Djeneba Sidibe, Jerry Jankowski, Susan Hansen, David Herman, Optimum Graphics, Inc., and Johnson Pool & Spa (“Plaintiffs”) represent a certified class of individuals and businesses in Northern California who paid health insurance premiums to certain health plans run by Aetna, Anthem Blue Cross, Blue Shield of California, Health Net, and United Healthcare.

Plaintiffs are or were insured by health plans that contract with Sutter, a healthcare system that spans 24 hospitals, five medical foundations, and 40 ambulatory surgery centers.

Plaintiffs allege that Sutter charged supracompetitive rates to these health plans, which the health plans in turn passed on to Plaintiffs by charging higher premiums. Plaintiffs are therefore “indirect purchasers” of Sutter’s services, and their “theory of antitrust impact depends on two separate overcharges”: an overcharge by Sutter to the health plans, and an overcharge by the health plans to Plaintiffs.

Aetna Health of California Inc., Aetna Live Insurance Company, Anthem Blue Cross, Blue Shield of California, United Healthcare Services Inc., and Kaiser Foundation Health Plan Inc., are Intervenors in this action.

This litigation was filed in 2012 and has proceeded for over a decade. The lawsuit was certified as a class action in 2020, allowing it to proceed on behalf of millions of Californians with health plans from specific insurers.

The district court initially set a damages period beginning on September 28, 2008. This was four years before Plaintiffs sued in September 2012, reflecting the statute of limitations for all three statutes. Second, the district court granted summary judgment to Sutter on Plaintiffs’ monopolization claims (section 2 of the Sherman Act) and for all claims between 2008 and 2010. Thus, the damages period began on January 1, 2011. Third, the district court granted several of Sutter’s motions in limine to exclude evidence..

The case proceeded to trial in February 2022 at a San Francisco Federal District Court on Plaintiffs’ claims under the Cartwright Act only. Following a four week trial a jury returned a verdict in favor of Sutter. Plaintiffs appealed the entry of final judgment in favor of Sutter.

The 9th Circuit Court of Appeals reversed the district court’s entry of final judgment and remand for a new trial in the published case of Sidibe et. al. v Sutter Health -22-15634 (June 2024)

On appeal Plaintiffs contended that the district court impermissibly excluded relevant evidence, failed to instruct the jury to consider Sutter’s anticompetitive purpose, failed to instruct the jury that the relevant purchasers are the health plans, and wrongly denied Plaintiffs’ motion for sanctions against Sutter for the destruction of evidence.

In the 98 page Opinion, the Court of Appeals first addressed Plaintiffs’ contention that the district court contravened California law when it omitted the word “purpose” from the jury instructions on Plaintiffs’ unreasonable course of conduct claim and that the legal error was not harmless.

The panel held that the district court contravened California law by removing the word “purpose” from the Judicial Council of California Civil Jury Instructions and thus failing to instruct the jury to consider Sutter’s anticompetitive purpose as to the unreasonable course of conduct claim, and that the legal error was not harmless.

Plaintiffs’ second contention is that the district court abused its discretion in excluding pre-2006 evidence and that the error was prejudicial.

The panel held that the district court abused its discretion under Fed. R. Evid. 403 in excluding as minimally relevant all evidence of Sutter’s conduct before 2006, which was five years before the specific contracts that Plaintiffs alleged caused them harm were negotiated and took effect.

The excluded evidence concerned the inception, Sutter’s stated purpose, and effects of the conduct challenged during the trial. The panel held that Sutter failed to rebut the presumption that the error prejudiced Plaintiffs because, among other things, the excluded evidence would have rebutted Sutter’s testimony and arguments at trial.

For the foregoing reasons, the district court erred in failing to instruct the jury to consider Sutter’s anticompetitive purpose and in excluding highly relevant pre-2006 evidence. Accordingly, the Court of Appeals reversed the district court’s entry of final judgment and remand for a new trial.

Dissenting, Judge Bumatay would affirm the jury verdict.