Sidibe v. Sutter Health

Background

This supplemental order addressed proposed jury instructions in the plaintiffs’ antitrust action against Sutter Health and other defendants. Sutter asked the court to instruct the jury that it could consider a business-justification defense to the plaintiffs’ per se tying claim. A per se tying claim treats a qualifying tying arrangement as unlawful without applying the ordinary, broader analysis of whether the restraint is unreasonable under all the circumstances. The plaintiffs argued that procompetitive effects and business justifications were not relevant to that claim.

Sutter also requested a special verdict form requiring separate findings for each challenged contract provision and, alternatively, an instruction limiting damages to harm caused by antitrust violations. The plaintiffs argued that the challenged provisions and practices operated together as a single antitrust theory, so separate findings for each provision were not required.

Business Justifications

The court reviewed California and federal antitrust authorities. Although some decisions recognize a more nuanced approach to categorizing restraints, the court concluded that the weight of current California authority supports applying the per se tying rule without allowing business justifications as a defense. The court also reasoned that allowing such a defense would undermine the purpose of the per se rule by requiring a fact-intensive inquiry into the competitive effects of the challenged arrangement.

The court therefore adhered to its earlier conclusion that procompetitive justifications are relevant only to the plaintiffs’ rule-of-reason claim, not to the tying claim. The court’s stated conclusion was that, under current California law, business justifications are not a defense to the per se tying claim.

Damages and Verdict Form

The court held that the decisions cited by Sutter did not require separate damages findings for each challenged contract term. Unlike the situation discussed in Comcast, the plaintiffs here did not rely on multiple rejected antitrust theories. Instead, they alleged that the contract provisions and related practices operated together to restrain trade.

The court concluded that requiring the jury to decide whether each provision was independently unlawful could improperly prejudge whether the provisions, considered together, supported the plaintiffs’ single antitrust theory. The court therefore did not include a special-verdict question addressing each challenged provision separately.

The court adopted a damages instruction stating: “Any damages you award are limited to the damages from injury caused by conduct that violates the antitrust laws.” The court found that this instruction adequately addressed Sutter’s concern that the jury might award damages based on lawful conduct.

Disposition

The court stated that it had issued final jury instructions and a verdict form consistent with two rulings: business justifications were not a defense to the per se tying claim, and the individual aspects of the plaintiffs’ single antitrust theory did not need to be separately listed on the verdict form. The jury nevertheless would be instructed to limit any damages award to injuries caused by antitrust violations. The order stated that it disposed of ECF Nos. 1491, 1492, 1500, 1503, 1508, and 1509.