US News & World Report fails to block San Francisco subpoenas over hospital rankings

(CN) — U.S. News & World Report lost its bid to avoid subpoenas by San Francisco City Attorney David Chiu seeking information about the publication's methodology behind its "Best Hospitals" list.

U.S. District Judge William Orrick III threw out the First Amendment lawsuit by the magazine Tuesday, in which it has asked for a preliminary injunction against enforcement of the city attorney's subpoenas.

Orrick found the publication was too hasty in bringing its lawsuit in federal court because a California state court must first decide, if the city attorney asks for it, whether U.S. News has to respond to the subpoenas.

"The subpoenas carry no automatic sanctions for noncompliance; they are not self-enforcing and require a state court order to be enforced," Orrick wrote. "The city attorney has not pursued such an order, and if he does, I do not know whether he will modify his requests or what the superior court will do."

“I am pleased the court saw right through this legal charade and dismissed the lawsuit entirely,” Chiu said in a statement. “It’s disappointing that U.S. News chose to waste judicial resources on a red herring lawsuit to evade legitimate questions about its undisclosed financial links to the hospitals it ranks.”

U.S. News said it will appeal the judge's decision to the Ninth Circuit.

The media company publishes a wide range of rankings, including an influential annual list of the best colleges and universities in the United States.

However, the San Francisco city attorney's office claims it discovered last year that U.S. News accepts payments from the entities it endorses without disclosing those financial links.

U.S. News receives revenue, the city attorney says, from hospitals through licensing fees to use its “Best Hospitals” badges, subscriptions to access the data underpinning the rankings, advertising on its website and in the Best Hospitals Guidebook, as well as payments for “Featured Hospital” placement.

This revenue is significant, according to the city attorney's office, with at least one hospital acknowledging that it paid U.S. News $42,000 to use the “Best Hospitals” badge for one year.

Chiu began an investigation in June 2023 into potential violations of California law and first sent letters to U.S. News for information about the hospital rankings.

When the media company failed to respond these letters, Chiu sent sent two subpoenas in January 2024 to obtain what he says is "the necessary information to determine the scope of the company’s potential violations of California consumer protection laws."

In return, U.S. News filed the lawsuit a day before its deadline to respond to the subpoenas.

But whereas the publication argued that it was entitled to a preliminary injunction because it faces a credible threat of prosecution, Orrick didn't see it that way.

The city attorney hasn't threatened U.S. News with criminal or civil prosecution, the judge said, and a clause included in the subpoenas — that failure to comply might lead to a citation for contempt in superior court — wasn't a threat to prosecute.

"We respectfully disagree with the district court’s ruling and intend to continue fighting for the First Amendment and challenging any threat to the constitutional right that news organizations rely upon," a U.S. News spokesperson said. "No city official anywhere in the country should be allowed to launch a fishing expedition just because they disagree with a news outlet’s editorial decisions.”

Follow @edpettersson

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