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A New Jersey appeals court has ruled that a Jewish conversion therapy practice must pay $3.5 million to former clients after it breached the terms of a settlement agreement that reduced the group’s financial liability.
On Tuesday, the Appellate Division of the Superior Court of New Jersey upheld a lower court’s ruling finding that the Jewish Institute for Global Awareness (JIFGA), formerly known as Jews Offering New Alternatives to Healing (JONAH), had violated the terms of a settlement agreement reached with plaintiffs in December 2015, six months after a New Jersey jury found the organization had violated New Jersey’s consumer fraud law.
In issuing that decision, the jury found that JONAH had violated the consumer fraud law by promising a service on which it could not deliver: the changing of clients’ orientation from gay to straight, on the premise that being gay is a treatable mental disorder, a position that was rejected by the American Psychiatric Association more than four decades ago.
It also awarded the plaintiffs — three former clients and two of their mothers — $72,400 in damages to compensate them for fees they paid to JONAH to enroll in conversion therapy sessions, as well as remedial mental health counseling for one of the former clients.
As part of the settlement, JONAH agreed to pay the full jury award and reached an agreement in which the group’s founder, Arthur Goldberg, and its lead counselor, Alan Downing, agreed to pay $400,000 out of a proposed $3.5 million judgment.
Goldberg and Downing would be liable for the full amount if they were found to have violated the agreement. In addition, another counselor, Elaine Berk, who was not named as a defendant in the case, agreed to pay $400,000 of the $3.5 million if she was found in violation of the agreement.
The settlement also required JONAH to permanently cease its operations and dissolve its corporate entity.
However, just 11 days after the settlement was agreed to, JONAH’s leadership team filed articles of incorporation to become JIFGA, with the same assets, leadership team, and core operations as before.
JIFGA then began referring clients to individual therapists and to “experiential weekends” that purported to be able to successfully change people’s sexual orientation or gender identity.
Over the next three-and-a-half years, JIFGA continued collecting referral fees as a middleman between clients and counselors, and continued promoting various types of conversion therapy programs.
Lawyers with the Southern Poverty Law Center, which was part of the legal team representing the clients in the original consumer fraud lawsuit, filed a complaint in New Jersey Superior Court in April 2018, asking the court to enforce the permanent injunction against JONAH — and any future identities it may take on — and require JONAH, Goldberg, Downing, and Berk to pay the remainder of the $3.5 million in attorney’s fees and legal costs that they had agreed to pay if they violated the terms of the settlement.
In June 2019, Superior Court Judge Peter F. Bariso, Jr. issued a 47-page written decision ordering JIFGA to dissolve, and ordered the organization and its founders to pay the full $3.5 million judgment for breaching the terms of the settlement.
Bariso also imposed additional restrictions prohibiting Goldberg and Berk from serving as directors of any New Jersey nonprofit corporation, and ordered them to pay an additional amount of money to compensate plaintiffs for any attorney’s fees incurred in the process of asking the court to enforce the 2015 injunction.
Upholding Bariso’s decision, the appeals court found that JONAH’s founders violated the terms of the settlement agreement and were liable for the full $3.5 million.
Michael Laffey, an attorney representing the defendants told the New Jersey Law Journal that the ruling made “clear factual errors” and discussed issues that were not briefed before. He said his clients are now “considering their options.”
In 2013, while the lawsuit against JONAH was pending, New Jersey lawmakers passed a law prohibiting licensed mental health professionals from engaging in the practice of conversion therapy on minors.
But because the plaintiffs were over age 18 when the suit was filed, and the defendants were not licensed professionals but unlicensed “life coaches” and counselors, they were forced to bring a lawsuit alleging that JONAH had committed consumer fraud by promising a product or service that it could not deliver.
Thomas Kessler, of Cleary Gottlieb Steen & Hamilton, one of the lawyers for the plaintiffs, said the lawsuit “fills in the gap” by protecting parties not covered by the statewide ban on conversion therapy on minors, and could potentially “serve as a road map” for other ex-clients seeking a remedy after being subjected to conversion therapy.
“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.”
Scott McCoy, the interim deputy legal director of LGBTQ rights and special litigation for the Southern Poverty Law Center, applauded the appeals court’s decision.
“This case was always about protecting vulnerable people and families against the purveyors of fraudulent, harmful and ineffective so-called gay-to-straight conversion therapy,” McCoy said in a statement. “We are gratified that the appellate decision agreed that Judge Bariso’s decision was correct and that the New Jersey legislature got it right when it outlawed conversion therapy for minors because ‘[b]eing lesbian, gay, or bisexual is not a disease, disorder, illness, deficiency, or shortcoming.'”
McCoy added: “The Court meant what it said. Conversion therapy is fraudulent because it is based on the lie that LGBTQ people can and should be fixed. Along with our clients and other allies, we will not stop until we eradicate these dangerous practices in New Jersey and around the country.”
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