Last month, the Third Circuit issued a 2-1 decision in Cottrell v. Alcon Labs.,[1] reversing a district court’s dismissal of a class action lawsuit on standing grounds. The putative class in Cottrell is comprised of consumers of prescription eye droplet medication used to treat glaucoma. In their complaint, the named plaintiffs allege that the manufacturers and distributors of the droplets engaged in unfair trade practices—as prohibited by state consumer protection statutes—by selling them in dispensers that discharge the medicine in doses that are too large (i.e., the bottle’s dropper squirts out 15mL when an average consumer allegedly only requires 7mL).
In its decision below, the district court granted the defendants’ motion to dismiss on the grounds that the named plaintiffs lacked Article III standing, reasoning that the plaintiffs’ theory of injury rested on speculation about hypothetical alternatives and generalized disagreements about dispenser design.[2] However, the Third Circuit saw things differently, ruling that the named plaintiffs alleged a sufficient injury by claiming that the defendants caused them to waste money on medication that was effectively impossible for them to use.[3] In its opinion, the court broadly interpreted the Supreme Court’s phrase “invasion of a legally protected interest,” to hold that any allegation of financial or economic injury—regardless how hypothetical or speculative—suffices for purposes of Article III.[4]
The appellate court stressed that the named plaintiffs had brought suit pursuant to state consumer protection statutes that prohibit “unfair” business practices in rejecting the argument that the complaint merely expressed “dissatisfaction” with available products.[5] The Third Circuit chided the lower court’s decision for improperly blending the merits issue of the validity of the named plaintiffs’ claim with the jurisdictional issue of whether they possessed Article III standing to sue in federal court. In doing so, the Cottrell Court found the named plaintiffs’ allegations that a better-designed droplet dispenser would have saved them money to be non-speculative and to have stated a concrete and particularized injury.[6]
Perhaps most interesting was that the Third Circuit consciously decided to split with the Seventh Circuit, which had ruled on the same issue in a nearly-identical case, called Eike v. Allergan, Inc.,[7] just six months earlier. In his short opinion in Eike, Judge Posner focused on the fact that the plaintiffs had not alleged any type of deception or misrepresentation on the defendants’ part and the market pricing “assumptions” built into the plaintiffs’ allegations of injury.[8] But in the Third Circuit’s estimation, the Eike decision failed to account for the fact that the alleged misconduct related to an entirely separate category of illegal business practices from fraudulent, deceptive, or misleading practices—“unfair” business practices.[9] More fundamentally, the Third Circuit stated that Judge Posner got the entire analysis backward for purposes of standing, beginning with his assessment of whether the plaintiffs had a cognizable claim as...
