A federal antitrust lawsuit against Sutter Health is headed for trial in October after a judge rejected the health system's attempt to dismiss the allegations.
The class-action case, Sidibe v. Sutter Health, has for years run parallel to a similar, more well-publicized case being litigated in California state court, UFCW & Employers Benefit Trust v. Sutter Health. In Sidibe, U.S. Magistrate Judge Laurel Beeler on Monday rejected Sutter's motion for summary judgment on four out of six counts contained in the lawsuit, allowing allegations of all-or-nothing contracting practices to go forward.
Matthew Cantor, a partner with Constantine Cannon who serves as lead counsel for the Sidibe plaintiffs, said his team looks forward to recovering damages on behalf of the certified class, which stands at more than 3 million people but could be as high as 4 million. He said the judge's order describes evidence that Sutter forced health plans to enter into unwanted systemwide contracts and other anticompetitive provisions.
"We intend to put that evidence as well as much more evidence on those topics to the jury," Cantor said.
In the Sidibe case, fully insured health plans accuse Sacramento, Calif.-based Sutter of imposing all-or-nothing contracts that have forced employers and members to overpay by hundreds of millions of dollars over the years. The claims are almost identical to those in the UFCW case, except UFCW centers on harm to self-insured plans.
Among the allegations moving forward: that Sutter engages in so-called "tying" arrangements in its insurance contracts. Since those facts are in dispute, Beeler said those allegations aren't eligible for summary judgment.
The lawsuit accuses Sutter of forcing insurers to include inpatient services at its hospitals in tied markets—those where the system does not dominate—as a condition for accessing inpatient services at Sutter hospitals in tying markets, those where Sutter is the only hospital provider or the dominant one. The plaintiffs allege that's a violation of the federal Sherman Antitrust Act and California's Cartwright Act, the state's version of the antitrust law.
For its part, Sutter has contended its systemwide contracts are merely how it sets prices—with discounted rates for plans that are in-network versus out of network—and don't constitute tying arrangements.
The judge agreed with Sutter that the health plan plaintiffs did not show a dispute of material fact with respect to their claims that the health system attempted to monopolize and maintain monopoly power over the market.
In a statement, Sutter applauded the ruling, writing, "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."
Beeler also granted summary judgment to Sutter for alleged damages between 2008 and 2010, noting that the plaintiffs failed to show injury for that time period.
