Attorney General Christopher S. Porrino and the Division of Consumer Affairs have reached a settlement with a California fertility clinic that has agreed to remove a clause in its contracts that effectively barred consumers from posting negative reviews of their experience with the clinic and its personnel on crowd-sourced review websites by threatening them with fines of up to $10,000 for each day the content remained on the web.
Fertility Bridges, Inc., operating from offices in Illinois and California by offering egg donation-consulting services nationwide, including in New Jersey, had potential customers sign contracts which included a clause restricting its customers from taking any action that negatively impacts an organization, its reputation, products, services, management or employees and requiring that any online review of the company be vetted first by the firm’s attorneys. The contract also warned consumers that anonymous online reviews could be tracked by IP addresses.
By signing the contract, consumers agreed “to a $10,000 a day libel fine until the false post or false complaint is removed. Fertility Bridges will also fine any website listing such libel a $10,000 a day fine,” according to the terms of use.
An investigation by the Division found the company’s “online reviews clause” effectively amounted to a “gag order” on dissatisfied consumers. The Division alleged that Fertility Bridges’ inclusion of the clause in its contracts, and subsequent attempt to enforce the clause, constituted unconscionable commercial practices in violation of the New Jersey Consumer Fraud Act.
As a result of the Division’s findings, the company agreed in the Consent Order to remove the relevant clauses from its contracts with its New Jersey customers. Further, the company represented that it would remove the clauses in its contracts throughout the United States.
On the same day the Consent Order was filed, President Barack Obama signed into law the Consumer Review Fairness Act, which prohibits the inclusion of clauses in form contracts that seek to restrict consumers from posting reviews on the Internet. The Consumer Review Fairness Act also provides additional powers to the State Attorneys General to bring actions to obtain appropriate relief.
Fertility Bridges, in addition to removing the review clause from its contracts, agreed to a $1,500 fine.