U.S. Seventh Circuit Dismisses Class Action for Lack of Article III Standing against Manufacturers of Eye Drops Approved by the FDA

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A district court judge sitting in the Southern District of Illinois certified eight classes the manufacturers of eye drops that are allegedly unnecessarily large, in violation of the Illinois Consumer Fraud Act and the Missouri Merchandising Practices Act, because each eye drop exceeds 16 microliters, while the optimal size of an eye drop for treatment of glaucoma is 16 microliters, no more.  “The difference between the price per drop of the eye drops at their present size, and the presumably lower price if the drops were smaller, multiplied by the number of drops that have been bought by the members of the class, are the damages the class is seeking.”

In a decision authored by Judge Posner, the U.S. Seventh Circuit Court of Appeals reversed the certification order and directed that the suit be dismissed:

The classes do not allege any type of collusion in violation of the antitrust laws. Nor is there any allegation of misrepresentation. “The argument is only that the price of the eye drops is excessive because a smaller drop, costing less to produce and (especially) to package, could be sold at a lower price yet still cover the producers’ costs, and therefore the only benefit of the larger drop is to the producers’ profits, which is why, the class argues, the producers are not motivated to make the change.”

(Judge Posner notes that: “This assumes that profits would decline if the defendants switched to selling the smaller, cheaper-to-produce eye drops. But that’s far from certain; lower prices might result in greater sales and as a result higher rather than lower profits.”)

“The defendants’ large eye drops have been approved by the Food and Drug Administration (FDA) — in other words have been determined to be safe and effective for treatment of glaucoma. That doesn’t exclude the possibility that a smaller drop would be as or even more effective, and also cheaper. But those are matters for the class members to take up with the FDA. A court can review a determination by the FDA, but it cannot bypass the agency and make its own evaluation of the safety and efficacy of an unconventionally sized eye drop for treatment of glaucoma. Not that the class members are likely to get far with the FDA. They don’t want the agency to rescind its approval of the large drops — they don’t argue that the large drops are unsafe or ineffective. They just want the defendant companies to start manufacturing smaller drops. But the agency can’t force a private company to manufacture a product the company doesn’t want to make — all it can do is approve or disapprove drugs that a company does make.

“Even supposing it were demonstrable that a smaller eye drop would be more effective and cheaper than the ones manufactured by the defendants, the class members would have no cause of action.  You cannot sue a company and argue only — ‘it could do better by us’ — which is all they are arguing.  In fact, such a suit fails at the threshold, because there is no standing to sue. One cannot bring a suit in federal court without pleading that one has been injured in some way (physically, financially — whatever) by the defendant. That’s what’s required for standing. 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, the class having failed to allege an invasion of a legally protected interest.”

 

Eike v. Allergan, 850 F.3d 315 (7th Cir. 2017).

 

 

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