US District Court Lawsuit

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

 

AMERICAN ADDICTION                           )

CENTERS, INC., RECOVERY                     )

BRANDS, LLC, and ADDICTION               )

LABS OF AMERICA, LLC,                         )

)

Plaintiffs,                                             )

 

) v.

 

NATIONAL ASSOCATION OF                  )

ADDICTION TREATMENT                        )

PROVIDERS,                                                )

)

Defendant.                                           )

 

  1. ) Civil Action                                          JURY TRIAL DEMANDED

 

COMPLAINT

 

American Addiction Centers, Inc., Recovery Brands, LLC, and Addiction Labs of America, LLC (collectively, “AAC”), for their Complaint against Defendant National Association of Addiction Treatment Providers (“NAATP”), state as follows:

  1. STATEMENT OF THE CASE
    1. NAATP is an addiction treatment industry trade association that has positioned itself as the de facto regulator of the addiction treatment industry. NAATP, under the guise of consumer protection, has lied to members of the United States Congress, Google, and the public at large, promoting a malicious and divisive “good guys versus bad guys” narrative about addiction treatment providers. This deceptive, egregious behavior has been part of NAATP’s strategy of controlling and interfering with critical advertising markets, locking AAC out of them, and

 

damaging AAC financially. More broadly, NAATP seeks to gain control of addiction treatment industry marketing channels in order to damage and injure high-quality, innovative treatment providers such as AAC, thereby aiding NAATP member organizations.

  1. NAATP, through its employees, its board of directors, and a number of member organizations, has illegally sought to damage AAC by (a) lying about AAC’s marketing practices to Congress, Google, Google’s certifying organization, LegitScript, LLC (“LegitScript”), the press, and the public; (b) continuously rewriting its membership rules to exclude AAC; (c) blocking AAC from participation in the critical Google Ads, YouTube (which is owned by Google), Facebook, and Bing online advertising platforms; (d) threatening retaliation against its members if they try to reach those suffering from addiction on AAC’s websites; (e) adopting membership requirements to bar providers who own or operate an online directory or use marketing or advertising channels not controlled or approved by NAATP; (f) applying its restrictive standards to AAC, while ignoring them when it comes to NAATP’s and its members’ own marketing practices and behavior; and (g) threatening retaliation against its members if they use AAC’s diagnostic testing services. In this way, NAATP benefits itself and its member organizations by injuring AAC, saving them millions of dollars a year while preserving or improving their market
  2. NAATP has painted the industry that it purports to represent as filled with liars and cheaters (other than, of course, NAATP and NAATP members). It has intentionally, falsely, and maliciously associated AAC with a minority of unscrupulous treatment providers, whose actions do not represent those of AAC or the compassion and sense of mission demonstrated by most treatment providers. In short, in order to protect the organizations that sit on its board of directors

 

and other of its members, NAATP has wrongfully tarnished not just AAC’s reputation but that of the addiction treatment industry as whole.

  1. Through its unfair and improper behavior, NAATP has hurt those seeking treatment for alcoholism and addiction. Those with the courage to seek help now have greater difficulty finding high quality treatment options, because of NAATP’s continuing efforts to limit and control online and other advertising channels. NAATP continues to defame AAC and sow confusion in the addiction treatment industry using lobbyists, publicists, and lawyers to extend its control as the industry’s self-appointed regulator.
  2. This Complaint seeks relief from NAATP’s dishonest and detrimental behavior and its efforts to damage AAC and to stifle competition and innovation in the addiction treatment industry.

II.

 

THE PARTIES

 

  1. American Addiction Centers, Inc. is a Nevada Corporation with its principal place of business located at 200 Powell Place, Brentwood, Tennessee American Addiction

Centers, Inc. is a for-profit treatment company whose parent company’s stock is listed on the New

 

York Stock Exchange.  AAC  is a leading provider of  inpatient and  outpatient  substance  abuse

 

treatment  services  for  adults  struggling  with  drug  addiction,  alcoholism,  and  co-occurring

 

mental/behavioral health issues. AAC currently operates treatment centers in California, Florida, Massachusetts, Mississippi, Nevada, New Jersey, Rhode Island, and Texas. AAC’s founder, chairman, and CEO, Michael Cartwright, is a treatment industry innovator whose accomplishments include contributing to the widespread acceptance of “dual diagnosis” addiction treatment,  which  recognizes  the efficacy of both  Twelve-Step principles  effective  in  treating

 

addiction along with the need for diagnostic, psychiatric, and medical treatment for co-occurring disorders such as depression and anxiety. AAC is an active member of the National Association of Behavioral Healthcare (“NABH”), which AAC believes is the most effective trade organization representing the addiction treatment industry. AAC’s CEO Michael Cartwright serves as treasurer of NABH, whose board of trustee members are listed at https://www.nabh.org/about-nabh/board-

of-trustees-staff/.

 

  1. Recovery Brands, LLC (“Recovery Brands”) is a California limited liability

 

in reaching potential patients.

 

  1. Addiction Labs of America, LLC (“ALA”) is a Delaware limited liability company

 

business in Tennessee. ALA operates a testing laboratory in Tennessee, the customers or potential

 

customers of which include patients being treated at both AAC and non-AAC treatment centers.

 

  1. NAATP is a Colorado nonprofit corporation with its principal place of business located at 1120 Lincoln Street, Suite 1104, Denver, Colorado NAATP may be served with the Summons and Complaint through its registered agent for service of process, Marvin Ventrell. NAATP boasts of a nationwide membership in excess of 600 different providers and more than 930 different treatment facilities. NAATP has a 25-member board of directors that is dominated by not-for-profit organizations that compete with AAC and have benefited from and contributed to NAATP’s unlawful, unfair, defamatory, and tortious actions, including the Hazelden Betty Ford Foundation, which operates at least 17 treatment facilities nationwide and chairs NAATP’s board of directors (“Hazelden Betty Ford”), and Caron Treatment Centers, which operates at least nine treatment facilities in the Eastern United States (“Caron”). During the time frames relevant to the allegations herein, NAATP’s board of directors has consisted of at least 72% not-for-profit organizations and their representatives.

III. JURISDICTION AND VENUE

  1. This Court has federal question subject matter jurisdiction under 28 U.S.C. § 1331 because this Complaint asserts claims under federal law (specifically the Lanham Act, 15 S.C.
  • 1125). In addition to federal question subject matter jurisdiction, this Court also has diversity jurisdiction under 28 U.S.C. § 1332.
  1. American Addiction Centers, Inc. is a Nevada corporation with its principal place of business located in Brentwood, Tennessee. Therefore, it is deemed to be a citizen of the states of Tennessee and

 

  1. Recovery Brands, a wholly owned subsidiary of American Addiction Centers, , is a California limited liability company with its principal place of business located in San Diego, California. As a wholly owned limited liability company subsidiary, Recovery Brands has the same citizenship as American Addiction Centers, Inc., and, therefore, it is deemed to be a citizen of the states of Tennessee and Nevada.
  2. ALA is a Delaware limited liability company with its principal place of business located in Brentwood, Tennessee. ALA is a wholly-owned subsidiary of AAC HN. As a wholly owned limited liability company subsidiary of AAC HN, ALA has the same citizenship as AAC HN and, therefore, it is deemed to be a citizen of the states of Delaware and
  3. NAATP is a Colorado nonprofit corporation with its principal place of business in Colorado. Therefore, NAATP is deemed to be a citizen of the State of Colorado. Complete diversity exists between Plaintiffs and Defendant. The amount in controversy in this case exceeds

$75,000. This Court also has supplemental jurisdiction under 28 U.S.C. § 1367 as the state law claims and the federal claims have certain common core facts.

  1. Jurisdiction is also proper in this Court under Tennessee’s long arm statutes,

 

Code Ann. §§ 20-2-201-202. NAATP has harmed AAC in various improper ways, including through defamation and tortious interference, as outlined below. Such actions were not only specifically directed at AAC in Tennessee but also caused significant damage to AAC in Tennessee, including but not limited to, the loss of millions of dollars in revenue, increased costs, lost net profits, lost market capitalization and increased costs of capital. NAATP’s actions have resulted in the layoffs of scores of Tennessee-based AAC employees, among hundreds laid off nationwide.

 

  1. This Court has personal jurisdiction over NAATP as NAATP has directed its activities toward and into Tennessee, has defamed AAC and interfered with AAC’s contractual and business relationships in Tennessee by and through its actions, has committed multiple torts in Tennessee, and has specifically directed its actions against AAC knowing that the harm would befall AAC in Tennessee. As a result of NAATP’s tortious and unlawful actions specifically directed at AAC in Tennessee, AAC was forced to lay off scores of Tennesseans who, prior to NAATP’s tortious and unlawful actions, had employment with AAC in Tennessee. NAATP has encouraged its members not to advertise with AAC owned directories and not to do business with AAC on related lines of business such as lab testing. Many of these facilities and businesses are located in NAATP’s actions have harmed and reduced competition by damaging AAC, in an attempt to benefit NAATP members, many of which are located in Tennessee.
  2. NAATP’s improper actions and violations of Tennessee state consumer protection laws have inflicted substantial injury on AAC, Tennessee citizens, and treatment providers in Tennessee.
  3. NAATP’s due process rights are not offended by this Court’s exercise of personal jurisdiction over NAATP’s own website, www.naatp.org, boasts that its organization has nationwide operations and membership. Its membership directory shows that there are 41 NAATP- approved treatment centers located in Tennessee, including 28 NAATP-approved treatment centers located in the Middle District of Tennessee. NAATP wrongfully excluded AAC from its membership knowing that AAC was and is located in Tennessee and in the Middle District of Tennessee. NAATP has waged a campaign specifically targeting AAC, knowing that AAC is located in Tennessee and the Middle District of Tennessee. NAATP thus engages in interstate commerce and has purposefully availed itself of doing business in Tennessee.

 

  1. Venue is proper in this District under 28 U.S.C. § 1391(b)(2). NAATP’s actions have been directed into Tennessee and thus a portion of the events giving rise to the events of this case have occurred in Tennessee. AAC’s good name and corporate goodwill are assets of AAC. NAATP has engaged in a concerted and sustained campaign to defame AAC and unlawfully and unfairly label AAC as an unethical actor in the addiction treatment industry. NAATP’s false and deceptive advertising and defamatory statements have been published in Tennessee and its tortious actions have been directed to Tennessee, all of which have damaged AAC’s property located in Tennessee including its name, goodwill, and advertising revenue streams. Venue is further proper before this Court pursuant to 28 S.C. § 1391(b)(3) as NAATP is subject to personal jurisdiction before this Court.

IV. FACTS

Growth and Competition in the Addiction Treatment Industry

 

  1. Addiction and alcoholism have long been a source of emotional pain and societal challenge. Fortunately, over the last century, because of the growth and effectiveness of Alcoholics Anonymous and other Twelve-Step programs, as well as increased awareness of mental health disorders, the stigma surrounding the disease has diminished
  2. Because the acceptance of addiction as a disease has been a slow, century-long process, the addiction treatment industry has not matured as quickly as other healthcare sectors. The industry has long been, and continues to be, highly fragmented, consisting of mostly small operators. National standards of care and best practices have been relatively slow to develop, in part because the industry has not had large, clinically sophisticated, national healthcare systems to help drive innovation and

 

  1. The opioid crisis of the last two decades, however, combined with increased access to mental health treatment as a result of the Mental Health Parity and Addiction Equity Act in 2008 and the Patient Protection and Affordable Care Act in 2010, has caused a surge in the number of treatment providers nationwide and increased access to addiction
  2. AAC, founded in 2011, has sought to create a national addiction treatment system that elevates standards of clinical care and heightens the industry as a whole through innovation and competition. Because of its status as the only publicly-traded addiction treatment-focused company, AAC has attracted significant media and investor attention and became the most transparent and highly scrutinized company in the treatment industry. AAC embraces its position as the industry leader and the heightened scrutiny and standards to which it is
  3. In recent years, increased competition and other industry developments have placed intense operational pressures on addiction treatment providers. Indeed, according to a March 4, 2019 Vista Research Group report titled “The State of Addiction Treatment 2019” many “addiction treatment centers, some of whom have been in business for many years, are struggling to survive

. . . .”

 

  1. Prominent not-for-profit board members of NAATP, such as Hazelden Betty Ford and Caron, have struggled with this new environment and have not welcomed competition from for-profit providers. A review of publicly available tax filings reveals the declining financial condition of these leading not-for-profit systems. For instance, between 2015 and 2017, annual revenues at Hazelden Betty Ford dropped from $223,551,683 to $183,947,324. Meanwhile, Hazelden Betty Ford went from an operating surplus (revenues less expenses) of $41,261,099 in 2015 to operating losses of $7,789,671 in 2016 and losses of $7,680,828 in 2017. Caron experienced similar struggles, swinging from an operating surplus of $13,062,108 (revenues less

 

expenses) for the 2014 tax reporting year to losses of $8,740,184 and $8,919,330 for 2015 and 2016, respectively.

  1. At the same time, expenses at these not-for-profit providers – especially executive compensation – remained high. For instance, according to publicly available tax filings for 2015 and 2016, Hazelden Betty Ford paid its Chief Executive Officer Mark Mishek total compensation of $817,813 and $676,918, respectively. In its 2015 and 2016 tax reporting years, Caron paid its Chief Executive Officer Douglas Tieman total compensation of $824,314 and $638,991, respectively. As is clear from these hefty pay packages, even though not-for-profit treatment providers do not distribute profits to shareholders, they are cash engines for senior executives who are highly motivated to reduce competition in order to keep revenues high at their
  2. As shown in detail below, the sinking fortunes of these prominent NAATP members led NAAT to adopt a broad strategy that has focused on unfairly attacking AAC. The same dynamic has played in other areas of For example, when for-profit hospital chains such as Nashville-based Healthcare Corporation of America (“HCA”), began to grow their networks of hospitals in the 1970s and 1980s, non-profit hospitals fiercely fought the changes, innovation, and competition caused by the growth of the sophisticated for-profit operators. Innovation and quality care should be the focus of all healthcare providers – but long-established providers invariably feel threatened by change. They attempt to prevent or slow change through any means necessary. In this instance, NAATP has crossed the line by using illegal, defamatory, and improper methods to stifle AAC’s growth, innovation, and success.

The Challenge of Reaching the Addict

 

  1. Despite increased awareness and access to care, addiction and alcoholism represent a growing national The 2019 Vista Research Group report notes that, according to the 2017

 

National Survey on Drug Use and Health issued by the Federal Substance Abuse and Mental Health Services Administration (“SAMHSA”), 20.7 million Americans needed treatment for substance use disorder in 2017. However, only 2.5 million of those needing treatment received care from an addiction treatment facility, meaning 18.2 million people who need help were not treated.

  1. The SAMHSA survey underscores the pernicious denial associated with

 

Of the 18.2 million who did not receive treatment, only 1.0 million – a mere 5% – think they need it. In other words, those suffering from addiction typically cannot see that they have a problem, though the need for help is apparent to everyone else around them.

  1. Moments of contemplation, in which addicts and alcoholics recognize that they have a problem, are intermittent and Competent addiction treatment professionals understand that these windows of contemplation are precious opportunities for change. Thus, information about treatment options and access to care, including online resources, should be readily accessible in order to minimize barriers and resistance to treatment.
  2. The addiction treatment advocacy organization Shatterproof recognizes the need for rapid access to care. The Shatterproof National Principles of Care, which can be found via the Internet link https://www.shatterproof.org/shatterproof-national-principles-care, state:
    • Fast access to treatment: Addiction alters brain chemistry. So when an individual is able to seek treatment, that moment must be
    • Rapid access to appropriate substance use disorder care – What that means: Ability to rapidly engage individuals in the type and intensity of services that promptly meets their

 

  • Why it matters: Brain circuits associated with motivation, inhibition, and stress tolerance are often severely affected among individuals with [a substance use disorder]. Thus, periods of motivational readiness rarely sustain and rapid access to appropriate care is

AAC’s Innovative Online Outreach Platforms Help People Find Treatment

 

  1. In addition to clinical and diagnostic innovation, AAC has also sought to lead the industry forward in patient outreach and digital
  2. To this end, AAC purchased Recovery Brands in 2015. Founded in 2011 by individuals who themselves had achieved sobriety, Recovery Brands consists of a portfolio of websites that provide information about alcoholism, addiction, treatment, and
  3. The unfortunate stigma around addiction, as well as time and confusion about options for treatment, is often a barrier to accessing treatment. Because of the anonymity and privacy it affords, many people seeking treatment turn to the Internet. A majority of addicts and alcoholics begin their treatment journey with online
  4. Recovery Brands’ websites include rehabs.com, recovery.org, and com.

 

Each website includes a directory that lists treatment facilities by geographic location. Such directories help consumers to efficiently learn about available treatment options. AAC’s directories provide factual business information (such as name, address, website, and phone number) obtained from publicly available sources, along with clinical programming information provided by the listed treatment centers, as well as user-generated alumni reviews. These reviews help people looking for treatment and their families make informed decisions about their healthcare. See https://www.healthleadersmedia.com/clinical-care/70-patients-call-online-

reviews-crucial-selecting-healthcare-providers.

 

  1. AAC’s directory websites have resulted in as many as two million calls to non- AAC addiction treatment facilities. Innumerable callers have obtained the care they need at non- AAC treatment facilities. As an example, one user of AAC’s rehabs.com website wrote a note of thanks to rehabs.com and AAC, stating: “This was the only place I could find reviews of rehab centers in my It helped give me the confidence to make the right choice in Faith Home in SC. 2 years sober, was the best decision I’ve ever made.” Likewise, treatment centers that have used rehabs.com services to reach potential patients have expressed similar gratitude to AAC. One Southern California treatment center wrote to AAC, “We have admitted 3 clients from rehabs.com

. . . and they are all thriving in recovery.”

 

  1. AAC’s online directories provide those seeking help in finding treatment various options in their areas without the need for multiple searches across various platforms, much like the yellow pages in a phone book. The websites are similar to other listings and review websites, which are common on the Internet, useful to consumers and include websites such as google.com’s business listings, www.yelp.com, and www.yellowpages.com.
  2. Soon after its formation, Recovery Brands saw its websites blossom into an important venue for those seeking help for addiction to connect with addiction treatment Recovery Brands invested heavily in creating original content, written by addiction treatment specialists and other professionals, meant to engage and inform people interested in recovery.
  3. Recovery Brands’ business model is, in essence, to “do well by doing good.” By helping de-stigmatize addiction and provide ready access to treatment options, the company grew quickly.
  4. Treatment centers – many of which have limited budgets– gravitated to Recovery Brands, because listing in its directory websites allowed them to market and promote their services

 

free-of-charge. For those treatment centers with the resources to pay for advertising, Recovery Brands implemented a customary model used elsewhere in the healthcare industry and in other industries. It offered treatment centers a more prominent paid advertisement in return for payments based on the number of users who “click-through” to a treatment center’s website or directly call that treatment center. This is the same concept used by innumerable health information websites, such as WebMD or healthline.com.

  1. Hundreds of treatment industry providers – including hundreds of NAATP members – participated in Recovery Brands’ collaborative listings and paid advertising resources. In fact, as of early 2018, more than 300 NAATP members have participated in Recovery Brands’ listing
  2. Recovery Brands received millions of dollars in annual advertising revenue, which came from hundreds of addiction treatment providers – including many NAATP members – that had determined that rehabs.com and recovery.org were effective places for them to directly reach suffering alcoholics and

A NAATP Board Member’s Failed Anticompetitive Attack on Recovery Brands

 

  1. Not all NAATP treatment centers members welcomed Recovery Brands and the increasing prevalence of online marketing in addiction treatment. In fact, some NAATP treatment centers viewed Recovery Brands as a threat because it represented the growth of competition in the addiction treatment industry and the increasing costs of
  2. Seabrook House, Inc. (“Seabrook House”) is a not-for-profit addiction treatment provider located in New Jersey and a vocal member of NAATP’s board of
  3. Like Hazelden Betty Ford and Caron, Seabrook House has struggled in the face of increased competition in the addiction treatment industry. Between 2013 and 2014, Seabrook

 

House saw its operations flip from a $477,294 operating surplus (revenues less expenses) to a

 

$352,488 loss, according to public tax filings. Like Hazelden Betty Ford and Caron, Seabrook House has continued to compensate its chief executive officer handsomely. According to public tax filings, Seabrook House Chief Executive Officer Edward Diehl received total compensation of

$1,163,908 in 2014 and $766,948 in 2015.

 

  1. Seabrook House resented Recovery Brands’ success in building online treatment directories and the fact that competitors were attracting patients by advertising on Recovery Brands’
  2. In 2014, Seabrook House sued Recovery Brands in federal court, alleging that inclusion of Seabrook House in the rehabs.com online directory constituted trademark infringement and unfair competition. Recovery Brands fought back citing to well-established First Amendment commercial free speech precedents and fair use laws. Recovery Brands noted numerous other examples of the right to operate directories that benefit consumers such as yellowpages.com, yelp.com and even Google business listings. Directories are a constitutionally protected category of speech. AAC’s position on the importance of online directories to those suffering from addiction may be found at:

https://www.fiercehealthcare.com/sponsored/online-addiction-treatment-resources-critical-

 

lifelines-for-those-seeking-help.

 

  1. In the face of Recovery Brands’ defense, Seabrook House voluntarily dismissed its lawsuit with prejudice and without Recovery Brands making any settlement payment. A news report discussing dismissal of the case can be found at https://www.behavioral.net/news-

item/seabrook-house-drops-marketing-lawsuit.

 

  1. AAC purchased Recovery Brands in 2015. The purchase of Recovery Brands gave AAC the rights to several very high profile, high-traffic websites and online directories and the ability to promote AAC’s treatment centers on these sites. These websites provided AAC an immediate and significant competitive advantage over virtually all of NAATP’s other
  2. Upon information and belief, in addition to being dissatisfied with the unsuccessful litigation against Recovery Brands, Seabrook House and other prominent NAATP members vowed that, if consumer sentiment, the First Amendment, and trademark laws were not on their side, there must be another way to stop Recovery Brands and the competitive advantage that AAC had gained from acquiring

NAATP Seeks to Recover from Its Own Scandal and Devises Strategy to Damage AAC

  1. By 2015, NAATP was at a Its most prominent and vocal board members such as Hazelden Betty Ford (which is NAATP’s chair organization), Caron, and Seabrook House were struggling financially in the face of increased industry competition.
  2. At the same time, NAATP was still seeking to recover from an embezzlement scandal.
  3. In 2010, the Pennsylvania Attorney General called NAATP’s Board Chair Cathy Palm to report that it was suspected that NAATP’s longtime President and CEO Ronald J. Hunsicker had embezzled some $500,000 from the organization via credit card fraud. A description of the scandal can be found here:

https://www.behavioral.net/article/naatp-board-recounts-hunsicker-investigation

 

  1. In the wake of this scandal, NAATP had a number of interim executive directors before selecting Marvin Ventrell for that role in
  2. Ventrell helped launch NAATP’s 2015 strategic plan, in which the organization announced that it would, “Establish and promote NAATP as a modern, state of the art, powerful,

 

persuasive, and authoritative addiction profession leader.” In that same 2015 strategic plan, NAATP announced that it would, “Establish and Publish Industry Ethics Guidelines including a NAATP Complaint Policy and Procedure.”

  1. Covertly, Ventrell and NAATP board members, including Hazelden Betty Ford, Caron and Seabrook House, developed a plan to damage and defame AAC, and to unfairly compete against AAC. Under the plan, NAATP would position itself and its not-for-profit board members as the moral vanguards of the treatment They would leverage the use of publicity around questionable practices of some new for-profit treatment providers to allow NAATP and its most prominent members to become de facto regulators of the industry, including industry marketing channels.
  2. A key to NAATP’s strategy has been to taint the reputations of Recovery Brands and AAC by falsely and maliciously describing these innovative entities as part of the wave of “for profit bad guys” that are destroying the addiction treatment industry by seeking to profit from recovery. As an example of this strategy, Ventrell, as detailed below went so far as to call the state of addiction treatment marketing a “holocaust of corruption,” a description that is not only sensationalistic and inaccurate but also highly offensive to many. NAATP and certain of its members have carried out and continue to advance their plan through the following means:
  • Defaming AAC by falsely and publicly describing Recovery Brands’ marketing practices as illegal and

 

  • Using lobbyists, public relation firms, and lawyers to spread this misinformation and to position NAATP (which, ironically, was still reeling from an embezzlement scandal) as the industry’s regulator and ethical

 

  • Using this smear campaign to gain influence over industry marketing and advertising regulations, including LegitScript and the critical Google Ads online advertising platform, and then blocking AAC from participation on Google

 

  • Presenting false information to the United States Congress and Google about AAC, while positioning Hazelden Betty Ford, Caron, and other not-for-profit NAATP board member organizations as righteous, upstanding

 

  • Writing and rewriting its ethics codes to ban AAC from NAATP membership in order to portray AAC as unethical and causing LegitScript, Google’s advertising certification organization, to do the same – thereby restricting competition from AAC.

 

Each of these tactics is described in detail below.

 

NAATP Pressures Google to Suspend Paid Online Advertising

 

  1. As NAATP admitted in a July 22, 2018 written submission to Congress, “The internet serves as the primary source for consumer location of addiction treatment The

majority of internet searches are performed on the Google platform.”

 

  1. Because approximately 90% of Internet searches are run on Google, it is no surprise that NAATP’s attack on AAC began with
  2. As of 2017, AAC was a member of NAATP. NAATP had never given any indication to AAC that AAC was in violation of any NAATP standards. Indeed, AAC did not violate any such standards. But NAATP was by then committed to adopting new standards to prevent AAC from continuing to thrive and
  3. The first target of NAATP was online search via Google, the gateway to treatment for many
  4. Google Ads (known until 2018 as Google “Adwords”) is a crucial advertising platform for many American businesses, including addiction treatment
  5. In fact, Google Ads generates tens of billions of dollars in annual advertising revenue. The Google Ads platform involves bidding by businesses to appear prominently at the top of the web page if a consumer searches for certain key words on the Google search For

 

instance, addiction treatment providers bid against each other so that their advertisements appear when consumers search for terms like “alcoholism,” “drug rehab,” and “drug treatment.”

  1. Google places advertisements at the top of its search results for the provider that bids the highest for each word or phrase or combination of
  2. As of 2017, AAC was a leading user of the Google Ad platform. As a whole, the treatment industry spent an estimated $100 million per year on Google Ads, with AAC one of Google Ads’ largest treatment center customers. Such spending ensured that AAC websites and facilities were prominently listed in search results, thereby increasing AAC’s ability to serve addicts in need. AAC and Recovery Brands each had a good relationship with Google. Indeed, AAC has never received any warnings or notices of any kind from Google never suggested it had any problem with AAC’s marketing efforts.
  3. But AAC’s significant participation in the Google Ads market and the bidding by other competitors created additional costs for NAATP members. For example, according to its publicly available tax filings, Caron was already spending $524,000 on Google advertising by 2014. As AAC sought to out-bid competitors for top placements in the Google Ads system, other providers were forced to raise their bids to compete. Such costs were not welcomed by old line treatment providers. Competing for customers was not their strong suit and they thrived when addicts had less information about treatment providers and fewer treatment options.
  4. NAATP and certain of its members therefore sought a way to get control and influence over the Google Ads platform. If they controlled the online search process, they would reduce competition for placement on Google Ads, thereby lowering their advertising costs and saving millions of dollars per year while improving their competitive

 

  1. The “hook” for NAATP to seek to change the search process for addiction treatment was provided by a number of disreputable bad actors in the These bad actors were known to operate what seemed like unbiased addiction help telephone call centers, but were actually paid to steer customers to certain treatment facilities. The bad actors would even hack web listings and change contact numbers to their own numbers to increase call volumes. AAC has never participated in any such conduct. Indeed, AAC’s Google web listings have even been victimized by these bad actors hacking into AAC directories and fraudulently altering content.
  2. NAATP approached Google in 2016 and 2017 to discuss how the Google Ads program (still known as Adwords at that time) could be changed to minimize unethical marketing in the addiction treatment
  3. In its effort to ingratiate itself with Google, NAATP even invited Google Adwords Ambassador, Josh Weum, to speak at NAATP’s 2017 National Annual Meeting held in Austin, Texas.
  4. According to a September 26, 2017 article in Bloomberg titled “Why it Took Google So Long to End Shady Rehab Center Ads,” Google’s Adwords Ambassador told the NAATP conference that Google Adwords was the most efficient way to reach addicts who could afford
  5. According to the same September 26, 2017 Bloomberg article, Google’s presentation touting the advantages of online advertising to the NAATP 2017 Conference was met with a very negative response from NAATP leaders, and Google was surprised by the response. The response led Google to more seriously consider changing its marketing platform for addiction treatment providers. Discussions with NAATP continued.

 

  1. Upon information and belief, and unbeknownst to AAC at the time, NAATP misrepresented to Google and its business partners that AAC’s directory websites were deceptive rogue “lead generators” and “call center aggregators.” AAC was not aware and could not have been aware of NAATP’s
  2. Upon information and belief, NAATP’s misrepresentations to Google about AAC’s websites unfairly and unjustifiably lumped AAC’s websites in with a host of other websites and operators that actually did participate in unethical
  3. NAATP’s campaign worked and, in late 2017, Google halted all use of Google Ads for advertising addiction treatment facilities. Google issued the following statement:

Substance abuse is a growing crisis and even as we’ve helped healthcare providers connect with people who need help, unfortunately there’s also been a rise in deceptive practices from bad actors taking advantage of those in need. This is a complex issue with varying degrees of regulation in different countries, which is why we’ve decided to suspend ads in the entire addiction treatment center category globally while we consult with experts to find a better way to connect people with the treatment they need.

 

  1. The New York Times reported on the move by Google saying, “In this case, the restrictions will limit a popular marketing tool in the $35 billion addiction treatment business, affecting thousands of small-time ”
  2. Robert Epstein, Senior Research Psychologist at the American Institute for Behavioral Research and Technology, noted that “if a Google executive decides your business or industry doesn’t meet its moral standards, it bans you from AdWords; these days, with Google’s reach so large, that can quickly put you out of ”
  3. The suspension of marketing on Google Ads caused an immediate and dramatic shift in addiction-related Google online search There was no preferential placement and so

 

results were based only on Google algorithms. AAC was well-positioned for this new regime, due to its stable of popular and effective Recovery Brands websites.

  1. Three months later Google announced that it would partner with LegitScript to start a certification program for addiction treatment providers. Providers would not be allowed on the Google Ads platform unless they first obtained LegitScript certification. Treatment providers would complete extensive documentation and pay high application fees to obtain LegitScript’s blessing before being allowed back onto the Google Ads platform. LegitScript’s announcement of its partnership                with           NAATP           can           be           found at: https://www.legitscript.com/blog/2018/04/legitscripts-new-certification-program-for-addiction-

treatment-providers-will-help-those-most-vulnerable/

 

  1. On the same day LegitScript announced that it was charged by Google with vetting access to the AdWords market, NAATP Executive Director Marvin Ventrell sent an announcement about this move to NAATP’s membership saying, “I am pleased to report after months of

collaborative work, the process of reinstituting the advertising of addiction treatment through

 

Google is underway.” (emphasis added).

 

  1. LegitScript acknowledged that this verification program was developed in coordination with NAATP and that, “these and other organizations will form an advisory committee to LegitScript to ensure the continuous improvement and accountability of LegitScript’s program, and leading experts will keep LegitScript informed about new trends and challenges.”
  2. The President and CEO of LegitScript, John Horton, stated, “We hope that our program will help provide patients and our partners (like Google) information about which programs provide genuine treatment and which are, in essence, ” Such laudable goals

 

would, of course, have given AAC no concern, since its award-winning facilities provide excellent care and have successfully assisted tens of thousands of addicts.

  1. In that same April 16, 2018 announcement, Horton said, “I also want to approach our new program with some humility. Although I believe we’ve got the standards right, I want to

extend an invitation to experts in the field to let us know how we can improve our program, making

 

sure that we’re certifying the legitimate entities and accurately blocking the noncompliant ones.

 

We always want to hear how we can do better. In the internet pharmacy and telemedicine space, I think that we’ve done a good job, but that’s not only because of our internal processes and staff expertise; it’s also because of the partnerships we have in place – companies, patients, and

regulatory authorities that share what  they are seeing with us,  and help  us understand  how  the

 

problematic entities operate and who they are.” (emphasis added).

 

  1. Just as they had done with Google, NAATP’s Marvin Ventrell met with LegitScript’s Horton to discuss, among other things,
  2. Unknown to AAC at the time, NAATP’s Marvin Ventrell told LegitScript’s Horton that AAC and its websites were deceptive and that AAC was an unethical operator that should be excluded from the Google Ads
  3. While NAATP was already an advisor and an “expert” that LegitScript was listening to in April, 2018, LegitScript had not yet spoken with
  4. Upon hearing the announcement that LegitScript would be vetting companies for participation in the Google Ads program, AAC reached out to LegitScript and Horton and offered to be an additional advisor to LegitScript. All efforts to meet with Horton, or work with LegitScript, have been rebuffed based on NAATP’s substantial efforts to paint AAC as an unethical

 

  1. LegitScript now not only controls access to the Google Ads program, but it also performs a similar function for Facebook and Bing, Microsoft’s online search engine. Paid search is only available to those who can gain LegitScript certification but such certification is denied to AAC because it has been blacklisted by
  2. As described below, AAC has spent hundreds of employee hours completing and supplementing all application paperwork for LegitScript. AAC has paid all application fees and complied with all other certification requirements. LegitScript, however, refuses to certify AAC based on NAATP’s defamatory and tortious

NAATP Excludes AAC From Membership

 

  1. Since AAC was a member in good standing of NAATP throughout 2017, NAATP’s discussions with Google, which included NAATP’s attacks on AAC, led to an obvious question: Why was AAC a member of NAATP if NAATP’s leaders stated AAC was an unethical marketer and treatment provider?
  2. As Google moved closer to agreement with NAATP to regulate treatment providers’ access to Google Ads, NAATP knew that it had to terminate AAC from its membership if it was to keep AAC off of Google Ads. There was a substantial problem, however, because NAATP knew that AAC was in compliance with all of its bylaws and had never before been sanctioned or put on notice for any alleged violation by NAATP, therefore, had to change its rules in order to eject AAC from its membership.
  3. NAATP was informed by Google that Google was likely to take action early in 2018 to suspend addiction treatment providers from Google Ads on a temporary basis. In order to help with its arguments that AAC should be barred from the Google Ads platform, NAATP’s board of directors hurriedly drafted and adopted a new set of ethics rules that it thought would exclude

 

AAC from membership. NAATP’s desperation to adopt the rules quickly and without comment from its membership is illustrated by the fact that the rules were adopted on New Year’s Day 2018. They were called “Ethics 2.0.”

  1. NAATP’s primary purpose in adopting “Ethics 2.0” was to exclude AAC from membership and thereby exclude AAC from the Google Ads
  2. Even though AAC was a member of NAATP in 2017, it was not notified that new ethical rules were being
  3. Even though AAC was a member of NAATP in 2017, it was not invited to participate in the process of drafting “Ethics 0.”
  4. The odd timing of the adoption of “Ethics 2.0” was also based on NAATP’s underhanded mechanism for ejecting AAC from its membership. NAATP knew that it could not argue that AAC had violated any rules of the group so, NAATP decided it would simply refuse to renew AAC’s membership for 2018 based on AAC’s purported failure to comply with “Ethics 2.0.”
  5. Exclusion from NAATP can cause a treatment center reputational damage. And because NAATP controls and influences LegitScript, if a provider can obtain membership to NAATP, then it has substantially improved its chances of gaining LegitScript approval to use Google Ads. Other damage comes from removal from NAATP’s online directory of all NAATP members. The NAATP directory is one of a limited number of online directories and AAC’s listing had resulted in business for
  6. As a part of “Ethics 2.0”, NAATP also announced a new “Ethics Complaint Process.”

 

  1. Under that NAATP “Ethics Complaint Process”, if a complaint is initiated by NAATP, the Executive Director is to prepare a complaint, “that (a) identifies the member organization who is alleged to have violated the Code (the ‘Respondent’); (b) describes the act(s) at issue and the reason(s) for the Complaint; (c) states whether the acts are ongoing or continuing;

(d) explains why the acts violate the Code; (e) provides any relevant or supporting information and documentation.”

  1. Even though it adopted Ethics Complaint Process, NAATP did not follow its own policy or procedure. NAATP did not afford AAC the procedural protections therein because NAATP was aware that AAC would vigorously defend itself, causing delay and uncertainty at a time when NAATP had to show Google and LegitScript that it had severed ties with AAC if it hoped to keep AAC off of Google
  2. Under the NAATP “Ethics Complaint Process,” once a complaint is prepared it is to be served on the member and the member then has 30 days to
  3. NAATP did not provide AAC an opportunity to rebut any of NAATP’s allegations about AAC’s business
  4. Under the NAATP “Ethics Complaint Process,” once a member has answered a complaint against it, a committee is empaneled to hear the case and make recommendations as to the outcome of the dispute. NAATP did not empanel a committee to hear any case against
  5. Even if a member is determined to have violated one of the ethics rules, the “Ethics Complaint Procedure” describes progressive discipline that includes an opportunity to correct any issues. NAATP completely denied AAC of any due process rights to have any dispute as to its compliance with “Ethics 2.0” fairly heard and

 

  1. NAATP denied AAC any opportunity to work with NAATP to educate the group about AAC’s operations or to discuss what if any changes would be made to AAC’s web operations to address any alleged code
  2. In the wake of NAATP’s decision to exclude AAC from NAATP membership, AAC wrote to NAATP and asked for details of its alleged transgressions. For months, NAATP refused to provide any specifics as to how AAC allegedly violated “Ethics 0.”

NAATP Defames AAC at the 2018 National Annual Meeting

 

  1. Although AAC was excluded from membership in NAATP and excluded from being an exhibitor at the NAATP 2018 National Annual Meeting held May 20-22, 2018, AAC sent a representative to the meeting in hopes of meeting with NAATP and
  2. When reached at the meeting, NAATP Executive Director Ventrell told AAC’s representative that he would talk with AAC after the annual meeting. This was not Ventrell’s intent, as NAATP, Ventrell, and Hazelden Betty Ford spent months afterward dodging further requests from AAC to
  3. In fact, Ventrell had no intention of meeting with AAC – instead, he dodged AAC’s request to meet because he knew that NAATP was about to falsely and maliciously tell the press, public, and the United States Congress that AAC’s websites were deceptive and
  4. As of the 2018 National Annual Meeting, NAATP had still not provided AAC with any notice of what rules it had allegedly violated or an opportunity to respond to any allegations of NAATP rule
  5. Yet during the 2018 National Annual Meeting, NAATP gave a presentation to the 700 registered attendees titled, “Deceptive or Transparent? There IS a Bright Line in Web Marketing.” Present during that presentation was LegitScript’s CEO John Also present

 

during that presentation were representatives of hundreds of other addiction providers, many of which are also customers or potential customers of AAC’s web advertising and diagnostic testing businesses.

  1. Slide 10 of the NAATP slideshow presented at the meeting is titled, “Problematic Practices – Unbranded, Aggregation and Lead Sales
  2. Immediately below that title were the words, “70 Aggregation and lead sales sites identified. These are considered deceptive under the NAATP Code of Ethics.” (emphasis added)
  3. Among the 70 websites identified are numerous AAC and Recovery Brands sites including rehabs.com, recovery.org, and drugabuse.com. Below is a true and correct image of Slide 10, with AAC owned websites highlighted:

 

  1. Those in attendance, including LegitScript’s John Horton, were aware (or would readily discover) that drugabuse.com, projectknow.com, recoverybrands.com, recovery.org, rehabs.com, and treatment4addiction.com are owned and operated by AAC’s Recovery
  2. Consistent with its move to be the de facto regulator for the addiction treatment industry, NAATP’s presentation did not distinguish between current, former, or non-members of NAATP.
  3. On Slide 13 of the presentation, NAATP characterized AAC and the other owners of the 70 websites by claiming that they were acting out of greed and desperation. A true and correct image of this slide is as follows:

 

  1. NAATP employees, including its quality assurance officer Peter Thomas, authored the slideshow which defamed

 

  1. Following the slideshow presentation, Ventrell, took the stage to introduce LegitScript’s John Horton. In his remarks introducing John Horton, Ventrell talked about NAATP’s role in helping shape the LegitScript vetting
  2. Ventrell told the conference attendees:

 

. . . Some people will be angered and feel defensive about the way they do things. And I hear that. I hear it from those people. My suggestion is that discernment is critical at this point in time in our world. The ability to discern people’s intentions and their values and their dedication to this work and their legitimacy is critically important. Rogue groups begin to form in opposition to people who do good things. We are going to do good things and if that happens then that happens. Be

 careful who you play with. That’s my caution.

 

We are not going to end this conference on a whimper. We are going to go out with a bang. This is a big day. Folks are very interested in this session as they should be. This is really important. We’re gonna find out sort of exactly how this program of reinstating AdWords through the LegitScript folks and the Google relationship and our work on it come together and what that looks like now and what that’s going to look like going forward . . . .

 

We met with them [Google] and we began the process of advising them and they were taking our advice as to how they should manage, how they should vet, how they should understand who the good guys and the bad guys are. Because the bad guys tell you they’re the good guys. That’s what they’re good at. They even hold ethics conferences . . . I said that out loud (laughter in the audience) and so it’s

complicated and Google in their wisdom brought along LegitScript. (emphasis added).

 

  1. Through these comments, NAATP’s Executive Director falsely and maliciously told LegitScript’s John Horton and hundreds of other conference attendees that AAC was not legitimate and was a “bad guy.” Conference attendees knew that he was speaking about AAC because it was Recovery Brands which had routinely invited NAATP and its members to conferences it hosted to invite input on treatment industry marketing ethics and other
  2. By saying “Be careful who you play That’s my caution,” NAATP was telling its members that if they did business with AAC they too would be blacklisted by NAATP. And in the context of the discussion about the relationship between NAATP and LegitScript, the

 

organizations were also saying that doing business with AAC could jeopardize a treatment provider’s LegitScript certification and access to Google Ads.

  1. Immediately following these statements by Ventrell, LegitScript’s John Horton took the stage and affirmed that NAATP helped draft the LegitScript standards and was a LegitScript trusted
  2. In the months that followed the NAATP 2018 National Annual Meeting, AAC saw a marked decrease in the number of treatment providers advertising on AAC’s directory websites and/or purchasing lab testing services from
  3. One such treatment provider confirmed AAC’s concerns about the impact of NAATP’s comments about “being careful who you play with” when that treatment provider informed AAC that they would no longer advertise on AAC’s directory sites. The provider wrote that it wanted “to make sure we aren’t affecting our status with the ongoing LegitScript vetting process and NAATP’s stance on the ”
  4. Many other treatment providers similarly stopped advertising with AAC’s directories in the months after the 2018 NAATP National Annual Meeting, similarly stating that they were concerned that doing business with AAC could lead to their exclusion by NAATP and their being denied LegitScript
  5. Recovery Brands and AAC lost millions of dollars in advertising revenue (and resulting lost net profits) due to the untrue and defamatory statements of

AAC Applies for LegitScript Certification

  1. In May 2018, before the NAATP 2018 Annual Meeting, AAC reached out to Horton and asked to meet to better understand LegitScript’s process for being allowed to advertise on Google Ads. A copy of LegitScript’s certification standards can be found at:

 

https://www.legitscript.com/service/certification/addiction-treatment/standards/                           and

 

https://www.legitscript.com/service/certification/addiction-treatment/

 

  1. Initially, Horton agreed to a meeting, cordially stating in emails to AAC that he would be happy to meet with AAC’s clinical leaders and executives. However, following NAATP’s false and malicious statements about AAC at the NAATP 2018 Annual Meeting, as well as similar mistruths made by NAATP in its Congressional appearances and NAATP’s publications about those appearances, LegitScript has refused to meet with AAC. Meanwhile, many other treatment providers, that are members of NAATP, have been certified by

NAATP Lies to Congress About AAC and Publicizes its Attacks

  1. In 2017 and 2018, NAATP, NAATP representatives, and NAATP board member organizations made more than 30 trips to Washington, D.C. to meet with members of Congress, Congressional staffers, and federal regulators.
  2. NAATP and its affiliates hired numerous lobbyists and public relations firms with the aim and intent of falsely and maliciously labeling AAC as a deceptive and unethical treatment provider, while positioning NAATP and its members such as Hazelden Betty Ford and Caron as the industry’s ethical paragons. NAATP’s goal was to serve as the industry’s de facto
  3. NAATP specifically lobbied Congress to hold hearings on the addiction treatment industry so that NAATP and its cadre of members seeking to protect and increase their market share could have a platform to establish NAATP’s effective control over the
  4. In these meetings with members of Congress and staffers, as well as in public statements, NAATP and NAATP-affiliated lobbyists and board members portrayed AAC as emblematic of the dishonest marketing plaguing the addiction treatment industry, falsely claiming that AAC engages in online hijacking of competitors’ phone numbers and misdirects or misleads

 

 

32

 

  1. All of these statements made by NAATP were utterly false. NAATP’s real motive was to taint AAC with the false information and to cause AAC reputational damage and to prevent AAC from advertising on Google Ads, while positioning NAATP as a self-regulatory organization that could save the industry from AAC and other greedy
  2. NAATP’s strategy included defaming AAC before Congress and then republishing and recirculating such false and defamatory statements via NAATP’s and member websites and media
  3. On December 12, 2017, the Subcommittee on Oversight and Investigations of the

 

U.S. House of Representatives Energy and Commerce Committee (the “House Subcommittee”) held a hearing entitled “Examining Concerns of Patient Brokering and Addiction Treatment Fraud.”

  1. NAATP successfully convinced Congressional staffers to have Caron Chief Executive Officer Douglas Tieman represent it at the
  2. At the hearing, in both written and oral testimony, Tieman portrayed the addiction treatment industry as overtaken by greedy profiteers. Tieman told the House Subcommittee that NAATP was developing a list of “bad actors” in the industry. Tieman told the House Subcommittee that NAATP was developing ethical policies and a list of ethical providers who follow these policies. “More importantly,” Tieman said, “we will also have a list of those that are violating those ”
  3. Tieman also testified about alleged “predatory web practices” and misleadingly identified AAC’s recovery.org as an example. Mr. Tieman’s written testimony included a discussion of “unethical marketers that have taken advantage of Caron [Treatment Centers].” In testimony regarding examples of alleged piracy of Caron’s website and telephone listings,

 

Tieman followed his other allegations by identifying recovery.org for “prominently including phone numbers that do not connect callers to Caron . . . [and] that the recovery.org website is owned by a treatment center not affiliated with Caron.” Caron published Mr. Tieman’s false written testimony on its website, Caron.org, and trumpeted the same substance from Tieman’s Congressional testimony in press releases.

  1. In short, Tieman knowingly and falsely accused AAC and org of hijacking misdirecting treatment center phone calls.
  2. In fact, Caron and Recovery Brands had interacted with respect to Recovery Brands websites for years. As part of this collaboration, Recovery Brands has provided Caron with information on how to access its directory listings on Recovery Brands websites and to correct any out-of-date contact information.
  3. Tieman’s testimony also failed to mention or disclose that Caron has engaged for its own benefit with AAC’s Recovery Brands by responding 125 times to user reviews of its facilities on the Recovery Brands website rehabs.com. Nor did he mention that Caron previously approved its facility listing on a Recovery Brands website.
  4. Tieman’s false testimony was part of NAATP’s strategy to take advantage of the House Subcommittee’s investigative process to unfairly compete with, defame, and injure AAC, thereby giving Hazelden Betty Ford, Caron, and other prominent NAATP members a competitive edge.

The July 24, 2018 Congressional Hearing and NAATP’s Continued Attacks on AAC

 

  1. The House Subcommittee again held hearings on July 24, 2018 focused on internet marketing practices in the addiction treatment

 

  1. Present at that hearing and testifying before Congress were NAATP’s Marvin Ventrell and Mark Mishek, CEO of prominent NAATP member Hazelden Betty Also present was AAC’s CEO, Michael Cartwright.
  2. In connection with that hearing, NAATP submitted the written testimony of Marvin Ventrell. That written testimony (which was then mirrored in oral testimony before Congress) contained a number of misleading and untruthful
  3. On Page 6 of the written testimony, NAATP testified that:

 

Prior to launching Ethics Code 2.0, NAATP worked with legal counsel to develop a comprehensive process whereby addiction treatment provider members of NAATP who are suspected of ethics code violations would be reviewed for code compliance. Fellow members, non-member providers, and the public may file a complaint against a NAATP member based on ethics code violations. Thereafter, the alleged conduct is reviewed by NAATP and notice and opportunity to respond is given to the provider. If a violation is found to exist, the NAATP member may incur the following penalties: notice and an opportunity to cure the violation or expulsion from membership. Our goal is to encourage compliance rather than punish. As part of code enforcement, NAATP also began, as of January 1, 2018, a process whereby members’ code compliance can be internally assessed when the member’s annual membership is expiring. This process allows NAATP to determine whether the member that is expiring should be invited back based on code compliance. (emphasis added)

 

  1. This testimony gave the misleading impression that due process was afforded AAC prior to its ejection from NAATP.
  2. NAATP then claimed that, “For-profit call centers, treatment center operated directories, and similar web directories do not reliably fulfill this function and frequently mislead the consumer.” NAATP’s own “Ethics 2.0,” however, permitted its members to operate for-profit call centers, treatment center operated directories, and similar web directories so long as the directory listings provided the direct phone number and contact information for the center listed

 

in the directory. See “Ethics 2.0” at § IV(B)(4). Thus, while telling Congress such marketing practices were improper, NAATP’s own ethics rules permitted them.

  1. NAATP’s written testimony then went on to say, “The NAATP Addiction Industry Directory is a comprehensive and transparent listing of all members without rank or

recommendation, just date of service, location, staffing, programs, and credentials. Combined with

 

the NAATP Guide to Selecting Addiction treatment, the AID [Addiction Industry Directory] serves the QAI [Quality Assurance Initiative] objectives and helps protect the consumer as well.” (emphasis added). Ventrell was not shy in suggesting that the NAATP directory was the only ethical one in the business.

  1. In his oral testimony before the House Committee, Ventrell said that “bad actors” were at fault for the issues in the industry. Ventrell specifically said that these “bad actors” were not members of NAATP or were no longer members of NAATP. As a result, NAATP’s Ventrell knowingly and intentionally labeled AAC as a “bad ”
  2. In oral testimony before Congress, NAATP and Mark Mishek of Hazelden Betty Ford misled Congress by claiming that NAATP members including Hazelden Betty Ford had not previously advertised with AAC’s directories or that they knew nothing about this. In truth, many NAATP members, including Hazelden Betty Ford, advertised with AAC and hundreds of others worked collaboratively with AAC to develop their directory listings. In a post-hearing written submission, NAATP was forced to admit that at least 21 NAATP members had paid to advertise on AAC directory sites. The true number of those NAATP members using AAC’s website directories was – and is – much
  3. As evidenced by documents submitted to Congress by AAC, available at aacthetruth.com, Hazelden Betty Ford was one of those NAATP members which advertised

 

with AAC and sought AAC’s help in responding to patient reviews of its facility on AAC’s directory.

  1. However, Mishek categorically denied that Hazelden Betty Ford had ever used AAC’s advertising services, misleading the Congressional
  2. During the Congressional testimony, NAATP’s Ventrell confirmed for the first time that NAATP had excluded AAC from membership because NAATP did not believe that AAC had adequately branded websites (i.e., websites that clearly indicated the affiliation of the website with AAC). As of July 2018, NAATP’s “Ethics 2.0” stated as follows:

NAATP members must be transparent regarding their identity and services. NAATP members must provide prominent information in all their advertising, on their websites, and in their collateral marketing materials about the type and model of services, corporate entity, treatment program brand, licensing, accreditation, location or facilities, and staff credentials. “Ethics 2.0” A at § IV(B)(2).

 

  1. Yet, all of AAC’s websites identified in multiple places AAC as the owner and operator of the sites, including, but not limited to, in the “About Us” page on each
  2. The NAATP standard does not define the degree or level of transparency needed to meet this standard and NAATP refused to meet with AAC despite repeated requests to do so to discuss exactly what NAATP wanted from AAC’s websites. As of July 2018, NAATP’s “Ethics 2.0” additionally stated as follows:

Web directories that use facilities images, name, logos, and trademarks that do not clearly identify that facility’s direct phone number and website are prohibited. Banners and borders on websites that utilize a web directory’s call center number, especially when conveying an appearance of being a consultant or independent specialist, are prohibited. “Ethics 2.0” at § IV(B)(4).

 

AAC’s web directories listed the direct phone number and contact information of each facility listed. The call center number listed on AAC web directories were in the body of the website, not

 

the border or the banner. If someone called the general helpline, the person answering the call identified themselves as being affiliated with AAC.

  1. Other NAATP members operated online treatment center directories, including Sierra Tucson, a NAATP board member which operates such websites and is owned by Acadia Healthcare.
  2. At the July 24, 2018 Congressional Hearing, Federal Trade Commissioner (“FTC”) Rahit Chopra released a letter calling for-profit treatment centers greedy profiteers who were ruining the addiction industry. Chopra’s letter even went so far as to state – incorrectly – that not- for-profit treatment centers are not subject to FTC advertising regulations, but for-profits are scrutinized by the FTC. The “good guys versus bad guys” theme of Chopra’s letter parroted NAATP’s campaign – and, on information and belief, was drafted largely by NAATP and or NAATP associated lobbyists and
  3. The day after the Congressional hearing, NAATP issued a false and deceptive press release to its 900 members recapping the testimony and claiming that present at the hearing were, “representatives from several companies the committee felt engaged in questionable behavior.” It was clear in context that AAC was one of these companies that allegedly “engaged in questionable behavior” as it was known in the industry that AAC testified at the hearing. Hazelden Betty Ford issued a similar press release, lauding Mishek’s testimony which had included outright falsehoods about Hazelden Betty Ford’s advertising practices and use of AAC advertising
  4. NAATP then published its and Ventrell’s false and deceptive statements before Congress on NAATP’s website and in industry publications in July,

NAATP Continues to Dodge AAC’s Requests to Meet

  1. Immediately after the Congressional hearing, Mr. Cartwright had approached

 

 

 

38

 

you had a problem with AAC, you could have just called,” and that he would be happy to discuss any suggested changes to AAC’s directory website.

  1. Following the July 24, 2018 Congressional hearing, AAC continued its effort to meet with NAATP to further understand NAATP’s concerns about AAC’s marketing practices. On July 30, 2018, AAC wrote to Ventrell saying, “Following up on our conversation, members of our executive leadership would like to meet with you and your team as soon as We have been trying to reach you for quite a while and hope that you could find time for us.”
  2. NAATP continued to criticize, defame, and misrepresent AAC in the press while ignoring AAC’s meeting requests. For instance, in the July 30, 2018 edition of Drug and Alcoholism and Drug Abuse Weekly, Ventrell was quoted as follows: “As for American Addiction Centers, ‘My statement to Michael Cartwright is that if he wished to come into compliance, I would be happy to speak with him about this but I don’t know how he could with his current business model.” In short, Mr. Ventrell intentionally and falsely stated that AAC was “out of compliance” with applicable treatment industry regulations in order to further NAATP’s narrative of AAC as a bad
  3. On August 8, 2018, NAATP’s counsel responded to AAC’s request for a meeting: in a letter that stated “With respect to your request that members of NAATP executive leadership team meet with members of AAC’s executive leadership team, that request is respectfully ” NAATP’s counsel went on to state, “Should AAC make the type of substantive changes that Mr. Cartwright testified AAC would make, such as properly branding its websites and being transparent as possible to consumers about its ownership of those sites, NAATP would certainly entertain further discussions or an application for membership.”

 

  1. AAC gladly took NAATP’s suggestions from the hearing and enhanced and made even more prominent the branding of such sites as “AAC” sites, even though AAC’s directory websites already clearly and prominently indicated, in multiple places, that AAC owned and operated the sites, in compliance with all applicable law. As part of this enhanced branding, AAC placed the header “An American Addiction Centers Resource” across the top of its websites. AAC also added a consumer guide on how to identify “red flags” in choosing a treatment center, which was consistent with NAATP’s own recommendations. AAC even publicly thanked NAATP for suggesting these changes in editorials calling for an honest conversation among LegitScript, NAATP, and for-profit treatment centers about industry marketing reform. Examples of AAC’s public efforts to promote such an honest discussion – which NAATP and LegitScript refuse to have – are available at https://thehill.com/opinion/healthcare/407755-effective-regulation-of-the-addiction-treatment-

industry-will-take and

 

https://www.thefix.com/american-addiction-centers-upgrades-recovery-community-websites.

 

  1. However, NAATP continued to ignore AAC’s overtures and calls for

 

Instead, it continued its broad-brush, anticompetitive public campaign against “lead generators” and worked with LegitScript to further restrict treatment industry advertising options.

LegitScript Adopts Rules Favoring Not-For-Profits; Allows Certain NAATP Members to Resume Advertising on Google Ads

  1. At the same time that AAC was attempting to engage NAATP, AAC continued to try to access to the Google Ads market through LegitScript certification. However, considering NAATP’s control and influence over LegitScript, and the false and defamatory statements NAATP had made about AAC, it should not be surprising that AAC’s good faith efforts were met with resistance, delay, and changing

 

  1. For instance, when AAC was ready to apply for LegitScript certification in May of 2018, AAC requested that LegitScript enter into a customary confidentiality agreement to ensure that confidential information provided to LegitScript would not be LegitScript, however, insisted that the confidentiality agreement permit it to give the documents to third parties, including governmental agencies, without AAC’s consent. LegitScript required AAC to sign LegitScript’s newly drafted form confidentiality agreement, which did not contain any due process rights that AAC requested. Given LegitScript’s gatekeeper status and the importance of online advertising for addiction treatment providers, AAC had no option other than to comply.
  2. Even more telling, LegitScript’s counsel indicated that this kind of form confidentiality agreement would be required by LegitScript of all “for profit” applicants for Google Ads certification. In other words, not-for-profit treatment centers would not be subjected to this “my way or the highway ” LegitScript’s double standard between for-profit and not-for- profit operators mirrors NAATP’s narrative that not-for-profit operators are inherently good and for-profit providers are inherently suspect.
  3. LegitScript did not sign and return the nondisclosure agreement until August 22, 2018; negotiations over the agreement caused a months-long delay in processing of AAC’s application for Google Ads certification (not that it mattered since LegitScript, based on NAATP’s interference, had no intention of approving AAC’s application).
  4. Meanwhile, in August 2018, Google began permitting LegitScript-certified treatment centers to bid on keywords and resume advertising on Google Ads. Not surprisingly, those initially let back on to the Google Ads platform by LegitScript were overwhelmingly not- for-profit operators that were members of

 

  1. By the fall of 2018, it had become clear to AAC that neither NAATP nor LegitScript had any interest in discussions with AAC about the “good guys versus bad guys” nature of their policy making. In order to promote such a dialogue, AAC would need to be more proactive and public.
  2. In September 2018, the House Subcommittee sent to AAC a follow-up list of supplemental questions. On information and belief, and as with the first round of House Subcommittee questions, the second set of questions had been suggested to House Subcommittee staff members and/or ghost written by NAATP personnel, NAATP board members, and NAATP- affiliated lobbyists. The questions specifically called out AAC’s online directories and suggested that AAC’s directories should not list any treatment center unless the treatment center expressly consented to be listed. The questions represented NAATP’s continuing efforts to re-litigate, through extrajudicial measures, the failed 2014 Seabrook House lawsuit against Recovery
  3. In its responses to Congressional inquiries, AAC pushed back on NAATP’s “good guys versus bad guys” narrative and false, defamatory attacks on
  4. In particular, AAC’s responses to Congress, which are available at aacthetruth.com, pointed out the following:
  1. The CEOs of both Caron and Hazelden Betty Ford made false statements to Congress about
  2. Caron CEO Douglas Tieman lied in stating that AAC’s recovery.org website was set up to hijack and misdirect calls to treatment
  3. Further, Hazelden Betty Ford’s Mark Mishek had falsely stated that his organization had never advertised on AAC’s directory websites, when in fact it

 

had – and had even contacted AAC about using its directories more efficiently the week of the July 24, 2018 Congressional hearing.

  1. AAC’s filings included emails, purchase orders, consent forms, and other attachments from Caron and Hazelden Betty AAC’s filings demonstrated that, far from being above the fray of allegedly unethical “lead generation,” Caron and Hazelden Betty Ford had used (and continued to use) Recovery Brands’ free and paid marketing services – even as they were acting in concert with NAATP to smear AAC’s reputation and gain control of Google Ads and other addiction treatment industry marketing channels.
  2. In its responses to Congress, AAC described the importance of online treatment directories, and the false premises of NAATP’s anti-directory stances. The filings stated:

Much emotion surrounds addiction, addiction treatment and the current opioid epidemic. Unfortunately, the outrage about some addiction treatment providers’ alleged deceptive marketing practices is so hyperbolic, however, that some useful marketing practices, used through the industry by good healthcare providers, are being conflated with the unethical practices of some bad actors.

 

For instance, the terms “leads” and “lead generation” have become pejoratives in the addiction treatment industry. In fact, NAATP’s Code of Ethics expressly prohibits the “buying and selling of patient leads.”

 

However, all treatment centers – indeed, all businesses, generally – participate in “lead generation.” A “sales lead,” according to BusinessDictionary.com is an “inquiry, referral, or other information, obtained through advertisements or other means, that identifies a potential customer (prospect).” In other words, the term “lead” refers to all forms of outreach to the identification of potential clients, whether through advertising, business referrals promotion or other forms of marketing, publicity or communication.

 

A more nuanced and informed discussion of “lead generation” in the addiction treatment industry would not ask only the question, “Does your organization buy or sell leads?” implying that any sort of advertising or promotion is inappropriate and unethical. Rather, a more productive inquiry would ask questions such as:

 

  • Does your organization generate leads by advertising or marketing in a way that is deceptive or harmful to a prospective patient?

 

  • Does your organization generate leads by engaging in patient brokering, or paying bribes, kickbacks or other such payments in order to induce patient referrals?
  • Does your organization operate a call center that generates leads by gathering information about potential patients and then selling patient’s information to third parties?
  • Does your organization generate leads through websites that don’t disclose publicly who owns or operates them?

 

  1. AAC further stated:

 

It is unfortunate that in the midst of a nationwide addiction and mental health crisis, a number of addiction treatment industry leaders are making these baseless allegations [about AAC’s online directories]. AAC has reached out to NAATP, Hazelden Betty Ford and Caron to end this unproductive feuding. Anticompetitive attacks are destructive to the mission of helping people recover from addiction.

 

  1. AAC’s filing also stated:

 

 

People suffering from addiction, who are brave enough to seek treatment, should be encouraged and supported to get help. They should have access to as many credible treatment options as possible, whether through websites, call centers or other forms of advertising and outreach. Reform efforts should not seek to ban or stigmatize advertising, marketing, or online directories, or otherwise suggest that online directories or call centers require unnecessary oversight; rather, reform should ensure that advertising, marketing and interaction with those seeking treatment is conducted in a useful, honest and transparent manner.

 

Mirroring NAATP, LegitScript Denies AAC Access to Google Ads

 

  1. In the face of the changes that AAC made to its websites, on information and belief, NAATP had to take further action to keep AAC from being certified by LegitScript and gaining access to Google Ads. NAATP thus worked with LegitScript to update and amend LegitScript’s certification requirements to further NAATP’s goal to injure and damage
  2. On September 17, 2018, LegitScript e-mailed AAC stating that it had changed its certification standards and the program’s terms and conditions. The changes applied immediately to AAC and other applicants not yet approved for doing business on Google

 

  1. Under the amended standards, any “lead generator” would be barred from Google Ads under LegitScript certification Standard 17. “Lead generator” was defined as follows:

An applicant is a lead generator if:

 

° Your website is not owned, operated or commonly controlled by the entity that owns or operates the addiction treatment provider to which it refers internet users, and

° You refer potential clients to third party addiction treatment provider, irrespective of whether those addiction treatment providers independently meet LegitScript certification criteria.

 

This is not intended to prohibit bona fide addiction treatment applicants that, as an ancillary part of their business, refer patients to other addiction treatment centers. It is intended to prohibit applicants for whom the primary business strategy is compensated, for-profit referrals and that otherwise meet the definition of these bullets.

 

  1. Highlighting NAATP’s influence, LegitScript’s initial set of certification standards largely tracked NAATP’s “Ethics 2.0.” However, because AAC met “Ethics 2.0” and online directory advertising by treatment centers was permissible under those rules, NAATP changed course and had LegitScript add the new Standard 17 in order to keep AAC off of Google
  2. Because of NAATP’s interference, LegitScript refused to meet with AAC or engage in any kind of policy discussion regarding addiction treatment
  3. Yet if applied correctly and fairly, AAC is not a “lead generator” under Standard

 

  1. AAC’s directories do not refer a prospective patient to any treatment provider – no more than the Yellow Pages refer someone reading it to a specific Rather, just like NAATP’s member directory and Google’s addiction treatment business listings, AAC’s websites list information from which prospective patients can make decisions about which treatment options they want to explore. Further, AAC’s operation of these web directories is ancillary to its core business, consistent with LegitScript Standard 17.

 

  1. Notably, LegitScript has created certification standards in a variety of industries other than the addiction treatment industry and none of those other certification standards contains a lead generation prohibition.
  2. Only where NAATP is an “expert” advisor to LegitScript is there a lead generation prohibition to participate in the Google Ads
  3. In order to confirm that NAATP had not been targeting it by and through these new rules, AAC asked for a meeting with LegitScript. Horton continued to refuse to meet with AAC, saying in an email, that he had been getting too many meeting requests and “I’ve adopted a firm policy of saying no to all of ”
  4. From May of 2018 through the date of this filing, AAC has continued to seek certification from LegitScript in order to advertise on Google
  5. The application process has been continuously delayed, with AAC’s inquiries to LegitScript as to the status of its application typically going unanswered for weeks or even At the same time, AAC has provided information that LegitScript has requested. LegitScript has then requested the same information again, saying it does not have it.
  6. All the while, despite its CEO John Horton’s initial promise to meet in person with AAC, LegitScript has refused to have any discussions with AAC other than through email. AAC has asked LegitScript to consider meeting with AAC and others who may have perspectives on addiction treatment marketing that are different than NAATP’s.
  7. Despite his April 2018 pledge to bring a broad set of treatment industry perspectives into LegitScript’s rule-making, the only expansion of LegitScript’s advisory board beyond NAATP has been the 2019 addition of Cumberland Heights, a Tennessee not-for-profit treatment center that is a prominent NAATP board

 

  1. Highlighting the success of NAATP’s plan and actions to defame and damage AAC, LegitScript’s treatment of AAC has mirrored NAATP’s patterns of refusing to have a meaningful policy discussion about addiction treatment marketing, slow-rolling AAC’s application review, and rewriting rules as needed to exclude
  2. AAC has attempted to explain to LegitScript that it did not understand why LegitScript found Standard 17 to be a barrier to AAC’s participation in Google Ads. In response, LegitScript has made inaccurate statements that mirror those of NAATP’s Ventrell statements, to the effect that AAC’s directory sites improperly “refer” users to third-party treatment
  3. In order to further address LegitScript’s concerns, AAC offered to add language to all of its directory websites stating the following: “Any listing on this directory does not constitute a recommendation of a referral to this or any other particular facility. In choosing a treatment center, we suggest that you ask a number of questions directly of that treatment center about the quality of care at the facility, costs of care and other issues. We have a list of suggested questions here [link to website page on how to spot red flags] and you can also consider the tips for selecting a treatment provider here [link to LegitScript suggestions, list of approved facilities or other organization’s suggested resources].”
  4. But due to NAATP’s firm position that AAC must not be allowed to advertise on Google Ads, LegitScript has not relented. It refuses to certify AAC because it operates treatment directory websites although, ironically, Google, LegitScript’s client, is permitted to operate treatment facilities and lead generation platforms, as described
  5. On March 28, 2019, LegitScript finally confirmed that there were no issues with AAC or its facilities which would have precluded AAC from gaining access to the Google Ads market other than this unjustified NAATP “lead generator”

 

  1. LegitScript specifically stated:

 

Except for a number of links to third-party providers and lead generators (both operated by AAC and others) found on most submitted AAC facility domains, all AAC facilities that have applied for LegitScript certification appear, at this time, generally eligible for certification. We have not identified other significant barriers to certification besides the multiple lead generator issues. (emphasis added).

 

  1. LegitScript’s failure to act on AAC’s application unless AAC shuts down its online platforms used by third party treatment centers is a de facto denial engineered by Because LegitScript certification is required to advertise on Google, Facebook, and Bing – all of which were important sources of customer traffic to AAC – AAC has seen reduced client admissions and a commensurate loss of revenue and profits. NAATP’s ultimate goal of putting AAC out of business has not yet been achieved but AAC and its employees have suffered significant losses.

NAATP Once Again Rewrites Its Ethics Standards to Ban AAC

 

  1. In September of 2018, AAC reapplied for NAATP membership. NAATP had finally stated why it objected to AAC’s treatment directories – because it felt that AAC’s ownership of the directories was not prominent enough on the websites. AAC then enhanced its branding to even more prominently show its ownership of the sites. Thereafter, NAATP had no pretext under its “Ethics 2.0” rules to continue to exclude AAC from membership (and never had a legitimate reason for barring AAC in the first place).
  2. In October of 2018, AAC publicly released its supplemental filings with Congress that called out NAATP’s lies and distortions to the House Subcommittee and
  3. With its true motives coming to light, and AAC requiring NAATP to make a decision as to its membership application, NAATP finally agreed to meet with Several AAC executives met with NAATP personnel in Denver on October 23, 2018.

 

  1. It became apparent in the meeting that NAATP had never done a thorough or objective review of AAC’s directory websites despite publicly maligning
  2. For instance, Ventrell stated that he was concerned that AAC’s websites and call centers refer directory users to third party treatment centers for AAC made clear to Ventrell that labeling AAC’s sites as “referral” sites was inaccurate and misleading.
  3. AAC’s directory websites do not recommend any specific treatment center. They simply list treatment options and information about each option, based on publicly available information and information provided by treatment The decision as to which option is best for the prospective patient is left to the patient.
  4. AAC also explained to Ventrell the same things it had to Congress: that the AAC call center listed on its directory websites was clearly labeled as AAC’s; that AAC’s call center employees work only for AAC and do not make any third party paid referrals; that users of AAC’s websites connect directly with listed treatment centers of their choice; and that hundreds of NAATP members had worked with AAC to develop their
  5. And AAC stated that while it had no objection to other treatment organizations creating directories that are accurate and transparent about who owns and operates them, it did take issue with NAATP’s double standard of allowing organizations like NAATP board member Sierra Tucson to be allowed to operate, or have its affiliates operate, treatment directories and yet remain in good standing with
  6. NAATP representatives told AAC that they would require AAC to allow centers to “delist” from treatment directories, notwithstanding that First Amendment and fair use laws allowed AAC and any other citizen or organization in the country to operate truthful, accurate directories. When AAC asked NAATP to articulate the harm caused to potential patients or

 

treatment centers members from being in the treatment directories, NAATP could not give an answer – because the true answer is that NAATP and its prominent board member organizations such as Hazelden Betty Ford and Caron resented the competitive marketing advantage that AAC had through its directory websites and that they were seeking to curtail this advantage notwithstanding the usefulness of websites like recovery.org to those seeking help for addiction.

  1. Following the meeting, AAC’s new Chief Digital & Marketing Officer sent letters to all 25 NAATP board member organizations, offering to conduct individual visits or webinars with them where they could review and comment on AAC’s directory websites. Not a single NAATP board member organization replied to the
  2. In short, NAATP found itself in a bind: AAC had made the changes to its websites NAATP requested and demonstrated that it qualified for NAATP membership. But NAATP and its prominent board member organizations, such as Hazelden Betty Ford and Caron, remained dead set against AAC being readmitted to NAATP membership, because doing so would be an acknowledgement that AAC was not a “bad ” AAC would be allowed back onto Google Ads and would once again have the ability to outbid other providers for the most prominent placement in search results.
  3. NAATP solved its problem by resorting to its previous tactics: by defaming AAC in the press and then rewriting its rules to exclude
  4. In November and December of 2018 and into 2019, AAC continued to seek communication with NAATP as to the status of its membership application. NAATP had pledged that it would make a decision in January 2019 but January passed without any decision or further responses to or communications with

 

  1. With AAC’s membership application still pending, Ventrell then again defamed, attacked, and mischaracterized AAC in an industry trade publication. In an interview with Alcoholism and Drug Abuse Weekly published on February 4, 2019, Ventrell called AAC a “bad actor” and falsely stated that AAC hijacks phone calls and otherwise engages in unethical “bait and switch” marketing
  2. And faced with the fact that NAATP could not honestly argue that AAC’s directory websites violated “Ethics 2.0,” NAATP once again quickly rewrote its ethics rules to exclude AAC.

NAATP’s “Ethics 2.5”

 

  1. NAATP has rapidly moved from “Ethics 1.0,” which basically said treatment programs should be transparent and not deceptive, to “Ethics 0,” and now, after AAC had clearly come into compliance with 2.0, to “Ethics 2.5” which can be found at: https://www.naatp.org/resources/ethics.
  2. In Alcoholism and Drug Abuse Weekly, NAATP’s Ventrell offered the following basis for 2.5: “We found conduct was very good, but we need additional clarification on some practices.” Ventrell announced that NAATP therefore would adopt “Ethics 2.5” prohibiting treatment centers from running a directory of providers on their
  3. Ventrell cited the AAC website which included 300 members of NAATP. Ventrell continued, “In fact, the vast number of those programs didn’t pay anything to be listed. And it is my understanding that if they say they don’t want to be there, they won’t be ”
  4. Ventrell’s statements to Alcoholism and Drug Abuse Weekly were riddled with falsehoods and outright lies about AAC. AAC had informed Congress that the 300 treatment centers consisted of both paid advertisers and many that actively participated with AAC in writing

 

and designing their directory listings in order to provide those seeking treatment with valuable information and promote their facilities. Whether or not those organizations also paid for advertising is totally beside the main point – which is that AAC invested in innovative online platforms where treatment centers and those seeking help could connect, and that hundreds of NAATP members had benefited from those sites and voluntarily and knowingly collaborated with AAC in the creation of the treatment center listings.

  1. In making false and defamatory statements published in Alcoholism and Drug Abuse Weekly, Ventrell’s and NAATP’s motive were the same as ever: to injure and damage AAC and thereby shield its prominent members, such as Hazelden Betty Ford and Caron, from competition.
  2. On February 20, 2019, NAATP, through counsel, wrote to AAC stating that:

 

As you may be aware, NAATP’s Board of Directors recently amended NAATP’s Code of Ethics (and thus its membership criteria) to prohibit NAATP members (or applicants) from owning, operating or otherwise controlling a directory-type website. The amendment will go into effect this month, and will be applied uniformly to every NAATP member or applicant. Because AAC owns and operates a number of directory sites, and because AAC has repeatedly stated that it will continue to do so, AAC does not qualify for membership in NAATP.

 

  1. In short, NAATP had rewritten its rules to keep AAC out, just as it had done in December 2017. NAATP adopted “Ethics 2.5” as of March 1,
  2. Under “Ethics 2.0,” NAATP members could operate a web directory as long as it provided the direct contact information of the facilities listed. Under “Ethics 2.5,” NAATP members, “may not own, operate or otherwise control directory type ”
  3. Even worse, NAATP selectively enforces its “Ethics 2.5.” Its prohibition on ownership of a directory website has been directed only at AAC, as other members of NAATP

 

have continued to operate directory websites, including board member Sierra Tucson and member organization Advanced Recovery.

  1. This double standard is in addition to the many other inconsistencies in NAATP’s application of its membership standards, such as (i) the fact that NAATP itself operates a member directory that is used by those seeking treatment; (ii) the fact that NAATP members buy patient leads on Google Ads and numerous other advertising platforms; and (iii) the fact that Google, to whom NAATP is an advisor on industry ethics, is not being held to the same standards written by LegitScript and

LegitScript’s and NAATP’s Rules Create Confusion and an Apparent Double Standard with Respect to Google’s Healthcare and Lead Generation Operations

 

  1. Beyond giving NAATP and LegitScript the power to control the advertising choices of treatment providers, NAATP’s and LegitScript’s rules have also created a double standard with regard to Google, on the one hand, and AAC, on the
  2. Under this double standard, to be allowed on Google Ads, AAC, a treatment provider, is forced to shut down its treatment directories and other forms of online advertising to those in need of addiction treatment, because AAC is allegedly an unethical “lead generator” that, according to LegitScript, refers or “directs” Internet users to treatment sites.
  3. Yet Google itself is both an online lead generation platform and an addiction treatment
  4. In fact, Google Ads promotes itself as exactly such – i.e., the platform in which businesses can most effectively “generate ”
  5. Google has numerous pages dedicated to the Google Ads program. One such page is available at https://support.google.com/google-ads/answer/1722135?hl=en and titled “Drive

 

sales and generate leads.” Participation in Google Ads is explicitly said to allow businesses to “generate leads”. An image of the relevant portion of that webpage reads:

 

 

  1. Further, Google’s operates directories that undoubtedly “direct” users to third party addiction treatment centers not owned or operated by Google Business Listings – formerly known as the “Google Directory” – represents the world’s largest online directory platform. The directory can be accessed by businesses, including addiction treatment centers, at https://www.google.com/business/.
  2. In addition to its core online products and services, Google has also expanded into the healthcare provider industry. One research report, available at https://www.cbinsights.com/research/report/google-strategy-healthcare/, states: “Google seems

to be going after the healthcare space from every possible angle.”

 

  1. As part of its healthcare expansion strategy, Google has entered into the addiction treatment space in Dayton, Ohio, in conjunction with local Ohio “OneFifteen,” which is financed by Google’s healthcare arm known as Verily Health and other Google business partners, describes itself as being named after the number of Americans a day who die from opioid overdoses. Google states: “the OneFifteen is a ‘learning health system’. . . Beyond providing the technical infrastructure to treat patients day-to-day, the system will also generate insights that could advance the understanding of how to treat and promote sustained recovery for those experiencing addiction and allow for evolving best practices.” See

 

 

54

 

  1. AAC welcomes Google’s participation in the addiction treatment field. Google’s participation in the field will hopefully promote innovation and competition that will raise the quality of care given to those suffering from
  2. At the same time, LegitScript, Google’s advertising certification agency that is relying on NAATP for guidance and perspective about the addiction treatment industry, has created an uneven playing field, where Google is allowed to operate both addiction treatment and online advertising platforms, while AAC and others are barred from being able to do both if they want access to Google
  3. At this time, AAC has no reason to believe that Google is intentionally creating this uneven playing field. But because LegitScript refuses to meet with AAC to discuss addiction treatment industry marketing issues and continues to mirror NAATP’s anticompetitive policies, the issue remains
  4. Meanwhile, LegitScript and NAATP are further expanding their self-regulatory

 

reach.

 

  1. For instance, LegitScript’s revised standards state that LegitScript “may conduct on-site inspections of  your  facility/ies,  and  you  will  in  no  way  restrict  LegitScript  ” LegitScript has issued no guidance on such inspections or explanations of how it or NAATP are qualified to conduct such inspections. Nor has LegitScript described why this is necessary, given that long-standing accreditation agencies such as the Joint Commission and state and federal health agencies already conduct such inspections, using qualified inspectors and clinicians.
  2. And NAATP continues to advocate for LegitScript to go even farther in regulation of the Tieman, the Caron Foundation President, has publicly called for regulation not just

 

of Google Ads, but of the non-paid or “organic” search results that appear in Google, which would effectively mean that Google’s algorithms that determine search placements would be controlled by LegitScript and NAATP.

Misleading Use of Google Ads by NAATP Members

 

  1. Since AAC has been barred from Google Ads as a result of NAATP’s defamation and tortious conduct, AAC is unable to bid even on its treatment centers’ names or the “American Addiction Centers” brand name. Meanwhile, NAATP members each day are paying Google Ads to have their treatment centers’ advertisements show up when users search for information about American Addiction Centers or AAC facilities.
  2. For instance, a recent search for “River Oaks Treatment Center” (an AAC facility) on com yields in advertisements for the following NAATP members coming up before the site for the River Oaks Treatment Center:
    • Beachway Therapy Center – a NAATP member and LegitScript certified;
    • Beachside Rehab Center – a NAATP member and LegitScript certified; and
    • The Oaks at La Paloma (located in Memphis) – a NAATP member and LegitScript certified.

 

  1. A snapshot of the results of a recent search for “River Oaks Treatment Center” on google.com is set out in the image below:

 

 

 

  1. Similarly, a recent search for “American Addiction Centers” on Google.com resulted in the following top three advertisements appearing in this order:
    • Beach House Rehab Center, beachhouserehabcenter.com – a NAATP member and LegitScript Certified;
    • FHE Health, fherehab.com – a NAATP member and LegitScript certified;
    • English Mountain, englishmountain.com – a NAATP Member and LegitScript certified; and
    • Transformations Treatment Center, transformationstreatment.center – a NAATP member and LegitScript

 

  1. A snapshot of the results of a recent search for “American Addiction Centers” on google.com is set out in the image below:

 

 

 

 

  1. According to NAATP, “Ethics 0,” and “Ethics 2.5,” its members are not supposed to engage in any false or misleading marketing practices. See “Ethics 2.0” at § IV(B)(1), “Ethics 2.5” at § IV(B)(2).
  2. NAATP members’ purchase of AAC’s brand name on Google Ads is undoubtedly a deceptive marketing practice. Because of NAATP-permitted actions, consumers searching specifically for help from AAC on Google are being misdirected to NAATP member facilities. However, NAATP has taken no action to correct these and similar deceptive actions by its members.

 

NAATP’s Interference with AAC’s Lab Business

 

  1. NAATP’s concerted effort to damage AAC’s business has also involved attacks on AAC’s diagnostic testing services, namely Addiction Labs of America, LLC (“ALA”) of Brentwood,
  2. Through ALA, AAC has sought to raise the effectiveness of diagnostic testing in the treatment industry, offering not just toxicology and other traditional compliance-related tests but also genetic testing and other services that can help inform clinicians and patients of other relevant conditions affecting their mental
  3. ALA offers its testing services to third-party treatment centers that do not have their own diagnostic testing capabilities, including NAATP member
  4. In early 2018, AAC’s lab business learned that Gateway Foundation in Chicago, Illinois had requested proposals for handling its laboratory testing services. Gateway Foundation invited AAC’s lab business to submit a proposal, which AAC did on May 11,
  5. AAC was told that it was one of two finalists for the contract and AAC presented its proposal to Gateway Foundation’s review board on September 12, 2018. Gateway Foundation told AAC that a decision would be made within a few
  6. When AAC did not hear back from Gateway Foundation, AAC followed

 

Gateway Foundation – which is a NAATP board member organization – went completely silent, neither communicating that it had selected AAC as its lab vendor nor communicating that it had selected another vendor. Not coincidentally, Gateway Foundation’s freeze-out occurred at the same time that NAATP and NAATP board members were devising “Ethics 2.5” to further block AAC from NAATP membership.

 

  1. Upon information and belief, NAATP pressured Gateway Foundation to pick the other vendor option much as it had forced NAATP members to abandon AAC’s Recovery Brands advertising services or risk a NAATP and LegitScript
  2. Upon information and belief, AAC would potentially have earned substantial lab testing revenues, in the millions per year, had it obtained the Gateway Foundation
  3. AAC’s lab business, as with its online advertising business, has been damaged by false statements made at the NAATP 2018 National Annual Meeting and NAATP’s warning to its members to “be careful who you do business with.”

NAATP’s Campaign Against AAC Limits Patient Access to Care and Sows Confusion and Negativity About Addiction Treatment

  1. A year after LegitScript launched its Google Ads certification program in partnership with NAATP, access to care for those seeking care is more limited and confusion abounds in the
  2. Google Ads has reopened for business, but scores of high-quality for-profit treatment centers, including AAC, remain blocked from access by LegitScript. And as pointed above, Google’s entrance into addiction treatment has caused an apparent double standard allowing Google to be both a treatment provider and “lead generator.” In fact, LegitScript’s rules appear to bar any form of advertising (other than Google Ads) by stating that applicants cannot have any formal or informal business affiliation with lead
  3. Advertisers have left AAC’s directory websites and other online platforms that reach those seeking help, for fear of retaliation or blacklisting by NAATP or LegitScript. And LegitScript’s rule-making has reduced the incentive for the creation of other legitimate treatment directories. Thus, those seeking help for addiction have fewer sources of information and access to fewer treatment

 

  1. Meanwhile, other special interests in the healthcare industry – including pharmaceutical and health insurance companies – are attempting to enter into and control treatment provider advertising
  2. On information and belief, NAATP has held discussions on online directory strategy with Addiction Policy Forum, a controversial not-for-profit organization funded by the pharmaceutical industry. The New York Times has reported on how the pharmaceutical industry has enlisted Addiction Policy Forum as a paid partner, apparently “trying to position the industry on the right side of a health crisis that many blame it for creating.” See https://www.nytimes.com/2018/02/08/business/opioids-addiction-pharma.html
  3. Additionally, the health insurance industry – whose financial health depends upon limiting costs associated with addiction treatment – is also attempting to create online treatment directories. See https://www.behavioral.net/news-item/management/shatterproof-launching-

rating-system-treatment-

 

programs?utm_campaign=Enews&utm_source=hs_email&utm_medium=email&utm_content=6

 

9168408&_hsenc=p2ANqtz–NpRzNL5LbGVdz3w_e2rN3xNAcqj8Lt5IqHy7-tzMpKkK8-

 

4GrIYAC-G2hAsUgxWnpr4aUNCzkJGGZR160OTV4hLS4-g&_hsmi=69168408.

 

  1. In short, it appears that it is the policy of both NAATP and LegitScript that it is fine for the pharmaceutical and health insurance industries to fund and operate treatment provider directories, and there is no conflict of interest or ethical dilemma posed by this – but at the same time treatment providers themselves cannot operate
  2. Meanwhile, NAATP’s continues to undermine confidence in addiction treatment with its portrayal of the industry as filled with bad Using NAATP’s typically

 

sensationalistic and often offensive hyperbole, Ventrell recently told one publication that the industry is undergoing a “holocaust of corruption.”

NAATP’s Acts Damage AAC

 

  1. AAC’s losses based on NAATP’s attacks have been substantial. Total losses of many millions of dollars have directly resulted from NAATP’s actions, including at least the following: (a) a drastic decrease in third party treatment centers using Recovery Brands for paid advertising; (b) fewer third-party diagnostic testing business opportunities at ALA; (c) without access to Google Ads, AAC has experienced lower patient admissions to AAC’s core treatment facilities for a loss of tens of millions of dollars in revenue; (d) lost market capitalization and increased costs of capital; and (e) AAC has been forced to spend hundreds of thousands of dollars in legal, consulting, and other third party fees to mitigate NAATP’s lies about its

IV.

 

CAUSES OF ACTION

 

Cause No. 1 –– Violation of Section 43(a) of the Lanham Act

 

  1. Plaintiffs incorporate and re-allege the above paragraphs of this Complaint as if fully set forth
  2. Section 43(a) (1) (B) of the Lanham Act, 15 S.C. §1125(a)(1)(B), prohibits, inter alia, any “false or misleading description of fact, or false or misleading representation of fact which . . . in commercial advertising or promotion, misrepresents the nature, characteristics, [or] qualities . . . of . . . goods, services, or commercial activities.”
  3. NAATP generates its revenues at least in part from the annual membership dues paid by its In order to induce treatment providers to join and continue their membership with NAATP (and hence generate revenues), NAATP touts that one of the significant benefits of

 

being a member of NAATP is being on its online directory, the NAATP Addiction Industry Directory or “AID.” NAATP is, therefore, a competitor of AAC in the online directory business. The NAATP AID competes with Plaintiffs’ on-line directories in interstate commerce, and NAATP engages in nationwide or regional advertising by and through the use of the NAATP AID, NAATP’s websites, and other marketing of their services.

  1. NAATP has made and continues to make the false and misleading claims about AAC, its directories and business practices set forth above.
  2. Each of these claims is false and misleading and misrepresents the nature, characteristics, or qualities of AAC’s websites and on-line directories, as described herein. NAATP has authorized and directed the making of each of these false and misleading
  3. NAATP’s false claims are material to prospective treatment providers seeking to advertise on AAC’s websites or to prospective patients. NAATP’s false claims and improper attacks have caused and will continue to cause those potential advertisers and people seeking help to believe that AAC’s websites and directories are somehow less reliable or inferior to the services offered by the NAATP directory. In turn, this has resulted and will continue to result in NAATP enjoying both increased revenue and earnings, via increased membership resulting from the increased notoriety of and traffic on NAATP’s online directory. NAATP’s actions have injured and will continue to injure and damage
  4. NAATP’s deceptive conduct is and has been deliberate and willful and has injured and continues to injure
  5. NAATP’s advertising and promotional publications, as described above, violate Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).

 

  1. As a result of NAATP’s false public statements, deceptive advertising and misleading promotional publications, AAC has been injured and continues to be injured, in an amount to be determined at
  2. AAC, on one hand, and NAATP, on the other, are directly and indirectly competitors in the online directory advertising business. NAATP’s actions have impaired AAC’s ability to compete in the United States market, which has in turn damaged AAC. Additionally, NAATP’s advertising and assertions to LegitScript has resulted in AAC’s being constructively banned from advertising on Google Ads, Facebook, and Bing and will deny AAC access to significant advertising opportunities through those
  3. Moreover, unless NAATP is enjoined by this Court and ordered to retract and correct its false and misleading advertisements and statements, NAATP’s statements will continue to mislead the public and cause AAC to suffer a loss of sales, profits, and goodwill, along with the cost of remedial corrective advertising, much of which loss is, and will be, irreparable. As such, AAC is entitled to an injunction restraining NAATP, its directors, agents, employees, representatives, and all persons acting in concert with them from engaging in further acts of false advertising and promotion. AAC is further entitled to an order requiring removal of all of NAATP’s false and misleading statements against
  4. Plaintiffs seek any and all damages from Defendant as allowable under the Lanham Act, including but not limited to lost profits, disgorgement of NAATP’s ill-gotten gains, treble damages, attorneys’ fees and

Cause No. 2 – Defamation

 

  1. Plaintiffs incorporate and re-allege the above paragraphs of this Complaint as if fully set forth

 

  1. NAATP through its Executive Director and other agents and employees, including board member organizations such as Hazelden Betty Ford and Caron, has repeatedly and perniciously defamed
  2. As set forth in detail above, NAATP met with Google in 2017 to advocate for a ban or the imposition of limitations on the purchase of preferential listings for addiction treatment providers in Google
  3. During those discussions, and in discussions with LegitScript, NAATP mischaracterized AAC as a bad actor and a company which needed to be barred from marketing via Google
  4. AAC could not have known about NAATP’s defamatory comments to Google until at the earliest May, 2018 when NAATP acknowledged that it pressured Google to suspend addiction treatment
  5. At the time NAATP made those misrepresentations to Google, NAATP had not taken reasonable efforts to determine the truth or falsity of those
  6. The effort to seek a modification in the Google Ads platform was motivated, at least in part, by a desire for its members to gain an advantage in the purchase of Google Ads. NAATP sought lower advertising costs and greater availability for preferential placements for its most influential
  7. NAATP’s comments to Google about AAC were not motivated by any partially permissible
  8. NAATP’s statements to Google falsely alleged marketing misdeeds by AAC that were rooted either in ignorance of AAC’s actual operations or a willful effort to harm AAC to benefit itself and its favored member

 

  1. As set forth in detail above, NAATP has met with LegitScript and developed a close relationship with
  2. NAATP helped write the standards that LegitScript would use to vet whether companies like AAC would be permitted to purchase Google
  3. In the course and scope of its relationship with LegitScript, work on the standards, and vetting applications to the Google Ads program, NAATP has defamed AAC and its reputation to
  4. NAATP has misrepresented AAC’s actual marketing practices to LegitScript and branded AAC a bad actor that needs to be excluded from the Google Ads
  5. AAC could not have known about these defamatory comments to LegitScript until at the earliest NAATP’s admission that it was working with LegitScript in May, 2018 coupled with NAATP’s statements at the NAATP National Annual Meeting in late May,
  6. On information and belief, no company which was previously a member of NAATP and was excluded from NAATP membership after the launch of “Ethics 2.0” has been approved by
  7. NAATP’s defamatory comments about AAC have resulted in AAC being denied LegitScript certification and access to Google
  8. LegitScript even used language similar to the language used by NAATP when explaining why AAC would not be permitted to purchase Google
  9. For example, NAATP has falsely claimed that AAC refers patients to treatment providers. LegitScript parroted that falsehood when explaining why AAC would not be permitted to purchase Google

 

  1. NAATP defamed AAC with its press release issued prior to the 2018 NAATP National Annual
  2. NAATP defamed AAC with its words and the PowerPoint shown to the industry at the 2018 NAATP National Annual
  3. As set forth in detail in this Complaint, NAATP has further defamed AAC in Congressional testimony that NAATP republished on its website and
  4. NAATP has defamed AAC in numerous editions of Alcoholism & Drug Addiction Weekly and in USA Today, on drugfree.com, in Bloomberg, and in Mother Jones.
  5. In the July 30, 2018 publication of Alcoholism & Drug Abuse Weekly, NAATP’s Marvin Ventrell is attributed as saying:

“What’s right and wrong should no longer be confusing.” The next step he [Ventrell] said, is for all treatment programs that want ‘longevity’ to get in line with the NAATP ethics code. As for American Addiction Centers, “My statement to Michael is that if he wishes to come into compliance, I would be happy to speak with him about this but I don’t see how he could with his current business model.”

 

  1. NAATP’s publication in Alcoholism & Drug Abuse Weekly could only be reasonably read to state that AAC is wrong and an unethical operator which will not have longevity in the
  2. In the October 3, 2018 publication of USA Today, Marvin Ventrell said, “The key is not to be assessed by a marketer on a website but by a clinical provider at a reputable ”
  3. Ventrell’s comments were directed at AAC and its directory websites. Those in the industry understood exactly who he was talking about based on the context of his other public statements about AAC.
  4. NAATP and Ventrell were specifically saying that AAC was not a “reputable” treatment

 

  1. In a November 20, 2018 article published by Bloomberg and titled “Prosecutors Watching for Grist in Substance Abuse Treatment,” NAATP’s Marvin Ventrell is quoted as saying, “If you don’t cheat, you can’t make a fortune, nor should you in the addiction treatment ”
  2. The November 20, 2018 Bloomberg article came at a time when NAATP’s Ventrell had already accused AAC of being one of those “bad actors” companies that allegedly “cheated.”
  3. The November 20 Bloomberg article also specifically discussed lab testing fees and came at a time during which NAATP was actively discouraging its board member, Gateway Foundation, from hiring AAC for its lab testing
  4. In the February 4, 2019 edition of Alcoholism & Drug Abuse Weekly, NAATP’s Marvin Ventrell is quoted as follows:

“It’s not just a matter of things not being branded properly,” said Ventrell referring to the bait-and-switch in which programs would list one provider but callers would be diverted to another. In particular, Ventrell cited the American Addiction Centers website . . .

 

  1. NAATP’s comments can only be reasonably read to suggest that AAC’s websites engage in bait-and-switch
  2. AAC does not engage in bait-and-switch tactics.

 

  1. In a February 2019 story published by Mother Jones, Mother Jones specifically noted that AAC had been excluded from NAATP membership and then questioned NAATP’s Ventrell about the decision to exclude members like AAC. Ventrell said, “people are dying and nobody else is doing it . . . our association can’t survive a holocaust of ”
  2. Ventrell’s comments in Mother Jones can only be reasonably understood to wrongfully suggest that AAC is one of those former NAATP members responsible for patient deaths and a “holocaust of corruption.”

 

  1. NAATP’s consistent misrepresentations to the public about AAC alleged that AAC is a corrupt organization that engages in reprehensible marketing practices and cares more about profits than patient
  2. NAATP’s misrepresentations about AAC were made with knowledge of their falsity or without any reasonable effort to discover the truth or falsity of the
  3. NAATP wrongfully represented that AAC referred patients to treatment

 

  1. NAATP misrepresented to its members that AAC was such a bad actor that they should not do business with AAC including as to advertising on the directory sites and lab testing services and then republished its false statements on its own websites, through publications, and via the websites of Hazelden Betty Ford and
  2. On multiple occasions in 2018, AAC asked to meet with NAATP to address any reasonable concerns that NAATP may have and to understand NAATP’s basis for excluding AAC after the roll out of “Ethics 0.”
  3. From January to October, 2018, NAATP refused to meet with AAC and refused to confirm the basis for NAATP making such derogatory statements about
  4. At the time NAATP excluded AAC, NAATP made its determination without meeting with AAC and without any due process. Having made unilateral determinations as to AAC’s alleged bad acts, without meeting with AAC, NAATP cannot claim that it had a good faith basis for making the false statements that it made about
  5. NAATP’s sustained and continued campaign to defame and marginalize AAC by attacking its corporate integrity and business practices was done either intentionally or in reckless disregard for the

 

  1. NAATP will stop at nothing to try to remove AAC as a competitor to its members, even though NAATP in doing so acts to the detriment of suffering addicts in need of
  2. As a result of NAATP’s defamation of AAC, AAC has been

 

  1. NAATP’s defamation of AAC has successfully kept AAC out of the Google Ads market and interfered in AAC’s other business lines resulting in millions of dollars in lost advertising dollars, patient revenues, and lab testing
  2. AAC asks for an award of compensatory damages from NAATP for defamation in an amount to be determined at trial but far in excess of $75,000.
  3. Because NAATP’s defamation of AAC has been intentional or reckless, has been sustained despite AAC’s best efforts to educate NAATP, and has caused serious economic harm, AAC should be awarded punitive damages in an amount ten times the base compensatory damages, as well as their attorney’s fees, interest and

Cause No. 3 – Tortious Interference

 

  1. Plaintiffs incorporate and re-allege the above paragraphs of this Complaint as if fully set forth
  2. AAC had existing contractual and/or business relations with 300 or more of NAATP’s members, many of which paid to advertise on AAC’s directory websites. AAC also had prospective business relations with the rest of NAATP’s
  3. NAATP was well aware that there were contractual and/or business relationships between AAC and a number of NAATP’s members and was well aware of AAC’s prospective contracts and/or business relationships with other NAATP
  4. Key current and former board members of NAATP, including Hazelden Betty Ford and Caron, were among those who over the years paid to advertise on AAC’s directory

 

  1. As board members, their knowledge and actions are attributable to

 

  1. In addition to a number of NAATP’s members being customers of AAC for advertising services on AAC’s directory sites, AAC sold lab testing services to a number of NAATP’s
  2. In particular, AAC’s lab testing service had a prospective business relationship with Gateway
  3. As part of NAATP’s campaign against AAC, NAATP threatened, pressured and/or intimidated its members to stop doing business with AAC both as to advertising services and as to lab testing
  4. NAATP specifically pressured Gateway Foundation to not use or to stop using AAC’s lab testing
  5. NAATP pressured its members to stop doing business with AAC soon after excluding AAC from NAATP membership and after defaming AAC to NAATP members, Google, and
  6. In addition to the business relationships and prospective relationships between AAC and NAATP members, AAC had an existing contractual or business relationship with Google.
  7. AAC purchased ads from Google and this marketing was significant to AAC’s ability to attract potential
  8. NAATP was well aware of the relationship between AAC and Google whereby AAC bid on and purchased preferential placement after certain words and phrases were entered in online

 

  1. NAATP pressured Google to halt or modify the Google Ads program for addiction treatment facilities and Google did
  2. NAATP developed a close relationship with LegitScript and then used that close relationship to continue to interfere with the business relationship between AAC and Google and to keep AAC from being able to advertise on Google Ads.
  3. AAC additionally had prospective business relationships with numerous patients that it would have been able to reach by and through its online advertising. NAATP was fully aware of these prospective business relations and used improper means to interfere with them thereby denying patients of lifesaving treatment and AAC of patient
  4. NAATP employed improper means to interfere with the existing contractual relationships and business relationships between AAC and NAATP members, Google and prospective patients including defamatory comments, coercion, and sharp
  5. NAATP interfered with AAC’s business relations without even fully understanding how AAC operates, what AAC does, and what AAC does not do and acted with the specific intent to cause the interference. NAATP has, therefore, acted with malice.
  6. Rather, NAATP made the unjustified determination that AAC was a bad actor and then employed shifting standards under “Ethics 0” and the “Ethics 2.5” to exclude AAC, damage its business, and attempt to run AAC out of business.
  7. NAATP has been able to significantly restrict the number of its members who do business with AAC and to keep AAC from being able to utilize the Google Ads
  8. AAC’s damages stemming from NAATP’s tortious interference with AAC’s existing contractual and business relations have been substantial, including lost patient admissions, lower advertising revenues, and lost lab fees (and the resulting lost net profits from all three).

 

  1. AAC seeks an award of compensatory damages in an amount to be determined at trial. Such amount is well in excess of $75,000.
  2. Because NAATP’s tortious interference as to AAC’s existing contractual and business relations was and is intentional, AAC seeks an award of punitive damages in an amount to be determined by the jury or in the alternative for treble damages under Tenn. Code Ann. § 47- 50-109. AAC additionally seeks all of its attorneys’ fees, interest, and

Cause No. 4 – Constructive Fraud

 

  1. Plaintiffs incorporate and re-allege the above paragraphs of this Complaint as if fully set forth
  2. As the self-proclaimed ethical watchdog of the addiction treatment industry and as the “expert” advisor to LegitScript, NAATP owes a legal and ethical duty to engage in its self- assumed watchdog role with due care and to make reports and recommendations only after reasonable inquiry and due process to those
  3. NAATP has failed to meet its legal and equitable duty to discharge these assumed duties with reasonable care and without misleading others including, but not limited to, LegitScript and Google, when it made specific representations that AAC was not an ethical actor in the treatment industry and had been excluded from NAATP for
  4. As the self-assumed ethical watchdog of the addiction treatment industry, NAATP’s actions and pronouncements can be expected to influence others including, but not limited to, Google, LegitScript, and members of NAATP.
  5. NAATP has exercised this watchdog role recklessly and in a manner designed to either intentionally or unintentionally deceive others as to

 

  1. NAATP excluded AAC from its membership on the same day it announced “Ethics 2.0” alleging AAC would not meet “Ethics 2.0” without first providing any notice to AAC as to alleged transgressions or an opportunity to respond to such
  2. NAATP informed others of the exclusion of former members like AAC without conducting any reasonable investigation or providing any due
  3. In that manner, NAATP’s guidance to Google, LegitScript, its members, and others is constructively
  4. Later in 2018, AAC provided NAATP with robust opportunities to talk with AAC’s ethicist and to attend webinars as to the actual operation of AAC’s
  5. NAATP failed to participate in that reasonable fact finding and had already made up its mind to continue to exclude and blacklist
  6. NAATP created “Ethics 0” and “Ethics 2.5” without seeking sufficient input from potentially affected parties such as AAC.
  7. NAATP fails to consistently enforce either “Ethics 0” or “Ethics 2.5” and thus its guidance to others is constructively fraudulent.
  8. Because of NAATP’s role with LegitScript, AAC is reasonably entitled to rely upon NAATP’s representations about AAC to entities like LegitScript and NAATP members and did so in this
  9. AAC has been specifically damaged by NAATP’s constructive fraud in its representations about AAC to LegitScript and other NAATP
  10. As a result of that constructive fraud, AAC has been denied access to the Google Ads market, been denied advertising revenues, revenues related to patient treatment, and lab testing

 

  1. AAC seeks an award of all of its compensatory damages for NAATP’s constructive fraud, as well as all of its attorneys’ fees, interest, and

Cause No. 5 – Breach of Contract and Breach of the Duty of Good Faith and Fair Dealing

 

  1. Plaintiffs incorporate and re-allege the above paragraphs of this Complaint as if fully set forth
  2. AAC’s membership in NAATP up to and through December 31, 2017 constituted a contractual Membership dues were paid and rules and bylaws established the terms of the parties’ relationship. For instance, the “Ethics 1.0” code governed member conduct.
  3. Under the law of Tennessee, and nearly all other states, every contract is subject to a duty of good faith and fair
  4. NAATP adopted “Ethics 2.0” and the Ethics Complaint Process

 

The Ethics Complaint Process included notice of claims, a right to respond, and progressive discipline.

  1. Since AAC’s purported failure to comply with “Ethics 2.0” was the basis for its ejection from NAATP, NAATP had a duty of good faith and fair dealing to comply with its own Ethics Complaint Process in dealing with
  2. NAATP breached that duty as to AAC when it announced the adoption of “Ethics 2.0” and, on the same day, technically before “Ethics 0” was even in force, excluded AAC from NAATP membership on the basis that NAATP deemed AAC to have breached “Ethics 2.0.”
  3. This implied duty of good faith and fair dealing is critically important to a membership organization that has assumed the role of industry ethical
  4. As a de facto regulator for the treatment industry that has the power to influence and control access to the Google Ads market through its “expert” role with LegitScript, NAATP

 

must in good faith reasonably provide notice of alleged departures from any ethical standard and an opportunity to be heard or to correct the issue prior to being excluded from membership.

  1. NAATP did not provide any reasonable notice, due process, or opportunity to be heard when it excluded AAC from
  2. NAATP’s breach of contract and breach of the duty of good faith and fair dealing has damaged AAC by keeping it off the NAATP AID directory and, through its power to direct LegitScript, by excluding AAC from the Google Ads
  3. The consequential damages to AAC from NAATP’s breach of contract and breach of the duty of good faith and fair dealing are significant including millions of dollars in damages from lost ad revenue, lost patient admissions, and lost lab testing
  4. AAC seeks an award of its compensatory damages from NAATP for breach of contract and breach of the implied duty of good faith and fair

Cause No. 6 – Violation of the Tennessee Consumer Protection Act

 

  1. Plaintiffs incorporate and re-allege the above paragraphs of this Complaint as if fully set forth
  2. NAATP has disparaged the services of AAC by false and/or misleading representations of fact as to AAC in violation of Tenn. Code Ann. § 47-18-104(b)(8).
  3. Among other misrepresentations of fact as to AAC’s services, NAATP has falsely claimed that AAC refers prospective patients to treatment providers for compensation and that the referral happens by persons not trained to screen
  4. AAC does not in fact refer patients to third party providers for

 

  1. AAC operates directory websites that allow prospective patients to gather information about different treatment options, to decide for themselves which option best fits their

 

needs, and then give the prospective patient the contact information of the third party treatment center so that the patient can directly contact the treatment provider they think is best for them.

  1. AAC’s misleading representation as to the services provided by AAC has damaged AAC because it was that specific misrepresentation that was cited by and relied upon by LegitScript to keep AAC out of the Google Ads
  2. LegitScript expressly lists NAATP as one of its “experts” that helped created the LegitScript verification program and continues to advise
  3. It is not surprising then that NAATP’s misrepresentation as to the services provided by AAC would be parroted by LegitScript as the basis to bar AAC from the Google Ads
  4. NAATP’s misrepresentations as to the services provided by AAC are willful and knowing.
  5. AAC repeatedly sought meetings with NAATP to explain that AAC does not provide referrals in the manner ascribed by NAATP. NAATP repeatedly refused to meet with AAC. NAATP then asked to meet with AAC’s ethicist but then refused to meet with that ethicist when times to meet were NAATP and its board members failed to attend webinars hosted by AAC to explain in detail how the websites worked.
  6. NAATP failed to provide AAC with any due process or reasonable opportunity to respond to allegations against
  7. AAC has suffered an ascertainable loss as a result of NAATP’s misrepresentations as to the services provided by AAC. AAC has lost substantial advertising revenues, patient admissions, and lab testing
  8. AAC asks for an award of actual damages from NAATP for its misrepresentation as to AAC’s

 

  1. Because NAATP’s misrepresentations as to AAC’s services have been willfully and knowingly made, AAC asks for an award of exemplary damages pursuant to Code Ann.
  • 47-18-109(a)(3) in the amount to be determined by the jury.

 

  1. AAC also asks for an award of its attorneys’ fees pursuant to Tenn. Code Ann. § 47-18-109(e)(1).

VI.

 

PRAYER FOR RELIEF

 

Now having fully set forth its Complaint against NAATP, AAC prays for the following

 

relief:

 

  1. That process be issued and that NAATP be made to answer this Complaint;

 

  1. That the substance of this Complaint be tried before a jury;

 

  1. That AAC be granted a preliminary and final injunction against NAATP as set forth

 

above;

 

  1. That AAC be awarded compensatory damages pursuant to one or more of the causes of action set forth above;
  2. That AAC be awarded punitive damages against NAATP for one or more of the causes of action set forth above or, in the alternative, that AAC be awarded exemplary damages pursuant to Tenn. Code Ann. § 47-18-109(a)(3) and/or 47-50-109 in an amount three times base damages;
  3. That AAC be awarded treble damages under the Lanham Act;

 

  1. That AAC be awarded its attorneys’ fees pursuant to the Lanham Act, Tenn. Code Ann. § 47-18-109(e)(1) and any other applicable federal or state statute or law;
  2. That AAC be awarded pre- and post-judgment interest;

 

  1. That AAC be awarded its costs; and

 

  1. For all such other and further relief to which AAC may be entitled as a matter of law or

JURY TRIAL DEMANDED

 

BUTLER SNOW, LLP

 

By:   s/ Daniel W. Van Horn              

DANIEL W. VAN HORN (18940)

 

6075 Poplar Ave., Ste. 500

Memphis, TN 38119

(901) 680-7331 (direct dial)

(901) 680-7201 (fax)

danny.vanhorn@butlersnow.com By: BEAU CRESON (032049)

150 3rd Avenue South, Ste. 1600

Nashville, TN 37201

(615) 651-6782 (direct dial)

(615) 651-6701 (fax)

beau.creson@butlersnow.com

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