Monday, March 25, 2019

claim to cure addiction can be false advertising, as can hidden bias

Grasshopper House, LLC v. Clean and Sober Media LLC, 2018 WL 6133710, No. 18-cv-00923-SVW-RAO (C.D. Cal. Oct. 18, 2018)

This is a dispute about addiction treatment. Counterclaim plaintiff Cliffside alleged that counterdefendant Passages violated the Lanham Act (1) by maintaining and operating websites with the appearance of neutrality or independence that actually promote Passages’ services without disclosing the affiliation to Passages, and (2) by representing that Passages possesses a “cure” for addiction via its treatment program and that a specific person was fully “cured” of addiction after completing the treatment program. Passages moved to dismiss and invoked California’s anti-SLAPP law, but both measures failed.

The court held that “websites violate the Lanham Act when they take advantage of their purported lack of bias to disseminate false or misleading information,” and that the “failure to disclose bias can be actionable under the Lanham Act ‘where that failure renders some other affirmative statement false or misleading.’ ” Cliffside sufficiently alleged that Passages operated websites that conveyed a lack of bias in order to disseminate information promoting Passages’ services, including direct links to Passages’ website.

Anti-SLAPP motion: “While Passages’ statements generally proclaiming that addiction can be ‘cured’ could be considered to be an issue of public interest,” those statements were part of its advertising.  Passages’ website repeatedly promised a cure, e.g., “we want to help you identify why you are using so that you can be cured of addiction, forever,” and

Our team of highly skilled therapists will show you or your loved one how to completely cure your dependency. I want you to notice that I do not mince words. I do not say “however,” “maybe,” “although,” “perhaps,” or use other qualifying terms or conditions. We will show you how to bring about a cure. That statement is based on the results we achieve at Passages, the world’s most effective center for the treatment of substance abuse, where our success rate at the time of this writing is 84.4%.

A “promotional book” claims that, through Passages’ treatment plan as detailed in the book, “[o]nce the underlying problems are discovered and cured, the need for drugs, alcohol, or addictive behavior will disappear—along with the craving.” And Passages repeatedly made statements that a specific person had been cured of addiction through Passages’ treatment program, e.g., “Pax has come out the other side whole, healed, and cured ...”

These statements were commercial speech and thus not covered by the anti-SLAPP law. The statements weren’t simply informative; they pertained to Passages’ specific “product”—addiction treatment programs at Passages’ facilities—and were made for the purpose of promoting Passages’ product and soliciting new clients. Even if Passages’ statements advertising its services were “intermingled with noncommercial speech” regarding the general curability of addiction, Passages “may not immunize false or misleading product information ... simply by including references to public issues.” Kasky v. Nike, Inc., 27 Cal. 4th 939, 966 (2002). Somewhat confusingly, the court says that “Passages’ ‘opinion’ that addiction is curable is merely an ‘opinion’ about the nature of Passages’ own product, which is sufficient to constitute commercial speech exempt from anti-SLAPP analysis,” conflating the fact/opinion divide with the commercial/noncommercial divide.  Apparently Passages also argued that addiction could be cured, probably contributing to the court’s mashup of issues: Passages submitted a declaration and purported expert report that the court thought “further bolsters Cliffside’s argument of false advertising.” Along with other problems, the report’s definition of a “cure” was that the former addict no longer consumes substances for the foreseeable future, even if the former addict “might still think about the substance, desire it, or dream about it.” This definition directly contradicted Passages’ statements that, following the completion of Passages’ treatment program, “[o]nce the underlying problems are discovered and cured, the need for drugs, alcohol, or addictive behavior will disappear—along with the craving.”

Even without the commercial speech exemption, Cliffside sufficiently demonstrated a probability of success on its false advertising claims against Passages. In a related case, another judge found that statements that a facility possesses a “cure” to addiction through its treatment program were clearly actionable as distinct from statements about “treatment” of addiction. See Grasshopper House, LLC v. Accelerated Recovery Ctrs., LLC, No. CV 09-08128 DMG (PLAx), 2010 WL 11549437, at *5-7 (C.D. Cal. Mar. 23, 2010).  The court here agreed.

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