Contact lens makers claim Utah’s new anti-price fixing law benefits one company

Posted at 11:53 AM, Jul 03, 2015
and last updated 2015-07-03 13:53:12-04

SALT LAKE CITY — In new filings before a federal appeals court, two contact lens manufacturers argue that the state’s new law prohibiting them from price-fixing benefits one company.

“This appeal concerns the State of Utah’s effort to regulate interstate commerce for the benefit of a favored in-state company,” lawyers for Bausch & Lomb and Alcon Laboratories wrote in a filing with the 10th U.S. Circuit Court of Appeals in Denver.

“The law confers special benefits on Utah-based retailers—including 1-800 Contacts, the largest contact lens retailer in the nation— for their sales in all 50 states. The law also purports to regulate contact lens manufacturers and distributors nationwide. Its purpose and effect are to insulate Utah retailers, but not non-Utah retailers, from a broad array of contact lens manufacturer policies, some of them in effect for years, that certain retailers would prefer to see disappear. The primary beneficiary of this law is its chief lobbyist, 1-800 Contacts.”

Read the filing here:

Bausch & Lomb, Alcon Laboratories and Johnson & Johnson are suing the state over SB169, which was passed by the Utah State Legislature earlier this year and signed into law by Governor Herbert. It prohibits contact lens makers from setting a minimum price for lenses and discriminating against retailers who sell for less.

In its filing, Johnson & Johnson said that the new law affects more than just Utah consumers.

“Utah cannot dictate special terms that apply exclusively to a designated set of interstate transactions between out-of- state manufacturers and in-state retailers. Nor may the State command that commercial goods be sold within its borders,” the company wrote in the filing.

Read the filing here:

A federal judge in Utah and the 10th Circuit Court have so far refused to halt the new law from going into effect. The state is expected to respond to the appeal by the end of the month. 1-800-CONTACTS and Costco Wholesale have joined the state in defending the new law.