Hoffman’s support for Carroll’s lawsuit, which was first disclosed in a letter to a judge Thursday by Trump’s lawyers, has sparked a sharp dispute in the case, which is scheduled for trial in federal court in Manhattan on April 25.
Trump’s lawyers, writing to the judge, accused Carroll of concealing Hoffman’s role, which they said they only learned of this week from her lawyers. They said the disclosure raised “significant questions” about Carroll’s credibility and whether her allegations against Trump were, as he has said, a “hoax” brought “to advance a political agenda.”
They asked for a one-month postponement so they could investigate the funding issue. The judge, Lewis A. Kaplan, on Thursday evening said he would allow Trump’s lawyers the opportunity to conduct a narrow inquiry into the funding issue, but he declined to delay the case.
Carroll’s lawyers in their own letter argued that the financial support was irrelevant to Carroll’s legal claims and that she had nothing to do with obtaining the outside funding and no dealings with anyone associated with the nonprofit.
They noted that it was not until September 2020, almost a year after Carroll filed the first of what became two lawsuits against Trump, that their firm obtained the funding to help pay “certain costs and fees.”
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They said Trump’s effort to delay the trial – earlier this week he asked that it be delayed because of a “deluge of prejudicial media coverage” concerning his recent criminal indictment in New York – was “his latest transparent effort to keep a jury from deciding Carroll’s claims.” Hoffman is a billionaire tech entrepreneur known for co-founding LinkedIn, which went public in 2011 and sold to Microsoft for $26 billion in 2016. He has a long history of funding Democratic candidates and causes, including those specifically designed to counteract Trump’s influence.
Dmitri Mehlhorn, a philanthropic adviser for Hoffman, said in a statement that since 2017 they have acted as “third-party funders who support people in obtaining their legal rights.”
“Trump and his defenders keep trying to change the subject, because they don’t want a neutral court of law to evaluate his behavior,” Mehlhorn said.
He added that they had made an earlier grant through a nonprofit to support a different public interest lawsuit being handled by the firm Kaplan Hecker & Fink, which later took up Carroll’s case. He said that later, in September 2020, Carroll’s lawyer, Roberta A. Kaplan, asked if money from that grant could be used for Carroll’s suit.
“We had no prior knowledge at the time of the original grant that our funding would go to support her case in particular,” Mehlhorn said.
Mehlhorn declined to specify the size of the original grant.
Hoffman is part of the so-called PayPal Mafia, a network of well-connected tech executives and investors who got their start at the payments company in the late 1990s. That crew includes tech mogul Peter Thiel, who is a prominent Republican donor and has secretly funded lawsuits. In 2016, Thiel paid $10 million for wrestler Hulk Hogan to sue media outlet Gawker Media for an invasion of privacy, ultimately leading to Gawker’s bankruptcy.
In New York and elsewhere, there is a well-established financial industry in which outsiders invest in lawsuits, whether involving car accidents, contract claims or mere slip-and-fall cases, said Anthony Sebok, a professor at the Benjamin N. Cardozo School of Law and an expert on litigation finance and legal ethics.
Sebok added that there was nothing wrong, legally or ethically, with an outsider who has no connection to a plaintiff providing funding to a lawsuit after it is filed, “either to make money or just because they have a rooting interest in the outcome.”
The clash over Hoffman’s role is just the latest twist in litigation stemming from the allegation by Carroll, a former Elle magazine columnist. In a 2019 book and excerpt in New York magazine, she accused Trump of pushing her against a dressing room wall in luxury department store Bergdorf Goodman in Manhattan in the mid-1990s, saying he then pulled down her tights, opened his pants and forced himself upon her.
Trump denied her accusation, saying that he had never met Carroll, that she was “totally lying” and that he could not have raped her because she was not his “type.”
Carroll, saying Trump’s comments had damaged her reputation, sued him in 2019 for defamation. She sued him again last year – this time accusing him of rape – under a new state law in New York that grants adults a one-time window to sue those who they say abused them even if the statute of limitations has long expired.
It is that lawsuit that is scheduled for trial this month.
The original defamation case has been tangled in appeals. On Thursday, the District of Columbia Court of Appeals – a local court akin to a state’s supreme court – issued a 41-page ruling that declined to decide whether Trump was acting in his capacity as president when he made the disparaging comments.
The ruling was a partial victory for Carroll because the defamation lawsuit will continue, and because the D.C. court laid out for New York judges a detailed explanation about when an employer can be held liable for the actions of an employee – an explanation that appears favorable to Carroll.
After Carroll sued Trump for defamation, the Justice Department intervened under a law that substitutes the government as the defendant when federal officials are sued for official acts – meaning a case must be dismissed. That raised the question of whether Trump was acting as president when he talked about Carroll.
In October 2020, Kaplan rejected the Justice Department’s attempt to substitute the government as the defendant, ruling that Trump’s comments had “no relationship to the official business of the United States.” But a higher court asked the D.C. Court of Appeals to decide whether Trump was acting as a private person or as an employee of the federal government.
Had the D.C. court ruled in favor of Trump, that would have effectively brought an end to the defamation case. But it balked, saying there were not yet enough facts in the record to make that determination.
