In a unanimous opinion, Lowe v. Audet, __ N.J. ___ (2026) (slip op.), the New Jersey Supreme Court held that insurance brokers, producers, and agents are not exempt from the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1, under the judicially created “learned professional” exemption, as semi-professionals or otherwise. The Court’s opinion will have an immediate impact on the insurance industry in New Jersey, subjecting insurance brokers, agents, and producers to potential liability under the CFA, one of the nation’s strongest consumer protection laws.

Lowe’s reach, however, is not limited to the insurance industry. The opinion portends potential significant exposure for a broad range of other industries currently reliant on the “learned professional” exemption, including the possibility of treble damages, attorneys’ fees, and costs available under the CFA. The Court invited the Legislature to clarify whether certain professionals are exempt from CFA liability and, if so, to identify those professionals with specificity. But the Court signaled that, absent legislative clarity, it will “await a case that presents a direct challenge” to the “learned professional” exemption. While declining to formally abolish the exemption, the Court expressed “serious doubts” about its textual and legislative foundations and left the exemption’s continued viability an open question under New Jersey law. The opinion serves as a stark warning to regulated professionals and businesses operating in New Jersey.

Background

Legal Framework and Prior Case Law

The CFA prohibits unconscionable commercial practices, deception, fraud, and misrepresentation in connection with the sale or advertisement of merchandise or services. The statute not only affords litigants a private cause of action through which they can recover compensatory damages, attorneys fees, and treble damages, but also allows for imposition of civil penalties of up to $10,000 for a first violation and $20,000 for each subsequent violation.

The CFA does not expressly exempt any category of professionals from liability. Rather, the “learned professional” exemption, including as extended to “semi-professionals,” is a judicial creation with a long doctrinal history. The Appellate Division first “planted the seed” for this exemption in Neveroski v. Blair, 141 N.J. Super. 365 (App. Div. 1976), where the court described real estate brokers as “semi-professionals” analogous to learned professionals, suggesting they were exempt from the CFA due to their activities and existing regulation. Although the legislature nullified Neveroski as to the sale of real estate, subsequent Appellate Division decisions continued to rely on Neveroski’s treatment of semi-professionals generally. In Lemelledo v. Benefit Management, 150 N.J. 255 (1997), the Appellate Division held that the CFA applies absent a “direct and unavoidable conflict” with another regulatory scheme, but the court did not expressly endorse or reject a “learned professional” exemption or its application to “semi-professionals.” Next, in Macedo v. Dello Russo, 178 N.J. 340 (2004), the Supreme Court held that a physician’s advertising of his own professional services was insulated from the CFA under the “learned professional” exemption. The Court reasoned that when the CFA was enacted, physicians were not permitted to advertise, so the CFA “obviously” was not intended to reach physicians’ advertisements.

In Plemmons v. Blue Chip Insurance Services, 387 N.J. Super. 551, 564 (App. Div. 2006), the Appellate Division interpreted Macedo and Neveroski as supporting a broader exemption for regulated semi-professionals, concluding that insurance brokers were “semi-professionals” exempt from CFA liability for services within the scope of their licenses. Nearly 14 years later, however, the Appellate Division, in Shaw v. Shand, 460 N.J. Super. 592 (App. Div. 2019), construed the exemption narrowly, holding it applies only to professionals such as physicians, attorneys, and theologians, “who have historically been recognized as ‘learned’ based on the requirement of extensive learning or erudition.” Shaw departed expressly from Plemmons, finding its reasoning inconsistent with Lemelledo.

Positions of the Parties and Amici

Plaintiff James Lowe, M.D., a neurosurgeon who co-owned a medical practice and several unrelated businesses, purchased a series of insurance policies covering, among things, disability from Defendants Bernard Audet and Richard Laver, insurance brokers who worked for Defendant The Creative Financial Group, Ltd. (collectively, “Defendants”). According to the plaintiff, Defendants marketed, sold, and procured disability policies for the plaintiff, advising him that he would receive maximum benefits if he became disabled.

The plaintiff was diagnosed with a vision condition that prevented him from performing neurosurgery. When he submitted claims for maximum disability benefits, the insurers paid only partial benefits, citing his other business interests. The [laintiff brought a CFA count, among others, against Defendants, who moved to dismiss under Plemmons. The trial court granted dismissal, the Appellate Division affirmed, and the Supreme Court granted certification.

Before the Supreme Court, the plaintiff argued that insurance brokers fall outside the “learned professional” exemption, urging adherence to Shaw and contending that brokers are primarily engaged in commercial sales activity and that the CFA’s broad remedial purpose counsels against expansive exemptions. Defendants argued that, per Plemmons, insurance brokers are “semi-professionals” excluded from CFA liability for services performed within the scope of their licenses because they require specialized knowledge regarding coverage options, policy terms, and regulatory requirements, and their conduct is already subject to oversight by the New Jersey Department of Banking and Insurance.

Several amici curiae supported reversal. The New Jersey Attorney General argued that the CFA must be construed broadly and that the “learned professional” exemption extends only to professionals historically excluded from the CFA’s ambit, not insurance brokers. And the New Jersey Association for Justice and New Jersey Citizen Action each argued that the “learned professional” exemption should not apply to “semi-professionals” at all.

The Supreme Court’s Analysis

In reversing the Appellate Division’s decision, the Supreme Court acknowledged that the case law related to “semi-professionals … leaves more questions than answers.” Per the Court, the exemption has no support in the CFA’s text, and the Legislature amended the CFA to specifically nullify Neveroski and its treatment of certain “semi-professionals.”

Notwithstanding these “lingering questions,” the Court concluded that insurance brokers, producers, and agents are not exempt from the CFA. The Court identified several primary reasons for its conclusion:

• First, insurance brokers are not historically “learned” professions—they are not part of the “narrow class” of recognized learned professions (physicians, attorneys, theologians) referenced in Shaw.
• Second, at the time the CFA was adopted, there was no historic advertising ban for insurance brokers as there was for the physicians in Macedo.
• Third, although insurance brokers are licensed and regulated, per Lemelledo, such regulation alone is insufficient to qualify for an exemption absent a “direct, unavoidable conflict” between the CFA and the concurrent regulatory scheme.
• Fourth, insurance brokers require only a 20-hour course per license type, with no required high school diploma, thereby underscoring that the position does not fit the high-erudition rationale for the “learned professional” exemption.
• Fifth, the CFA must be broadly interpreted to accomplish its remedial purpose to root out consumer fraud, and its exemptions must be construed narrowly. Exempting insurance brokers from the CFA’s reach would improperly bloat the “semi-professionals” exemption and “unduly narrow” the statute.

While the Supreme Court focused on whether semi-professionals are exempt from the CFA, the Court noted expressly that it did not affirm the underlying “learned professional” exemption—“a judicially created exception that does not appear in the text of the CFA.” The Court expressed “serious doubts” about the basis for the exemption, stating it would “await a case that presents a direct challenge to address it.” In the interim, the Court invited the legislature to provide clarity about whether certain professionals are exempt from CFA liability and, if so, to identify the relevant professionals.

Key Takeaways

Insurance brokers, producers, and agents are definitively subject to the CFA. These professionals do not fall within the “learned professional” exemption, as semi-professionals or otherwise.

The future status of the “learned professional” exemption is uncertain. Although the Court did not overrule the “learned professional” exemption (or its expansion to “semi-professionals”), its analysis leaves the doctrine on tenuous footing. The Court’s emphasis on the absence of statutory text supporting the exemption, combined with its observations about the CFA’s remedial purpose and the legislature’s intent to provide expansive consumer protection, suggests the exemption’s days may be numbered. At minimum, plaintiffs may be emboldened to challenge the exemption’s application in other professional contexts, and professionals and semi-professionals likely will face a more hostile judicial environment, with lower courts reluctant to apply, much less extend, the exemption’s reach.

All eyes are on the legislature. The Court’s invitation to the legislature signals that the Court views the delineation of any professional exemption as a legislative—not judicial—function. Unless and until the Legislature acts to determine whether any professional should be exempt from the CFA, the exemption landscape remains unsettled, with disputes and litigation almost certain to arise regarding which, if any, professionals can qualify for CFA exemptions.

Businesses and professionals should reevaluate compliance programs. Policies, procedures, disclosures, and representations should be reviewed for CFA compliance and updated as needed. Professionals in all regulated fields should no longer assume they will be able to rely on the “learned professional” (or “semi-professional”) exemption to defend against CFA claims.

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