I mediate many NJ Consumer Fraud Act cases. The state passed the original law in 1960 “‘to combat the increasingly widespread practice of defrauding the consumer” and added a private cause of action in 1971. (A private cause of action means that an aggrieved party can bring suit, not just the state of New Jersey.) The law is very robust and wide-reaching with many nuances specific to use, such as home contractors. Essentially, the NJ Consumer Fraud Act outlaws unconscionable business practices (i.e. deception, fraud, false promises, misrepresentations, etc.). A party who prevails in a Consumer Fraud Act claim is entitled to triple damages and attorney fees.
A plaintiff in a Consumer Fraud Act case must prove 3 things to prevail:
- Unlawful conduct by the defendant (i.e. the unconscionable business practice).
- An ascertainable loss by the plaintiff.
- A causal relationship between the unlawful conduct and the ascertainable loss.
A recent high-profile trial level case decision was published by the court. In Ferguson v. JONAH (HUD-L-5473-12), the defendant (Jews Offering New Alternatives for Healing) offered “conversion therapy” to “convert” homosexuals to be heterosexuals. Mainstream mental health does not believe such conversion is possible and thus outside the standard of care for mental health. JONAH filed a motion for partial summary judgment to dismiss the consumer fraud counts, contending that the subsequent therapy required by the plaintiffs would not constitute an ascertainable loss (rather an unrelated cost).
As the court states in the opinion:
The definition of ascertainable loss and what constitutes ascertainable loss has been subject to considerable litigation and debate. The Supreme Court of New Jersey has recognized that “[t]here is little that illuminates the precise meaning that the Legislature intended in respect of the term ‘ascertainable loss’ in our statute.” Thiedemann, supra, 183 N.J. at 248; see also D’Agostino, supra, 216 N.J. at 190 (“Notwithstanding the importance of ascertainable loss, we find sparse guidance in the statutory text.”) It is incumbent on a private plaintiff to present sufficient credible evidence from which a factfinder can find or infer that the plaintiff suffered an actual loss. Ibid. That said, the element of ascertainable loss under the CFA must be “quantifiable or measurable.” Id. at 185 (citation and
quotation marks omitted). “To raise a genuine dispute about such a fact, the plaintiff must proffer evidence of loss that is not hypothetical or illusory.” Thiedemann, supra, 183 N.J. at 248.This is not to say, however, that an ascertainable loss need be “demonstrated in all its particularity to avoid summary judgment.” Ibid. Nor is ascertainable loss exclusively limited to an “out-of-pocket loss to the plaintiff.” Ibid. “An estimate of damages, calculated within a reasonable degree of certainty will suffice to demonstrate an ascertainable loss.” Id. at 249 (citation and internal quotation marks omitted).
The court saw no reason to grant the summary judgment motion dismissing the consumer fraud claims. From the opinion:
To conclude on the basis of this proposition that plaintiff’s post-JONAH treatment costs are not recoverable under damages sustained necessarily presumes that such costs are non-economic in nature. Because subsequent treatment costs are quantifiable–based on the amount expended on professional health services–even if these costs do not qualify as a CFA ascertainable loss, they constitute “damages sustained” for remedy purposes under the CFA.
Since unconscionable business practices are not defined and neither are ascertainable losses — as this case clearly demonstrates — and they provide for triple damages and attorneys fees, they make good cases to mediate. If you are looking to mediate your CFA case with an experienced mediator, please contact me.