Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Class certified for purchasers in antitrust case against surgical robot manufacturer, (Apr 1, 2025)

By Martin A. Steinberg, J.D.

The focus of the case is on Intuitive’s alleged anticompetitive conduct and its impact on the market, rather than its effect on individual class members.

The federal district court in San Francisco granted the Hospital Plaintiffs’ motion to certify a class in their antitrust case against Intuititive Surgical to include “all entities that purchased da Vinci service and EndoWrist systems from Intuitive in the U.S. at any time from May 21, 2017, to December 31, 2021.” Plaintiffs Larkin Community Hospital, Franciscan Alliance, Inc., and King County Public Hospital District No. 1 (dba Valley Medical Center) (together “Hospital Plaintiffs”) filed the class action against Intuitive Surgical, Inc. (Intuitive) for creating schemes of tying, exclusive dealing, and monopolization in the market for servicing of its robots in violation of Sections 1 and 2 of the Sherman Act. This is one of two related cases alleging anticompetitive conduct by Intuitive. The two cases involve similar antitrust claims, with this case brought by customers and the other by a competitor. Hospitals run by the Departments of Defense and Veterans Affairs are excluded from the Class (In Re Da Vinci Surgical Robot Antitrust Litigation, No. 3:21-cv-03825-AMO (N.D. Cal. Mar. 31, 2025)).

Background. Intuitive manufactures sophisticated medical devices used in surgical procedures. Intuitive designs, manufactures, and sells minimally invasive surgical robots (MISR) known as da Vinci Surgical Systems (da Vinci). In 2000, Intuitive’s da Vinci became the first surgical robot approved by the FDA. In 2003, Intuitive acquired Computer Motion and phased out Computer Motion’s Zeus surgical robot, leaving the da Vinci as the only surgical robot capable of performing soft tissue surgery between a patient’s pelvis and neck with a meaningful market share in the U.S. Plaintiffs presented evidence from an expert that Intuitive has maintained a share of the surgical robot market that exceeds 99% for the past several years.

Intuitive also manufactures surgical instruments that work with the da Vinci system, called EndoWrists, which are surgical instruments attached to the da Vinci’s mechanical arms. Intuitive controls the frequency of EndoWrist instrument replacement through a built-in self-destruct mechanism, which utilizes a “use counter.”

Hospital Plaintiffs are three entities that own da Vinci systems and sought to represent a putative class of other da Vinci purchasers. Larkin operates two hospitals in Florida, and in 2017, it leased two da Vincis. Franciscan operates several hospitals in the Midwest. It previously owned several da Vinci Si systems, but it replaced them over time between 2015 and 2020 and currently operates only one da Vinci system. Valley currently owns two systems. Franciscan and Valley had long-term service contracts with Intuitive throughout the relevant period; Larkin had a service contract for part of the period.

Each purchaser or lessor of a da Vinci enters into a Sales, Licensing and Service Agreement (SLSA) or corresponding lease agreement with Intuitive. These contracts with hospitals and surgery centers prohibit any repair or modification of EndoWrist devices and limit the use of EndoWrist devices to the maximum number of uses mandated by Intuitive. If a da Vinci customer violates these provisions, the contract provides that Intuitive may cease servicing the robot, cancel its warranty, terminate the contract, and withhold the sale of instruments and replacement parts.

Rule 23(a). First, the court found that the class is sufficiently numerous, making it impracticable to join all members. Intuitive also admitted in its Answer that the Class contains thousands of members.

Second, commonality is readily satisfied because the focus of the case is on Intuitive’s alleged anticompetitive conduct, along with its impact on the market, rather than its effect on individual class members. For the commonality assessment, common contentions regarding Intuitive’s market-wide conduct, including threshold questions of market definitions, can be resolved in one stroke. Hospital Plaintiffs rely on common evidence to prove their claims, with a substantial reliance on the expert opinions of Prof. Einer Elhauge. His opinions pertain to common questions related to defining the relevant markets and whether Intuitive has market power in those markets. Common questions of law similarly apply to Intuitive’s antitrust liability, including whether Intuitive engaged in anticompetitive conduct, and whether that conduct ultimately violated federal antitrust law.

Third, regarding typicality, the Plaintiffs presented sufficient evidence of a market-wide impact to proceed against Intuitive’s allegedly anticompetitive practices. The purported “lack of interest” does not render these Hospital Plaintiffs’ claims untypical, and Hospital Plaintiffs satisfy the typicality element overall. The test of typicality is whether the other members have had a similar injury, whether the action is based on conduct, which is not unique to the named plaintiffs, and whether the same course of conduct has injured other class members. The claims, however, do not need to be substantially identical.

Although Valley Medical may be considered a government entity in a broad sense, it is not a government hospital within the context of this case. Further, any potential ambiguity in the Plaintiffs’ class definition can be clarified to include Valley Medical. Regarding Larkin, Intuitive argued that it is not a typical class member because it released its claims against Intuitive in early 2024. However, Intuitive made no effort to raise the release as a defense until its opposition brief in the instant motion. Intuitive thus waived its release as an affirmative defense by failing to assert it in a timely manner. Franciscan’s claims are also typical of the rest of the Class because Intuitive’s prohibition on third-party repair of EndoWrists applied to every class member regardless of the discrete clause that Intuitive contends was omitted from Franciscan’s agreement.

Fourth, the court found that the Class representatives possess the same interest and suffered the same alleged injury as the class members, indicating that their interests are aligned. The Plaintiffs and members of the proposed class share an interest in proving that Intuitive’s conduct violated the antitrust laws, and Plaintiffs have diligently litigated this case. Accordingly, the court found that the proposed Class Representatives satisfy the adequacy requirement. Moreover, the court confirmed Spector Roseman and Kodroff, P.C., Hausfeld LLP, and Cohen Milstein Sellers & Toll PLLC as Co-Lead Class Counsel.

Rule 23(b)(3). The court first found that common issues and common proof of antitrust violations predominate. The predominance inquiry requires Plaintiffs to demonstrate that common questions predominate as to each cause of action for which they seek class certification. In support of their Section 1 claims, Hospital Plaintiffs point to the SLSA contracts Intuitive formed with its customers. Every SLSA contract with every Class member prohibited EndoWrist repair and replacement, as well as da Vinci servicing, by third parties.

Regarding the Section 2 claim, they present common evidence that Intuitive maintains monopoly power in the relevant markets. Hospital Plaintiffs show, for example, that Intuitive and other industry participants do not consider MIST robots to be in direct competition with traditional surgical procedures, and that alternative forms of surgery do not constrain Intuitive’s robot prices to competitive levels. They further demonstrated that Intuitive has enjoyed a near-complete monopoly (99.5-99.6% market share) in the MIST robot market since introducing its da Vinci in 2000.

The dispute regarding proof of antitrust harm accordingly boiled down to a merits question limited to the tying claims, leaving the exclusive dealing and monopolization claims intact and ripe for class-wide assessment. Plaintiffs need not prevail on their claims as a matter of law at this stage. Instead, they must demonstrate that a common issue could be resolved in a single stroke. With the assistance of Prof. Elhauge’s opinion, the Hospital Plaintiffs showed that common issues predominate. If a jury is persuaded by Hospital Plaintiffs’ class-wide evidence at trial, the Class as a whole will win, and if the jury remains unpersuaded, the entire Class will lose. The Class members’ claims are entirely cohesive and will prevail or fail together such that no further inquiry into the merits is appropriate. Thus, the court found that common issues of antitrust impact predominate.

Once plaintiffs have established an antitrust violation and antitrust injury, courts require only a reasonable estimate of the amount of damages they have suffered. Prof. Elhauge presented a method for calculating class-wide damages. Having already found his damages model adequate to survive Intuitive’s Daubert challenge, the court concluded that his damages model also meets the standard for Rule 23(b)(3) predominance.

Regarding superiority, the court concluded that maintaining this action as a class action would be superior to individual actions. Intuitive’s argument that the class will be unmanageable because it includes state and local hospitals misunderstood the Class definition, and it ignored the bounds proffered by the Hospital Plaintiffs and Elhauge. As Intuitive acknowledged, Elhauge’s damages calculations excluded only hospitals run by the Departments of Defense and Veterans Affairs and otherwise include other hospitals that are state and local governmental entities, such as Valley Medical. The exclusion of hospitals run by the Departments of Defense and Veterans Affairs appears to be readily achievable, and Hospital Plaintiffs raise no dispute about refining the class definition to include state and local hospitals more clearly.

Rule 23(b)(2). Hospital Plaintiffs additionally sought to certify a class for injunctive relief under Rule 23(b)(2). Unlike Rule 23(b)(3), Plaintiffs do not need to show that the predominance of common issues or the superiority of class adjudication exists to certify a Rule 23(b)(2) class. Whether Intuitive’s conduct is anticompetitive requires a market-wide analysis, and if found to be unlawful, any potential injunctive remedy necessary to address such market-wide conduct is necessarily indivisible. Thus, the proposed class satisfied the requirements of Rule 23(b)(2).

The general contours of an injunction sought by Plaintiffs may include a prohibition on the enforcement of portions of Intuitive’s contracts that implicate unlawful tying or exclusive dealing for EndoWrists and service. That level of specificity was sufficient at this stage, the court held. A more specific injunction will depend on further fact-finding and the claims that the Plaintiffs prove through subsequent litigation. Therefore, to the extent that Hospital Plaintiffs seek to certify a Rule 23(b)(2) class for injunctive relief only, the court granted the motion for class certification.

The Case is No. 3:21-cv-03825-AMO.

Judge: Olguín, A.

Attorneys: Bonny E. Sweeney (Hausfeld LLP) for Larkin Community Hospital. Crystal Lohmann Parker (Paul, Weiss, Rifkind, Wharton & Garrison LLP) for Intuitive Surgical Inc.

Companies: Larkin Community Hospital; Intuitive Surgical Inc.

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