Sacramento, CA — Following news that California Governor Gavin Newsom has vetoed AB 3129, a bill that would have given the California Attorney General’s Office greater ability to review and block private equity firms or hedge funds from purchasing healthcare facilities (so-called “roll-up”), and to prohibit private equity or hedge funds from interfering in the practice of medicine by medical professionals (“private equity practice of medicine”), the American Economic Liberties Project released the following statement.

“It is nothing short of shameful for Governor Newsom to veto a well-considered bill that would have protected medical professionals and patients from the documented harms of private equity interference in healthcare,” said Lee Hepner, Senior Legal Counsel at the American Economic Liberties Project. “The rationale provided by Governor Newsom for this particular veto could easily have been addressed in the normal legislative process. The worst impulse would be to normalize the Governor’s ability to single-handedly kill legislation that is the product of years of advocacy and thoughtful amendment, and which earned supermajority support in both chambers. It is not normal, it is unacceptable, and the legislature would be well-suited to override Newsom’s veto.”

“Just this term, the Governor has killed legislation that would grant a lifeline to struggling newsrooms and journalists, refused to rein in pharmacy benefit managers’ anticompetitive tactics, and pushed for questionable exemptions in fair wage reform — while greenlighting bills that give handouts to wealthy donors,” added Hepner. “If Governor Newsom purports to advance the interests of working people, small businesses and families across California, then he should provide better explanation of these problematic vetoes.”

AB 3129, led by Assemblymember Jim Wood (D-Healdsburg), passed by a vote of 21-11 in the Assembly and 49-14 in the Senate, advancing to the Governor’s desk earlier this month. It is the fourth attempt by lawmakers and advocates to pass a bill of this nature, and represented a substantially narrowed approach compared to prior iterations. The bill would have granted additional powers to the California State Attorney General to review and block acquisitions and roll-up schemes from private equity firms and hedge funds across the healthcare industry, and would have prohibited private equity firms and hedge funds from interfering in the practice of medicine by medical professionals.

AB 3129 received widespread support from patient and antitrust advocates, including lead sponsor Health Access CA, and was endorsed by Chair Lina Khan of the U.S. Federal Trade Commission and California Attorney General Rob Bonta. In a substantive report released in May 2024, Private Equity in Health Care: Prevalence, Impact and Policy Options for California and the U.S, the California Health Care Foundation concluded that “additional policy innovation is urgently needed” to stem private equity’s harmful investment across the healthcare industry.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.