Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Ill.: Claims that eye drops are too large for consumer’s eyes continue, (Mar 20, 2014)

By Melissa Skinner, J.D.

Consumers’ claims that manufacturer’s and distributor’s eye drops were too big for the consumers’ eyes were allowed to continue over motions to dismiss based on several theories. Specifically, the consumers claimed that because the drops were too big for the eyes, excess liquid would run down the face, and in turn, the consumers would not get enough of the medication necessary to treat the consumers’ conditions. The court found that the consumers’ claims under Illinois and Missouri consumer unfair practices laws withstood the motions to dismiss based on failure to allege unfair practice, causation, and injury because the consumers plead sufficient facts to support those elements of the claims. Further, statutory exemption was not evident as an available affirmative defense on the face of the consumer’s complaint and preemption could not be applied as the facts of the case have not been developed (Eike v Allergan, Inc., March 18, 2014, Herndon, D).

Background. Charlene Eike, Shirley Fisher, Jordan Pitler, and Alan Raymond (collectively, the consumers) brought suit on behalf of themselves and a class of individuals who purchased certain eye drops from certain manufacturers and distributors including: Allegan, Inc., Allergan, USA, Inc., Allergan Sales, LLC, Alcon Laboratories, Inc., Alcon Research Ltd., Falcon Pharmaceuticals, Ltd., Sandoz, Inc., Bausch & Lomb Incorporated, Pfizer, Inc., Merck & Co., Inc., Merck, Sharp & Dohme Corp., and Prasco, LLC (collectively, Allergen). Specifically, the consumers alleged that Allergan made and sold eye drops in bottles that produced drops that were too large for eyes, that excess liquid was wasted when it ran down the cheek of the consumers, and, in turn, caused consumers to purchase additional drops to account for the waste. Additionally, the consumers claimed that the resulting waste led consumers to need additional drop bottles for which they were not necessarily reimbursed. Further, some of the consumers did not receive the additional medication as those consumers could not afford to purchase the additional bottles. The consumers brought claims of violation of both the Illinois Consumer Fraud and Deceptive Business Practice Act (ICFA) and the Missouri Merchandising Practices Act (MMPA).

Unfair practice. Allergan’s motion to dismiss included the argument that the consumers did not allege that the manufacture and distribution of the drops constituted an unfair practice, which is required under the ICFA and the MMPA. Because Allergan containers are “designed to dispense eye drops larger than the capacity of the human eye,” they violate the Federal Trade Commission’s Policy Statement on Unfairness. The ICFA and MMPA only require a showing of a violation of public policy, and court found the consumers properly pleaded that the container design goes against public policy and is an instance of unfair practice. Further, and in response to Allergan’s arguments for dismissal, the court found the consumers sufficiently alleged that this design was the proximate cause of an actual injury and that the pleadings met the specificity requirements under the Federal Rules.

Statutory exclusion and preemption. Allergan also attempted to dismiss the case based on the application of a statutory exemption under the ICFA and MMPA that bars Allergan from the consumer claims. The court held that a statutory exemption is only applicable in a motion to dismiss when the affirmative defense available in the exemption “appears on the fact of the complaint.” Because this defense was not evident on the face of the consumers’ complaint, the court found that the statutory exemption could not be applied at this time in the proceeding. Similarly, with respect to Allergan’s assertion of FDA regulations preempting the consumer claims, the court found this was not an issue that was appropriately considered at this time in the proceedings. Although Allergan claimed that the consumers’ allegations were pursuant to state law that conflicted with the federal regulations, the court found that the record required further development before that argument could be considered.

Generic distributors. Specific distributors of the generic versions of the eye drops at issue, Prasco, LLC (Prasco) as well Alcon Laboratories, Inc. and Alcon Research, Ltd. (Alcon), attempted to dismiss the complaint in separate motions based on the fact that, as generic distributors, these companies did not have unilateral authority to change the design of the product under FDA provisions. In response, the court reemphasized that preemption questions would not be considered pursuant to this motion and also noted that the consumers alleged Prasco and Alcon were authorized to change the dropper size independently.

The case number is 3:12-cv-01141-DRH-DGW.

Attorneys: John G. Simon (Simon Law Firm PC) for Charlene Eike. Troy A. Bozarth (Hepler Broom LLC) for Allergan, Inc. Lori G. Cohen (Greenberg Traurig) for Alcon Laboratories, Inc., Falcon Pharmaceuticals, Ltd. and Sandoz, Inc.

Companies: Allergan, Inc.; Alcon Laboratories, Inc.; Falcon Pharmaceuticals, Ltd.; Sandoz, Inc.

Cases: StateUnfairTradePractices IllinoisNews