U.S. District Judge Gonzalo Curiel made the ruling from the bench in San Diego, California, with more motions to be heard in the coming weeks.
The case -- one of two class-action lawsuits by former students of a real estate training program founded by Republican presidential nominee Donald Trump in California -- is set for trial in November. A message left with Trump's presidential campaign was not immediately returned.
This latest development is part of an ongoing saga for Trump after he came under fire in June for questioning Curiel's impartiality based on his Mexican heritage.
Trump was condemned by Democrats and Republicans alike after he repeatedly referred
to Indiana-born Curiel as a "hater" and a "Mexican," while criticizing the judge's rulings in the case.
One of Trump's harshest rebukes came from House Speaker Paul Ryan, who described the language as "sort of like the textbook definition of a racist comment."
Trump later defended himself in a written statement, saying he did not believe "one's heritage (made) them incapable of being impartial."
"Based on the rulings that I have received in the Trump University civil case, I feel justified in questioning whether I am receiving a fair trial," Trump said.
He added that he also had "concerns as to my ability to receive a fair trial" due to his presidential campaign's focus on illegal immigration.
Trump University was launched in 2005 as a real estate seminar business that promised to teach students Trump's investing techniques.
The business, which has effectively been defunct for several years, is facing three lawsuits filed by and on behalf of dissatisfied enrollees, two class actions in California and a lawsuit by New York Attorney General Eric Schneiderman.
The plaintiffs allege Trump's program took in an estimated $40 million, but was mired in fraud and deception. Trump has defended the school and said the lawsuits should have been dismissed.