Sidibe v. Sutter Health (Summary)

ANTITRUST

Sidibe v. Sutter Health, No. C 12-04854 LB (N.D. Cal. June 20, 2014)
The U.S. District Court for the Northern District of California dismissed a complaint from a class action lawsuit alleging that a healthcare system was involved in anticompetitive conduct in violation of antitrust law.

The company that owns and operates the largest network of hospitals in the area was alleged to be involved in anticompetitive behavior by initiating the use of “tying arrangements,” in which the company required hospitals to include high-priced plans in their health plan networks.

The court found that the complaint did not plead sufficient facts to support the proposed inquiry into the adequacy of the relevant geographic markets in question. Also, the complaint suggested that geographic markets be examined by the location where health plan members actually go. The court found, however, that the Sixth Circuit mandates analyzing geographic markets by examining the availability of substitute products.

Additionally, the complaint failed to properly define the geographic markets by stating that they were roughly congruent with the Dartmouth Atlas of Health Care’s definition of “hospital service area.” The court was unconvinced by this definition, and held that the Dartmouth Atlas was not sufficient to define relevant terms for antitrust purposes. Because the relevant geographic markets were not properly identified or supported in the complaint, the factual allegations stemming from the faulty definitions were dismissed entirely.