Bausch & Lomb Settles Lawsuit, Takes a Charge

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From Times Wire Services

Bausch & Lomb Inc., the third-biggest maker of contact lenses, said it took a charge of $15 million, or 18 cents a share, against its fourth-quarter earnings to settle a class-action antitrust lawsuit.

The company will give eligible U.S. consumers benefits packages worth more than $120 each to settle claims that it conspired with optometrists, the American Optometric Assn. and two other manufacturers to refuse to sell contact lenses to mail-order companies and other distributors.

Under terms of the settlement, which dates to 1994, Rochester-based Bausch & Lomb will pay $8 million into a fund and will provide consumers with a package of goods and services worth $9.5 million.


Bausch & Lomb also has agreed to sell its lenses to pharmacies and mail-order companies on a nondiscriminatory basis.

The company didn’t admit to wrongdoing, saying it settled to end a long, costly legal wrangle. The class-action lawsuit was filed by attorneys general in 32 states, including California, and other lawyers for plaintiffs.

Eligible consumers will receive rebates for some Bausch & Lomb lenses, free contact lens solution products, coupons for the purchase of other Bausch & Lomb products and a rebate for an eye exam.

Consumers who bought replacement lenses from Bausch & Lomb and two other defendants, Johnson & Johnson and Ciba Vision, the eye-products unit of European drug maker Novartis, since Jan. 1, 1988, can register to receive the benefits package, Bausch & Lomb said.

The lawsuit alleged that optometrists, acting through their trade association, conspired with lens manufacturers to restrain competition in the sale of replacement disposable contact lenses by refusing to make such lenses available to pharmacies and mail-order firms.

Because replacement disposable lenses, unlike other contact lenses, do not need to be individually viewed on consumers’ eyes by an eye-care practitioner, pharmacies and mail-order firms can provide consumers with a less expensive and more convenient way to purchase replacement disposable contact lenses, according to New York Atty. Gen. Eliot Spitzer.


Ciba recently agreed to settle similar charges and to pay more than $6 million.

The two remaining defendants are Johnson & Johnson Vision Products and the American Optometric Assn. Their trial is scheduled to begin March 19 in federal court in Jacksonville, Fla.

Bausch & Lomb’s settlement of the suit resulted in a fourth-quarter loss of $10.4 million, or 9 cents a share, a company spokeswoman said.

Bausch & Lomb had reported fourth-quarter results Jan. 25. Its operating profit fell 27% to $37.4 million, or 70 cents a share, from $51.4 million, or 88 cents, a year ago.

The lawsuit “was so old it dropped below the radar screen,” David Katz, chief investment officer for Matrix Asset Advisors Inc., told Bloomberg News. “It’s more of the same, which is annoying news. . . . It’s not meaningful in terms of long-term earnings impact.”

Bausch & Lomb shares rose 34 cents to close at $50.13 on the New York Stock Exchange. The shares have dropped 16% in the last 12 months.