[co-author: Stephanie Kozol]*
Washington Attorney General (AG) Bob Ferguson prevailed in his lawsuit against a plastic surgery practice, Allure Esthetic, and its owner, Dr. Javad A. Sajan (collectively, the company), alleging violations of the federal Consumer Review Fairness Act (CRFA), based upon the company’s practice of requiring patients to sign nondisclosure agreements (NDAs) that prohibited them from posting negative online reviews. The District Court granted the AG’s motion for summary judgment (in part) and found the company liable for violations of the CRFA. Damages will be decided at a later date.
The AG’s office filed the lawsuit in December 2022, alleging that the company attempted to suppress negative online reviews by requiring patients to sign pretreatment NDAs before receiving services. The complaint also accused the company of falsely inflating its online ratings on platforms like Yelp and Google by coercing patients to remove negative reviews and ordering employees to post fake positive reviews.
In a recent ruling, U.S. District Judge Ricardo S. Martinez granted partial summary judgment in favor of the state, finding that the company’s use of pretreatment NDAs violated the CRFA. The court found that the company used three versions of the NDAs over a five-year period, affecting more than 10,000 patients. These agreements included provisions that required patients to pay substantial fines or damages for posting negative reviews and forced dissatisfied patients to work with the practice to reach a resolution before sharing their experiences online.
The court has yet to determine whether the company’s post-service NDAs also violated the CRFA and the penalties that will be imposed for these violations. Additionally, the court will consider whether the NDAs violated the Washington Consumer Protection Act and federal medical records privacy law.
Why It Matters
The AG’s action sends a clear message to businesses operating within the state that companies may not use NDAs or other means to influence consumer reviews. The CRFA is a powerful tool for regulators attempting to maintain objectivity with respect to online review platforms and not allowing online review platforms to mislead or deceive consumers. The Washington AG’s office has demonstrated its commitment to enforcing this law, and other states are similarly beginning to recognize the CFRA and state analogs as another tool for consumer protection.
This case underscores the regulatory emphasis on transparency and fair business practices in the digital age. Regulators are focusing on protecting the ability of consumers to share their experiences online and increasingly viewing any interference by a company in this regard as a violation of the law and/or unfair or deceptive conduct.
*Senior Government Relations Manager
