Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.J. Super.: Partial summary judgment granted on consumer fraud claims against conversion therapy group, (Feb 12, 2015)

By Linda O’Brien, J.D., LL.M.

In an action by consumers against an organization providing conversion therapy services, the superior court in Hudson County, New Jersey decided that the group’s alleged misrepresentation describing homosexuality as a mental disorder and providing “success” statistics when the group failed to track or maintain records of client outcomes was a violation of the state consumer fraud statute as a matter of law. Thus, the consumers’ motion for partial summary judgment was granted (Ferguson v. JONAH, February 10, 2015, Bariso, P.).

Jews Offering New Alternatives for Healing (JONAH) offers a conversion therapy program that purports to change the sexual orientation of individuals who experience same-sex attraction. Michael Ferguson, Benjamin Unger, and Chaim Levin, who participated in JONAH conversion therapy regimen, filed suit against JONAH, its founder, and a counselor, alleging violations of the New Jersey Consumer Fraud Act (CFA). The plaintiffs asserted that the group used deceptive practices to entice consumers to pay for their costly services for gay-to-straight therapy. Both parties filed cross-motions for summary judgment.

The CFA prohibits the use of misrepresentations in connection with the sale or advertisement of services and requires proof of three elements: (1) unlawful conduct by the defendant; (2) an ascertainable loss by the plaintiff; and (3) a causal relationship between the unlawful conduct and ascertainable loss, the court explained. The plaintiffs contended that the group’s statements describing homosexuality as a mental illness or disorder and including specific “success” statistics for its sexual orientation change efforts (SOCE) that had no factual basis for calculating those statistics qualified as misrepresentations under the CFA as a matter of law.

According to the court, it was the general consensus of physicians in the mental health field that homosexuality was not a mental disorder but instead a normal variation of human sexuality. Thus, any representations made to the contrary would constitute misrepresentations under the CFA. Moreover, it would be misleading to tell consumers that a specific success rate for its services existed when the merchant did not track success rates or establish a procedure to confirm its representations of success rates. In this case, since JONAH did not track or maintain records of the success rates of its SOCE therapy services, it was a misrepresentation in violation of the CFA to use specific success statistics in the advertising and sale of those services, in the court’s view.

In denying the defendants’ motion for summary judgment, the court determined that JONAH’s statements regarding efficacy of its program was not mere puffery. JONAH’s statement that its program was effective in changing homosexuality and was scientifically proven to be effective was a factual misrepresentation as opposed to an exaggerated opinion. Furthermore, the plaintiffs’ complaint did not attempt to limit JONAH’s religious expression relating to a belief that sexual orientation was changeable or restrict an individual’s ability to self-determine their sexuality by restricting access to SOCE. Since the alleged misrepresentations did not pose any religious questions, JONAH’s constitutional argument was not a sufficient basis for summary judgment, the court concluded.

The case is No. L-5473-12.

Attorneys: Bruce D. Greenburg (Lite DePalma Greenberg, LLC), Morris Dees (Southern Poverty Law Center), and James L. Bromley (Cleary Gottlieb Steen & Hamilton LLP) for Michael Ferguson, Benjamin Unger, and Chaim Levin. Michael P. Laffey (Messina Law Firm, P.C.) and Charles S. LiMandri (Freedom of Conscience Defense Fund) for Jews Offering New Alternatives for Healing, Arthur Goldberg, Alan Downing, and Alan Downing Life Coaching, LLC.

Companies: Jews Offering New Alternatives for Healing

Cases: StateUnfairTradePractices Advertising NewJerseyNews