Costco Class Action Lawsuit Filed Over ‘Illegal’ Eye Doctor Operation

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A class action lawsuit filed against Costco Wholesale Corp. was transferred to a California federal court on Jan. 29, alleging that the retailer is violating a California law which prohibits “one-stop-shops” by allowing optometrists and opticians to conduct business from the same location.

California resident Jason De Carlo originally filed the Costco class action lawsuit on Oct. 30, 2013 in California Superior Court in San Diego, alleging unlawful business practices under California law.

“Since at least 1981, California law has also been understood to prohibit joint franchise or business relationships between retailers of prescription eyewear and optometrists,” the Costco class action lawsuit explains. “This includes, most notably, a ban on the establishment of so-called ‘one-stop shops,’ wherein a corporation arranges for an optometrist to provide eye examinations ‘on or near’ the same retail space where prescription eyewear is sold.”

The point of the state laws, the class action says, is to protect customers from possible hazards that could arise from a joint operation such as making decisions that are influenced by financial interests rather than for medical reasons.

De Carlo says he visited an optometrist at a San Diego-area Coscto store in June 2012. Following his eye exam, he also purchased eyewear from the onsite optician.

The California man believes that because of their “joint operation,” he was charged “above market prices” and that he “paid more than he should have for his eyewear and herein alleges that he sustained financial damage as a result of Defendants’ conduct.”

De Carlo also says that he would not have gone to Costco for his examination if he had known that the “joint enterprise was illegal.”

Costco puts on its website and printed materials that the large retailer houses “Independent Doctors of Optometry,” which De Carlo says does not “insulate the company from liability under California law.”

De Carlo also claims that the medical information given to the on-site Costco optometrist is shared with Costco employees without the consent of the patient, in violation of the patient’s privacy.

“During eye examinations at defendant’s retail locations, Costco’s optometrists obtain medical information from patients during the patient history review and eye examinations,” the Coscto class action lawsuit explains. “The Costco optometrist then provides that information to Costco retail employees not under the direct supervision or control of the optometrists, and is provided for marketing and/or sales purposes, not for medical reasons.”

He is charging Costco with violating unfair competition laws, the consumer legal remedies act, and the confidentiality of medical information act.

De Carlo wants to represent other Costco customers who have had eye exams or purchased eyewear from the retailer at sometime in the last four years.

He is asking for $1,000 in damages for sharing medical information with opticians as well as actual damages, restitution, disgorgement and injunctive relief.

DeCarlo is represented by Kevin F. Quinn and Benjamin I. Siminou of Thorsnes Bartolotta McGuire LLP.

The Costco Class Action Lawsuit is DeCarlo v. Costco Wholesale Corp. et al, Case No. 3;14-cv-00202, in the U.S. District Court for the Southern District of California.

UPDATE: On July 31, 2018, the 9th U.S. Circuit Court of Appeals reversed the dismissal of a class action lawsuit alleging Costco Wholesale Corporation and MBNR Inc. misleadingly offered eye exams by “independent” optometrists.