Sutter Health is in the midst of a lawsuit for business practices that drove up health care prices for Californians

The coronavirus pandemic has unleashed more than a flood of disease in this country. It’s also expected to accelerate a wave of hospital mergers and acquisitions – with big hospitals buying up smaller ones. This consolidation, economists say, is one of the main reasons the cost of health care in this country is going through the roof.

There’s a lawsuit over this in COVID-ravaged California, with the state attorney general claiming that Sutter Health, a hospital chain based in Sacramento, got so big it had essentially become a monopoly.

On the eve of the trial, Sutter tentatively agreed to a settlement that’s awaiting a judge’s approval. But this is, even at this stage, a landmark case because it pulled back the curtain on what has rarely been seen or so thoroughly documented before: how and why hospital prices have been skyrocketing.

Sutter is a sprawling health care system that’s the largest and most dominant provider in Northern California.

Xavier Becerra: They’re like the bully on the block. They were able to bully everyone else to conform; it was my way or the highway.

The state’s attorney general, Xavier Becerra, filed a civil lawsuit against Sutter in 2018. We interviewed him before the pandemic and before he was nominated for secretary of Health and Human Services.

Xavier Becerra: They were gobbling up hospitals. They were gobbling up physicians through these physician practices. They were just munching away, getting bigger and bigger.

Till they amassed a conglomerate of 24 hospitals, 12,000 physicians, and a string of cancer, cardiac and other health care centers.

Xavier Becerra: Sutter got big enough that it could use its market power to dominate, to dictate. It was abusing of its power.

The suit accuses Sutter of embarking on “…an intentional, and successful, strategy…” of cornering much of the market in Northern California, and then jacking up prices — for example, on the price of delivering a baby.

To accesses the complete story, watch the 60 Minutes broadcast.

The Third Circuit has upended a Pennsylvania federal court ruling that a business wasn’t a joint employer to Medicaid-funded home care workers and thus didn’t have to face class claims it failed to pay them overtime, saying jurors could find otherwise based on the company’s role in the program.

In a nonprecedential opinion, a circuit panel on Monday overturned U.S. District Judge Jeffrey L. Schmehl’s Jan. 28 decision granting summary judgment to Public Partnerships LLC in a proposed class action from Ralph Talarico, noting that PPL establishes rules for the direct care workers, sets their working conditions and maintains their records.

“Whether PPL is Talarico’s employer is a genuine dispute as to a material fact because the evidence — viewed in the light most favorable to the nonmoving party, Talarico — does not so favor PPL that no reasonable juror could render a verdict against it,” according to the panel opinion authored by U.S. Circuit Judge Michael A. Chagares.

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Talarico launched the suit in 2017, claiming PPL violated the federal Fair Labor Standards Act and Pennsylvania wage laws by only paying overtime when direct care workers spent more than 40 hours a week with one client — if the extra hours were divided among multiple clients, they would only be paid at the regular rate, court documents state.

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Talarico attorney Christine E. Webber of Cohen Milstein Sellers & Toll PLLC told Law360 on Tuesday, “Plaintiffs are pleased that the Third Circuit recognized that there are disputes of fact, so that plaintiffs’ claim that PPL is their joint employer must go to trial. We look forward to the case returning to the district court, where we hope to establish PPL’s joint employer status, and ultimately recover overtime compensation for these hard working caregivers.”

Talarico is represented by Christine E. Webber and Paul I. Osadebe of Cohen Milstein Sellers & Toll PLLC, Richard Katz of Arnold, Beyer & Katz Law Firm and Rachhana T. Srey of Nichols Kaster PLLP.

Rhode Island Employees’ Retirement System, Providence, is suing Pinterest Inc. executives and board members, claiming they fostered a culture of discrimination and retaliation that also hurt its financial success.

The lawsuit filed Nov. 30 in U.S. District Court in San Francisco is supported by the $2 billion Ohio Laborers’ District Council and Contractors’ Pension Fund, Westerville.

The $8.5 billion Rhode Island pension fund charges that Pinterest’s top executives and board members “personally engaged in, facilitated or knowingly ignored the discrimination and retaliation against those who spoke up and challenged the company’s white, male leadership clique. As a result of defendants’ illegal misconduct, the Company’s financial position and its goodwill and reputation among its largely female user base (which Pinterest’s success depends upon) were harmed and continue to be harmed,” the complaint said.

Rhode Island Treasurer Seth Magaziner said in an emailed statement that “the Pinterest board’s deference to a culture of sexism and systemic discrimination has impaired Pinterest’s value and the value of the system’s investment in Pinterest.

The lawsuit charges Pinterest officials, including board Chairman and CEO Ben Silbermann, co-founder and board member Evan Sharp, and Chief Financial Officer Todd Morgenfeld with breaching their fiduciary duty, wasting corporate assets, abusing control and violating proxy solicitation disclosure rules.

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Rhode Island ERS is seeking corporate governance reforms and to have Pinterest executives and board members pay for the damages related to the alleged breaches of fiduciary duties. “We are bringing this action to meaningfully reform corporate governance at Pinterest and ensure this misconduct is addressed,” Mr. Magaziner said.

The lawsuit also references Pinterest’s dual-class share structure. After its initial public offering in April 2019, shares held by co-founders and pre-IPO stockholders were reclassified to give them most of the voting power, which the company noted in its 2019 10-K “limits or precludes other stockholders’ ability to influence corporate matters.”

The Employees’ Retirement System of Rhode Island says they breached their fiduciary duty.

The Employees’ Retirement System of Rhode Island is suing board members and top executives at Pinterest, alleging that they engaged in or ignored discrimination at the company.

The $8.5 billion retirement system, which is a Pinterest shareholder, is suing them on behalf of the company itself and the Laborers’ District Council and Contractors Pension Fund of Ohio.

The complaint follows a tough year for Pinterest: Black executives Ifeoma Ozoma and Aerica Shimizu Banks spoke out during the summer about being underpaid and discriminated against. Ex-chief operating officer Francoise Brougher filed a lawsuit soon after, alleging gender bias.

According to the retirement system’s complaint, filed on November 30, the company’s “white, male leadership clique” breached their fiduciary duty by “perpetrating or knowingly ignoring the long-standing and systemic culture of discrimination and retaliation at Pinterest.”

The retirement system alleged that this led to lawsuits, settlements, and a hit to the company’s reputation that ultimately affected Pinterest’s market value.

A Pennsylvania federal judge on Wednesday declined to throw out a proposed class action over EQT Corp.’s merger with Rice Energy, ruling that investors adequately alleged that EQT’s executives made statements about the benefits of the merger that “were simply not true at the time they were made.”

The natural gas producer’s investors claim that EQT misled them about anticipated operating efficiencies and cost reductions that ultimately failed to materialize after its $6.7 billion merger in 2017. In particular, the shareholders alleged that EQT said it would be able to achieve savings by drastically increasing its drilling locations despite the fact that the company knew there wasn’t actually enough undrilled space to do so.

EQT asked the court to nix the suit in January, arguing that investors behind the suit are attempting to “convert their disappointment” with the company’s post-merger performance into securities fraud. The company said that it was indeed possible for it to drill as many new wells as it had promised, thus its statements weren’t misleading.

But U.S. District Judge Robert J. Colville held Wednesday that the amount of acreage possessed by EQT and Rice and the amount of available, undrilled acreage that could be used were “knowable, quantifiable facts at the time defendants and their representations.”

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Shareholders lodged their securities suit in June 2019, alleging that EQT promised in investor calls, press releases and regulatory filings that the merger would bring $2.5 billion in synergies and save the company $100 million in 2018 alone. The company had said that combining oil and gas leases with Rice Energy would create large, contiguous areas for drilling longer horizontal gas wells in the Marcellus Shale, according to the suit.

But investors say the leases weren’t as close together as promised, and the company’s costs actually went way up after the merger, causing a $300 million increase in the cost of drilling in the third quarter of 2018 and a 13% stock drop that “eras[ed] nearly $700 million in shareholder value in a single day.”

Notably, the October 2018 earnings report at issue in the suit also led to a proxy fight between EQT and Rice Energy’s founders, who challenged the company’s post-merger strategy. The Rice founders ultimately won the battle last July, when shareholders overwhelmingly voted to give control of the company to brothers Toby and Derek Rice.

In September 2019, a Pennsylvania magistrate judge tapped Bernstein Litowitz Berger & Grossmann LLP and Cohen Milstein Sellers & Toll PLLC to lead the EQT action. The lead plaintiffs filed an amended complaint that December.

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As recently as March, the investors were represented by M. Janet Burkardt and Jocelyn P. Kramer of Weiss Burkardt Kramer LLC, Salvatore J. Graziano, Adam H. Wierzbowski, Jai K. Chandrasekhar and Brenna Nelinson of Bernstein Litowitz Berger & Grossmann LLP and Steven J. Toll, S. Douglas Bunch, Susan G. Taylor, Megan K. Kistler, Christina D. Saler and Jessica Kim of Cohen Milstein Sellers & Toll PLLC.

The complete article can be viewed here.

Top executives ignored allegations of discrimination, complaint says.

Pinterest shareholders are suing the company’s top executives, including CEO Ben Silbermann, for allegedly enabling a culture of discrimination. The toxic work environment has hurt the company’s reputation, leading to a user boycott and financial harm, the complaint alleges.

The CEO “repeatedly placed himself before the Company, surrounding himself with yes-men and marginalizing women who dared to challenge Pinterest’s White, male leadership clique,” the complaint says. The company ignored or silenced employees who tried to speak out.

The plaintiff in the suit is the Employees’ Retirement System of Rhode Island, which oversees $8.5 billion in public assets, including retirement funds for thousands of Rhode Island teachers, firefighters, and nurses.

The suit claims Pinterest executives and board members breached their fiduciary duty by failing to respond to allegations of workplace discrimination. “Even when presented with widespread claims of race and gender discrimination at Pinterest, the [executives and board members] did nothing to address this misconduct,” it says.

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This isn’t the first time shareholders have tried to hold companies accountable in the wake of significant press coverage. In September, Google’s parent company Alphabet settled a series of shareholder lawsuits claiming the company had created a toxic work environment where women were repeatedly sexually harassed. The complaints came after The New York Times reported the company protected former executive Andy Rubin, paying him $90 million after he was investigated for sexual harassment.

The complete article can be viewed here.

A Boeing shareholder told the Seventh Circuit during oral arguments Monday that the aerospace giant’s bylaws deprive shareholders of their rights to bring federal derivative claims over allegedly misleading proxy statements made about its 737 Max jets.

Seafarers Pension Plan, which has alleged in Illinois federal court that current and former Boeing board members and executives made false and misleading statements about the development and operation of 737 Max, is asking the Seventh Circuit to overturn a district court decision to enforce a forum selection clause in Boeing’s bylaws. Seafarers argues the clause, which states that the Delaware Chancery Court “shall be the sole and exclusive forum for … any derivative action,” takes away the right of shareholders to assert certain claims.

Enforcing the forum bylaw eliminates shareholders’ right to assert derivative claims under the Securities Exchange Act and violates Congress’s mandate that federal courts retain exclusive jurisdiction over those claims, Seafarers attorney Carol V. Gilden of Cohen Milstein Sellers & Toll PLLC told the three-judge panel.

“It’s quite clear there are strong federal interests in terms of protecting the securities markets, in terms of enforcing federal jurisdiction, that certainly outweigh any effort to, if you will, kick the case to Delaware,” Gilden said.

Delaware state court doesn’t have the full body of the law and all the regulations that come into play “when a company like Boeing files with the [U.S. Securities and Exchange Commission] a proxy statement that is then disseminated to investors and used to solicit their votes on things like the directors, executive compensation and shareholder proposals,” Gilden said.

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Seafarers contends in its lawsuit, filed in Illinois federal court in December 2019, that misrepresentations were made in proxy statements about the 737 Max so shareholders would “re-elect and entrench” the same problematic board members whose oversight failures caused the two crashes.

It says the district court overly relied on the Bonny decision when it granted Boeing’s dismissal bid in June.

Judges Frank Easterbrook, Diane Wood and David Hamilton sat on the panel for the Seventh Circuit.

Seafarers is represented by Carol V. Gilden, Megan Kistler, Amy Miller and Richard A. Speirs of Cohen Milstein Sellers & Toll PLLC.

Cohen Milstein Sellers & Toll PLLC has been recognized as a 2020 Practice Group of the Year by Law360 in four categories:  Class Actions, Environmental, Life Sciences and Securities. Cohen Milstein is the only plaintiffs’ firm to be recognized in the Environmental and Life Sciences categories, and one of only four plaintiffs’ firms to be recognized in more than one category.

The editors at Law360 selected Cohen Milstein from among over 775 nominations in recognition of the firm’s “landmark matters and general excellence.”

See a complete list of the 2020 honorees.

The U.S. Department of Justice put deal makers on notice last month with a very public rollout of a lawsuit blasting Bain & Co. for withholding documents regarding Visa Inc.’s latest mega-deal.

The lawsuit sought enforcement of a civil investigative demand, or CID, for documents the consulting firm generated advising the credit card giant on its $5.3 billion purchase of fintech company Plaid Inc. The move raised the specter the DOJ wanted to demonstrate its ire with third-party advisers that refuse to comply with information requests.

But the far quieter scuttling of the Bain lawsuit two weeks later generated new questions about the department’s plans.

Some antitrust professionals had speculated the Antitrust Division was trying to make an example out of Bain when it filed an Oct. 27 petition accusing the company of improperly withholding the material.

But then the DOJ challenged the merger itself Nov. 5, and just four days later, quietly dropped the petition against Bain. The department justified this by stating it will seek the same documents as part of the bigger merger challenge now underway in California federal court.

So why file the petition in the first place, only to render it moot with a lawsuit nine days later? The DOJ didn’t respond to a request for comment, but antitrust professionals have a few ideas.

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In first contesting Bain’s alleged noncompliance, the DOJ certainly seemed intent on highlighting broader frustrations with third parties that refuse to honor information requests. The petition itself derided Bain’s claim that the documents were privileged and argued that employing “unfounded privilege claims to withhold client’s documents is a pattern among consulting firms, accounting firms and investment banks.”

According to the DOJ’s petition, Bain itself referred to the document fight as a “familiar” row over privilege — but the department argues that consultants don’t provide protected legal advice, but rather “business expertise” that cannot be withheld as privileged.

The head of the Antitrust Division has also offered a few tantalizing hints about the agency’s broader concerns with CID compliance.

“The division’s petition against Bain is aimed at securing relevant documents and making clear that the division will hold third parties to the deadlines and specifications in the CIDs we issue,” Assistant Attorney General Makan Delrahim said in publicly announcing the petition.

Days later, but before the merger challenge was brought, Delrahim said during a Competition Policy International event Oct. 29 that he was “surprised” to learn the division hadn’t sought to enforce a CID in court in more than 25 years.

“One of our important functions is to have the data to properly analyze transactions. And it’s really important for parties to turn over the documents that we require,” Delrahim said at the time. “And so if there’s inappropriate claims of attorney-client privilege for some documents, we will challenge that in court. And in this matter, there’s a particular set of documents that we thought was very relevant that we need to have for this important transaction.”

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As for the Bain case, antitrust professionals offered a mixed assessment as to whether it represents a one-time dispute with a single company, or if it’s emblematic of a larger trend of noncompliance with information requests.

Joel Mitnick, a partner at Cadwalader Wickersham & Taft LLP and a former FTC trial attorney, said the Bain dispute is likely a one-off event. While Mitnick said some companies believe financial adviser communications are privileged and may balk at turnover deadlines, he has seen no broad problem with CID compliance.

It is common, however, to see some pushback on information requests, according to Benjamin Sirota, a Kobre & Kim LLP attorney and former DOJ Antitrust Division prosecutor. He says that discussions of CID scope and production are a recurring element in antitrust probes, and “it’s rare that there’s no negotiation whatsoever.”

Those negotiations usually come to a halfway point between demands and pushback, according to Douglas Gansler, a former Maryland attorney general who now heads Cadwalader’s state attorneys general practice and who focused his remarks on information demands from state enforcers.

“CIDs are almost always overbroad,” Gansler said, with “a fishing expedition element.” Recipients usually want to comply, he said, “but they want to do it in a reasonable way.”

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Daniel McCuaig, a longtime DOJ antitrust litigator who is now a partner at Cohen Milstein Sellers & Toll PLLC, similarly said CID compliance issues usually are resolved through negotiation or limited to the timeliness of responses. But he is also supportive of CID enforcement actions, lamenting a “hesitance” in the past to go to court.

In his own time at the DOJ, McCuaig said he and other trial attorneys asked several times to bring CID enforcement actions but were turned down or dissuaded from making formal requests.

“People were so concerned that we would get bad precedents that we sometimes acted as if those theoretical precedents already were on the books,” he said.

Bloomberg L.P. is again being accused of discriminatory workplace practices, this time by a current employee who is joining the lawsuit of a former reporter.

Naula Ndugga, currently a news producer for Bloomberg’s Quicktake vertical, is now part of the discrimination lawsuit filed in August by Nafeesa Syeed. She joins Syaeed’s allegations of pay and promotion practices that undermine women, and generally being subjected to a hostile work environment for women of color run by an all white and almost entirely male leadership team. But she laid out her specific experiences over three years of work in a revised complaint filed in court Friday night.

“Despite receiving positive feedback, Ndugga has repeatedly been overlooked for raises, promotions, favorable assignments, professional growth, and opportunities that were given to her male peers,” the complaint alleges.

Ndugga claims that she’s been paid less than her male peers since she started working at Bloomberg, first as an intern for $25 an hour and then full-time as a news producer for $65,000 a year. Men who were hired out of the same internship program got starting salaries of $75,000.

Ndugga has received one raise of an additional $1,500 a year during her time at Bloomberg, putting her current salary at $66,500, according to the complaint. Although she’s had positive performance reviews, the complaint claims she has seen at least 18 male peers receive higher pay and raises and been recommended for another raise the last two years by a senior male producer.

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Now, Sayeed and Ndugga are also represented by Cohen Milstein Sellers & Toll, a major plaintiff-side litigation firm in Washington that has worked on behalf of residents of Flint, Mich., in their lawsuits over water quality, in addition to the smaller Clancy Law Firm, which has brought other discrimination lawsuits against Bloomberg. The updated compliant includes new federal claims of discrimination under Title VII of the Civil rights Act. The initial complaint only claimed violation of state laws.

Beyond pay and promotion disparities, Ndugga claims discrimination went to the core of her work. When executives decided to give producers content by theme, male peers were asked which themes they preferred to cover, and Ndugga said she was not. Instead she was assigned the “scraps” that no one else took.

When she was again denied a raise in February, Ndugga pitched that she might move into a new role focused specifically on race and identity within her production team. She was allegedly rejected because she “already filled that role by being a Black woman on the team.” Meanwhile, the word “colored” was allegedly used in news scripts, according to the complaint.

In another instance, Ndugga asked a white male executive producer, David Meyers, why a video on global marathons included coverage of Uganda that depicted a white woman “holding seemingly impoverished Black Ugandan children.” Instead of discussing the issue, the producer allegedly yelled, threw his headphones in Ndugga’s direction and demanded that she go talk to him outside. She refused and the following day he emailed her, along with their boss Mindy Masucci, global content leader of Quicktake, saying she could report him to HR “if she felt so inclined,” while also accusing her of being “aggressive” and depicting her as an “angry Black woman,” according to the complaint.

This incident allegedly resulted in the executive producer boxing her out at work, not inviting her to staff meetings and cutting her off of emails, to the extent that her coworkers began forwarding them to her “so she would be aware of information needed for her job.”

Her complaints were allegedly ignored. But at the end of May, she was scheduled to conduct an on camera interview with a source to discuss the police killing of George Floyd, booking her guest and getting training. The interview was suddenly canceled and Ndugga was told “only ‘certain people’ were qualified to conduct live interviews,” despite men with similar levels of experience being allowed to do so, according to the complaint.

Overall, Ndugga claims Bloomberg’s all white and male editorial management committee have “refused repeatedly” this year to cover topics of race, “saying they didn’t want to “become the race channel.” She tried to bring up the issue of diversifying coverage on a call with editor in chief John Micklethwait and was again ignored. And yet, Ndugga claims that she’s been asked “many times” to “recount her own trauma, as a Black female to ‘help guide the team,’ only to be trivialized and mislabeled.”

Although Ndugga is currently employed by Bloomberg, by joining Sayeed’s lawsuit, she is seeking a declaratory judgment that Bloomberg has violated Title VII, engaged in discriminatory practices, and for damages of no less than $5 million. The women are still seeking class action status, to include similarly situated past and current Bloomberg employees.