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Learned Professionals and the Consumer Fraud Act The New Jersey Supreme Court has recently held that advertisements by “learned professionals” are not subject to claims for consumer fraud. Macedo v. Dello Russo, No. A-93-02 (decided Feb. 2, 2004). In Macedo, the plaintiffs sued a doctor whose practice performed laser eye surgery on them. Although they suffered no physical injury and did not claim that their treatment fell below the appropriate standard of care, they alleged that they were misled into thinking that a doctor with no limitation on his license would perform the surgery when such was not the case. The Supreme Court reversed the Appellate Division because (i) the Consumer Fraud Act was enacted in 1960 when physicians and lawyers were not permitted to advertise and therefore could not have been meant to apply to them, and (ii) the act has not been amended to encompass them now that such professional advertising is permissible. The Court considered lawyers, physicians, dentists, accountants and engineers (when acting in their professional capacities) to fall within the learned professional category. In deciding this case, the Court did not analyze the policy reasons why it might be inappropriate to afford a remedy under the Consumer Fraud Act for omissions or affirmative misstatements by professionals. It simply noted in dicta the Appellate Division’s comment in another case that the nature of professional services “does not fall into the category of consumerism,” and recognized that advertisements of learned professionals are subject to “comprehensive regulation” by relevant regulatory bodies and to common law remedies. The Macedo opinion was no sooner handed down than legislation was introduced that would make licensed professionals subject to the act for misrepresenting, deceiving, concealing, suppressing or omitting facts in advertisements for professional services. We have serious concerns about the wisdom of such legislation. First, it does not seem to us that the rendering of professional services, which require nuanced judgments by highly educated professionals, comprise consumer services in the same way as nonprofessional or semi-professional services do. The U.S. Supreme Court has stated that “[i]t would be unrealistic to view the practice of professions as interchangeable with other business activities.” Goldfarb v. Virginia State Bar, 421 U.S. 773, 788-89 (1975). In contrast, examples of services appropriately subject to the act are automobile and house repair services. Second, lawyers, doctors and other professionals are subject to scrutiny and oversight by their own licensing and regulatory boards. As to lawyers especially, New Jersey’s Constitution, Article VI, � II, par. 3, provides that the practice of law is to be regulated by the New Jersey Supreme Court, which has been held to have exclusive power over the practice of law. Third, doctors and lawyers and other learned professionals are subject to sufficient common law remedies. Highly trained and educated professionals can be sued for malpractice. They can also be sued for battery, if, as was alleged in Macedo, a doctor performs a procedure without consent. And if an advertisement contains a misleading statement, an action for common law fraud or misrepresentation would lie. On the other hand, the requirements for malpractice suits (such as obtaining an affidavit of merit) could be circumvented if the suit could be styled as one for consumer fraud. Moreover, to subject professionals to the Consumer Fraud Act would be an open invitation to attorneys to add a count for consumer fraud in most malpractice cases in an attempt to obtain triple damages and attorneys’ fees, otherwise not available. It would also be an invitation to attorneys to allege misrepresentations or omissions by professionals even where, as in Macedo, no harm was done, since proof of a misrepresentation or omission under the act results in an award of attorneys’ fees, even where there is no ascertainable loss. Cox v. Sears Roebuck & Co., 138 N.J. 2, 24, (1994). We are also concerned about what would constitute a material omission in such cases. Would doctors and attorneys have to advise patients and clients as to how many of their patients had died, how many suits they had lost or that they had been sued in the past for malpractice? Could omissions of this type be considered material to a consumer selecting a professional, such that a suit for consumer fraud on such basis could get to a jury? Fourth, malpractice insurance might not cover the defense of consumer fraud actions or damages awarded for consumer fraud. Thus, every time they advertised any service, or even spoke to a patient or client (depending on how broadly the act were amended), professionals would be taking a risk that a patient like the one in Macedo would sue because of a claimed material omission of fact. In short, adding a cause of action against learned professionals for consumer fraud would be likely to result in increased litigation with little benefit to patients or clients, who already have adequate remedies in cases of professional malpractice. At the very least, any amendment to the Consumer Fraud Act should limit such suits against professionals to those based on affirmative misstatements of fact in commercial advertisements disbursed to the public, and should explicitly exclude from coverage suits otherwise based on negligence in the actual performance of professional services. Scholarships and Religion The state of Washington provides scholarships for gifted students to encourage them to continue their studies after high school. The money may be applied to any education-related expense, including room and board, as long as the student is enrolled at a public or private college or university within the state, and for any discipline — except the study of theology. The constitutionality of this exception was challenged by Joshua Davey, an otherwise eligible student who was refused a state scholarship because he chose to major in pastoral ministries in preparation for entering the ministry after graduation. Washington’s constitution expressly forbids public funds to be used for religious instruction, and Davey claimed he was being deprived of his free exercise and free speech rights under the U.S. Constitution. The U.S. Supreme Court disagreed, upholding Washington’s scholarship program with its exception for theology in Locke v. Davey, No. 02-1315 (Feb. 25, 2004). The 7-2 majority, led by Chief Justice William Rehnquist, held that the prohibition was just as constitutional as its opposite; that is, a statute that included scholarships for religious studies would also pass constitutional muster. We agree with the majority. The decision acknowledges that there is no one balancing point between the Establishment and Free Exercise clauses but that there is room for different legislative approaches among the several states. In contrast, the minority opinion, led by Justice Antonin Scalia, would curb the states’ ability to direct the disposition of public funds — an unusual restriction on states’ rights from a voice on the Court that is more often heard in favor of devolving power from the center to the states. Scalia’s comparison between college scholarships and public-welfare benefits is inapposite. Providing benefits to individuals for their personal welfare, such as prescription benefits, cannot be equated with giving public funds to an individual solely to enable him to choose a religious career. The Free Exercise Clause does not entitle one to exercise that freedom at government expense. The decision in Locke is conservative in the traditional sense of the word, that is, of maximizing the freedom of the individual states to legislate in accordance with their respective constitutions. The federal government would do well to heed the subtle message of Locke when it suggests amending the Constitution for social purposes.

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