Farella Braun + Martel Files Lawsuit to Hold Down Healthcare Costs

April 8, 2014 Announcement

Complaint alleges that Sutter engages in anticompetitive practices that result in overcharges of nearly 40% to employers for the same services offered by competing hospitals.   

San Francisco (April 8, 2014):  Farella Braun + Martel LLP today joined several other law firms in filing a class action complaint against Sacramento-based Sutter Health, alleging that Sutter engages in anticompetitive conduct in violation of the California Cartwright Act and the state Unfair Competition Law.  

“This is an important case for everyone concerned with the high cost of healthcare.  Sutter’s illegal actions have caused healthcare costs in San Francisco and throughout Northern California to be approximately 38% higher than the cost for the same medical services in Southern California, where Sutter has no hospitals,” said Farella lead attorney John L. Cooper.   

The case, UFCW & Employers Benefits Trust v. Sutter Health, et al., Case No. 14-538451, (Link to Complaint) was filed on behalf of a class of “Self-Funded Payors,” also known as self-insured entities, which provide healthcare benefits to their employees.  These employers are typically larger businesses that paid Sutter’s higher prices when their employees used the services of any of Sutter’s 27 general acute care hospitals in Northern California.   

According to the complaint, Sutter has violated the law by prohibiting employers from knowing in advance the cost of particular procedures and from offering their employees incentives to choose Sutter’s lower-priced competitors..  Sutter’s practices maintain inflated prices insulated from competition by other hospitals.  Sutter also forces healthcare insurance providers to include all Sutter hospitals in their provider networks regardless of employer and patient preferences for only certain Sutter hospitals.  Together, these contracting practices unlawfully restrain competition and constitute price tampering in violation of California’s antitrust and unfair competition laws.  

The lawyers at Farella representing the plaintiffs include John L. Cooper, Roderick M. Thompson, Christopher C. Wheeler, Alex Reese, and Janice W. Reicher.  Richard L. Grossman of Pillsbury & Coleman is the lead attorney for the class, which is also represented by attorneys at Cohen Milstein Sellers & Toll and Davis Cowell & Bowe. 

Farella Braun + Martel represents clients throughout the United States and abroad in sophisticated business transactions and complex commercial, civil and criminal litigation. Farella lawyers are known for their imaginative legal solutions, dynamism and intellectual creativity. With an unwavering service ethic and interdisciplinary team approach, the firm is committed to advancing clients' objectives in the most effective, coordinated and efficient manner. Founded in 1962, Farella is headquartered in San Francisco and maintains an office in the Napa Valley focused on the wine industry. 

Melinda Hepp / Traci Stuart   
Blattel Communications    
[email protected] / [email protected]

Cheryl Loof
Farella Braun + Martel
[email protected]