State of Washington v. Alderwood Surgical Center LLC et al

Filing 153

CONSENT DECREE. Upon entry of this Consent Decree, and with continuing jurisdiction for enforcement as provided herein, this action, and any and all claims asserted against the Defendants herein, are dismissed with prejudice and without costs or fees to any Party other than as expressly provided in this Consent Decree. Signed by Judge Ricardo S. Martinez. (SB)

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1 The Honorable Ricardo S. Martinez 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 STATE OF WASHINGTON, 10 11 12 13 14 15 NO. 2:22-cv-01835-RSM Plaintiff, CONSENT DECREE v. [CLERK’S ACTION REQUIRED] ALDERWOOD SURGICAL CENTER, LLC, a Washington limited liability company; NORTHWEST NASAL SINUS CENTER P.S., a Washington professional service corporation; and JAVAD A. SAJAN, M.D., Defendants. 16 17 I. JUDGMENT SUMMARY 18 1.1 Judgment Creditor State of Washington 19 1.2 Judgment Debtors Alderwood Surgical Center, LLC; Northwest Nasal Sinus Center P.S.; and Javad A. Sajan, M.D. 21 1.3 Principal Judgment Amount $5,000,000 22 1.4 Post-Judgment Interest Rate: 12 percent per annum 23 1.5 Attorneys for Judgment Creditor: Matthew Geyman Zorba Leslie Alexandra Kory Bret Finkelstein Ben Brysacz Rabi Lahiri Assistant Attorneys General 20 24 25 26 CONSENT DECREE - 1 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 1.6 Attorneys for Judgment Debtors: 1.7 Plaintiff State of Washington, by and through the Consumer Protection Division 2 3 Steven Fogg Blake Marks-Dias Corr Cronin LLP 4 of the Washington Attorney General’s Office (the State), conducted an investigation and 5 commenced this action pursuant to the Consumer Review Fairness Act, 15 U.S.C. § 45b 6 (CRFA), the Health Insurance Portability and Accountability Act, 42 U.S.C. § 1320d-5(d) and 7 45 C.F.R. § 164.508(b)(4) (HIPAA), and the Washington Consumer Protection Act, 8 Wash. Rev. Code § 19.86 (CPA); and 9 1.8 Defendants Alderwood Surgical Center, LLC, Northwest Nasal Sinus 10 Center P.S., and Javad A. Sajan, M.D. (Defendants) are represented by their attorneys, Steven 11 Fogg and Blake Marks-Dias, Corr Cronin LLP; and 12 1.9 The State is represented by its attorneys, Robert Ferguson, Attorney General, and 13 Matthew Geyman, Zorba Leslie, Alexandra Kory, Bret Finkelstein, Ben Brysacz, and Rabi Lahiri, 14 Assistant Attorneys General; and 15 1.10 The State and Defendants (the Parties) have agreed on a basis for the settlement 16 of the matters alleged in the State’s Complaint and to the entry of this Consent Decree against 17 Defendants without the need for trial or further adjudication of any issue of law or fact; and 18 1.11 Defendants recognize and agree that this Consent Decree is entered into 19 voluntarily and that no promises, representations, or threats have been made by the Attorney 20 General’s Office or any member, officer, agent, or representative of the State to induce them to 21 enter into this Consent Decree, except the provisions and representations contained herein; and 22 23 24 1.12 Defendants waive any right they may have to appeal from this Consent Decree or to otherwise contest the validity of this Consent Decree; and 1.13 The Parties further agree that this Court shall retain jurisdiction of this action and 25 jurisdiction over the Parties for the purpose of implementing and enforcing the terms and 26 conditions of this Consent Decree and for all other purposes related to this action; and CONSENT DECREE - 2 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 1.14 2 NOW, THEREFORE, it is hereby ORDERED, ADJUDGED, AND DECREED 3 Entry of this Consent Decree is in the public interest. as follows: 4 5 II. 2.1 GENERAL This Court has jurisdiction of the subject matter of this action and over the Parties. 6 The State’s Complaint in this case states claims upon which relief may be granted under the 7 provisions of the CRFA, 15 U.S.C. § 45b, HIPAA, 42 U.S.C. § 1320d-5(d) and 8 45 C.F.R. § 164.508(b)(4), and the CPA, Wash. Rev. Code § 19.86. The Court is fully informed 9 of the allegations raised by all Parties, and finds no just reason to delay entry of this Consent 10 11 Decree to resolve this matter. 2.2 This Consent Decree or the fact of its entry does not constitute evidence or an 12 admission by any Party regarding the existence or non-existence of any issue, fact, or violation 13 of any law alleged by the State. Nor does this Consent Decree modify or vacate the Court’s 14 ruling on April 12, 2024 (Dkt. #97), which granted the State’s Motion for Partial Summary 15 Judgment and held that Defendants’ pre-service nondisclosure agreements violated the CRFA. 16 2.3 This Consent Decree resolves with prejudice all of the State’s claims against 17 Defendants arising out of or relating to the facts and matters specifically described in the 18 Complaint (Dkt. #1), and all of Defendants’ defenses, allegations, or claims against the State 19 arising out of or relating to the facts and matters described in the Amended Answer (Dkt. #30). 20 Nothing herein shall affect any claims against the Defendants by individuals or entities not a 21 party to the lawsuit or defenses the Defendants have to any such allegations or claims. 22 III. INJUNCTIVE RELIEF 23 Application and Scope of Injunctive Terms. These injunctive provisions shall apply to 24 Defendants and Defendants’ successors, assigns, transferees, owners, officers, managers, 25 employees, agents, representatives, and all other persons or entities acting on behalf of or in 26 concert with Defendants. For clarity, the term Defendants encompasses all persons or entities CONSENT DECREE - 3 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 authorized to act on Defendants’ behalf or with their authority on issues subject to this Consent 2 Decree. These injunctive provisions are intended to have the same form, scope, and application 3 as set forth in Fed. R. Civ. P. 65(d). 4 Notice. Within thirty (30) days following entry of this Consent Decree, Defendants shall 5 inform all of their owners, officers, managers, current employees, agents, representatives, and 6 any other persons or entities acting in concert with Defendants or on their behalf of this Consent 7 Decree in sufficient detail to ensure that those persons and entities comply with this 8 Consent Decree. 9 10 3.1 Injunctive Relief. Defendants shall comply with the following: 3.3.1 Pre-Service Nondisclosure Agreements. For as long as the CRFA remains 11 effective, Defendants shall not use any form of pre-service agreement that prohibits or restricts 12 prospective patients from offering honest reviews or descriptions of their experiences, whether 13 such reviews are posted online or otherwise. 14 3.3.2 As to pre-service nondisclosure agreements signed by Defendants’ 15 patients before March 24, 2022 (hereafter, the pre-service NDAs), Defendants shall not enforce, 16 attempt to enforce, or assert the validity of such pre-service NDAs. 17 3.3.3 Post-Service Nondisclosure Agreements. For as long as the CRFA 18 remains effective, Defendants shall not condition any refund for (a) patients who receive goods 19 only (e.g., non-prescribed aftercare products), or (b) patients who receive no actual medical 20 treatment, procedures or services (e.g., patients who cancel a consultation), on a patient signing 21 any form of post-service nondisclosure agreement (hereafter, post-service NDA). 22 3.3.4 For as long as the CPA remains effective, Defendants shall not offer 23 patients cash payments, free products or services, or other inducements to enter into post-service 24 NDAs without disclosing at the time of such offer that entering into the nondisclosure agreement 25 is a condition for receipt of the inducement. 26 3.3.5 CONSENT DECREE - 4 (2:22-cv-01835-RSM) Any post-service NDA that Defendants use with patients who have ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 received actual medical treatments or procedures shall fully comply with the CPA, CRFA 2 and HIPAA. 3 3.3.6 Reviews on Third-Party Platforms. Within sixty (60) days following entry 4 of this Consent Decree, Defendants shall perform a full audit of all public reviews of Defendants 5 on the following third-party platforms: Google, Yelp, RateMD, Healthgrades, WebMD, and 6 Vitals. Defendants shall use reasonable best efforts to identify every review they had any role in 7 creating, posting, or shaping in any manner, and request that each platform take down all such 8 reviews, and any other fake reviews Defendants identify during their audit. Defendants shall 9 simultaneously copy the State on such correspondence and cooperate with any request from the 10 platform or the State for additional information. Defendants shall provide the State with 11 confirmation, in the form of a declaration under oath, once they have complied with this term. 12 3.3.7 For as long as the CRFA remains effective, Defendants shall not directly 13 or indirectly create reviews for posting on third-party review platforms (e.g., Google, Yelp, 14 RateMD, Healthgrades, WebMD, and Vitals). Defendants shall not post fake reviews, or hire 15 third parties to post fake reviews, or directly or indirectly cause reviews to be posted by anyone 16 who has not received services from Defendants, regardless of whether Defendants offer payment 17 or other inducement in return for such reviews. Notwithstanding the foregoing, nothing herein 18 shall restrict Defendants from responding to consumer reviews in compliance with the HIPAA 19 Privacy Rule. 20 3.3.8 For as long as the CRFA remains effective, Defendants shall not threaten 21 to sue or sue patients who post reviews on third-party platforms unless the review is defamatory 22 or “clearly false or misleading” as defined in the CRFA, 15 U.S.C. § 45b(b)(2). Defendants shall 23 not publicly disclose patient personal health information, or threaten to do so, in response to 24 patient reviews. 25 3.3.9 26 Followers on Social Media and “Best Doctor” Voting. Defendants shall not directly or indirectly purchase followers on social media, or directly or indirectly purchase CONSENT DECREE - 5 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 votes for voting contests such as “best doctor” lists. The use of legitimate third-party vendors to 2 help increase Defendants’ social media presence and engagement with prospective followers is 3 not prohibited. This term will sunset after ten (10) years. While it is in place, upon request, 4 Defendants shall provide the State with information about any arrangements with such vendors. 5 3.3.10 Photographs. Within sixty (60) days following entry of this Consent 6 Decree, Defendants shall conduct a full audit of the “before and after” photographs on their 7 websites and social media and remove any photographs that contain photoshopped changes other 8 than cropping, sizing, lighting adjustments, and/or removing protected health information. All 9 remaining “after” photos on Defendants’ websites and social media shall accurately reflect the 10 actual result of the procedure, and shall not include any changes to patient anatomy, including 11 changes in body (or body part) size, implant position, implant size, nipple position, nipple size, 12 or any other body morphology. Accurate photographic images may be mechanically 13 straightened. This section does not apply to animations, graphics, and videos. Defendants shall 14 provide the State with confirmation, in the form of a declaration under oath, once they have 15 complied with this term. This term and the terms in Paragraphs 3.3.11, 3.3.12 and 3.3.13 relating 16 to photographs will sunset after ten (10) years. 17 3.3.11 For all future “before and after” photographs displayed on Defendants’ 18 websites or social media, Defendants will only post photographs in their original forms or with 19 the following non-material adjustments or enhancements: cropping, lighting adjustments, and/or 20 removing personally identifying information at the patient’s request. Defendants will not allow 21 third parties to post photos to Defendants’ websites or social media accounts that violate 22 this term. 23 3.3.12 If a photograph is adjusted or enhanced in a manner consistent with the 24 preceding paragraphs, Defendants will post a clear and conspicuous photograph disclaimer on 25 its website and social media to ensure a reasonable consumer understands the photograph has 26 been enhanced in a non-material manner. CONSENT DECREE - 6 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 3.3.13 If a patient requests that protected health information (such as a scar or 2 tattoo) be removed, Defendants will only blur out the information from the photograph and will 3 not otherwise alter the image. This term does not permit Defendants to blur or otherwise obscure 4 the appearance of scarring resulting from patient treatments depicted in the images. 5 6 IV. 4.1 MONETARY RELIEF AND NOTICE TERMS Monetary Payment. Defendants shall pay $5,000,000 as directed by the Attorney 7 General and described below, including payments to patients who signed Defendants’ pre- 8 service NDAs. and a payment to the Attorney General’s Office for recovery of the Attorney 9 General’s costs and attorneys’ fees, future monitoring and enforcement of this Consent Decree, 10 future enforcement of the CPA and other consumer protection laws, or any lawful purpose in the 11 discharge of the Attorney General’s duties at the sole discretion of the Attorney General. Any 12 remaining balance amount shall be made after payments due per sections 4.5, 4.6 below. 13 4.2 The payments in Paragraph 4.1 do not include any disgorgement identified and 14 paid to patients as a result of the audit of the Galderma rebate program described in Section V 15 below, nor does it include administrative costs Defendants may incur in complying with this 16 Consent Decree. 17 4.3 Notice Letter. Within thirty (30) days following entry of this Consent Decree, 18 Defendants shall send (at their expense through a third-party vendor) a notice letter to every 19 identified patient who signed one of the pre-service NDAs informing them that: (a) Defendants 20 release the patient from the terms restricting them from sharing accurate reviews; (b) Defendants 21 will not try to enforce those terms against the patient; and (c) Defendants will not publicize any 22 patient’s health information or otherwise retaliate against a patient for posting an honest review. 23 The Parties estimate that Defendants will send this notice letter to approximately 21,000 patients 24 or former patients. 25 4.4 26 Restitution Letter. Within thirty (30) days following entry of this Consent Decree, Defendants shall also send (at their expense through a third-party vendor) a second, separate CONSENT DECREE - 7 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 letter from the Attorney General to all patients who signed Defendants’ pre-service NDAs, 2 enclosing a check payable to the patient as set forth in Paragraphs 4.5 and 4.6 below. The 3 Attorney General’s Office will provide the text, letterhead, and envelopes to the vendor for 4 this mailing. 5 4.5 For all patients not previously refunded who signed one of Defendants’ pre- 6 service NDAs after paying a $100 consultation fee to schedule a consultation with Dr. Sajan, the 7 restitution letter described in Paragraph 4.4 shall include a payment of $120, representing the 8 $100 consultation fee and interest estimated at $20. The Parties estimate that approximately 9 6,000 patients will receive approximately $720,000 under this provision. 10 4.6 For patients who signed one of Defendants’ pre-service NDAs, but who did not 11 pay a consultation fee, the letter described in Paragraph 4.4 shall enclose a payment of $50 as 12 restitution or equitable disgorgement from Defendants’ profits. The Parties estimate that 15,000 13 patients will receive approximately $750,000 under this provision. 14 4.7 Defendants shall not send any other contemporaneous communication in any 15 form to patients about this Consent Decree, or the notice or restitution letters described above, 16 without the prior agreement of the Attorney General’s Office. 17 4.8 Following entry of this Consent Decree, Defendants shall pay the remaining 18 balance of the $5,000,000 in Paragraph 4.1 (minus the total amounts sent to patients under 19 Paragraphs 4.5 and 4.6) to the Office of the Attorney General, Consumer Protection Division, 20 Attention: Margaret Farmer, Litigation Support Manager, 800 Fifth Avenue, Suite 2000, 21 Seattle, WA 98104, unless otherwise directed. Defendants will make payments as follows: 22 23 24 25 (a) An initial payment of $2,000,000 within thirty (30) days of entry of this consent decree; (b) A second payment of $1,000,000 within ninety (90) days of entry of this consent decree; and 26 CONSENT DECREE - 8 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 (c) A third payment for the full amount of the balance remaining, including the 2 funds remitted for any uncashed checks sent to patients under Paragraphs 4.5 3 and 4.6, by the date set forth in Paragraph 4.9. 4 4.9 In the event that a consumer does not cash a check sent under the provisions of 5 Paragraphs 4.5 and 4.6, such funds shall revert to the Attorney General’s Office to be used for 6 any lawful purpose at the sole discretion of the Attorney General. Defendants shall provide an 7 accounting of any uncashed checks to the Attorney General’s Office, and remit those funds to 8 the Attorney General’s Office within one hundred eighty (180) days of the date the checks 9 were mailed. 10 11 4.10 payment required by this Consent Decree shall be a material breach of this Consent Decree. 12 13 Absent extraordinary circumstances, Defendants’ failure to timely make any V. 5.1 AUDIT OF GALDERMA REBATE PROGRAM Defendants hired a forensic accounting firm (JS Held) in April 2024 to conduct a 14 full independent audit (Audit) of their administration of the Galderma Consumer Loyalty 15 Program to Defendants’ patients. Such Audit is anticipated to be completed by August 15, 2024. 16 Upon entry of this Consent Decree, Defendants shall authorize JS Held to communicate directly 17 with the Attorney General’s Office regarding all relevant aspects of the Audit, including 18 JS Held’s assignment and qualifications, and the data and information Defendants provided to 19 JS Held. The Attorney General’s Office will have thirty (30) days from that communication to 20 approve or reject the retention of JS Held for the purposes of the Audit, or to raise any issue with 21 the Audit, JS Held’s assignment, or the scope of JS Held’s work. In the event the Attorney 22 General’s Office rejects the retention of JS Held, Defendants agree to retain a different forensic 23 accounting firm, subject to the Attorney General’s Office’s approval, to conduct the Audit. 24 Defendants further agree to fully cooperate with JS Held’s requests (or those of any subsequently 25 retained firm) for information or documents related to the Audit. 26 5.2 If JS Held (or such other firm as may be retained in its place) identifies CONSENT DECREE - 9 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 discrepancies in the Audit, Defendants shall correct those discrepancies and pay any related 2 disgorgement to consumers. Defendants authorize JS Held to disclose the Audit to the Attorney 3 General’s Office, and to discuss any findings and conclusions with the Attorney General’s 4 representatives. The AGO will notify the Defendants of such communication and allow for 5 Defendants’ presence. For any discrepancies for which no consumer can be identified, 6 Defendants shall pay disgorgement to Galderma or the State of Washington as determined by 7 the Attorney General in his sole discretion. These disgorgement payments are independent of, 8 and shall not be set off against, any monetary relief otherwise provided for in this 9 Consent Decree. 10 5.3 Within thirty (30) days of receiving the Audit results from JS Held (or such other 11 firm as may be retained in its place), Defendants shall send a letter at their expense to all 12 impacted consumers, the text of which shall be reviewed and approved by the Attorney General’s 13 Office prior to sending. The letter shall inform every consumer receiving a disgorgement check 14 that they are receiving the check as a result of this lawsuit. In the event that a consumer does not 15 cash the disgorgement check, such funds shall revert to the Attorney General’s Office to be used 16 for the purposes set forth in Paragraph 4.1 above at the sole discretion of the Attorney General. 17 Defendants shall provide an accounting of any unclaimed checks to the Attorney General’s 18 Office, and remit those funds to the Attorney General’s Office within one hundred eighty (180) 19 days of the date the disgorgement checks were mailed. Any and all such funds are independent 20 of, and shall not be set off against, any monetary relief otherwise provided for in this 21 Consent Decree. 22 23 VI. 6.1 ENFORCEMENT Defendants shall be in full compliance with all requirements and obligations this 24 Consent Decree imposes on Defendants by the date of entry of this Consent Decree, except as 25 otherwise indicated herein. 26 CONSENT DECREE - 10 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 6.2 If Defendants violate a condition of this Consent Decree they shall notify the 2 Attorney General’s Office immediately. If Defendants violate a condition of this Consent 3 Decree, the Attorney General may seek, and the Court may impose, additional conditions, civil 4 penalties of up to $125,000 per violation pursuant to the CPA, Wash. Rev. Code § 19.86.140, 5 restitution, injunctive relief, attorneys’ fees, costs, and such other remedies as the Court may 6 deem appropriate. The Attorney General may present any such violations to the Court in an 7 evidentiary hearing in which Defendants shall have an opportunity to be heard, and the Court 8 may order such relief if it finds by a preponderance of the evidence that Defendants have violated 9 a material condition of this Consent Decree. In any successful action to enforce this Consent 10 Decree against Defendants, they shall bear the State’s reasonable costs, including reasonable 11 attorneys’ fees. 12 6.3 Jurisdiction is retained by this Court for the purpose of enabling any Party to this 13 Consent Decree to apply to the Court, to the extent permitted herein, for enforcement of 14 compliance with this Consent Decree, or otherwise address the provisions of this 15 Consent Decree. 16 17 18 6.4 Nothing in this Consent Decree shall grant any third-party beneficiary or other rights to any person who is not a Party to this Consent Decree. 6.5 Nothing in this Consent Decree shall be construed to limit or bar any other 19 governmental entity or person from pursuing other claims or remedies against Defendants or any 20 other person, i.e., other than the Consumer Protection Division of the Attorney General’s Office 21 whose claims against Defendants are released under this Consent Decree as set forth in 22 Paragraphs 2.3 and 8.4. 23 6.6 Under no circumstances shall this Consent Decree, or the name of the State of 24 Washington, this Court, the Attorney General’s Office, the Consumer Protection Division, or 25 any of their employees or representatives, be used by Defendants or any of their successors, 26 assigns, transferees, owners, officers, managers, employees, agents, representatives, or any other CONSENT DECREE - 11 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 persons or entities acting in concert with Defendants, in connection with any selling, advertising, 2 or promotion of products or services, or as an endorsement or approval of Defendants’ acts, 3 practices, or conduct of business. 4 6.7 This Consent Decree in no way limits the State from conducting any lawful 5 non-public investigation to monitor Defendants’ compliance with this Consent Decree or to 6 investigate other alleged violations of the CPA or other consumer protection laws. 7 6.8 Until such time as Defendants have fully and completely satisfied all obligations 8 under Sections III, IV, and V of this Consent Decree, this Consent Decree shall be binding upon 9 Defendants’ successors and assigns. Defendants and their successors and assigns shall notify the 10 Attorney General’s Office at least thirty (30) days prior to any change-in-control of Defendants 11 that would change the identity of the corporate entity responsible for compliance obligations 12 arising under this Consent Decree; including, but not limited to, dissolution, assignment, sale, 13 merger, or other action that would result in the emergence of a successor corporation; the creation 14 or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to 15 this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or 16 address. Provided, however, that with respect to any proposed change in the corporation about 17 which Defendants and their successors and assigns learn less than thirty (30) days prior to the 18 date such action is to take place, Defendants and their successors and assigns shall notify the 19 Attorney General’s Office as soon as is practicable after obtaining such knowledge. 20 6.9 Any notice or other communication required or permitted under this Consent 21 Decree shall be in writing and delivered to the following persons or any person subsequently 22 designated by the Parties: 23 24 25 26 CONSENT DECREE - 12 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 2 3 4 For Plaintiff: Office of the Attorney General Consumer Protection Division Attention: Matthew Geyman, AAG 800 Fifth Avenue, Suite 2000 Seattle, WA 98104 5 6 7 VII. 7.1 For Defendants: Corr Cronin LLP Attention: Steven Fogg and Blake Marks-Dias 1015 Second Avenue, Floor 10 Seattle, WA 98104 Alderwood Surgical Center, LLC 3500 188th Street SW, Suite 670 Lynnwood, WA 98037 COMPLIANCE AND RELATED TERMS Recordkeeping. Defendants shall retain all records relevant to their compliance 8 for a period of ten (10) years. Specifically, Defendants shall maintain records identifying all 9 personnel, including all third parties, who provide services in relation to any aspect of the 10 settlement and shall maintain all records necessary to demonstrate full compliance with the 11 provisions of the settlement. Defendants shall provide such records to the Attorney General’s 12 Office within ten (10) business days of a request. 13 7.2 Training. Within one hundred twenty (120) days, to the extent such internal 14 policies and training programs do not already address the CPA, HIPAA, and/or the CRFA, 15 Defendants shall develop internal policies and implement a training program to train employees 16 and staff on truthful non-deceptive advertising and compliance with the CPA, HIPAA, and the 17 CRFA. Defendants shall provide records concerning such policies and trainings to the State 18 within ten (10) business days of a request. 19 7.3 Implementation as to Third Parties. Defendants shall inform any current vendors, 20 independent contractors, or other third parties working for Defendants involved in providing 21 online marketing, social media, or reputation management services to Defendants of the 22 principal terms of the settlement sufficient to ensure the third party’s compliance with this 23 Consent Decree. 24 25 7.4 Defendants shall not retaliate against any current or former employee or patient for cooperating with the State in its investigation and discovery in this case. 26 CONSENT DECREE - 13 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 2 3 4 5 6 7 8 VIII. 8.1 OTHER PROVISIONS This Consent Decree represents the full and complete terms of the settlement entered into by the Parties hereto. 8.2 The Parties agree and affirm that each of them has the authority to execute and perform the terms of this Consent Decree. 8.3 This Consent Decree may be executed in counterparts, and a facsimile or .pdf signature shall be deemed to be, and shall have the same force and effect as, an original signature. 8.4 This Consent Decree releases with prejudice all claims against Defendants 9 described in the State’s Complaint (Dkt. #1) and any claims against the Attorney General, the 10 Attorney General’s Office, or any of its employees arising out of or relating to the allegations in 11 Defendants’ Amended Answer (Dkt. #30). As part of its release of claims, Defendants agree to 12 withdraw the Public Records Act request submitted by Defendants’ in-house counsel Erin 13 O’Leary dated March 26, 2024. 14 8.5 The Consent Decree releases Defendants (and their respective agents, owners, 15 employees, officers, related business entities, business affiliates, lawyers and accountants), with 16 respect to all claims or counterclaims that were or could have been brought by the State related 17 to any acts or omissions by Defendants alleged in the Complaint that predate entry of this 18 Consent Decree, including any claim under common law or under any federal, state, or local 19 statute or ordinance. 20 21 22 8.6 The parties acknowledge that the Court issued a ruling regarding violations of the Consumer Review Fairness Act as to pre-service NDAs. 8.7 The State acknowledges that the Defendants do not agree that any violation as 23 alleged by the State occurred, any certainly not intentionally. Moreover, this settlement 24 agreement is not intended, and shall not be construed as, any admission of liability by 25 Defendants, as such liability is in fact and law denied. 26 CONSENT DECREE - 14 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 2 IX. 9.1 DISMISSAL OF ACTION Upon entry of this Consent Decree, and with continuing jurisdiction for 3 enforcement as provided above, this action, and any and all claims asserted against the 4 Defendants herein, are dismissed with prejudice and without costs or fees to any Party other than 5 as expressly provided in this Consent Decree. 6 7 8 The Clerk of the Court is ordered to immediately enter the foregoing Judgment and Consent Decree. DATED this 8th day of July, 2024. 9 A 10 RICARDO S. MARTINEZ UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Presented by: Notice of Presentment Waived and Approved as to Form by: ROBERT W. FERGUSON Attorney General CORR CRONIN LLP /s Matthew Geyman MATTHEW GEYMAN, WSBA #17544 ZORBA LESLIE, WSBA #58523 ALEXANDRA KORY, WSBA #49889 BRET FINKELSTEIN, WSBA #48845 BEN BRYSACZ, WSBA #54683 RABI LAHIRI, WSBA #44214 Assistant Attorneys General 800 Fifth Avenue, Suite 2000 Seattle, WA 98104 Attorneys for Plaintiff State of Washington /s Blake Marks-Dias STEVEN W. FOGG, WSBA #23528 BLAKE MARKS-DIAS, WSBA #28169 1015 Second Avenue, Floor 10 Seattle, WA 98104 Attorneys for Defendants Alderwood Surgical Center, LLC, Northwest Nasal Sinus Center P.S., and Javad A. Sajan, M.D. CONSENT DECREE - 15 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744 1 2 3 4 5 6 CERTIFICATE OF SERVICE I certify that I caused a copy of the foregoing to be served on all counsel of record via the ECF system. I certify, under penalty of perjury under the laws of the State of Washington, that the foregoing is true and correct. DATED this 1st day of July, 2024, at Seattle, Washington. 7 s/ Matthew Geyman MATTHEW GEYMAN Assistant Attorney General 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 CONSENT DECREE - 16 (2:22-cv-01835-RSM) ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744

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