California’s Sutter Health agrees to pay $228 million to settle antitrust lawsuit

By Mike Scarcella

April 28 (Reuters) - California’s Sutter Health, one of the largest health systems in the United States, has agreed to pay $228 million to resolve a class action lawsuit accusing it of artificially driving up insurance premiums.

Employers and individuals who sued Sutter in 2012 filed the proposed settlement late on Friday in the San Francisco, California federal court, seeking a judge’s approval.

The class of more than 3 million small businesses and individuals alleged Sutter violated U.S. antitrust law by forcing health plans to agree to contracts that prevented them from steering patients to lower cost, non-Sutter hospitals.

They sought damages for allegedly overpaying for health care from the 1990s to 2020, at one time asking for more than $400 million. The plaintiffs lost at a four-week jury trial in 2022, but a U.S. federal appeals court last year revived the lawsuit.

The case had been set for a retrial this spring.

The hospital and plaintiffs in a joint statement said the settlement “is what’s best for the parties, for patients and for the class, and the prospect of additional litigation is not in anyone’s interest.”

Sutter denied any wrongdoing in agreeing to settle. The plaintiffs’ lawyers said they would seek up to 33% from the settlement fund for legal fees, or about $76 million.

Nonprofit Sutter operates dozens of hospitals and clinics in northern California and generated more than $18 billion in revenue in 2024.

In 2021, a California state judge approved a $575 million settlement between Sutter and plaintiffs including the state of California and the United Food and Commercial Workers International Union and Employers Benefit Trust.

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: Jean Kim of Constantine Cannon, Matthew Cantor of Shinder Cantor Lerner and Azra Mehdi of The Mehdi Firm

For defendant: David Kiernan of Jones Day

Read more:

Verdict for Sutter Health in antitrust case overturned on appeal

Jury finds for Sutter Health in California antitrust trial

Jones Day wins bid opposing all-virtual trial in Sutter antitrust case