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Published on February 29, 2024
San Francisco City Attorney Battles U.S. News & World Report in Court Over Alleged Covert Hospital PaymentsSource: City Attorney of San Francisco

In a bold move to shield consumers, San Francisco City Attorney David Chiu has launched a salvo against U.S. News and World Report, seeking to toss out what he calls a "baseless" lawsuit by the media company. U.S. News is fighting to hinder Chiu's investigation into its ties with the hospitals it rates, which could involve potentially illegal business practices, as reported by the City Attorney's Office.

The crux of the issue lies in the claim that U.S. News might be profiting from the hospitals it ranks while keeping this a secret from the public. According to the San Francisco City Attorney's briefing, one hospital in Kansas coughed up $42,000 to U.S. News for the rights to boast the "best hospitals" badge for a single year. This income stream blurs the line between unbiased reporting and paid endorsement, raising significant concern over the integrity of their hospital rankings—which impact millions, including those in California.

Chiu's office has been on the company's tail since June 2023, probing its possible undisclosed revenue stream from hospitals. Rather than addressing the matter, U.S. News filed a lawsuit alleging that their free speech was being stifled. Chiu wasn't having any of it, though, declaring, "U.S. News is not above the law, and its bullying litigation tactics will not deter us from standing up for patients and consumers," in a move to get the lawsuit chucked.

"We are hopeful the Court will see right through this legal charade and dismiss the lawsuit entirely," Chiu remarked, staunchly opposing the preliminary injunction motion brought forth by U.S. News. The filed subpoenas in January, intended to snag necessary information for the investigation, were met with resistance as U.S. News opted to wage a court battle instead of cooperatively responding. The company's actions have even stirred up concerns nationwide, drawing support for the City Attorney from local jurisdictions and officials across the United States through an amicus brief.

The contentious case, presented to the U.S. Northern District Court of California as U.S. News & World Report, L.P., v. City Attorney of San Francisco David Chiu, case No. 24-00395, is a flashpoint in debates over the ethics of media rankings and consumer trust. The public awaits the court's judgement, anticipated to set a precedent for transparency and ethical reporting standards in the industry.