9th Circ. Revives Costco Eye Exam Class Action Lawsuit

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

On Tuesday, 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.

The 9th Circuit found that U.S. District Judge John A. Houston made an error when it determined plaintiff Jason DeCarlo had not sufficiently alleged that he had been harmed by Costco’s alleged deception about its eye exams.

The appellate court sent the Costco class action lawsuit back to the district court.

According to the Costco eye exam class action lawsuit, which was originally filed in October 2013, DeCarlo paid $49 for an eye exam at a Costco in the San Diego area in June 2012 and purchased eyewear from the optician at the store.

He says he overpaid for his eyewear. He also claims that he paid for a comprehensive exam but actually received a 15-minute exam.

These brief, non-comprehensive exams were intended to have optometrists at the Costco store fill more prescriptions in a shorter amount of time, the Costco eye exam class action lawsuit alleges.

DeCarlo says that he was unaware at the time that “one-stop-shops,” in which a corporation arranges for an optometrist to provide eye exams in the same retail space where eyewear is sold, are prohibited by California law.

He claims that in-store signs misled him into believing the optometrists operated independently of Costco.

The Costco class action lawsuit alleges that Costco had lease agreements with MBNR that controlled the type of services offered and recommended by the optometrists, their fees, advertisements, and the hours they worked.

If he had known that the tenant relationship violated California law, DeCarlo would not have had the in-store eye exam at Costco, the Costco class action lawsuit says.

The Costco class action lawsuit was sent to the U.S. District Court for the Southern District of California in January 2014. The case was dismissed for lack of subject matter jurisdiction and DeCarlo filed an amended complaint in October 2014.

In September 2015, the Costco class action lawsuit was dismissed after a judge agreed with Costco that DeCarlo was not required to purchase prescription eyewear from Costco and that the prescription he received allowed him to fill it at a location of his choosing.

In Tuesday’s ruling, the 9th Circuit determined that DeCarlo has standing to pursue his claims under California’s False Advertising Law, Consumer Legal Remedies Act, and the “unfair” and “fraudulent” prongs of California’s Unfair Competition Law.

The appellate panel also found that the district court correctly dismissed DeCarlo’s claim under the “unlawful” prong of the Unfair Competition Law because he had not alleged an injury due to the alleged violation, but opened up the possibility for DeCarlo to amend the pleading.

DeCarlo is represented by Jeffrey Isaac Ehrlich of The Ehrlich Law Firm, Brian S. Kabateck of Kabateck Brown Kellner LLP and Brett J. Schreiber of Thorsnes Bartolotta McGuire LLP.

The Costco Eye Exam Class Action Lawsuit is Jason DeCarlo v. Costco Wholesale Corporation, et al., Case No. 16-156602, in the 9th U.S. Circuit Court of Appeals.