NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS JUN 4 2024

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

DJENEBA SIDIBE; JERRY JANKOWSKI; No. 22-15634

SUSAN HANSEN; DAVID HERMAN;

OPTIMUM GRAPHICS, INC.; JOHNSON D.C. No. 3:12-cv-04854-LB POOL & SPA, on Behalf of Themselves and All Others Similarly Situated,

MEMORANDUM*

Plaintiffs-Appellants,

v.

SUTTER HEALTH,

Defendant-Appellee, ______________________________

AETNA HEALTH OF CALIFORNIA, INC.;

AETNA LIFE INSURANCE COMPANY;

ANTHEM BLUE CROSS; BLUE SHIELD

OF CALIFORNIA; UNITED

HEALTHCARE SERVICES, INC.; KAISER

FOUNDATION HEALTH PLAN INC.,

Intervenors.

Appeal from the United States District Court for the Northern District of California Laurel D. Beeler, Magistrate Judge, Presiding

Argued and Submitted August 24, 2023 San Francisco, California

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: BUMATAY, KOH, and DESAI, Circuit Judges.

Djeneba Sidibe, Jerry Jankowski, Susan Hansen, David Herman, Optimum

Graphics, Inc., and Johnson Pool & Spa (collectively “Plaintiffs”), representatives

of a certified class of businesses and individuals that paid health insurance

premiums to certain health plans, appeal the entry of final judgment after a jury

verdict in favor of Defendant Sutter Health (“Sutter”) on Plaintiffs’ claims of tying

and unreasonable course of conduct under the California Cartwright Act. See Cal.

Bus. & Prof. Code § 16720 et seq. We have jurisdiction under 28 U.S.C. § 1291.

In this memorandum disposition, we address the district court’s denial of sanctions

and its refusal to instruct the jury that health plans are the only relevant purchaser

when defining the market. Regarding these issues, we affirm.1

1. The district court did not err in refusing to instruct the jury that health

plans are the only relevant purchaser when defining the market. “Definition of the

relevant market is a factual question ‘dependent upon the special characteristics of

the industry involved and we will not disturb such findings unless clearly

erroneous.’” Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s Health Sys., Ltd.

1 In a concurrently filed opinion, we address the district court’s exclusion of pre- 2006 evidence and failure to instruct the jury to consider purpose when evaluating unreasonable course of conduct under California law. As to these issues, a majority of the panel reverses and remands. Judge Bumatay dissents from that decision and concurs only in this memorandum disposition.

2 (“St. Luke’s”), 778 F.3d 775, 783 (9th Cir. 2015) (quoting Twin City Sportservice,

Inc. v. Charles O. Finley & Co., 676 F.2d 1291, 1299 (9th Cir. 1982)); see also

High Tech. Careers v. San Jose Mercury News, 996 F.2d 987, 990 (9th Cir. 1993)

(“The process of defining the relevant market is a factual inquiry for the jury.”).

Under the commonly accepted two-stage model of healthcare competition, health

plans are the focus because “the impact of a [small but significant nontransitory

increase in price] would not register” with patients. St. Luke’s, 778 F.3d at 785.

However, this does not mean that patients are irrelevant. Patient preferences and

behaviors can affect the relative bargaining positions of health plans, and thus

affect price negotiations. Thus, the identity of the relevant purchaser is a question

of fact, and the district court did not err in leaving this question for the jury.

2. The district court did not abuse its discretion in denying sanctions for

Sutter’s destruction of evidence. First, the district court’s assertion that “the record

does not suggest any destruction of evidence relevant to this case” is not based on a

categorical exclusion of pre-2006 evidence, but on an assessment of the record,

including Plaintiffs’ failure to request discovery preceding 2006 and Plaintiffs’

failure to identify categories of destroyed documents that they believed would be

relevant. Second, the district court applied the correct legal standard for intent,

under which “bad faith is required for inherent power sanctions.” Fink v. Gomez,

239 F.3d 989, 993 (9th Cir. 2001). Finally, the district court was correct that, even

3 if a presumption of prejudice applied, the presumption had been overcome.

AFFIRMED.

4