Walmart, Costco Operate Illegal Optometry Operations, Consumers Say

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On Monday in California, consumers urged the Ninth Circuit court to revive two lawsuits that claimed that Walmart and Costco illegally had optometrists give in-store eye exams, violating California consumer protection law.

The consumers argued before a three-judge panel that a lower court was wrong to dismiss their two separate eye exam cases on the basis that the Walmart optometry lawsuits allegedly did not have the necessary Article III standing.

These two cases were initially filed in state court in November 2013 by Mojdeh Omidi and Aurora Telleria against Walmart Inc. and by Jason DeCarlo against Costco Wholesale Corp., and were later removed to federal court.

Omidi and Telleria’s lawyer argued on Monday that the cases should not be dismissed before the pleading stage because when the lawsuits were filed, California law prohibited eyeglass retailers from having in-store optometrists.

Though Walmart fired back at the eye exam lawsuits by claiming that they could not be held liable because it didn’t directly lease retail space to the optometrists, Omidi and Telleria’s lawyer claimed that the optometry business associated with the in-store optometrist, functioned as a “straw man,” created expressly to help the company dodge the state law.

The consumers in the two Walmart, Costco illegal eye exam lawsuits claimed that they were harmed because Walmart and Costo led them to believe that the optometrists giving eye exams in the stores were independent.

The plaintiffs claim that in reality, the optometrists controlled the optometrists’ operations via lease agreements they had made with the third-party.

The consumers alleged that Walmart and Costco’s control over the optometrists’ operations dictated what services the optometrists offered and recommended to customers, how the businesses were advertised, what the hours were, and how much services cost.

The plaintiffs say this relationship violated the California Business and Professions Code, which before 2016, prohibited licensed optometrists from having “proprietary interest, co-ownership, landlord-tenant relationship, or any profit-sharing arrangement” with an eyeglass retailer.

According to the Walmart Costco optometry exam lawsuits, the optometrists were subject to Walmart’s corporate interests.

Omidi and Telleria claim that Walmart intentionally deceived consumers about the nature of the relationship between Walmart and the optometrists, by specifically and falsely advertising that the eye exams were conducted by “Independent Doctors of Optometry.”

The plaintiffs say they decided to have their eye exams done in-store specifically because they believed the optometry businesses were independently operated, and claim that had they known the truth about the relationship, they would not have chosen to have their eye exams done there.

Omidi and Telleria are represented by Brian S. Kabateck of Kabateck Brown Kellner LLP.

DeCarlo is represented by Jeffrey I. Ehrlich of The Ehrlich Law Firm.

The Costco Eye Exam Class Action Lawsuit is Jason DeCarlo v. Costco Wholesale Corp. et. al., Case No. 16-56602, in the U.S. Court of Appeals for the Ninth Circuit.

The Walmart Eye Exam Class Action Lawsuit is Mojdeh Omidi v. Wal-Mart Stores Inc., Case No. 17-55539, in the U.S. Court of Appeals for the Ninth Circuit.

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.