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How California’s antitrust laws are utilized

Antitrust laws are focused on removing unfair restraints from trade and commerce. Antitrust laws, whose foundation lies in the Sherman Act and Clayton Act, may be enforced in two ways:

  • The state attorney general can sue on the state’s behalf to end an unfair practice through a prohibitive injunction or by administering punishment via fines and consumer compensation.
  • Consumers or competing businesses can file a private ‘right of action’ in which they use a lawsuit to recover damages.

A recent case study

This past winter, Sutter Health agreed to pay a $575 million settlement in its antitrust case. The California Attorney General filed a case against Sutter Health, a large nonprofit health care system totaling 24 hospitals and 34 surgery centers in Northern California. The case came after a group of employers claimed Sutter Health had driven up market prices using its vast dominance in the region. Recently, the S&P Global Ratings downgraded Sutter Health’s bond ratings due to the combination of the settlement and the impact of COVID-19 raising doubts amongst investors.

The terms of the agreement

Sutter Health agreed to cease a series of actions that the Attorney General alleged unfairly squashed competition. One of these practices included ‘all-or-nothing’ contract arrangements that insisted insurers had to include all of Sutter Health’s hospitals if it wanted contracts with any one of them. The health care system will continue operating as a single system while it enacts these changes. The settlement included oversight by a ‘special monitor’ to ensure the entity complies with the terms of the agreement for a minimum of ten years.

Improving free trade and commerce

Settlements like the one against Sutter Health, according to California’s Attorney General Xavier Becerra, are integral to ‘restoring competition’ in economic markets. If your company is considering a lawsuit against a company using unfair competition tactics, contact a lawyer with experience in commercial business litigation.