The main Paradigm Treatment lawsuit is Sadeh v. Paradigm Treatment Center LLC, a defamation case filed in June 2020 by an Arizona psychologist who said the company’s then-medical director wrote a letter that got her removed from a patient’s care. A federal judge let most of her claims move forward in December 2020, and the case was terminated in April 2022 without a public verdict on the docket. Paradigm has also faced a separate regulatory fight in New York, where state officials rejected its application to open a residential facility in Armonk.
Who Sued Paradigm and Why
Shanna Sadeh, a licensed psychologist in Scottsdale, Arizona, filed suit against Paradigm Treatment Center LLC and Chelsea Neumann, M.D., in Maricopa County Superior Court in June 2020. The defendants removed the case to the U.S. District Court for the District of Arizona the following month, where it landed before Chief Judge G. Murray Snow.1CourtListener. Sadeh v. Paradigm Treatment Center LLC
Sadeh worked in trauma-focused evaluation and therapy for children in family court proceedings. In March 2019, she began treating an adolescent who had been referred to her by a court-appointed therapeutic interventionist, Dr. Carol Mellen. That July the adolescent entered Paradigm’s residential program, and after about five weeks was discharged back to Sadeh’s care.2Trellis Law. Sadeh v. Paradigm Treatment Center LLC
On August 29, 2019, Neumann sent a letter to Sadeh and Dr. Mellen calling Sadeh’s recommendations “unprofessional and psychologically harmful.”3vLex. Sadeh v. Paradigm Treatment Ctr. LLC The adolescent’s mother filed the letter with the family court. According to Sadeh, a judge then ordered her to stop treating the adolescent.4Midpage. Sadeh v. Paradigm Treatment Center
What Sadeh Claimed
Her amended complaint brought three claims: defamation per se, false light invasion of privacy, and interference with business relations. She said the letter, along with additional verbal statements, portrayed her as incompetent and harmful to her patient, and that this damaged her professional reputation. She sought compensatory and punitive damages plus a declaratory judgment.2Trellis Law. Sadeh v. Paradigm Treatment Center LLC
Paradigm and Neumann moved to dismiss. Their central argument was that the statements were shielded by an absolute litigation privilege because they arose in connection with a family court proceeding. Sadeh separately asked the court to seal the case, citing the minor patient’s privacy.
What the Court Ruled
Judge Snow issued a consolidated ruling on December 10, 2020. He denied Sadeh’s motion to seal, finding her privacy concerns speculative and short of the “compelling reasons” standard needed to overcome the presumption of public access to court records.5GovInfo. Sadeh v. Paradigm Treatment Center LLC, Order
On the motion to dismiss the amended complaint, the court granted it in part and denied it in part. Three specific paragraphs, numbered 72, 74, and 75, failed to adequately allege defamatory statements, either because they did not concern Sadeh or were too vague. The rest of her defamation claims survived, along with the false light claims.5GovInfo. Sadeh v. Paradigm Treatment Center LLC, Order The court declined to throw the case out on litigation privilege grounds, holding that the question could not be resolved from the pleadings alone.4Midpage. Sadeh v. Paradigm Treatment Center
An earlier order had already trimmed the defendant list. Claims against Chelsea L. Neumann M.D. Incorporated, a separate corporate entity, were dismissed without prejudice by stipulation in October 2020.1CourtListener. Sadeh v. Paradigm Treatment Center LLC
How the Case Ended
After the December 2020 ruling, the case moved into discovery, with scheduling conferences and protective-order motions on the docket through at least April 2021. The case was officially terminated on April 6, 2022.1CourtListener. Sadeh v. Paradigm Treatment Center LLC
The public docket does not include a final judgment or trial verdict, and no appeal is recorded. A termination roughly 18 months after the motion-to-dismiss ruling, with no public verdict, is consistent with a settlement or voluntary dismissal, though available court records do not confirm the precise resolution.
The Separate New York Regulatory Fight
Paradigm’s other well-known legal dispute is not a lawsuit but a regulatory rejection. Beginning in 2016, the company sought to open a residential program for up to eight youth ages 12 to 17 at 14–16 Cole Drive in Armonk, part of the town of North Castle. The proposed cost was around $49,000 per month per client, with an average stay of roughly 45 days.6The Journal News (lohud.com). Mansions as Treatment Centers in Armonk
Residents mobilized against the proposal. They alleged the facility was effectively a drug rehab, raised concerns about septic-system contamination of a nearby pond, traffic on narrow roads, the absence of onsite security, and proximity to a school and school bus stop. The Davis Pond Conservancy collected more than 1,000 petition signatures.7Patch. Armonk Residents Fight Drug Rehab Treatment Center for Rich Teens Paradigm founder Jeffrey Nalin countered that the program treated anxiety, depression, and trauma, not substance abuse, noting the company had applied through the Office of Mental Health rather than the Office of Alcoholism and Substance Abuse Services.
The application relied on New York’s Padavan Law, which lets group homes of 14 beds or fewer for people with mental disabilities bypass local zoning if they meet state standards, with communities able to object mainly on oversaturation grounds. The North Castle Town Board unanimously objected in January 2017, triggering a hearing before the state mental health commissioner that March.8The Examiner News. State Rejects Residential Treatment Center for Armonk
On October 11, 2017, Office of Mental Health Commissioner Ann Marie Sullivan denied the application. The rejection cited three deficiencies: Paradigm had not shown a public need for the program in the community, the proposal did not adequately address integrating youth into the local community or linking with other providers, and the facility’s exclusionary admission criteria raised concerns.8The Examiner News. State Rejects Residential Treatment Center for Armonk Paradigm had 10 days to request an appeal hearing with OMH and could have pursued a court challenge. No public record of a successful appeal has surfaced, and the company never opened a New York location.
Where Paradigm Stands Now
Paradigm Treatment Centers was co-founded in 2009 by Jeffrey Nalin, a licensed clinical psychologist, and Cole Rucker. By May 2020, both co-founders had left the company’s operations.9Struggling Teens. News From Paradigm Treatment The company now runs under the Altior Healthcare umbrella and, as of 2026, operates residential facilities in Malibu and San Rafael, California; Austin, Texas; and Coeur d’Alene, Idaho.10Newswire. Paradigm Treatment to Open New Residential Mental Health Facility Programs typically run 30 to 90 days and cover conditions including anxiety, depression, trauma, bipolar disorder, and substance abuse. The company accepts major commercial insurance but not Medicaid or Medicare.11Paradigm Treatment. Paradigm Treatment Centers