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Retailers dispute Vistakon’s interpretation of settlement
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JACKSONVILLE, Fla. — Lens Express and 1-800 CONTACTS have sought to intervene in a Florida federal court hearing to settle lawsuits filed against Johnson & Johnson’s Vistakon division. The two contact lens retailers filed motions with the court because they disagree with Vistakon’s interpretation of a settlement reached earlier this year.
The lawsuits, which were filed in 1994 by the attorneys general of 32 states, alleged that retail prices of replacement contact lenses were too high because Vistakon agreed with the American Optometric Association (AOA) that its lenses would be made available only through eye care professionals or retail optical and mass merchandisers.
Sandra Cain of the U.S. District Court in Jacksonville confirmed that 1-800 CONTACTS and Lens Express filed motions in that court on July 18 and July 23, respectively. The motions were filed in an effort for the companies to be treated as “interested parties with a right to agree or disagree” with the settlement terms. The two companies aim to secure this right before a Sept. 7 hearing when the judge will make a final determination on the settlement.
The settlement, agreed to in May, was signed by all parties and preliminarily approved by the court. Just prior to filing its motion, 1-800 CONTACTS said Vistakon’s interpretation of the settlement agreements and its subsequent actions in restricting supply of its contact lenses have made these products more difficult to obtain. This would in turn reduce 1-800 CONTACTS’ expected third-quarter revenues and gross margins, according to company executives.
Vistakon was the fourth and final party to settle in the antitrust case, which also included Bausch & Lomb, CIBA Vision and the AOA.
According to Philip R. Keefer, president of Vistakon Americas, the settlement is different for Vistakon than for the other two lens companies.
“Our understanding is that [the other two lens companies] have to sell to mail-order companies unconditionally for 5 years,” Mr. Keefer said. “We don’t have to sell to any new accounts unless they only sell with a valid prescription and comply with federal and all state laws regarding the sale and dispensing of contact lenses. So if they comply with 49 state laws, they are not compliant with all state laws, and we don’t have to sell to them."
This interpretation of the settlement by Vistakon prompted 1-800 CONTACTS and Lens Express to file the motions to intervene.
Representatives of 1-800 CONTACTS and Lens Express did not return phone calls seeking comment.