CONSUMER FRAUD- SCHOOL’S FALSE PROMISE OF EMPLOYMENT WITH LACK OF ACCREDITATION TANTAMOUNT TO CONSUMER FRAUD

After an admissions representative told her that on graduation, she would be able to perform ultrasounds on patients in hospitals and clinics and earn $65,000 per year, Plaintiff Suarez enrolled in the diagnostic medical ultrasound technician program of Defendant Eastern International College, formerly known as Micro Tech, a for-profit school.  According to the complaint, Plaintiff alleged that in order to obtain employment in this field, it was necessary to obtain certification from the American Registry for Diagnostic Medical Sonography (“ARDMS”).  Because Micro Tech lacked the necessary accreditation, Plaintiff was ineligible on graduation to take the examination administered by ARDMS to obtain the certification required by potential employers. Plaintiff further alleged that, as a practical matter, she could not either attain the credentials necessary to be eligible to take the ARDMS examination or obtain employment as an entry-level sonographer.  Plaintiff’s expert supported her version of the facts by explaining that major insurance companies would not reimburse a provider for any service performed by an ultrasound technician not certified by ARDMS; and the inability to obtain reimbursement and the risk of sanctions provided ample reason for employers to decline to employ any ultrasound technologist who was not certified by ARDMS.  As a result, Plaintiff sued Defendant alleging violations of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -195, and common-law fraud, and contended that the Defendant’s representations were false. 

Plaintiff appealed from an order granting summary judgment to Defendant and dismissing her complaint.  In an opinion dated August 23, 2012, the Appellate Division held that because a jury could find that Defendant’s statements were so misleading as to a material fact as to deprive the Plaintiff of the ability to make an intelligent decision as a consumer, the statements were actionable under the CFA and summary judgment was inappropriate.  The Appellate Division did affirm dismissal of Plaintiff’s common-law fraud claim on the basis that Defendant’s statements regarding Plaintiff’s potential employment and earning capacity were not statements of present or previously existing facts and therefore cannot provide the basis for a claim based on common law fraud.

Defendant also cross-appealed from the lower court’s decision, arguing that plaintiff's CFA claim should have been dismissed as barred under a “learned professional” exemption.   That exception, an exception created by the courts, provides that certain transactions are excluded from the purview of the CFA “because they involve services provided by learned professionals in their professional capacity.”  The reasoning for this exception is that such professionals are subject to regulation specifically applicable to their profession, which might conflict with the regulation of activities under the CFA.  The Appellate Division rejected Defendant’s argument that it was entitled to the “learned professional” exception because it provided post-high school educational and vocational training.  In support of its holding, the Appellate Division found that Defendant identified no regulatory body that defined uniform standards for the services Defendant provide or its activities as a for-profit training school, such that it would present a “patent and sharp” conflict with the application of the CFA.  Accordingly, the learned professional exemption was inapplicable to this particular case.

Click on Suarez v. Eastern International College for the entire opinion.  http://www.judiciary.state.nj.us/opinions/a2705-10.pdf

Have you been the victim of unscrupulous business practices?  Call us.  The BeinhakerMiller Law Firm, LLC can help.  Written by Gavin I. Handwerker, Esq.  Questions for Gavin?  Email him at gih@beinlaw.com.