A U.S. appeals court on Tuesday overturned a 2022 ruling that absolved Sutter Health in a class action lawsuit accusing the nonprofit system of anticompetitive practices.
A panel for the 9th U.S. Circuit Court of Appeals in San Francisco ordered a new trial, ruling 2-1 that the jury in the 2022 trial, which delivered a unanimous verdict, did not hear relevant evidence of Sutter's conduct before 2006 and was not instructed to consider Sutter's anticompetitive purpose, according to court documents.
Related: Jury sides with Sutter Health in federal antitrust case
The initial complaint was filed in 2012 in the U.S. District Court for the Northern District of California. It alleged Sutter forced millions of people to overpay for healthcare by more than $411 million over six years by forcing insurers such as Anthem Blue Cross, Aetna and UnitedHealthcare into systemwide contracts and preventing them from steering members to lower-cost options.
"The jury did not see or hear critical evidence," Matthew Cantor, lead counsel for the plaintiffs, said in a statement. "We look forward to presenting our entire case to a jury so that the millions of employers and individuals that comprise the certified class can be made whole for the illegal overcharges that Sutter foisted upon them."
Sutter, which said it is disappointed by Tuesday's ruling, could have faced more than $1 billion in damages if the jury had ruled against the health system in 2022.
Sacramento, California-based Sutter argued in the 2022 trial it has strong competition in the Northern California market, making it impossible to violate antitrust laws. The health system's legal team also showed jurors examples of insurer contracts that were not systemwide.
"Sutter Health intends to pursue all avenues to overturn the erroneous decision," a Sutter spokesperson said in a statement.
Dissenting Judge Patrick Bumatay compared the case to a long-running soap opera.
"We rely on the district court’s discretion to fashion reasonable limits for admissible historical evidence. After all, trials can’t last forever, and jurors can’t always process 5, 10, or 20 years of evidence," he wrote in his dissent.
Sutter has more than 57,000 employees and clinicians across 24 hospitals, five medical foundations and 40 ambulatory surgery centers in California.
