A nine-member jury sided with Sutter in March 2022, following a four-week trial. The purchasers’ appeal landed in the Ninth Circuit later that year.
During oral arguments in August 2023, Judge Koh appeared to lean toward undoing Sutter’s victory, questioning the various pieces of evidence omitted from the trial. Judge Koh said at the time that the exclusion “just seems contrary” to state precedent.
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.
