Judge Rules Federal Antitrust Class Action Against Sutter Health Must Go to Trial
Even as Sutter settles with California Attorney General, this landmark antitrust case challenges tying agreements that inflated the price of health insurance for millions of consumers.
Setting the stage for a critical antitrust trial, a U.S. District Court has ruled, in Sidibe v. Sutter Health, that a jury must decide whether the dominant Northern California health system imposed illegal all-or-nothing tying contracts that inflated health insurance costs for millions of fully insured payers.
Constantine Cannon partners Matthew L. Cantor and Jean Kim are representing a certified class of more than 3 million California individuals and employers who, it is alleged, overpaid for health coverage as a result of Sutter Health’s violation of the federal and state antitrust law.
On March 9, 2021, the Judge denied Sutter Health’s motion for summary judgement on the core claims that Sutter Health illegally tied services provided by different Sutter hospitals together to charge higher, inflated hospital prices to health plans. These hospital prices, the plaintiffs allege, were ultimately borne by the members of the Class in the form of higher premiums that they paid for health insurance. Similar anticompetitive efforts on nearly identical claims resulted in a $575 million settlement with the California Attorney General, which received a state Judge’s preliminary approval this week. Sidibe v. Sutter Health was filed approximately two years before the sister case: The two cases were consolidated for the purpose of conducting discovery.
“We are pleased that the Judge agreed that these claims should go to the jury and that our plaintiffs and millions of California families and businesses that make up the Class will finally get their day in court,” Cantor, lead counsel for the plaintiffs, said. “We look forwarding to showing how Sutter Health’s take-it-or-leave-it business model caused so many to repeatedly pay more than they should have for medical coverage.”
The fanfare surrounding the high-profile state settlement since it was first announced more than a year ago highlights the implications of the federal trial. The jury could find that Sutter violated federal antitrust law in how it imposed higher rates in various markets and by forcing health plans to succumb to anti-competitive contract terms or else be deprived of including Sutter hospitals in their provider networks — many of which are the only hospitals available to health plans in various markets. Such a verdict would invite new scrutiny into the pervasive anticompetitive practices of health systems nationwide.
“We look forward to bringing evidence before a jury that proves Sutter Health wielded its market power in an unacceptable manner,” Kim said. “We will prove that Sutter Health strong-armed insurance providers into accepting unfair conditions and saddled payers with inflated charges.”
The case is Sidibe v. Sutter Health, Case No. 3:12-cv-04854, U.S. District Court for the Northern District of California.
About Constantine Cannon
Constantine Cannon, with offices in New York, Washington, D.C., San Francisco, and London, has deep expertise in practice areas that include antitrust and complex commercial litigation, whistleblower representation, government relations, securities, and e-discovery. The firm’s antitrust practice is among the largest and most well recognized in the nation. Constantine Cannon’s experience spans across multiple industries including healthcare, banking, electronic payments, insurance, high tech, telecommunications, the Internet, and government contracting.
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