Antitrust Lawsuit Against Sutter Health by California AG Can Proceed, Judge Rules

Sutter Health failed in its attempt to persuade a San Francisco Superior Court judge to dismiss key claims in the antitrust lawsuit that California Attorney General Xavier Becerra filed about a year ago, alleging that the health care giant has used its market power to control prices and exclude competition.

“Yesterday’s court ruling is a giant step in the right direction,” Becerra said. “Hospitals that participate in anti-competitive practices to the detriment of their patients must be held accountable.”

Lisa Page, vice president of communications and public relations at Sutter, said: “Although we regret the court’s decision to deny the motion, the decision has no bearing on the ultimate resolution of the lawsuit. Whether the lawsuit is decided through additional motions or at trial by a jury, Sutter will continue to vigorously defend against plaintiffs’ claims.”

The health care provider has contended that the AG’s lawsuit would favor insurance carriers and increase their negotiating power. It also spelled out examples of how the AG’s demands would make doing business especially onerous: The company would have to use lengthy arbitrations to determine future contract terms, and it would have to negotiate contracts with insurers at staggered times, using separate teams that may not communicate with one another.

The AG’s lawsuit effectively subsumed a lawsuit by a grocery workers health plan, the UFCW and Employers Trust. That case also can proceed, Judge Anne-Christine Massullo stated in a 15-page decision issued late Thursday. The attorney general’s suit seeks payment for alleged overcharges incurred from any anti-competitive acts, something that plaintiffs in the class-action lawsuit against Sutter had been seeking since 2014.


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