“Curing homosexuality” found to be a fraudulent business practice

Ferguson v. JONAH  (Sup Ct of NJ, Docket No. HUD-L-5473-12, 25 June 2015)

In June 2015, a jury unanimously found in favour of five plaintiffs who filed a suit claiming that counselling and therapy provided by JONAH (Jews Offering New Alternatives for Healing) contravened New Jersey consumer fraud legislation. The plaintiffs claimed that JONAH engaged in misrepresentations and unconscionable commercial practices by claiming that homosexuality was a mental disorder and that JONAH’s services could reduce or eliminate this disorder. A jury found unanimously in favour of the plaintiffs and awarded a total of US $72,400 in damages.

Facts

The plaintiffs, Michael Ferguson and others who had paid for the therapy, filed an action against the defendants, JONAH and others. JONAH used counselling and other methods purportedly to help individuals reduce or eradicate their feelings of same-sex attraction.

JONAH stated their belief that:

…homosexuality is a learned behavior and that anyone can choose to disengage from their same-sex sexual fantasies, arousals, behavior and identity - if motivated and supported in that process. We also believe that with appropriate assistance, same-sex attractions can be reduced or eliminated followed by the subsequent development of one's innate opposite-sex attractions.

Importantly, JONAH typically charged the plaintiffs $60 for group therapy and $100 for individual counselling. Depending on the individual, these costs could exceed $10,000 per year.

During the individual counselling sessions, the plaintiffs were encouraged to disrobe and touch their genitals and buttocks. They were counselled to spend more time at the gym, spend time naked with their fathers and beat effigies of their mothers. In group therapy sessions, activities included standing in a circle naked, re-enacting scenes of past abuse through role-plays, making homophobic taunts and slurs and group cuddling sessions involving counsellors and their younger clients.

Legal claims

The plaintiffs claimed that JONAH's business services breached the Consumer Fraud Act, N.J.S.A. §§ 56:8-1 to -20. ("CFA"). The CFA at 56:8-2 provides that:

The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise … is declared to be an unlawful practice …

The plaintiffs claimed that JONAH breached this provision by misrepresenting that homosexuality is a mental disorder and that their therapy program was successful in treating this disorder.

The plaintiffs sought two types of damages: restitution of all sums paid to JONAH and reimbursement of costs associated with the mental health counselling required after undergoing JONAH's program.

Verdict

There were two relevant stages in this matter. First, in January 2015, the plaintiffs brought a motionto exclude expert testimony from witnesses brought by JONAH that supported the notion that homosexuality was an abnormal mental disorder. In February 2015, Judge Bariso, A.J.S.C. granted the plaintiffs' motion, finding in an unpublished opinion that the view was "outdated and refuted", and that "(b)ecause the generally accepted scientific theory is that homosexuality is not a mental disorder and not abnormal, these (expert) opinions are inadmissible." (Ferguson v. JONAH  (Sup Ct of NJ, Docket No. HUD-L-5473-12, 5 February 2015).

Secondly, the substantive proceedings were decided by jury verdict on 25 June 2015. The jury found unanimously for all plaintiffs that JONAH had breached the CFA by engaging in misrepresentation and unconscionable commercial practices. The plaintiffs were awarded US$72,400 in total.

Commentary

This case is significant in that it brings conduct associated with sexual orientation change efforts within the ambit of consumer laws. Interestingly, this case confirms that conduct can be classified as consumer fraud if it is contrary to accepted scientific theory. In particular, this religious-based counselling purported to "cure" a mental illness which is well accepted to not be a mental illness.

Given the similarities between the CFA and the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) ("ACL"), it is conceivable that an Australian court could find a breach of section 18 of the ACL on the same facts, particularly if a fee for service counselling service was to advertise their services as being able to "cure" same-sex attraction.

Any conduct must be "in trade or commerce" which includes "any business or professional activity (whether or not carried on for profit)". In JONAH the plaintiffs all paid a fee for the counselling sessions which brought JONAH's services within the ambit of the New Jersey CFA.

While there is some uncertainty about whether the ACL could be used in a similar way in Australia, given the lesser likelihood of fees being charged, consumer protection law and regulator may provide a useful starting point should a similar factual scenario arise.

Kelly Roberts is an Associate and Kathryn Schultz is a Graduate at Baker & McKenzie.