UFCW & Employers Benefit Trust Files Antitrust Class Action Against Sutter Health

SAN FRANCISCO, CA--(Marketwired - Apr 7, 2014) - UFCW & Employers Benefit Trust (UEBT) filed a class action lawsuit today against Sutter Health for violations of California's antitrust and unfair competition statutes. The suit, brought in the San Francisco County Superior Court (case #14-538451), alleges that illegal restrictions in Sutter Health's anticompetitive contracts resulted in substantial overcharges by its hospitals that would not be possible in a free, competitive market.

"This lawsuit was filed to stop a healthcare conglomerate from improperly using its market power to insulate its hospitals from competition by high quality, lower-priced competitors. We expect to recover the resulting illegal overcharges that Sutter inflicted on California businesses and return the funds to the entities that paid them," said Richard Grossman, UEBT's lead counsel from the San Francisco law firm of Pillsbury & Coleman LLP.

UEBT is an employment benefits trust that pays most of the healthcare costs incurred by the members of the United Food and Commercial Workers union (UFCW) and their dependents in Northern California. UEBT is operated for the benefit of its 60,000 participants by representatives from UFCW and the unionized grocery and retail industry employers that fund the healthcare benefits provided to their employees.

The suit alleges that Sutter imposes contract terms that make it impossible for health plans to substitute quality competing hospitals for Sutter's higher-cost hospitals in locations where substitution would benefit their healthcare provider networks. It accuses Sutter of imposing illegal contract terms that prohibit any effort to incentivize health plan participants to choose a more cost-effective competing hospital over a higher-priced Sutter hospital. It also alleges that Sutter deliberately hides its higher prices from the self-funded health plans that later will have to pay them. As a result, UEBT and other similarly situated entities have no alternative other than to pay Sutter's illegally inflated healthcare prices.

Sutter is the largest healthcare provider in Northern California. It has a chain of at least 27 hospitals as well as physicians' organizations with more than 5,000 members; medical research facilities; home health, hospice, and occupational health networks; and long-term care centers.

Pillsbury & Coleman LLP is lead counsel for UEBT and the proposed class of California employers and healthcare trusts that self-fund the healthcare employment benefits they provide to their workers. UEBT also is represented by Farella Braun & Martel LLP, Davis Cowell & Bowe LLP and Cohen Milstein Sellers & Toll PLLC