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In Tuesday's majority opinion, Judge Koh said the purchasers' theory of antitrust injury is key to understanding the Ninth Circuit's findings. Before the early 2000s, each Sutter provider negotiated its own contracts with health plans, and that meant that the local market conditions determined which party had the upper hand, she said.

Because of Sutter's status as the largest healthcare system in Northern California, there are several markets in which Sutter faced little competition for inpatient hospital services, if any competition at all, according to the opinion. The purchasers thus claim that Sutter's providers had market power in those areas, allowing them to charge higher prices, the majority said. However, in other areas, the purchasers noted that Sutter's providers still competed.

Their main contention is that Sutter tried to use its market power in the uncompetitive areas to charge higher prices in the competitive regions as well, the majority said.

"To do so, around the turn of the millennium Sutter began contracting with health plans on a 'systemwide' basis, meaning that one contract governs the relationship and imposes common terms between a health plan and all Sutter providers," the opinion states.

That systemwide contracting ultimately gave Sutter more leverage in negotiations with health plans and became the way in which Sutter imposed the allegedly anticompetitive contract terms, the purchasers claim.

The district court determined 2006 to be the cutoff date for evidence, reasoning that Sutter's systemwide contracts were renegotiated regularly and the contracts they had alleged were negotiated around 2011, according to the majority. But that reasoning "conflated plaintiffs' theory of liability with any damages to which plaintiffs would be entitled if they prevailed at trial," the majority said.

"Indeed, pre-2006 evidence is highly relevant to both plaintiffs' tying claim and their unreasonable course of conduct claim," Judge Koh wrote.

Specifically, the purchasers were barred from presenting evidence regarding admissions by Sutter executives, Sutter's switch from the individual negotiating to the systemwide contracting system, Sutter's imposition of the allegedly anticompetitive contract terms during that transition, and the health plans' objections to those terms and the switch.

Among that excluded evidence were memos and testimony from Sutter executives in which they discussed the "increased leverage," potential gains and likely opposition from insurers when it came to systemwide contracting. At one point, Sutter's then-Chief Financial Officer Robert Reed gave a deposition in which he stated that the purpose of making the switch was to garner "vastly better results," results that he clarified meant "better pricing," according to the order. And in a 2006 memo, future CEO Sarah Krevans stated, "Related to the health plans, we force them to pay us more. They do pay us more, and they don't like us … Mainly we pushed them because we could," per the order.