Antitrust Law Daily Preliminary approval for $15M settlement in suit alleging contact lens price fixing
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Friday, June 5, 2020

Preliminary approval for $15M settlement in suit alleging contact lens price fixing

By J. Preston Carter, J.D., LL.M.

Under the terms of the settlement, 1-800 Contacts—the last remaining defendant—has agreed to pay more than $15 million.

The federal district court in Utah preliminarily approved a proposed settlement of a class action against online contact lens sellers alleging that consumers paid artificially-inflated prices for contacts due to the sellers’ anticompetitive agreements. Under the terms of the proposed settlement, contact lens seller1-800 Contacts (1-800) agreed to pay $15,100,000 to resolve the claims. The court preliminarily fould that the settlement raised no obvious reasons to doubt its fairness and provided a reasonable basis for presuming that the agreement satisfied the requirements of Federal Rules of Civil Procedure 23(c)(2) and 23(e) (Thompson v. 1-800 Contacts, Inc., June 3, 2020, Campbell, T.).

The court has set a fairness hearing to be held on October 20.

Background. 1-800 is the last remaining defendant in a series of antitrust lawsuits filed by consumers against contact lens sellers. The court previously entered orders granting preliminary approval to the terms of three proposed settlements with the other sellers. The plaintiffs’ motion for preliminary approval stated that the proposed settlement is modeled after the other three, the product of multiple rounds of intense negotiations among experienced counsel, and informed by years of litigation.

Settlement. The court found that the proposed settlement agreement, pursuant to which 1-800 has agreed to pay $15,100,000, resulted from arm’s-length negotiations between highly experienced counsel and falls within the range of possible approval. The court also preliminarily certified a 1-800 Settlement Class consisting of at least several million consumers geographically dispersed across the United States. And the court appointed settlement class counsel and class representatives.

The court also preliminarily approved the plaintiffs’ notice plan. The plaintiffs sought a single notice program to inform class members of the four settlements and a plan to distribute the $40 million settlement fund. The plaintiffs proposed a "direct notice program via e-mail, as well as a robust, multi-faceted media campaign to provide indirect notice through online publication and the establishment of a dedicated settlement website."

Finally, the court preliminarily approved the plaintiffs’ plan of distribution. The plaintiffs’ motion stated that the plan is based on a factual record amassed through discovery and has been crafted to treat members of the settlement class fairly and distribute the funds efficiently. Also, distributions are to be made through electronic means selected by the claimant: either ACH, Venmo, or PayPal. However, distributions could be sent by check via U.S. mail, if class members so request.

Attorneys: David W. Mitchell (Robbins Geller Rudman & Dowd LLP) and Scott E. Gant (Boies Schiller Flexner LLP) for J. Thompson. Brent O. Hatch (Hatch Law Group PC) for 1-800 Contacts Inc.

The case is No. 2:16-cv-01183-TC-DBP.

Companies: 1-800 Contacts Inc.

MainStory: TopStory Antitrust UtahNews GCNNews

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