A federal jury issued a unanimous verdict for our client in a $1.2 billion antitrust class action trial.
Plaintiffs alleged that Sutter Health violated antitrust laws by tying the sale of services across certain inpatient hospitals and imposing contracts that further prevented insurers from steering patients to lower-cost options. The lawsuit, first filed in 2012, claimed this led to artificially inflated premiums for the class of individuals and entities paying premiums for commercial health insurance. Plaintiffs sought $1.2 billion in damages, after trebling.
Plaintiffs claimed that Sutter’s anticompetitive conduct was enabled by its dominance in Northern California. Defense counsel retained Cornerstone Research to support Gautam Gowrisankaran of Columbia University in an analysis of market definition and market power.
Defense counsel countered that Sutter’s contracting practices did not impose an anticompetitive tie, and that Sutter lacked the perquisite market power to do so because of the ample competition it faces across Northern California markets.
Professor Gowrisankaran identified evidence and sources of competition overlooked by the plaintiffs’ expert in their analyses of market definition and market power. This included competition from Kaiser Permanente, a vertically integrated hospital system and insurer with a large and growing presence in Northern California. After Professor Gowrisankaran’s testimony, the presiding judge noted that he and the opposing expert witness were “excellent witnesses in person” and that the jury would “wrap their verdict around the expert.”
Following a five-week trial ending in March 2022, a federal jury in the U.S. District Court for the Northern District of California issued a unanimous verdict in Sutter Health’s favor.