Class Action Alleging ‘Illegal’ Costco Eye Exam Centers Is Dismissed

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On Monday, a California federal judge granted a motion to dismiss a class action lawsuit against Costco Wholesale Corp. and MBNR Inc., the company that provides optometrists for Costco. The Costco class action lawsuit alleged that Costco violated California law by allowing optometrists to conduct business in the same location where prescription eyewear is sold.

Plaintiff Jason DeCarlo originally filed the class action lawsuit over the allegedly illegal optometry business in October 2013.  DeCarlo’s initial lawsuit was dismissed for lack of subject matter jurisdiction, and he filed an amended Costco eye exam center class action lawsuit in October 2014.

According to the Costco class action lawsuit, DeCarlo initially visited a Costco store in California in 2012 and sought the services of the on-site optometrist to address his eye health needs. He was charged $50 for the exam that he did not feel was comprehensive, but rather inadequate, and he felt overcharged for the service.

Following his eye examination, DeCarlo said he was then directed to the eyewear department where he spent around $160 for frames. He also felt overcharged for his eyewear purchase.

DeCarlo claimed that the state law regarding so-called “one-stop shops” for a business pairing with an optometrist nearby or on the same retail premises where prescriptions for eyewear can be filled were intended to avert dangers to consumers. Most notably, he mentions, a partnership as such could cause businesses to make decisions that are influenced by financial gain rather than for the medical well-being of consumers.

In addition to the claims about the illegal optometrist-optician locations in the store together, DeCarlo said the he was charged a premium on the exam and the eyewear. He alleges in his Costco class action lawsuit that he paid $14 to $21 more for his eyewear at Costco, and the comprehensive exam for $50 wasn’t comprehensive, but a mere 15-minute examination for refractory error. DeCarlo claimed the short, non-comprehensive exams were designed to have optometrists at Costco fill more prescriptions in a short amount of time.

In response to the amended class action lawsuit, Costco said that DeCarlo’s claims of “likely” overpaying for his glasses by $14 to $21 were not backed up by facts to support his claims. Costco stated that DeCarlo did not mention the specific eyewear he purchased, and did not cite other retailers and their prices for comparison.

Costco also maintained that there is no relationship between MBNR’s relationship with Costco and the pricing on their eyewear. Additionally, the defendants stated that DeCarlo was not required to purchase prescription eyewear from Costco as a condition of receiving an eye exam there, and his prescription was given to him freely to fill it in a location of his choosing.

The court agreed with Costco’s concerns and dismissed the Costco eye exam center class action lawsuit.

Though DeCarlo was already given the opportunity to amend his complaint once, and this is the second time his claims were dismissed, the judge offered him one final opportunity to have leave to amend his Costco class action lawsuit a second time. DeCarlo has until Oct. 30, 2015 to file an amended complaint.

DeCarlo is represented by Benjamin I. Siminou of Thorsnes Bartolotta McGuire LLP.

The Costco Eye Exam Center 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.