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Macedo v. Dello Russo

178 N.J. 340, 840 A.2d 238 (2004)

CONSUMER FRAUD ACT; PROFESSIONALS—The Consumer Fraud Act does not apply to professionals, such as doctors, acting in their professional capacity.

Patients sued a medical practice for violating the Consumer Fraud Act (CFA) because the doctor from the practice that actually performed the surgery on them was not fully licensed to do so. The patients did not allege that their treatment fell below the appropriate medical standard of care or that they suffered any injuries as a result of his treatment. They alleged that the practice told them that the doctor was a licensed physician with no limitations upon his license. They claimed mental anguish, loss of enjoyment of life, medical costs and economic damages.

In determining whether or not relief could be granted under the CFA, the Court analyzed the history of the Act. In 1960, a precursor to the CFA was adopted by the Legislature creating liability in connection with fraud in advertising. This act did not include advertising by physicians because such advertising was not allowed at the time. Since its enactment, the CFA has not been amended to include the advertising of professionals. Its only major change was to expand its reach to include the sale of real estate. The first judicial opinion addressing professionals and the CFA held that “[a member] of any of the learned professions [is not] subject to the provisions of the Consumer Fraud Act despite the fact that he renders ‘services’ to the public [because] the nature of the services does not fall into the category of consumerism.”

The only activities of a professional regulated by the CFA are activities outside of his or her professional capacity. When the case was before the Appellate Division, that Court relied on a prior case where an architect was held subject to the CFA for misrepresentations he made about building materials as part of a real estate merchandising scheme. Although he was an architect, a profession generally insulated from the CFA, he was not functioning in that capacity when he made the false representations to induce the purchase of a house. Instead, he was operating as a real estate agent, which is what subjected him to the CFA.

Therefore, according to the Supreme Court, so long as a professional is acting in his or her professional capacity, as was the case here, advertisements detailing professional services are insulated from the CFA.

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