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Seventh Circuit Rejects Consumer Fraud Class in Putative Eye Drop Class Action

Seventh Circuit Court of Appeals Judge Richard Posner made quick work of a recent class action suit brought by glaucoma patients who alleged that Allergan, Inc., and other drugmakers manufactured prescription eyedrops that were too large in order to increase their profits (Eike, et al., v. Allergan, Inc., et al., No. 16-3334, 7th Cir. (2017)). The case was on appeal from a district court ruling certifying eight classes of plaintiffs consisting of Illinois and Missouri residents who alleged that Allergan and six other pharmaceutical companies made eye drops that were unnecessarily large, in violation of the Illinois Consumer Fraud Act and Missouri Merchandising Practices Act.

Each eyedrop exceeded 16 microliters, beyond the optimal size the plaintiffs contended was necessary for treatment of glaucoma and therefore wasteful because the additional microliters added no therapeutic value, instead serving only to pad the companies’ profits. The plaintiffs sought damages amounting to the difference between the price per drop of the eye drops at their present size and the presumably lower price of smaller drops, multiplied by the number of drops purchased by the class members. 

However, Judge Posner pointed out that the plaintiffs did not allege price collusion, “whether tacit or express,” among the drugmakers. “[T]his is not an antitrust case,” Posner wrote for the three-judge panel. “Nor is there any allegation of misrepresentation. The argument is only that the price of the eyedrops is excessive because a smaller drop, costing less to produce … could be sold at a lower price yet still cover the producers’ costs.” Posner challenged the assumption that the defendants’ profits would decline from the sale of smaller and cheaper-to-produce eye drops, speculating that lower prices could result in more sales.

The class also alleged the large eyedrops carry a higher risk of side effects and are more likely to be used up faster, yet Posner noted that they failed to describe any such side effects. “There is no claim that [plaintiffs] have experienced side effects from the large drops, or have been harmed because they ran out of them early.” The plaintiffs, therefore, alleged no more than what Posner termed a “pocketbook” injury of paying what they considered too high a price for the product.

“Given the lack of any suggestion of collusion by the defendants … or of any claim that the defendants misrepresent the quality of their product, we are asked to decide a case based simply on dissatisfaction with a product made by multiple firms, or with its price.”

Following a lengthy allegory involving cats, one of Judge Posner’s favorite topics, he made note of the defendants’ argument that only a tiny percentage of each eye drop has a therapeutic effect on a patient’s eye, with the remainder consisting of inactive ingredients. They argued a smaller drop containing less fluid than 16 microliters would have a weaker therapeutic benefit. Posner also noted that the drops were approved by the Food and Drug Administration as safe and effective for glaucoma treatment, and whether smaller drops would be as or more effective was a matter for plaintiffs to take up with the FDA.

“[The plaintiffs] cannot bypass the [FDA] and make their own evaluation of the safety and efficacy of an unconventionally sized eye drop for treatment of glaucoma,” Posner wrote, adding that the plaintiffs never argued the large drops were unsafe or ineffective.

“You cannot sue a company and argue only ‘it could do better by us.’ … The fact that a seller does not sell the product that you want, or at the price you’d like to pay, is not an actionable injury; it is just a regret or disappointment—which is all we have here.”

Because the class failed to allege violation of a legally protected interest, Posner concluded it lacked standing and vacated the class certification with instructions to dismiss the case.Super Lawyers named Illinois partner dispute attorneys Peter Lubin, Vincent DiTommaso and Patrick Austermuehle Super Lawyers or Rising Stars in the Categories of Class Action, Business Litigation and Consumer Rights Litigation. DiTommaso Lubin Austermuehle’s Illinois business trial lawyers have over thirty years of experience in litigating complex class action, copyright, non-compete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes including lawsuits between businesses or between shareholders and owners of the same business.  Our Chicago and Schaumburg partnership dispute lawyers handle emergency business law suits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, LLC members, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud. You can contact us by calling (630) 333-0000 or our toll free number (877) 990-4990.  You can also contact us online here.