Sidibe v. Sutter Health

District Court, N.D. California·Decided March 11, 2022·No. 3:12-cv-04854·Unknown

Opinion

San Francisco Division DJENEBA SIDIBE, et al., Case No. 12-cv-04854-LB

Plaintiffs, SUPPLEMENTAL ORDER v. REGARDING JURY INSTRUCTIONS

SUTTER HEALTH, et al., Re: ECF Nos. 1491, 1492, 1500, 1503, Defendants. 1508, and 1509. Sutter has asked the court to instruct the jury to consider a “business justification” defense to the plaintiffs’ per se tying claim.1 The plaintiffs contend that procompetitive effects or “business justifications” do not apply to their per se tying claim and cite several cases supporting that position.2 The court previously held that “procompetitive justifications are relevant only to the rule-of-reason claim, not the tying claim.”3 The weight of existing California law and the purpose of the per se tying rule favor the plaintiffs’ position that procompetitive effects are not relevant to 1 Def.’s Br. re Jury Instrs. – ECF No. 1491 at 9–16. Citations refer to material in the Electronic Case File (ECF); pinpoint citations are to the ECF-generated page numbers at the top of documents. 2 Pls.’ Mem. of P. & A. re Jury Instrs. – ECF No. 1135 at 9–14; Pls.’ Mem. re Jury Instrs. – ECF 1492 at 4–5. the per se tying claim. The court, therefore, does not depart from its prior conclusion on this issue. Sutter also has asked the court to provide the jury with a special verdict form that “identif[ies] each of the challenged provisions and ask[s] the jury whether the effect of that provision was to restrain trade (either alone or together with the other provisions).”4 Alternatively, Sutter proposes that, “at the very least,” the court should instruct the jury that “damages must be limited to the harm that results from conduct that violates the antitrust laws.”5 Sutter’s request is primarily based on the decision in City of Vernon v. S. California Edison Co., where the court held that plaintiffs’ damages study was flawed because it “failed to segregate the losses, if any, caused by acts which were not antitrust violations from those that were” and affirmed the district court’s award of summary judgment to the defendant. 955 F.2d 1361, 1372–73 (9th Cir. 1992). Sutter also relies on the Supreme Court’s decision in Comcast Corp. v. Behrend, where the Court reversed an order granting class certification based on flaws in the damages model. 569 U.S. 27, 38 (2013). The plaintiffs oppose the proposed disaggregation instruction. The plaintiffs contend that the Comcast and City of Vernon decisions are inapplicable because the plaintiffs’ theory in this case is that certain clauses in the same contract operate synergistically to restrain competition.6 Based on the specific facts at issue in this case and the nature of the plaintiffs’ antitrust theory, the court will not include a special-verdict-form question addressing each of the challenged provisions separately, but will instruct the jury that “[a]ny damages you award are limited to the damages from injury caused by conduct that violates the antitrust laws.”7 1. Procompetitive Defenses to the Per Se Tying Claim The plaintiffs rely on several recent California and federal cases that articulate the per se tying rule without mentioning a defense based on procompetitive effects. First, the plaintiffs cite 4 Def.’s Br. re Jury Instrs. – ECF No. 1491 at 6. 5 Def.’s Resp. to Pls.’ Br. re Jury Instrs. – ECF No. 1509 at 2. 6 Pls.’ Br. re Jury Instrs. – ECF No. 1508 at 3–4. In re Cipro Cases I & II, where the court held that “[t]he per se rule reflects an irrebuttable presumption that, if the court were to subject the conduct in question to a full-blown inquiry, a violation would be found under the traditional rule of reason.”8 61 Cal. 4th 116, 146 (2015) (applying the Cartwright Act) (quoting Fisher v. City of Berkeley, 37 Cal. 3d 644, 666 (1984), aff’d, 475 U.S. 260 (1986)). Second, the plaintiffs cite Corwin, where the court said, “[t]ying arrangements are illegal per se ‘whenever a party has sufficient economic power with respect to the tying product to appreciably restrain free competition in the market for the tied product.’”9 4 Cal. 3d 842, 856 (1971) (applying the Cartwright Act). The plaintiffs also cite a Northern District case where the court — applying the Cartwright Act — held that “[a] tying arrangement can be per se illegal under either Section 16726 or 16727 if a defendant had sufficient economic power in the tying market to coerce the purchase of the tied product or a substantial amount of sale was affected in the tied product. . . . [T]he rule of reason does not apply, and the plaintiff need not separately prove a resulting adverse effect on competition in the market.”10 Nicolosi Distrib. Inc. v. BMW of N. Am., No. C 10-03256 SI, 2011 WL 1483424, at *4 (N.D. Cal. Apr. 19, 2011) (cleaned up).11 In short, several courts have articulated a per se tying rule that does not allow a defense based on procompetitive effects. These cases support the plaintiffs’ position that procompetitive effects are not relevant to the tying claim. Nonetheless, the main California Supreme Court cases suggest a modern trend toward less categorical rules and appear to recognize that some consideration of business justifications is possible even in per se tying cases. In In re Cipro Cases I & II, the California Supreme Court said,

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