A New Jersey appeals court has ruled that a Jersey City gay-conversion therapy practice is on the hook for a $3.5 million fee award after breaching the terms of a settlement in a consumer fraud suit.
The Appellate Division reinstated the fee award after upholding a trial judge’s ruling finding the group and administrators continued to engage in conversion therapy after they had agreed to a settlement that barred such activity, in exchange for a greatly reduced penalty.
Instead of shutting down the group, Jews Offering New Alternatives to Homosexuality, also known as JONAH, the defendants violated the settlement by continuing to operate under a new name, Jewish Institute for Global Awareness, the appeals court found.
Disbarred lawyer
The appeal follows a landmark 2015 jury verdict in the case, which found that JONAH, founder Arthur Goldberg and affiliated counselor Alan Downing violated the state’s Consumer Fraud Act by offering treatment services based on the premise that being gay is a mental disorder, a position rejected by the American Psychiatric Association more than four decades ago.
JONAH, Goldberg and Downing were ordered to pay $3.5 million in fees in the suit, which found that they engaged in consumer fraud. The verdict is believed to be the first of its kind nationwide. The plaintiffs are JONAH clients and their parents.
Goldberg is an ex-attorney who was disbarred in New Jersey in 1995 after pleading guilty to mail fraud and conspiracy to defraud in connection with fraudulent issuance of bonds to finance housing projects.
After the verdict, Goldberg and Downing agreed to a settlement that reduced their monetary penalty to $400,000, if they followed a series of conditions, including ceasing to engage in therapy to rid clients of homosexual attractions.
Another counselor at the center, Elaine Berk, who was not a named defendant, agreed to be liable for $400,000 of the $3.5 million if she did not abide by the terms of the settlement.
But instead of shutting down their group, JONAH, Goldberg, Downing and Berk violated the settlement by continuing to operate under the new name, the appeals court said. Therefore, the $3.5 million penalty is reinstated and Berk must pay $400,000 of that amount.
Michael Laffey, a solo practitioner in Red Bank who represented the defendants, said the ruling made “clear factual errors” and discussed issues that were not briefed before. In light of that, Laffey said his clients are “considering their options.”
Tuesday’s ruling is a victory for Cleary Gottlieb Steen & Hamilton, whose Thomas Kessler, Lina Bensman and Luke Barefoot handled the case along with Bruce Greenberg of Lite DePalma Greenberg & Afanador in Newark and Scott McCoy of the Southern Poverty Law Center.
In 2013, while the case was pending, New Jersey passed a law barring licensed mental health practitioners from practicing gay-conversion therapy on persons under age 18. But the plaintiffs in the present case were past age 18 when the suit was filed, and the defendants were not licensed professionals but unlicensed “life coaches,” Kessler said.
Kessler said the suit “fills in the gap” by protecting parties not covered under the state statute, and can “serve as a road map” for others wishing to bring similar suits. ”Conversion therapy works largely underground. It’s extremely important that litigation like ours exists to root out this dangerous practice.”
“The message today’s decision sends is conversion therapy is every bit as dangerous, harmful and illegal as it was when we won our jury verdict,” Kessler said. “The resources and enterprises that exist to fight conversion therapy are still on the job, and we’ll continue to fight these battles to prevent more harm to these incredibly vulnerable victims.”
Read More:
NJ Jury: Gay ‘Conversion Therapy’ Claims Were Consumer Fraud
Court Again Rejects Gay ‘Conversion Therapy’ Ban Challenge
Gay ‘Conversion Therapy’ Consumer Fraud Ruling First in U.S.
