June 4 (Reuters) - A U.S. appeals court on Tuesday revived a $411 million antitrust class action accusing California health system Sutter Health of engaging in anticompetitive behavior that artificially drove up insurance premiums, overturning a verdict against the plaintiffs and ordering a new trial.
A 2-1 panel of the 9th U.S. Circuit Court of Appeals found that the San Francisco jury that delivered a verdict in favor of Sutter in March 2022 was given improper instructions and prevented from hearing relevant evidence.
Matthew Cantor, a lawyer for the plaintiffs, said his clients did not have a "full and fair opportunity" to have their claims heard by a jury, and looked forward to the new trial.
"We agree there were both instructional and evidentiary errors at trial," Cantor said.
"Sutter Health is disappointed by today's divided appellate ruling and did not violate antitrust laws. Sutter Health intends to pursue all avenues to overturn the erroneous decision", a Sutter Health spokesperson said.
The case was brought by individuals and employers who accused the health system of forcing health plans to agree to contracts that prevented them from steering patients to lower cost, non-Sutter hospitals.
They sued on behalf of a class of about three million individuals and small businesses, who plaintiffs' lawyers said paid higher premiums for health policies from insurers including Anthem Blue Cross, Aetna and United Healthcare from 2011 to 2020 as a result of Sutter's conduct.
Circuit Judge Lucy Koh wrote on Tuesday for the majority that the lower court judge wrongly kept all evidence before 2006 out of the trial, including internal Sutter documents that could have helped plaintiffs prove that the company was pursuing an anticompetitive strategy.
Even though that evidence predated the specific conduct at issue in the case, it "was essential to prove these specific allegations and thus plaintiffs' theory of the case as a whole," she wrote.
Circuit Judge Patrick Bumatay, dissenting, said district courts had the discretion to set "reasonable limits" on evidence, and that appeals courts should generally defer to them.
"After all, trials can't last forever and jurors can't always process 5, 10, or 20 years of evidence," he wrote.
Nonprofit Sutter, which operates more than two dozen hospitals and clinics in northern California, reported about $15.8 billion in revenue last year.
The case is Sidibe v. Sutter Health, U.S. District Court for the Northern District of California, No. 3:12-cv-04854-LB.
For plaintiffs: Matthew Cantor of Constantine Cannon
For Sutter: Craig Stewart of Jones Day
Read more:
Jury finds for Sutter Health in California antitrust trial (Reporting By Brendan Pierson in New York and Disha Mishra in Bengaluru)
