The American Hospital Association has reached an out-of-court settlement with a group of healthcare vendors that say the AHA misrepresented the anticipated number of attendees at its last annual convention and trade show in 1996 in Philadelphia.
Specifically, the AHA is offering free or reduced-price advertising in its publications to the 450 exhibitors that bought floor space at the Phila-delphia convention in exchange for the lawsuit being dropped.
One of the exhibitors, Vertical Aeronautics International, sued the AHA last November in Los Angeles County Superior Court.
In its class-action lawsuit, Encino, Calif.-based Vertical Aeronautics alleged that the AHA projected 5,000 senior-level executives or 9,000 top healthcare decisionmakers would attend the 1996 convention.
But final attendance figures from the convention show paid attendance was just 2,200. Total attendance, including exhibitors, was 5,800. Past AHA summer conventions had drawn as many as 4,000 paid attendees (Aug. 12, 1996, p. 3).
"VAI was mad," said Edwin Schreiber, the attorney representing the company. "They thought it was going to be a great convention . . . and it was a bomb. Nobody showed up."
Vertical Aeronautics is a heliport consulting firm that designs helicopter landing sites at hospitals and police and fire departments.
Richard Wade, the AHA's senior vice president for communications, said the association settled the lawsuit to avoid expensive litigation.
"I think we marketed optimistically," Wade said. "Once you go on record like that, you set yourself up as to whether you meet those numbers, and we didn't."
After 95 years, the AHA decided to pull the plug on its annual summer convention and trade show because of declining attendance and as part of AHA President Richard Davidson's earlier decision to divest the association of fee-for-service activities.
Wade said the AHA had seen a trend of declining trade show attendance.
"We knew all along the Pennsylvania convention was going to be a tough sell, and that was the last one for that very reason," Wade said.
At that convention, exhibitors paid $18 per foot to show off their wares in a 60,000-square-foot convention venue.
The space rental generated nearly $1.1 million in revenues for the AHA and the Middle Atlantic Health Congress, which co-sponsored the convention.
The lawsuit names Middle Atlantic, a former regional trade show, as co-defendant. However Middle Atlantic, once sponsored by the hospital associations of Delaware, New Jersey, New York and Pennsylvania, has been replaced by a new annual trade show put on by the New Jersey Hospital Association. The hospital associations started to drop sponsorship of Middle Atlantic beginning in 1994.
Last week copies of the proposed settlement were sent to all exhibitors at the convention. MODERN HEALTHCARE bought booth space at the convention but does not plan on participating in the lawsuit or the settlement, said Publisher Charles S. Lauer.
The class-action lawsuit has never gone to trial, but the settlement will need court approval. A final settlement hearing is scheduled for July 28.
Those exhibitors that don't want to be part of the settlement have to sign a notice of exclusion by July 1. Accepting the advertising offer from the AHA resolves all claims against other defendants.
Settling the case for advertising is a way for exhibitors to get the exposure they missed at the convention, Schreiber said.
Schreiber said his client was out about $10,000 by the time they paid for the exhibition booth and traveled to the convention.