International Hotel at the Old Post Office Building in Washington July 23, 2014. REUTERS/Gary Cameron/File Photo
NEW YORK 鈥� A lawyer for Donald Trump on Tuesday urged a federal appeals court to halt a lawsuit accusing the U.S. president of exploiting his family name to promote a marketing scam targeting poor and working-class people.
The lawyer, Thomas McCarthy, told the 2nd U.S. Circuit Court of Appeals in Manhattan the plaintiffs were 鈥渄one in by the allegations of their own complaint,鈥� and that their proposed class action concerning the multi-level marketing company American Communications Network belonged in arbitration.
Four plaintiffs, including a hospice worker, accused Trump, his adult children Donald Jr., Eric and Ivanka and an affiliate of their family company of promoting ACN in exchange for millions of dollars in secret payments from 2005 to 2015.
The plaintiffs said ACN charged $499 to sell videophones and other goods, and the Trump family conned them into thinking Donald Trump believed their investments would pay off.
Trump and his children have called the civil lawsuit, one of many against the president, politically motivated, saying they had no control over ACN and that Trump鈥檚 endorsement was merely his opinion.
Some defendants prefer arbitration to litigation because evidence can be harder to come by, costs can be lower, and proceedings are often confidential.
U.S. District Judge Lorna Schofield refused in April to send the ACN case to arbitration, saying the plaintiffs had no reason to believe their arbitration agreements with ACN covered the Trumps.
In Tuesday鈥檚 arguments before a three-judge panel, Circuit Judge Denny Chin appeared to agree with Schofield鈥檚 conclusion that it was unfair for the Trumps to demand arbitration only after she had dismissed a racketeering claim.
鈥淵ou waited eight months before asking to compel arbitration,鈥� Chin told McCarthy. 鈥淵ou requested and obtained substantive relief 鈥� In those circumstances, why isn鈥檛 the right to arbitration, to the extent it exists, waived?鈥�
McCarthy responded that the claims against the Trumps and ACN were intertwined, that only 鈥渕inimal鈥� time had passed, and that the lawsuit was still in its early stages.
Roberta Kaplan, a lawyer for the plaintiffs, countered that arbitration is 鈥渇undamentally a matter of consent,鈥� and that her clients never expected to battle the Trumps in arbitration.
鈥淭his is a fraud case,鈥� she said. 鈥淭his is about what Donald Trump said.鈥�
The case is Doe et al v Trump Corp et al, 2nd U.S. Circuit Court of Appeals, Nos. 20-1228, 20-1278.