Sutter Wins Partial Summary Judgment in Federal Antitrust Case

Sutter Health won dismissal of some antitrust claims in a federal lawsuit and must proceed to trial on other claims alleging anticompetitive behavior by the Northern California health care giant.

The main issue in the lawsuit is whether Sutter uses its market power to tie its dominant, noncompetitive markets with its competitive markets. The result is forcing insurers through Sutter’s systemwide contracts to pay more.

The result, the individuals and companies allege, is hundreds of millions of dollars in higher in-patient services, costs and premiums.

Tuesday’s ruling in the U.S. District Court for the Northern District of California came the same day as a state Superior Court judge gave preliminary approval to a $575 million settlement in antitrust lawsuits by a joint union-employer fund for grocery employees and the California Attorney General’s office.

“From a legal perspective, because the overlap of the evidence on the liability issues, we see that as a positive development for our case as well,” Jean Kim, a partner at Constantine Cannon and lead co-counsel for the class in the federal case, said Wednesday. “That being said, we’re going to be trial ready” for the October jury trial.

The ruling is the latest in the case that already went to a federal appeals court, which revived the lawsuit and ordered it back to the trial court. The federal filing predates the state filings by two years.

“Despite years of discovery and several rounds of expert reports, the court rejected plaintiffs’ claim that Sutter monopolized or attempted to monopolize the hospital markets in Northern California,” the plan said in a statement Wednesday.

The federal antitrust case was brought by four patients and two companies that buy insurance for employees alleging Sutter tied purchasers into all-or-nothing plans and violated the state’s unfair business practices act. The plaintiffs contend Sutter’s practices violate the federal Sherman antitrust act and California’s antitrust statute.

Sutter won summary judgment on claims involving the years 2008 to 2010 because the purchasers failed to prove damages, meaning that they failed to establish injury, U.S. Magistrate Laurel Beeler in the Northern District of California said.

Sutter also won summary judgment on monopolization and attempted monopolization claims because the individuals and companies didn’t produce evidence showing disputes of material fact.

But Beeler held disputes involving material facts about Sutter’s power in the market where it’s dominant must be presented to a jury and don’t lend themselves to summary judgment.

Trial is set for Oct. 4-29 in San Francisco.

Constantine Cannon and the Mehdi Firm PC are lead class counsel. Jones Day and Bartko Zankel Bunzel & Miller represent Sutter.

The case is Sidibe v. Sutter Health, N.D. Cal., No. 3:12-cv-04854, order 3/9/21.