Antitrust Law Daily Wrap Up, ANTITRUST—M.D. Fla.: Class certification denied in photochromic lens antitrust case, (Apr 4, 2014)

By Linda O’Brien, J.D., LL.M.

In a proposed antitrust class action against a manufacturer of photochromic lenses, the federal district court in Tampa has denied class certification to a group of direct purchasers on the basis of inadequate representation due to a potential conflict of interest with certain class members (In re Photochromic Lens Antitrust Litigation, April 3, 2014, Whittemore, J.).

Three groups of direct purchasers of photochromic lenses filed a series of class actions against Transitions Optical for alleged anti-competitive conduct in the development, manufacture, and sale of photochromic treatments for corrective ophthalmic lenses. The Direct Purchaser Plaintiffs (DPPs) asserted claims for monopolization and conspiracy to monopolize in violation of Sections 1 and 2 of the Sherman Act. Specifically, the DPPS alleged that Transitions conspired with Essilor of America (EOA) and Essilor Laboratories of America (ELOA) to restrain competition and enforce exclusive dealing agreements with distributors. Transitions purchases lens blanks from lens manufacturers (lens casters), applies a patented photochromic treatment to the lens blanks, and sells the treated lenses back to the lens casters. The lens casters sell the treated lenses to wholesale laboratories and optical retailers, who in turn, sell the corrective lenses to eye care professionals. The DPPs moved for class certification.

Adequacy of representation. The court found that the DPPs failed to show that there was no conflict of interest between the class representatives and the proposed lens casters class members. The DPP class representatives proposed a class that would include three subcategories: (1) lens casters who purchases lenses directly from Transitions; (2) laboratories and retailers who purchased lenses directly from EOA; and (3) eye care professionals who purchased lenses from ELOA who, in turn, purchased the lenses from EOA. The named DPP class representatives were independent wholesale laboratories and eye care professionals who were not lens casters and did not purchase the photochromic lenses directly from Transitions.

The proposed class of lens casters had significantly different economic interests that the class representatives. The plaintiffs’ expert conceded, in an analysis of impact of the exclusive dealing arrangements, that certain lens casters benefited from the exclusivity agreements with Transitions which was the very conduct that the DPPs claimed to harm the class as a whole. Those benefits created a potential fundamental conflict of interests between the lens casters and the class representatives that precluded adequate representation of the class. In rejecting the DPPs argument to redefine the class to exclude some or all lens casters, the court noted that the argument was untimely and any removal of the lens casters from the class would not cure other defects that precluded class certification.

Predominance. The plaintiffs also failed to show that common questions of law or fact predominate the case. To satisfy the requirements of Federal Rule of Civil Procedure 23(b)(3), the questions in the class action that are subject to generalized proof and applicable to the class as a whole must predominate over questions subject to only individualized proof. The court noted that the DPPs failed to use a methodology capable of showing that every class member was impacted by the alleged antitrust violation. Exclusive dealing in isolation does not give rise to antitrust liability. The DPPs only demonstrated that 88 percent of lens casters were affected by the alleged anti-competitive conduct by Transitions and the number was determined through flawed methodology, the court concluded.

The case is No. 8:10-md-02173-T-27EAJ.

Attorneys: H. Laddie Montague (Berger & Montague, PC), Susan Gilah Kupfer (Glancy, Binkow & Goldberg, LLP) and Bart D. Cohen (Berger & Montague, PC) for Direct Purchaser Plaintiffs. Bart D. Cohen (Berger & Montague, PC) for B & B Eyes, Inc. Andrew C. Curley (Berger & Montague, PC) for Nouveau Vision, Inc. Britta Schnoor Loftus (Dorsey & Whitney, LLP) for Insight Equity AP X LP d/b/a Vision-Ease Lens Worldwide. Chul Pak (Wilson, Sonsini, Goodrich & Rosati, PC) and Kent Wycliffe Easter (Stradling, Yocca, Carlson & Rauth) for Transitions Optical, Inc. Chul Pak (Wilson, Sonsini, Goodrich & Rosati, PC) for Essilor International SA and Essilor of America, Inc.

Companies: B & B Eyes, Inc.; Nouveau Vision, Inc.; Insight Equity AP X LP d/b/a Vision-Ease Lens Worldwide; Transitions Optical, Inc.; Essilor International SA; Essilor of America, Inc.

Cases: Antitrust FloridaNews