Sidibe v. Sutter Health
2013 U.S. Dist. LEXIS 160512
N.D. Cal.2013Background
- Plaintiffs Sidibe and Dewey (putative class members) allege Sutter Health used "all-or-nothing" and "steering" contract terms with commercial insurers to force inclusion of all Sutter providers and incentivize use of Sutter facilities, raising prices and suppressing competition.
- Plaintiffs assert tied markets: Inpatient Hospital Services (tying product) and 38+ Specialty Provider Services (tied products); geographic markets alleged as local (county-level) and a larger regional "Linked Geographic Market."
- Plaintiffs claim antitrust injuries (higher premiums, co-pays, lower quality) and seek damages and equitable relief under Sherman Act §§ 1–2, California Cartwright Act, the UCL, and unjust enrichment.
- Sutter moved to dismiss under Rule 12(b)(6), arguing Plaintiffs failed to plead plausible relevant product/geographic markets, failed to plead anticompetitive effects in tied markets, and failed to allege monopoly power or improper acquisition/maintenance.
- The court granted dismissal without prejudice, finding the Second Amended Complaint did not plausibly define the relevant markets and therefore failed to state tying, monopolization, and related state-law claims; leave to amend was granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of relevant market definitions | Plaintiffs: markets are local (county) and regional; methodology in SAC suffices at pleading stage | Sutter: markets are vague/indeterminate, boundaries unsupported by facts | Court: Dismissed Sherman Act claims — markets not plausibly pleaded (must identify and support geographic boundaries) |
| Tying (per se and rule-of-reason) | Plaintiffs: Sutter ties inpatient access to purchase of specialty services; per se and rule-of-reason liability alleged | Sutter: Plaintiffs fail to plead market power in tying market and anticompetitive effect in tied markets | Court: Dismissed tying claims — no factual showing of adverse impact on a not-insubstantial volume of commerce in tied markets and markets undefined |
| Monopolization / Attempted monopolization (§2) | Plaintiffs: Sutter has market power via high local share and acquisitions, used contracts and acquisitions to exclude competition | Sutter: Plaintiffs fail to define market, show monopoly share, barriers to entry, or wrongful exclusion | Court: Dismissed §2 claims — lack of plausible market definition and insufficient allegations of willful acquisition/maintenance or dangerous probability of monopoly |
| State-law claims (Cartwright Act, UCL, unjust enrichment) | Plaintiffs piggyback state claims on federal antitrust theory | Sutter: State claims fail if federal claims dismissed | Court: Dismissed state claims for same reasons as federal claims; dismissal with leave to amend |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading requires plausibility to proceed to discovery)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for factual allegations)
- Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28 (market power requirement in tying claims)
- Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2 (rule of reason tying framework)
- Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (elements of attempted monopolization)
- Forsyth v. Humana, 114 F.3d 1467 (9th Cir.) (monopolization standards and market-definition requirement)
- Cascade Health Solutions v. PeaceHealth, 515 F.3d 883 (9th Cir.) (tying and leveraging market power analysis)
- Newcal Indus., Inc. v. Ikon Office Sols., 513 F.3d 1038 (9th Cir.) (relevant-market pleading can be dispositive on 12(b)(6))
- Brantley v. NBC Universal, Inc., 675 F.3d 1192 (9th Cir.) (tying elements discussion)
- Digidyne Corp. v. Data Gen. Corp., 734 F.2d 1336 (9th Cir.) (Ninth Circuit discussion on per se tying prerequisites)