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A law drafted to help Utah-based 1-800 Contacts is unconstitutional on its face because it tries to regulate interstate business transactions, attorneys for three leading contact-lens manufacturers told a federal judge Tuesday.
But an attorney for 1-800 Contacts, the nation's largest online contact-lens retailer, shot back that the companies were engaged in price-fixing and Utah consumers would pay millions of dollars a year more if the law was overturned.
With only a week to go before SB169 goes into effect, attorneys for the manufacturers squared off in a heavyweight legal match against those representing the Utah Attorney General's Office, 1-800 Contacts and Costco.
The Salt Lake City hearing was part of lawsuits brought by Alcon Laboratories Inc., Johnson & Johnson Vision Care and Bausch & Lomb that challenge the constitutionality of the law approved by the Utah Legislature.
The lens manufacturers have asked U.S. District Judge Dee Benson to issue a preliminary injunction to stop enforcement of the new law, set to take effect May 12.
The skirmish here is part of a larger fight nationwide over lens companies' policies that set minimum retail prices and refuse to provide the products to entities that sell or advertise contacts lenses for less than that.
New York Attorney David R. Marriott, who represents Alcon Laboratories, wasted no time in labeling SB169 "the 1-800 Contacts" bill, which he said was enacted to help protect the Orem company.
"The whole intent of this bill is to protect 1-800 Contacts," and singling out the company for special treatment at the expense of companies from other states is not allowed by the Commerce Clause of the U.S. Constitution, Marriott said.
University of Utah law professor Paul Cassell, a former federal judge who is representing 1-800 Contacts, attacked the lens companies' pricing policies.
"Let's not mince words: This is price-fixing," he said.
The law regulates only Utah transactions and its effect will be to promote a healthy economy, Cassell said.
Utah, like other states, has anti-trust laws that are aimed at promoting competition — which, he said, is what the contact lens law is doing.
Costco Inc., a big-box retailer that sells contact lenses, has intervened in the Utah case and last month also sued Johnson & Johnson over its pricing policies.
Shylah Alfonso, a Seattle attorney representing Costco, told Benson the lens companies' policies were hurting consumers.
"Costco wants to be able to price contact lenses at the price it wants," she said, indicating that if the law goes into effect, it could cause a drop in price for Utahns who wear contacts.
Assistant Utah Attorney General Parker Douglas told Benson that the law does not seek to regulate interstate transaction.
"This mandates not at all sales across borders," he said.
Benson, who peppered both sides with questions, took the matter under advisement but gave no indication of when he would rule.