A lawsuit over hospital grades becomes a free speech showdown 

By Jenna Greene

Sept 28 (Reuters) - Whether evaluating hospitals, hotels or hair dryers, consumers often turn to ratings and reviews. But how do free speech protections apply when those doing the rating are accused of misleading the public?

That question is now before a federal appeals court after five South Florida hospitals that received poor safety ratings won a lawsuit against nonprofit hospital-rating group Leapfrog.

Leapfrog argues in its appeal that its safety ratings, which assign hospitals a grade from A to F, reflect editorial judgments protected by the US Constitution's First Amendment. The plaintiff hospitals contend the methodology behind those grades is unfair and deceptive, in violation of Florida’s consumer-protection law.

The tension between the two legal theories sets the stage for a showdown before the Atlanta-based 11th US Circuit Court of Appeals — with implications that could reach far beyond hospital scorecards.

News organizations, civil-liberties groups and consumer advocates in a flurry of amicus briefs earlier this month warn that if the decision stands, it could chill wide swaths of public discourse.

“Ratings and reviews are woven into our marketplace of free expression,” Leapfrog counsel Derek Shaffer, a partner at Quinn Emanuel Urquhart & Sullivan, told me. “They deserve the fullest First Amendment protection, especially when offered for free by a nonprofit, patient-safety watchdog like Leapfrog.”

A spokesperson for the Palm Beach Health Network counters that the First Amendment “does not protect false factual statements or deceptive trade practices,” and that Leapfrog induced patients “to make important medical decisions on the basis of inaccurate information.”

The five Palm Beach hospital plaintiffs, all owned by Tenet Healthcare Corp, had opted not to participate in Leapfrog's surveys. After they received Ds and Fs, they sued the nonprofit in 2025 in West Palm Beach federal court, alleging its grading system amounts to “a brazen pay-to-play scheme.”

Washington, D.C.-based Leapfrog began issuing hospital safety grades in 2012 using data from publicly available sources as well as a lengthy survey that it sends to the medical centers.

In its questionnaire, Leapfrog probes hospitals' procedures in areas such as hand washing, intensive care unit staffing and how medication orders are entered. Leapfrog then crunches data from these and 19 other metrics to come up with a letter grade – a snapshot seen by millions of people each year who visit the organization’s website.

Leapfrog says patients are twice as likely to die of a preventable error at a C, D- or F-rated hospital as at one receiving an A.

That makes the question of how Leapfrog’s grades are calculated particularly consequential. Yet roughly 20% of hospitals do not participate in the survey, whether because it’s too time-consuming, as the plaintiff hospitals suggest, or because they might rate poorly if they shared their information, as Leapfrog implies.

The litigation centers on how Leapfrog handles these non-participants, which include the plaintiffs. Under a methodology adopted in 2024, Leapfrog “imputes” the lowest scores in certain categories where data is unavailable to hospitals that opt out of its survey.

Not surprisingly, that approach tends to lower their overall grades.

The hospitals' lawyers from Gibson, Dunn & Crutcher say that Leapfrog violates the Florida Deceptive and Unfair Trade Practices Act by misleading consumers about how its safety grades are calculated.

The hospitals argue that Leapfrog touts its “public, peer-reviewed methodology,” and says that the marks reflect how well a hospital does on safety, not whether it completed the survey. In reality, they argue, Leapfrog unfairly penalizes nonparticipants by assigning them arbitrarily low scores when data is missing.

They allege the practice is designed to drive survey participation and boost the value of the ratings, which Leapfrog markets to hospitals, insurers and other customers.

After a five-day bench trial in January, US District Judge Donald Middlebrooks agreed. Siding with the hospitals, he ruled that “Leapfrog’s approach constitutes an unfair and deceptive business practice.”

He ordered Leapfrog to cease assigning safety grades to the five hospitals under the current or similar methodology, make corrective disclosures and pay the hospitals’ attorney fees, which could top $10.5 million – more than Leapfrog's annual revenue.

But as Leapfrog points out, the judge in his 41-page decision makes no mention of the First Amendment. That’s because in a brief prior ruling, Middlebrooks rejected Leapfrog’s argument that the grades were protected opinion.

Instead, he found that the suit permissibly challenged Leapfrog's representations about its methodology. “Defendant’s First Amendment defenses are thereby inapplicable,” Middlebrooks held.

On appeal, Leapfrog and its amici argue it’s not that simple.

A letter grade that synthesizes multiple safety metrics “necessarily reflects editorial and expert judgments” for how the data should be handled and weighed, Leapfrog’s lawyers from Quinn Emanuel wrote on appeal. The First Amendment’s guarantees of free expression and a free press protect those judgments as opinion, they say.

In an amicus brief, The New York Times Co, Yelp, Consumer Reports and the Reporters Committee for Freedom of the Press agree.

Many news organizations offer subjective reviews or recommendations, they note. Each one employs a different methodology, making choices that some (especially those that don’t fare well) may perceive as unfair. But the First Amendment protects a speaker’s choice, “fair or unfair,” of which perspective on public issues to share with their audience, they argue.

Leapfrog and its supporters also argue that the hospitals cannot circumvent the First Amendment by invoking consumer protection laws.

The district court “conceived of the hospitals’ suit as a quotidian business dispute, seemingly outside the protections of the Constitution,” the American Civil Liberties Union, the Cato Institute and others said in an amicus brief, calling the treatment inconsistent with the demands of the First Amendment.

Leapfrog separately argues that the judge’s order amounts to an impermissible prior restraint, barring publication of future ratings based on the challenged methodology.

For the 11th Circuit, the broader question is whether this case is really about Leapfrog’s allegedly deceptive representations concerning its methodology, as the hospitals contend, or protected editorial judgments for how to rate hospital safety, as Leapfrog argues.

The answer could affect not only hospital grades, but the reviews, rankings and scorecards consumers encounter every day.