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Verdict in Sidibe v. Sutter Health Overturned by 9th Circuit Court of Appeals

On Tuesday, June 4, 2024, the 9th U.S. Circuit Court of Appeals overturned Sutter Health’s win in a $411 million antitrust suit, saying that the jury that found in favor of Sutter in 2022 was given improper jury instructions, and that the plaintiffs were improperly prevented from presenting relevant evidence. In September 2012, a class of individuals and employers who purchased fully insured plans from the five largest commercial health insurance companies in California filed this lawsuit alleging that Sutter Health restricted competition in the healthcare market using anticompetitive tactics. A similar lawsuit, filed by a class of self-funded employers and labor unions in state court and later joined by the California Attorney General, was settled when Sutter Health agreed to pay $575 million in damages, avoid using anticompetitive contract clauses and agreed to limits on increases for out-of-network prices.

With a 2-1 split in the Court’s decision to overturn the case, the majority opinion states that the lower court improperly kept pre-2006 evidence out of the trial, which included internal memos from Sutter executives that would have helped the plaintiffs prove Sutter’s anticompetitive strategies resulted in overpayments. The majority opinion also held that the district court improperly removed “purpose” from the jury instructions, failing to instruct the jury to consider Sutter’s anticompetitive purpose as to the unreasonable course of conduct claim. The dissenting Judge would have affirmed the jury verdict, stating a belief that district courts, and not the appellate courts, have the authority to determine a reasonable cutoff date for relevant evidence.

The court’s decision reverses the district court’s 2022 judgment and remands the case for a new trial. No timeline has been determined and the parties could still reach a settlement.

The Source has been following these cases for over a decade and we will continue to update our coverage of this lawsuit as it unfolds.  Our analysis of case can be found on our Sidibe v. Sutter Health case page and our coverage of the settled, state case can be found on our UEBT v. Sutter Health case page.

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