Alcon Laboratories, Bausch & Lomb Appeal To 10th Circuit Court

Appellate Case: 15-4073
Document: 01019451242
Date Filed: 06/26/2015
Page: 1
Nos. 15-4072, 15-4073

IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
JOHNSON & JOHNSON VISION CARE, INC., ALCON LABORATORIES, INC., AND
BAUSCH & LOMB INCORPORATED,
PlaintiffsAppellants,
v.
SEAN D. REYES, ATTORNEY GENERAL OF UTAH, IN HIS OFFICIAL CAPACITY,
DefendantAppellee.
and
1-800 CONTACTS, INC. AND COSTCO WHOLESALE CORPORATION,
Intervenor PlaintiffsAppellees,
ON APPEAL FROM AN ORDER OF THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH, THE HONORABLE DEE BENSON
CONSOLIDATED CIVIL NO. 2:15-CV-00252-DB
ORAL ARGUMENT SCHEDULED FOR AUGUST 27, 2015
BRIEF OF APPELLANTS ALCON LABORATORIES, INC., AND BAUSCH
& LOMB INCORPORATED
Amy F. Sorenson
Amber M. Mettler
SNELL & WILMER LLP
Gateway Tower West
15 West South Temple, Suite 1200
Salt Lake City, Utah 84101-1547
(801) 257-1900
David R. Marriott
David Greenwald
CRAVATH, SWAINE & MOORE LLP
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
(212) 474-1000
Attorneys for Appellant Alcon Laboratories, Inc.
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Erik A. Christiansen
PARSONS BEHLE & LATIMER
One Utah Center
201 South Main Street, Suite 1800
P.O. Box 45898
Salt Lake City, Utah 84145
(801) 532-1234
Clifford M. Sloan
Steven C. Sunshine
Maria Raptis
SKADDEN, ARPS, SLATE, MEAGHER &
FLOM LLP
1440 New York Avenue NW
Washington, DC 20005
(202) 371-7000
Attorneys for Appellant Bausch & Lomb Incorporated

June 26, 2015
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RULE 26.1 CORPORATE DISCLOSURE STATEMENT

Pursuant to Federal Rule of Appellate Procedure 26.1, PlaintiffsAppellants Alcon Laboratories, Inc., and Bausch & Lomb Incorporated make the
following disclosures:
Alcon Laboratories, Inc., is an indirect wholly-owned subsidiary of
Novartis AG, a publicly traded company.
Bausch & Lomb Incorporated is a wholly owned subsidiary of Bausch
& Lomb Holdings Incorporated. Bausch & Lomb Holdings Incorporated is
indirectly but wholly owned by its parent, Valeant Pharmaceuticals International,
Inc., a publicly traded corporation. Valeant Pharmaceuticals International, Inc. has
no parent corporation, and no publicly traded company owns more than 10 percent
of its stock.
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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ................................................................................... iii
CERTIFICATION PURSUANT TO TENTH CIRCUIT RULE 31.3(A) ............. vii
GLOSSARY........................................................................................................... viii
STATEMENT OF RELATED CASES ....................................................................ix
JURISDICTIONAL STATEMENT .......................................................................... 1
STATEMENT OF THE ISSUES............................................................................... 2
INTRODUCTION ..................................................................................................... 4
STATEMENT OF FACTS ........................................................................................ 8
A.
Contact Lenses Within the United States. ............................................. 8
B.
Contact Lens Manufacturers. ................................................................ 9
C.
The Utah Statute. ................................................................................. 13
D.
Course of Proceedings. ........................................................................ 16
E.
The District Courts Ruling. ................................................................ 17
SUMMARY OF THE ARGUMENT ...................................................................... 21

STANDARD OF REVIEW ..................................................................................... 26
ARGUMENT ........................................................................................................... 26
I.
ALCON AND B+L ARE LIKELY TO SUCCEED ON THE

MERITS. ........................................................................................................ 26
A.
The Utah Law Directly Regulates Interstate Commerce and Has

Impermissible Extraterritorial Effects. ................................................ 27
B.
C.
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The Utah Law Impermissibly Discriminates Against Interstate

Commerce. .......................................................................................... 33
1.
The Utah law discriminates facially and in its effects. ............. 34
2.
The discriminatory Utah law cannot survive strict

scrutiny. ..................................................................................... 39
3.
The manufacturers pre-enforcement challenge was

proper. ....................................................................................... 43
The Utah Law Imposes Excessive Burdens on Interstate

Commerce. .......................................................................................... 45
II.
ALCON AND B+L WILL SUFFER IRREPARABLE INJURY

ABSENT AN INJUNCTION. ....................................................................... 49
III.
THE THREATENED INJURY TO ALCON AND B+L

OUTWEIGHS ANY PUBLIC HARM THE INJUNCTION WOULD
CAUSE, AND THE PUBLIC INTEREST WOULD NOT BE
ADVERSELY AFFECTED. ......................................................................... 53
CONCLUSION ........................................................................................................ 56
ii
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TABLE OF AUTHORITIES
Page(s)
Cases
ACLU v. Johnson,
194 F. 3d 1149 (10th Cir. 1999) .............................................................45, 49, 50
ANR Pipeline Co. v. Corp. Commn of State of Okla.,
860 F.2d 1571 (10th Cir. 1988) .......................................................................... 50
Awad v. Ziriax,
670 F.3d 1111 (10th Cir. 2012) ....................................................................26, 53
Baldwin v. G.A.F. Seelig, Inc.,
294 U.S. 511 (1935) .............................................................................................. 5
Blue Circle Cement, Inc. v. Bd. of Cnty. Commrs,
27 F.3d 1499 (10th Cir. 1994) ............................................................................ 46
Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.,
509 U.S. 209 (1993) ............................................................................................ 48
Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth.,
476 U.S. 573 (1986) ............................................................................7, 27, 28, 30
Burwell v. Hobby Lobby Stores, Inc.,
134 S. Ct. 2751 (2014) ........................................................................................ 53
C & A Carbone, Inc. v. Clarkstown,
511 U.S. 383 (1994) ......................................................................................33, 39
California v. ARC America Corp.,
490 U.S. 93 (1989) .............................................................................................. 41
Citizens United v. Gessler,
773 F.3d 200 (10th Cir. 2014) ............................................................................ 53
Dennis v. Higgins,
498 U.S. 439 (1991) ............................................................................................ 54
Drakes Bay Oyster Co. v. Jewell,
747 F.3d 1073 (9th Cir. 2013) ............................................................................ 53
iii
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Edgar v. MITE Corp.,

457 U.S. 624 (1982) ........................................................................................4, 28
Evans v. Utah,
21 F. Supp. 3d 1192 (D. Utah 2014)................................................................... 53
Exxon Corp. v. Governor of Maryland,
437 U.S. 117 (1978) ......................................................................................41, 42
Gonzales v. Carhart,
550 U.S. 124 (2007) ......................................................................................45, 49
Grand River Enters. Six Nations, Ltd. v. Pryor,
425 F.3d 158 (2d Cir. 2005) ............................................................................... 28
Granholm v. Heald,
544 U.S. 460 (2005) ............................................................................................ 33
Healy v. Beer Inst.,
491 U.S. 324 (1989) .....................................................................................passim
Heideman v. S. Salt Lake City,
348 F.3d 1182 (10th Cir. 2003) .......................................................................... 26
Hobby Lobby Stores, Inc. v. Sebelius,
723 F.3d 1114 (10th Cir. 2013) .......................................................................... 53
Holder v. Humanitarian Law Project,
561 U.S. 1 (2010) ..........................................................................................45, 49
Hughes v. Okla.,
441 U.S. 322 (1979) ............................................................................................ 48
Hunt v. Wash. State Apple Adver. Commn,
432 U.S. 333 (1977) ......................................................................................37, 38
K-S Pharms., Inc. v. Am. Home Prods. Corp.,
962 F.2d 728 (7th Cir. 1992) .............................................................................. 30
Kan. Judicial Review v. Stout,
519 F.3d 1107 (10th Cir. 2008) ....................................................................45, 49
iv
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Kleinsmith v. Shurtleff,
571 F.3d 1039 (10th Cir. 2009) ....................................................................33, 39
Knevelbaard Dairies v. Kraft Foods, Inc.,
232 F.3d 979 (9th Cir. 2000) .............................................................................. 40
KT & G Corp. v. Attorney Gen. of Okla.,
535 F.3d 1114 (10th Cir. 2008) .......................................................................... 28
Minard Run Oil Co. v. U.S. Forest Serv.,
670 F.3d 236 (3d Cir. 2011) ............................................................................... 53
Nevares v. M.L.S.,
345 P.3d 719 (Utah 2015) ................................................................................... 27
Nken v. Holder,
556 U.S. 418 (2009) ......................................................................................20, 53
Or. Waste Sys., Inc. v. Dept of Envtl Quality of Or.,
511 U.S. 93-94 (1994) ......................................................................23, 34, 39, 40
Pike v. Bruce Church, Inc.,
397 U.S. 137 (1970) ............................................................................................ 46
Quik Payday, Inc. v. Stork,
549 F.3d 1302 (10th Cir. 2008) .......................................................................... 26
Steffel v. Thompson,
415 U.S. 452 (1974) ............................................................................................ 50
Toomer v. Witsell,
334 U.S. 385 (1948) ............................................................................................ 51
Wyo. v. Okla.,
502 U.S. 437 (1992) ............................................................................................ 33
Younger v. Harris,
401 U.S. 37 (1971) ........................................................................................45, 50
Statutes & Rules
15 U.S.C. 7601(a) ................................................................................................... 9
28 U.S.C. 1292(a)(1) ............................................................................................... 1
v
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28 U.S.C. 1331 ........................................................................................................ 1

28 U.S.C. 2201 ........................................................................................................ 1
28 U.S.C. 2202 ........................................................................................................ 1
42 U.S.C. 1983 ........................................................................................................ 1
Utah Code 58-16a-904 .......................................................................................... 38
Utah Code 58-16a-905 .......................................................................................... 39
Utah Code 58-16a-905.1 ................................................................................passim
Utah Code 58-16a-906 .......................................................................................... 14
Other Authorities
U.S. Const. Art I 8 cl. 3.....................................................................................2, 26
vi
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CERTIFICATION PURSUANT TO TENTH CIRCUIT RULE 31.3(A)

Pursuant to Tenth Circuit Rule 31.3(A), Plaintiffs-Appellants Alcon
Laboratories, Inc., and Bausch & Lomb Incorporated state that filing a joint brief
separate from Johnson & Johnson Vision Care, Inc. was necessary to permit full
and fair explanation of the impact of the Utah law on their businesses and in light
of the shortness of time for collaboration. While Alcon and Bausch & Lomb are
submitting a joint brief, any statements made about an individual companys
practices and policies (e.g., unilateral pricing policies) are made on behalf of that
company alone.
Amy F. Sorenson
Amber M. Mettler
SNELL & WILMER LLP
Gateway Tower West
(801) 257-1900
David R. Marriott
David Greenwald
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
(212) 474-1000
Attorneys for Appellant Alcon Laboratories, Inc.

One Utah Center
P.O. Box 45898
(801) 532-1234
Clifford M. Sloan
Steven C. Sunshine
Maria Raptis
SKADDEN, ARPS, SLATE, MEAGHER &
FLOM LLP
1440 New York Avenue NW
(202) 371-7000
Attorneys for Appellant Bausch & Lomb Incorporated
vii
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GLOSSARY
AG
Attorney General of the State of Utah
B+L
Bausch & Lomb Incorporated
ECP
Eye Care Professional
FDA
Food and Drug Administration
JJVCI
Johnson & Johnson Vision Care, Inc.
UPP
Unilateral Retail Pricing Policy
viii
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STATEMENT OF RELATED CASES

The district court order under appeal is also the subject of the pending
appeal captioned Johnson & Johnson Vision Care v. Reyes, No. 15-4071, which
was initiated on the same day as this appeal (May 12, 2015).
ix
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JURISDICTIONAL STATEMENT
The United States District Court for the District of Utah has subjectmatter jurisdiction over this action under 28 U.S.C. 1331 because the action
arises under 42 U.S.C. 1983 and the United States Constitution. Pursuant to
28 U.S.C. 2201-2202, the district court may issue a declaratory judgment and
further necessary or proper relief.
This Court has jurisdiction over this appeal pursuant to 28 U.S.C.
1292(a)(1) because the appeal is taken from an interlocutory order of the United
States District Court for the District of Utah denying Alcon and Bausch & Lombs
request for injunctive relief.
On May 11, 2015, the United States District Court for the District of
Utah entered a decision denying Alcons Motion for a Preliminary Injunction and
Bausch & Lombs Motion for a Preliminary Injunction. Alcon and Bausch &
Lomb timely moved to appeal that decision on May 12, 2015.
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STATEMENT OF THE ISSUES

1.
Whether a state law directly regulates interstate commerce or has
impermissible extraterritorial effects, in violation of the Commerce Clause of the

United States Constitution (the Commerce Clause), U.S. Const. Art I 8 cl. 3,
where (a) the law confers benefits on online retailers based in Utah for their sales
to consumers in all 50 states; (b) the law regulates the prices at which out-of-state
manufacturers products are sold in all 50 states; (c) the law, under the threat of
civil penalties for non-compliance, compels manufacturers, all of whom are
located outside the state, to engage in commerce with in-state retailers; (d) all of
the companies subject to regulation and enforcement are outside the state; and
(e) all of the conduct the law regulates takes place outside the state.
2.
Whether a state law regulating the commercial conduct of
manufacturers and distributors impermissibly discriminates against interstate

commerce, in violation of the Commerce Clause, where it (a) exempts in-state
retailers, but not out-of-state retailers, from any manufacturer policy affecting
retail prices; and (b) requires manufacturers to extend to all in-state retailers, but
not to out-of-state retailers, the benefits of programs that are normally reserved for
licensed eye care professionals.
3.
Whether a state law imposes excessive burdens on interstate
commerce, in violation of the Commerce Clause, where (a) the vast majority of the
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consumers purportedly benefited by the law are consumers who reside outside the
enacting state; (b) every company subject to penalty under the law is located
outside the state; and (c) the law puts every out-of-state retailer nationwide at a
disadvantage in competing against in-state retailers.
4.
Whether the parties seeking a preliminary injunction of enforcement
of an allegedly unconstitutional law before it goes into effect have shown that they
will suffer irreparable harm where, in the absence of a preliminary injunction, the
parties will suffer (a) a violation of their constitutional rights; (b) monetary loss
that cannot be recovered from the entity causing the loss owing to that entitys
sovereign immunity; and (c) intangible commercial losses, such as lost incentives
to innovate and loss of good will.
5.
Whether the balance of the equities and public interest factors favor
the entry of a preliminary injunction where (a) an injunction is required to prevent

the violation of a partys constitutional rights; (b) an injunction would preserve the
national interest in preventing state regulation of interstate commerce; and (c) the
requested injunction merely preserves the status quo until the case can be resolved
on the merits.
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INTRODUCTION
This appeal concerns the State of Utahs effort to regulate interstate
commerce for the benefit of a favored in-state company.
The law at issue, Utah Code Section 58-16a-905.1, is an extraordinary
intrusion into interstate commerce, in clear violation of settled principles of
Commerce Clause jurisprudence. The law confers special benefits on Utah-based
retailersincluding 1-800 Contacts, the largest contact lens retailer in the nation
for their sales in all 50 states. The law also purports to regulate contact lens
manufacturers and distributors nationwide. Its purpose and effect are to insulate
Utah retailers, but not non-Utah retailers, from a broad array of contact lens
manufacturer policies, some of them in effect for years, that certain retailers would
prefer to see disappear. The primary beneficiary of this law is its chief lobbyist,
1-800 Contacts. 1-800 Contacts, which has intervened in this action, contends
(correctly) that the law will entitle it to preferred treatment over non-Utah retailers
in all 50 states, not just Utah, and both the State and the district court have
explicitly declined to disagree with that interpretation.
It is well-established that a state may not directly regulate interstate
commerce or enact laws that have impermissible extraterritorial effects. See, e.g.,
Edgar v. MITE Corp., 457 U.S. 624, 640 (1982). But the Utah law not only
regulates interstate commerce; it compels it by subjecting out-of-state
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manufacturers to the threat of civil penalties if, pursuant to the announced terms of
a manufacturer program applied to retailers in all 50 states, they decline to ship
contact lenses to Utah discounters, or if, pursuant to the same program, they
decline to permit Utah discounters to participate in programs that are normally
reserved for licensed ECPs. At the same time, the Utah law regulates the prices at
which contact lenses are sold (by Utah contact lens retailers) in all 50 states. The
Supreme Court has held that a state has no power to project its legislation into
[another State] by regulating the price to be paid in that state for [goods] acquired
there. Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 521 (1935). That is exactly
what the law here does, and that effect is not speculative either. By its terms, the
law prevents manufacturers from taking actions that have the effect of fixing or
otherwise controlling the price that a contact lens retailer charges or advertises for
contact lenses. As construed by the State, the law does not distinguish between
prices that retailers charge or advertise to consumers inside Utah or outside Utah.
And when asked at oral argument whether the AG in fact interpreted the statute to
apply to transactions outside Utah, he responded, perhaps. See A-847
(OA Tr. 63:25). At the same time, manufacturers that violate the sweeping new
legislation in their dealings with Utah-based retailers are subject to severe civil
penalties.
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It makes no difference if the Utah law has any resemblance to

traditional state antitrust legislation. State antitrust statutes, like state statutes of
any other kind, must comply with the Commerce Clause, which means that they
must not favor in-state economic actors and they must not regulate primarily
interstate commerce. Unlike state antitrust laws of general application, the Utah
law applies to only one industry (contact lenses) and protects only in-state retailers,
and not out-of-state retailers, from manufacturer policies, and it gives benefits to
in-state retailers that are not extended to out-of-state retailers. Unlike ordinary
state antitrust laws, the Utah law compels out-of-state companies to do business
with in-state actors. Unlike ordinary state antitrust laws, the Utah law applies
predominantly to interstate transactions involving consumers who reside outside
Utah. And unlike state antitrust laws of general application, the legislative history
of the Utah law shows that it was enacted for the clear purpose of giving an
advantage in a predominantly national, interstate market to one in-state firm. It is
those aspects of the Utah law, which distinguish the Utah law from other state
antitrust statutes, that trigger its violation of the Commerce Clause.
The law is unconstitutional for another reason: it impermissibly
discriminates against out-of-state economic interests. The first part of the law, as
construed in the brief the AG submitted to the district court, insulates Utah
retailers, but not non-Utah retailers, from any manufacturer action or policy that
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affects the retail price of its contact lenses. It does so by subjecting out-of-state
manufacturers to the threat of civil penalties if they choose not to supply their
contact lenses to retailers in Utah who decline to abide by manufacturer pricing
policies that, in the AGs view, have the effect of fixing or otherwise controlling
the price that a contact lens retailer charges or advertises for contact lenses. The
second part of the law entitles Utah contact lens retailers that do not prescribe
contact lenses, such as low-cost discounters and internet sellers, to participate on
equal terms in any program that contact lens manufacturers have established over
the years for licensed ECPs. It does so by subjecting out-of-state manufacturers to
the threat of civil penalties unless they extend to Utah discounters (e.g., 1-800
Contacts) the benefits of any program designed for ECPs, nationwide, on the
theory that the manufacturer has discriminated against Utah discounters.
The Commerce Clause does not permit this kind of favoritism. The
Supreme Court has affirmed repeatedly that a state may not favor in-state
economic interests over out-of-state interests. Brown-Forman Distillers Corp. v.
N.Y. State Liquor Auth., 476 U.S. 573, 579 (1986). But that is precisely what the
Utah law does: it exempts Utah retailers, but not non-Utah retailers, from
manufacturers price policies; and it entitles Utah discounters, but not non-Utah
discounters, to benefits normally extended only to licensed ECPs. The practical
effect of the Utah lawwhich was reaffirmed before the district court by both the
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AG and 1-800 Contacts itselfis that 1-800 Contacts will be able to sell at a lower
price, nationwide, than all of its out-of-state competitors. This predicted effect is
not speculative; it is a necessary result of the text of the law, as narrowed by the
AG in its brief before the district court.
STATEMENT OF FACTS
A.
Contact Lenses Within the United States.

Contact lenses are worn by over 37 million adult U.S. residents, and
their sales within the U.S. amount to approximately $4 billion annually. (A-236,
238 (Declaration of Richard E. Weisbarth, OD (April 13, 2015) (Weisbarth
Decl.) 3, 11).) Contact lenses comprise a highly differentiated group of
products. They vary according to the eye condition they are intended to address
(e.g., near-sightedness, far-sightedness, astigmatism, presbyopia), the conditions
under which they are expected to be worn (e.g., during the day only or overnight),
the duration of use (daily, bi-weekly, or monthly), and their relative comfort. (Id.
4 (A-236).) The many varieties of contact lenses give rise to a large number of
competing offerings, with over 370 different types of soft contact lenses available
within the U.S. (Id. 6 (A-236).)
Contact lenses are FDA-regulated medical devices and may be sold
only with a valid prescription from a licensed ECP, such as an ophthalmologist or
an optometrist. (Id. 7 (A-237).) Once they are prescribed, however, contact
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lenses may be purchased either from the prescribing ECP or from an eye care
retailer (e.g., LensCrafters), a mass merchandise retailer (e.g., Costco, Wal-Mart),
an internet retailer (e.g., 1-800 Contacts, Lens.com), a pharmacy, or any other
person who sells the prescribed lenses. (Id. 8 (A-237).) Under federal law,
patients are entitled to receive their prescriptions from their ECPs to enable them to
fill and refill the prescription either from their prescribing ECP or from their
retailer of choice. (Id. (citing 15 U.S.C. 7601(a)).)
Over the past several years, sales of contact lenses through channels
other than ECPs have increased, reflecting general trends in e-commerce and the
rise of internet retailers, like 1-800 Contacts, dedicated to eye care products.
(Weisbarth Decl. 9 (A-237).) Internet retailers typically do not employ ECPs
who interact directly with consumers, and their customer service staff typically is
not qualified to assess or re-assess their customers vision correction needs, to
prescribe lenses, or to monitor ocular health. (Id. 10 (A-238).)
B.
Contact Lens Manufacturers.

In the U.S., there are currently four major contact lens manufacturers:
Alcon Laboratories, Inc. (Alcon), Johnson & Johnson Vision Care Inc.
(JJVCI), Bausch & Lomb Incorporated (B&L), and CooperVision Inc.
(CooperVision). (Id. 12 (A-238).) None of the four manufacturers has a
facility within Utah. For example, Alcon is based in Fort Worth, Texas, and all
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Alcon contact lenses shipped in the U.S. originate from Alcons facility in Johns
Creek, Georgia. (Id. 13-16 (A-238).) B+L has its principal place of business in
Bridgewater, New Jersey and no significant operations in Utah. (A-261
(Complaint for Declaratory and Injunctive Relief, Bausch & Lomb, Incorporated v.
Reyes, No. 2:15-cv-00259 (D. Utah Apr. 14, 2015) (Bausch & Lomb Compl.)
6).)
In introducing new products, a contact lens manufacturer faces the
challenges of educating ECPs about the attributes of its products and of
encouraging them, in turn, to inform patients of the products potential benefits.
(A-236, 240-41, 242-43 (Weisbarth Decl. 5, 23, 33).) This is a familiar
challenge for developers of innovative products. But it is exacerbated in the
contact lens industry because of the prevalence of lower-cost retailers, who
effectively free-ride on the efforts of ECPs to learn about a manufacturers
offerings and to educate consumers about their benefits whenever they fill or refill
the prescriptions the ECPs write. (Id. 33 (A-242-43).) ECPs may be reluctant to
undertake those efforts if, once a patient receives a prescription, it may be filled by
a low-cost contact lens reseller whose business model does not include those
investments and who free-rides on the professional services ECPs provide.
To overcome these challenges, to improve patient access to better
information and new technologies, and to enhance access to better eye care, a
10
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manufacturer may invest heavily in programs that benefit consumers, ECPs, and
the market for vision care products. (Id. 23 (A-240-41).) For example, over the
years, Alcons programs have included the following:
Fit rebates, consisting of enhanced rebates offered by an ECP who

fits a patient for contact lenses when the patients prescription is filled
by the prescribing ECP;
Rebates offered by an ECP to a patient who adopts new contact lenses

if the patients prescription is filled by the prescribing ECP;
Making free trial lenses available only to ECPs, and contact lens
retailers who are associated with an ECP, who fit patients with contact
lenses;
Launching new contact lens products gradually on a region-by-region

basis and making them initially available only from ECPs or retailers
who are associated with an ECP;
Discontinuing supplies to retailers who engage in gray market sales

activities.1
(Id.) These programs are operated on a nationwide basis and often are tailored to
the needs of specific ECPs and contact lens retailers. (Id. 24 (A-241).) Most of
the benefits of these programs are extended only to ECPs and retailers associated
with ECPs who prescribe contact lenses, and not to retailers such as internet
For contact lenses, gray market sales refer to sales of contact lenses that are
not authorized by the manufacturer, often by entities that are not licensed to sell
contact lenses (e.g., sales on internet auction sites, at flea markets, in convenience
stores, and in beauty supply stores). Gray market sales of contact lenses are
associated with a heightened risk to consumer health and safety because they allow
contact lenses to be obtained without a current valid (unexpired) prescription and
without the supervision of a licensed ECP. (Id. 8 (A-237).)
11
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resellers who dispense or resupply contact lenses but do not prescribe them. (Id.
25 (A-241).) Only some, not all, of the programs affect retail pricing.
Over the past two years, contact lens manufacturers also have adopted
Unilateral Pricing Policies or UPPs. (Id. 31-32 (A-242).) For example,
Alcon adopted a UPP in connection with the launch of four new premium products
beginning in June 2013. (Id. 31, 36-37 (A-242-44 ).) Under Alcons UPP, a
contact lens retailer is free to sell the covered product at any price. (Id. 34 (A243).) But if the retailer sells the product below a specified floor, and persists in
doing so after notice from Alcon, Alcon will decline to supply the seller with the
product in question for one year. (Id.) Alcon will continue to supply the seller
with other Alcon products and will not take any action against the seller other than
to discontinue supply. (Id.)2 The policy was announced through a public
statement by Alcon. (Id. 35 (A-243).) Alcon sought no agreement, formal or
informal, from any person to abide by the UPP. (Id.) Alcon acted independently
in adopting its UPP.
Similarly, in 2014, B+L adopted a UPP for two innovative contact
lens products that it spent years developing. (A-263, 265 (Bausch & Lomb Compl.
Thus, contrary to the statement in the district courts opinion, Alcons UPP
does not punish[] the retailer by terminating supply of contact lenses for one
year. (A-762.) Nor does B+Ls UPP have that effect.
12
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13-16, 21).) The policy provides that B+L will not supply those lenses to
customers who sell or advertise the lenses for less than a specified price. (Id. 21
(A-265).) The UPP is carefully circumscribed (it applies only to two specific lines
of new and innovative products) and unilateral. (Id. 22 (A-265).) It also makes
clear that resellers are free to set their own resale prices, while B+L will exercise
its own discretion about its potential commercial partners in a structured fashion.
(Id.)
C.
The Utah Statute.

On March 10, 2015, the Utah Legislature amended its Contact Lens
Consumer Protection Act through the addition of Section 58-16a-905.1. That

section reads as follows:
58-16a-905.1. Contact lens manufacturer or distributor Prohibited
conduct.
A contact lens manufacturer or a contact lens distributor may not:
(1) take any action, by agreement, unilaterally, or otherwise,
that has the effect of fixing or otherwise controlling the price
that a contact lens retailer charges or advertises for contact
lenses; or
(2) discriminate against a contact lens retailer based on whether
the contact lens retailer:
(a) sells or advertises contact lenses for a particular price;
(b) operates in a particular channel of trade;
(c) is a person authorized by law to prescribe contact
lenses; or
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(d) is associated with a person authorized by law to

prescribe contact lenses.
At the same time, the Legislature added a provision to Section 58-16a-906
(Penalties for Violations) stating that [t]he attorney general may bring a civil
action or seek an injunction and a civil penalty against any person who violates a
provision of Section . . . 58-16a-905.1.
The Utah law was championed in the Utah legislature by 1-800
Contacts, an intervenor in this case, a Utah company, and the largest contact lens
retailer in the United States. Indeed, the senator who sponsored the bill yielded the
majority of each of her opening statements in the House and Senate Committees to
a vice president of 1-800 Contacts, and she yielded additional portions of her
presentation in the House Committee to 1-800 Contactss outside counselthe
same counsel that is representing 1-800 Contacts in this action. (A-122-44
(Transcription of March 5, 2015, House Business and Labor Standing Committee,
Floor Debates for Utah Senate Bill SB0169 at 5-27); A-185-89 (Transcription of
February 17, 2015, Senate Business and Labor Standing Committee, Floor Debates
for Utah Senate Bill SB0169 at 4-8).) In the House Committee, the 1-800 Contacts
representative stressed that his company is the largest retail seller of contact
lenses in the world and touted the companys Utah residence:
We employ about a thousand people here in the state of Utah,
which is our headquarters, and we pay last year we paid a
little over $30,000,000.00 in payroll. We are a proud Utah born
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and raised company and we are happy to be in . And we have

been a proud partner with the state. (A-124 (Transcription of
March 5, 2015, House Business and Labor Standing
Committee, Floor Debates for Utah Senate Bill SB0169 at 7).)
A member of the Utah House candidly acknowledged that the Utah law was in the
halls and up on the Capitol . . . dubbed kind of the 1-800 bill. (A-93
(Transcription of March 10, 2015, House Floor Debates Day 43, Floor Debates for
Utah Senate Bill SB0169) at 15.)
Although the apparent impetus for the Utah law was the adoption of
UPPs by contact lens manufacturers, the law sweeps much more broadly. By its
terms, subsection (1) also reaches maximum resale price maintenance, the setting
of price ceilings by manufacturers, and maximum advertised price policies. And
subsection (2), the retailer anti-discrimination provision, reads like a wish-list for a
low-cost contact lens retailer (like 1-800 Contacts) who does not employ ECPs or
undertake the costs and liabilities associated with lens prescription. Under
subsection (2), any practice that favors an ECP over such a retailer is subject to
penalty, since it operates to discriminate against a retailer based on whether it is,
at minimum, authorized by law to prescribe contact lenses. Those practices
include some of the very ones described above: the offer of fit rebates; the offer
to ECPs of free trial lenses; product launches through ECP-affiliated retailers only;
and actions undertaken to prevent gray market sales by unauthorized resellers, who
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often sell lenses without valid refill prescriptions. (A-240-41 (Weisbarth Decl.
23).)
D.
Course of Proceedings.
Alcon initiated this litigation, and filed a motion for a preliminary
injunction, on April 13, 2015. On April 14, 2015, JJVCI and B+L filed separate
actions, which were consolidated by the district court on April 21, 2015. On April
20, 2015, non-parties 1-800 Contacts and Costco Wholesale (Costco) (the
intervenors collectively, with the AG the Opponents) intervened in the
proceedings. On April 28, 2015, the Opponents filed oppositions to plaintiffs
motions for a preliminary injunction.
In their opposition papers, none of the Opponents sought to defend the
Utah law as written. (See, e.g., A-400 (Defendants Memorandum in Opposition to
Plaintiffs Motions for Preliminary Injunction (AG Br.) at 8).) Instead, in tacit
recognition of the laws impermissible extraterritorial effects, they offered
narrowing constructions aimed at preserving the laws constitutionality, mainly by
limiting the laws application to a manufacturers dealings with Utah retailers.
Thus, according to the AG, the first part of the Utah law prohibits contact lens
manufacturers from taking any action that has the effect of fixing or otherwise
controlling the price that a [Utah] contact lens retailer charges or advertises for
contact lenses. (Id.) Similarly, according to the AG, the second part of the Utah
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law prohibits manufacturers from discriminat[ing] against a [Utah] contact lens

retailer based on, among other things, whether the retailer is authorized by law to
prescribe contact lenses. (Id.) According to the AG, the Utah law does not
extend its protections to non-Utah contact lens retailers. On the other hand,
according to the AG, the Utah law does extend its protections to Utah retailers like
1-800 Contacts even when they sell to consumers outside Utah. Ninety-nine of 1800 Contactss sales are to out-of-state consumers. (See A-296 (Affidavit of Laura
Angelini (April 14, 2015) (Angelini Aff.) 11).) When probed by the district
court on this point at oral argument, the AG declined to exclude the possibility that
a contact lens manufacturer could be punished under the Utah law based upon its
discontinuing supply of products to a Utah retailer who made sales in violation of
the manufacturers policies to consumers outside Utah. (See A-847-48 (OA Tr.
63:17-64:3) (I will answer that with a perhaps, but it would depend on the facts of
the case . . . .).) The State thus continues to hold the sword of possible civil
penalties over the manufacturers regarding a Utah retailers sales in all 50 states.
E.
The District Courts Ruling.

On May 11, 2015, the district court denied plaintiffs motions for a
preliminary injunction.
Extraterritorial Effect/Direct Regulation of Interstate Commerce:
The district court concluded that the Utah law has no extraterritorial effects
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because, [u]nder a deeply rooted and longstanding canon of construction, statutes

are presumed not to have extraterritorial effect. (A-766-67.) It applied that
presumption because it failed to see a clear indication of an extraterritorial
application in the statute at issue. (A-767.) The court did not address plaintiffs
arguments that the law regulated interstate commerce, and that it did so in a
manner that was direct and not merely incidental to regulation of purely
intrastate commerce. Most conspicuously, the court failed to explain how the
statutes regulation of sales by Utah-based retailers, such as 1-800 Contacts, to
consumers in all 50 states could be reconciled with binding Commerce Clause
precedent.
Discrimination Against Interstate Commerce: The district court
also concluded that the Utah law does not impermissibly discriminate against
interstate commerce because the court presumes the Utah Attorney General will
enforce the statute in a manner that does not violate the Commerce Clause.
(A-771.) The district court further reasoned that, if out-of-state retailers will be
disadvantaged, that is only because the manufacturers may wish to continue their
UPPs outside of Utah, and therefore (in the district courts view) the discrimination
flows from the UPPs and not from the Utah law. (A-768.) The district court did
not address that the Utah law, as construed by the AG, discriminates on its face
between Utah retailers and non-Utah retailers. Nor did the district court address
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the discriminatory effect of the second part of the law, asserting that Plaintiffs
constitutional concerns [with the AGs enforcement of this provision] are
premature and speculative. (A-770.)
Burden on Interstate Commerce: The district court concluded that
the Utah law did not impose an excessive burden on interstate commerce,
compared to the local benefits (i.e., lower prices to Utah consumers (A-771)) it
achieved. In reaching this conclusion, the court considered the burden on interstate
manufacturers associated with being forced to ship contact lenses to Utah under
circumstances under which it would otherwise not do so, and that retailers in
Utah, but not retailers in the other 49 states, would be exempt from manufacturer
policies, and concluded that these two burdens were no greater than the burdens
imposed by traditional state antitrust laws. (A-772) The court did not consider the
severe burden on interstate commerce imposed as a result of the Utah laws
predominant application to transactions between one in-state retailer, 1-800
Contacts, and consumers outside Utah to whom 1-800 Contacts ships. It also
observed that the effects of the law upon interstate commerce would be negated if
other states enact similar antitrust laws on their own. (Id.)
Irreparable Harm: The district court declined to find that
manufacturers would suffer irreparable harm in the absence of a preliminary
injunction. Because the AG had not yet brought an enforcement action against any
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manufacturer, the court reasoned that the prospect of such injury was speculative
at this stage, and dependent on how section 905.1 will be enforced. (A-77273.) The district court did not find that if the law was enforced according to its
terms (as narrowed by the AG in its brief), the forms of irreparable injury the
defendants had identified in their pre-enforcement challenge would not arise. Nor
did the court challenge the manufacturers observation that if the Utah law is
unconstitutional, the manufacturers will not be able to recover damages from the
state of Utah in light of the states sovereign immunity.
Balance of Hardships/Public Interest: Combining consideration of
these two factors (as is appropriate in a case to which the AG, charged with
protecting the public interest, is a party, see, e.g., Nken v. Holder, 556 U.S. 418,
435 (2009), the court found that injunction of the law would frustrate a measure
the Utah legislature determined was necessary to protect consumers and promote
free competition. (A-773-74) The court did not discuss the opposing hardships,
impediments to interstate commerce, and procompetitive benefits of their programs
that the manufacturers had identified in their moving papers, other than to observe
that Plaintiffs were provided a fair opportunity to present their positions to the
Utah legislature, but that the people of Utah chose to enact section 905.1 to
eliminate price fixing in favor of free competition. (A-774.) On May 12, 2015,
all three plaintiffs filed notices of appeal.
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SUMMARY OF THE ARGUMENT

The district court erred in denying a preliminary injunction against
enforcement of the Utah law because all of the requirements for enjoining this
unique statute were satisfied:
(1)
Alcon and B+L are likely to succeed on the merits of their
claims that the Utah law violates the Commerce Clause. The Utah law
violates the Commerce Clause for at least the following reasons:
(a)
The Utah law directly regulates interstate commerce
and has impermissible extraterritorial effects. The Utah law

directly regulates interstate commerce because it dictates the terms of
sales of contact lenses by Utah-based retailers, such as 1-800
Contacts, to consumers in all 50 states. Indeed, the law directly
compels interstate commerce because it authorizes the AG to sue any
out-of-state manufacturer that declines to supply contact lenses to
Utah-based discounters on account of their failure to abide by
uniform, nationally applied manufacturer policies. If the law goes
into effect, Alcon and B+L will be forced to ship contact lenses to
Utah retailers or face an enforcement action and civil penalties.
The Utah law also directly regulates interstate commerce
because it bars an out-of-state manufacturer from taking any action
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even unilaterallythat has the effect of controlling the prices that a

Utah contact lens retailer charges or advertises for contact lenses
throughout all 50 states. Thus, for example, the Utah law forbids
Alcon or B+L from setting a maximum retail price for the sales of
their products in Alabama or a minimum resale price for the sale of
their products in California, because in doing so the program will
necessarily regulate the price at which a Utah retailer can engage in
interstate commerce with (i.e., shipment of products to) consumers in
those states.
Finally, the Utah law has impermissible extraterritorial effects
because all of the companies, and virtually all of the conduct, that it
regulates are out-of-state. There are no contact lens manufacturers or
distributors in Utah, and all of the activity involved in administering
and enforcing the programs affected by the Utah statute takes place
outside Utah.
(b)
The Utah law impermissibly discriminates against
interstate commerce. The law discriminates on its face because, as

construed by the AG, the Amendment protects only a [Utah] contact
lens retailer, and not a non-Utah contact lens retailer, from any
policy or action by a manufacturer that affects the retail price at which
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contact lenses are sold. The law also discriminates in its practical
effect by enabling Utah retailers, but not non-Utah retailers, to sell
nationwide without regard to manufacturer policies. The law thus
permits Utah retailers like 1-800 Contacts to sell at lower prices than
non-Utah retailers, even outside Utah. Similarly, the law entitles a
[Utah] contact lens retailer, but not a non-Utah contact lens retailer,
to the benefits of every contact lens manufacturer program that is
designed for some kinds of retailers and not others, such as free trial
lenses and enhanced rebates that for years have been extended only to
ECPs and to retailers associated with an ECP. The unconstitutionally
discriminatory effects are the product of the operation of the Utah law,
not the operation of the manufacturer policies, because those effects
would not arise in the absence of the Utah law; the manufacturer
policies themselves do not treat in-state and out-of-state retailers
differently. Neither the AG nor the intervenors carried their burden,
or even made any real effort to carry their burden, to show that the
Utah law survives strict scrutiny. See, e.g., Or. Waste Sys., Inc. v.
Dept of Envtl Quality of Or., 511 U.S. 93-94, 100-01 (1994)
(explaining that discriminatory laws face a virtually per se rule of
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invalidity and must be invalidated unless they pass the strictest

scrutiny) (internal quotation marks and citation omitted).
(c)
The Utah law imposes excessive burdens on interstate
commerce. The Utah law imposes considerable burdens on

overwhelmingly interstate commerce, which are not justified by the
putative local benefits: lower prices on some contact lens products
purchased by Utah consumers. Every manufacturer subject to penalty
under the Utah law is located outside Utah, and the statute interferes
with those manufacturers pricing policies in all 50 states. The statute
also burdens out-of-state retailers, whom the statute disadvantages
vis--vis Utah retailers, in particular 1-800 Contacts. Indeed, the vast
majority of retail sales affected by the Utah law are sales in interstate
commerce made by 1-800 Contacts to consumers in other states.
Thus, the effect of the law upon interstate commerce is direct and
primary, not merely incidental.
(2)
Unless the Court enjoins enforcement of the Utah law,
Alcon and B+L will suffer at least three forms of irreparable harm.
First, Alcon and B+L will suffer a deprivation of constitutional rights
guaranteed by the Commerce Clause, which is per se an irreparable injury.
Second, Alcon and B+L will suffer financial losses that cannot be recovered
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because the State of Utah and the AGthe parties responsible for the
enactment and the enforcement of the Utah laware immune from damages
suits. Third, Alcon and B+L will suffer intangible marketplace losses, such
as diminished incentives to innovate, that cannot be quantified or recovered.
(3)
The balance of hardships and public interest factors favor
the granting of an injunction pending appeal. It is always in the public

interest to prevent the violation of a partys constitutional rights, and the
district courts observation that the public interest favors enforcement of
duly enacted laws proves too much: all unconstitutional laws are the
product of duly constituted legislative action. In this case, the harms are
compounded by the public harms that will result from enforcement of the
Utah law. Contact lens wearers will be less likely to be informed about new
products in the absence of the incentives created by the UPP and other
affected programs. And even if there were countervailing public interests
that favored enforcement, they would be mitigated by the consideration that
Alcon and B+L seek only a preliminary injunction to preserve the status quo
until this action is resolved on the merits.
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STANDARD OF REVIEW
The district courts decision not to issue a preliminary injunction is
reviewed for abuse of discretion. See Awad v. Ziriax, 670 F.3d 1111, 1125 (10th
Cir. 2012). This Court reviews the district courts factual findings for clear error
and its legal determinations de novo. See Heideman v. S. Salt Lake City, 348 F.3d
1182, 1188 (10th Cir. 2003). An abuse of discretion occurs . . . when the trial
court bases its decision on an erroneous conclusion of law or where there is not a
rational basis in the evidence for the ruling. Awad, 670 F.3d at 1125.
ARGUMENT
I.
ALCON AND B+L ARE LIKELY TO SUCCEED ON THE MERITS.

Alcon and B+L are likely to succeed on the merits of their claims
because the Utah law runs afoul of the Commerce Clause of the United States
Constitution. (U.S. Const. Art. I 8 cl. 3.) The Supreme Court long has
recognized that th[e] affirmative grant of authority to Congress [to regulate
interstate commerce] also encompasses an implicit or dormant limitation on the
authority of the States to enact legislation affecting interstate commerce. Quik
Payday, Inc. v. Stork, 549 F.3d 1302, 1307 (10th Cir. 2008) (alteration in original)
(quoting Healy v. Beer Inst., 491 U.S. 324, 326 n.1 (1989)). The Utah law exceeds
this limitation in at least three respects.
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The Utah Law Directly Regulates Interstate Commerce and Has

Impermissible Extraterritorial Effects.
In declining to enter a preliminary injunction, the district court
reasoned that the manufacturers constitutional challenge was unlikely to succeed

only because unless a statute gives a clear indication of extraterritorial
application, it has none (A-767 (quoting Nevares v. M.L.S., 345 P.3d 719, 727
(Utah 2015))) and because the court could see no clear indication of an
extraterritorial application here (A-767). Putting aside that the clear statement
rule the district court purported to apply has no mooring in federal Commerce
Clause jurisprudence, the courts inability to perceive the extraterritorial
application of this statute is puzzling. Whether read literally or as narrowed by the
AG, the Utah law regulates exclusively the activities of out-of-state companies and
regulates predominantly transactions by consumers located outside the State of
Utah. The law offers a casebook example of a law that regulates interstate
commerce directlynot merely, incidentallyand, as such, has impermissible
out-of-state effects.
When a state statute directly regulates . . . interstate commerce, the
Supreme Court will generally [strike] down the statute without further inquiry.
Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476 U.S. 573, 579
(1986). In addition, the Commerce Clause . . . precludes the application of a
state statute to commerce that takes place wholly outside of the States borders,
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whether or not the commerce has effects within the State. Healy, 491 U.S. at 336
(quoting Edgar, 457 U.S. at 642-43). Thus, a state statute that has the practical
effect of extraterritorial control of commerce occurring entirely outside the
boundaries of the state in question is invalid per se. KT & G Corp. v. Attorney
Gen. of Okla., 535 F.3d 1114, 1143 (10th Cir. 2008) (quoting Grand River Enters.
Six Nations, Ltd. v. Pryor, 425 F.3d 158, 168 (2d Cir. 2005)). In determining
whether a state statute directly regulates interstate commerce or has impermissible
extraterritorial effects, courts look to the effects of the state regulatory scheme.
See Brown-Forman, 476 U.S. at 579 (We have also recognized that there is no
clear line separating the category of state regulation that is virtually per se invalid
under the Commerce Clause, and the category subject to the Pike v. Bruce Church
balancing approach. In either situation the critical consideration is the overall
effect of the statute on both local and interstate activity.); Healy, 491 U.S. at 336
(The critical inquiry is whether the practical effect of the regulation is to control
conduct beyond the boundaries of the State.)
The Utah law directly regulates interstate commerce because it
(i) forbids any action by any manufacturer, having the effect of fixing or
otherwise controlling the price of contact lenses charged or advertised by a
contact lens retailer and (ii) prohibits discriminat[ion] against a contact lens
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retailer by the same class of entities without regard to whether the prohibited acts
take place or have effects within or outside Utah.
As an initial matter, all of the manufacturers regulated by the Utah
law are located outside Utah. Alcon is headquartered in Fort Worth, Texas; JJVCI
is headquartered in Jacksonville, Florida; B+L is headquartered in Bridgewater,
New Jersey; and CooperVision is headquartered in Pleasanton, California. (A-238
(Weisbarth Decl. 13).) Similarly, nearly all, if not all, contact lens distributors
are also located outside Utah. Moreover, the activities the law purports to control
also take place outside Utah. For example, all day-to-day activity and decisionmaking by Alcon personnel regulated by the Utah law, including all activity
relating to the administration and enforcement of Alcons UPP and other programs,
takes place at Alcons headquarters. (Id. 13, 26, 41 (A-238, 241, 245).) All
Alcon contact lenses shipped in the United States ship from Alcons facility in
Johns Creek, Georgia. (Id. 16 (A-238).) Alcon has no facilities in Utah (Id. 14
(A-238)); thus, all conduct by Alcon regulated by the statute takes place outside of
Utah.
But even clearer proof that the predominant focus of the Utah law is
the direct regulation of purely interstate commerce is that it regulates the sales of
contact lens productsall of which are manufactured by out-of-state entitiesto
consumers in all 50 states. Indeed, the law bars any manufacturer from taking any
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action that has the effect of controlling the prices that a Utah contact lens retailer
charges or advertises for contact lenses for sales outside of Utah. For example, the
Utah law bars an out-of-state contact lens manufacturer from setting a maximum
retail price for the sale of its products by a Utah contact lens retailer to a customer
in Alabama. Similarly, the Utah law bars an out-of-state contact lens manufacturer
from setting a minimum resale price for the sale of its products by a Utah contact
lens retailer to a customer in California. By exempting Utah contact lens retailers
from contact lens manufacturer pricing policies for out-of-state purchases, the Utah
law directly regulates interstate transactions and has constitutionally impermissible
extraterritorial effects on the price of contact lenses paid by out-of-state
purchasers.3 Whatever may be Utahs interest in regulating prices paid by its own
residents, it does not have any discernible interest in regulating the prices paid by
residents of other states. Yet under the AGs construction of the law, the primary
effect of Utahs enforcement of the law will be to regulate the prices paid for
See Healy, 491 U.S. at 336 (a state law may not have the practical effect of
establishing a scale of prices for use in other states.); Brown-Forman, 476 U.S.
at 582 (That the ABC law is addressed only to sales of liquor in New York is
irrelevant if the practical effect of the law is to control liquor prices in other
States.); see also K-S Pharms., Inc. v. Am. Home Prods. Corp., 962 F.2d 728, 730
(7th Cir. 1992) (Any statute of the form charge in this state the same price you
charge outside it carries the implied command: Charge outside this state the same
price you charge inside it. This latter, implied (but inseparable) command, the
[Brown-Forman] Court held, is a forbidden attempt to exercise extraterritorial
power.).
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contact lenses by residents of states other than Utah. (See A-296 (Angelini Aff.
11).)
Unlike any law cited by the AG or the intervenors, the Utah law
compels out-of-state contact lens manufacturers to send inventory to Utah contact
lens retailers when they might otherwise choose not to, an aspect of the Utah law
not shared by any other state statute of which we are aware or that the AG or
intervenors have pointed to. Again, the Utah law prohibits a variety of practices
including maximum and minimum resale price policies and discrimination against
a Utah contact lens retailer based on the price charged for contact lenses. At the
same time, the Utah law also prohibits the enforcement of such contact lens
manufacturer policies when, as is the case with Alcons UPP, enforcement consists
of discontinuing the supply to any contact lens retailer that persists in selling UPP
products below the price specified by Alcons UPP. (See A-243 (Weisbarth Decl.
34-35).) As a result, the Utah law obligates a manufacturer who has seen a Utah
retailer disregard its policies (including, but not limited to, resale pricing policies),
to continue to send to that Utah retailer, for an indefinite period, truck shipments
and courier packages containing contact lenses, or else risk an enforcement action
by the AG. In short, if a contact lens manufacturer declines to deal with a Utah
retailer because Utah bans manufacturer pricing policies, then the manufacturer
apparently will be subject to enforcement action by the AG for taking action that
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has the effect of controlling prices and discriminating against a Utah retailer. Any
such enforcement action would have the constitutionally impermissible effect of
project[ing] . . . one state regulatory regime into the jurisdiction of another State.
Healy, 491 U.S. at 336-37.
The district courts order did not meaningfully address any of the
controlling case law cited above, nor the per se prohibition under the Commerce
Clause on the direct regulation of interstate commerce by a state statute. Instead, it
assumed away the glaring constitutional defects in the Utah law by applying a
presumption against extraterritorial application of a state statute under Utah law
and further presuming that the Utah Attorney General will enforce the statute in a
manner that does not violate the Commerce Clause. (A-767, 771.) By essentially
delegating assessment of the constitutionality of the law to the state official
obligated to enforce it, the district court failed to address the distinguishing
features of the Utah law that are engaged however the AG chooses to enforce it:
(i) that it regulates only contact lens manufacturers and distributors that are located
out-of-state; and (ii) that it purports to affectand indeed compelconduct by
those manufacturers and distributors that occurs entirely out-of-state. For these
reasons, the district court erred by failing to address the constitutional flaws in the
Utah law, even as narrowed by the AG. Further, the district courts statement that
the AG will enforce the statute in a manner that does not violate the Commerce
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Clause begs the core questionwhether the statute itself violates the Commerce
Clause (as the Appellants maintain) or not (as the AG and intervenors maintain).
Appellants should not have to guess about the constitutional correctness of the
AGs interpretation on pain of substantial civil penalties.
B.
The Utah Law Impermissibly Discriminates Against Interstate

Commerce.
The Commerce Clause prohibits states from discriminating against
interstate commerce in favor of in-state interests. Granholm v. Heald, 544 U.S.

460, 472 (2005). A statute may be discriminatory either on its face or in practical
effect. C & A Carbone, Inc. v. Clarkstown, 511 U.S. 383, 402 (1994). A law
discriminates on its face if it explicitly distinguishes between in-state and out-ofstate actors. See Wyo. v. Okla., 502 U.S. 437, 455 (1992). A law discriminates in
its effects if, despite having facially neutral text, its effect is to favor in-state
economic interests over out-of-state interests, C & A Carbone, 511 U.S. at 402, or
if it alters the competitive balance between in-state and out-of-state firms,
Kleinsmith v. Shurtleff, 571 F.3d 1039, 1041 (10th Cir. 2009).
A discriminatory law is per se invalid, save in a narrow class of
cases in which the state can carry its burden of showing that the statute survives
strict scrutiny. See C & A Carbone, 511 U.S. at 392. Under that standard, a
discriminatory law must be declared invalid unless the state can prove that it
advances a legitimate local purpose that cannot be adequately served by
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reasonable nondiscriminatory alternatives. Or. Waste, 511 U.S. at 100-01

(internal quotation marks omitted).
1.
The Utah law discriminates facially and in its effects.
The Utah law discriminates both on its face and in its practical effects.
As construed by the AG (A-400), subsection 1 of the Utah law protects a [Utah]
contact lens retailer, but not a non-Utah contact lens retailer, from manufacturer
pricing policies. Subsection 2 of the Utah law entitles a [Utah] contact lens
retailer, but not a non-Utah contact lens retailer, to manufacturer programs that
are designed for some kinds of retailers and not others, such as fit rebates and
trial lenses.4 The Utah law thus differentiates, by its terms, between Utah and nonUtah retailers.
The Utah law also discriminates in its effects. Under subsection 1, a
[Utah] contact lens retailer, like 1-800 Contacts, can operate without regard to
manufacturer pricing policies nationwide, while all of its non-Utah-based
competitors must adhere to those policies to ensure continued supplies. The Utah
law gives in-state retailers a competitive advantage over every out-of-state retailer
Thus, the district court was wrong to characterize the law as merely
requir[ing] that manufacturers refrain from mandating price fixing within the state
of Utah and from discriminating against Utah retailers for reasons related to price
fixing. (A-769.) By its terms, the law applies to additional forms of
discrimination, such as the provision of trial lenses to some retailers/ECPs, but not
others, or the provision of fit rebates.
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in every state, not just in Utah. This permits Utah contact lens retailers to sell
nationwide without regard to the pricing policies of contact lens manufacturers
while not providing the same advantage to out-of-state contact lens retailers.
Similarly, subsection 2 guarantees to a [Utah] contact lens retailer who does not
prescribe lenses (e.g., 1-800 Contacts), but not to a similar non-Utah retailer,
access to manufacturer programs nationwide (such as fit rebates and free trial
lenses) that are designed for ECPs. In effect, this subsection extends to Utah
contact lens retailers a most favored nation treatment under which they must
receive the benefits of any program a contact lens manufacturer offers to any ECP
nationwide. Thus, a contact lens manufacturer is prohibited from offering an ECP
in Connecticut a volume discount not offered to a Utah contact lens retailer.
Similarly, the Utah law mandates that a contact lens manufacturer provide a Utah
contact lens retailer with the same rebate offered to contact lens retailers in
California who are associated with ECPs.
The district court dismissed these discriminatory aspects of the law on
the ground that any discrimination against out-of-state contact lens retailers is
entirely the result of Plaintiffs pricing policiesnot any action taken by Utah
(A-768 (quoting Costco Oppn at 14)), and thus concluded that contact lens
manufacturer policies, and not the Utah law, produce the discriminatory effects.
(See A-768 (Section 905.1 in no way requires or anticipates that out-of-state
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retailers will continue to be subject to UPPs.).) This conclusion is erroneous as a

matter of fact and law.
As a factual matter, it was an error for the district court to conclude
that the Utah law merely exempts Utah contact lens retailers from contact lens
manufacturer pricing policies (although that alone is sufficient to render it
unconstitutionally discriminatory). To the contrary, as demonstrated above, the
Utah law not only exempts Utah contact lens retailers from the terms of contact
lens manufacturers UPPs, but also mandates most favored nation treatment for
all Utah contact lens retailers under any contact lens manufacturer program
operated nationwide that extends benefits exclusively to ECPs or ECP-associated
contact lens retailers. As a result, by operation of Utah law, all non-ECP Utah
contact lens retailers (including 1-800 Contacts) will gain a competitive advantage
over their similarly-situated out-of-state counterparts, a result that is impermissible
under the Commerce Clause.
As a legal matter, the district court erred in holding that it is the
manufacturers policies, and not the unconstitutional effects of the Utah law, that
result in discrimination. By that logic, to avoid the Utah law producing
discriminatory effects, it falls upon the manufacturers to adapt or abandon their
nationwide policies. But as Alcon and B+L observed to the district court, it is the
unconstitutional prohibitions of the Utah law that bring about its discriminatory
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effects, and those constitutional defects cannot simply cured by requiring cessation
of the prohibited conduct. Were it otherwise, no law prohibiting conduct would
ever be unconstitutional because the state could always respond with the circular
argument that a laws constitutional infirmity can be avoided essentially by
complying with the prohibition.5 The district court also did not address the
Supreme Courts holding to that effect in Hunt v. Wash. State Apple Adver.
Commn, 432 U.S. 333, 350-51 (1977), in which a North Carolina law was found
to be discriminatory in violation of the Commerce Clause because its prohibitions
included a ban on Washington apple growers from shipping containers of apples
into North Carolina that displayed Washington quality stamps. There, as here, it
could have been argued that any discrimination resulted only from the Washington
growers practice of displaying quality stamps on their shipping containers, and
that such discrimination could be avoided by abandoning their longstanding
practice of doing so. Instead, the Supreme Court struck down the statute, finding
that its leveling effect . . . insidiously operate[d] to the advantage of local apple
producers, id. at 351, and noting that it required Washington growers . . . to alter
For example, a law subjecting to penalty those who engage in a form of

prayer could be upheld against constitutional challenge under the Free Exercise
Clause on the theory that an individual could engage in different, non-proscribed
forms of prayer.
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their long-established procedures . . . or abandon the North Carolina market, id. at

340. Because the same is true of the Utah law, it should be struck down.
The district court was also wrong to dismiss these concerns on the
ground that Utah Code 58-16a-904, in place since 2006, already requires contact
lens manufacturers to certify to the AG that their contact lens products are made
available in a commercially reasonable and nondiscriminatory manner. (See A770.) The very target of the new Utah statute, the UPP, is a nondiscriminatory
policy under the older statute in that it applies uniformly to any retailer, equally,
whenever the retailer chooses to sell below the UPP price. It gives no retailer
favored or disfavored treatment. As evidenced by the legislative history and the
parties positions in this case, however, the new statute deems the application of
that nonselective policy to be a form of discrimination against a retailer who
sells or advertises contact lenses for a particular price. That is a far more
onerous prohibition that eliminates even nondiscriminatory policies such as the
UPP or any other manufacturer policy regarding price. In addition, unlike the new
Section 905.1, the older statute contains relevant exemptions, including that it
expressly does not require a manufacturer to (a) sell contact lenses to different
contact lens distributors or customers at the same price; (b) supply to a seller
who is not in substantial compliance with Utah and federal law (i.e., a gray
market seller), or (c) sell to customers in all geographic areas lenses that are being
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test marketed on a limited basis in one geographic area, Utah Code 58-16a-905,
all practices that are prohibited under the new statute. Importantly, Section 904,
unlike Section 905.1, does not discriminate in its purpose or effect in favor of Utah
retailers over non-Utah retailers.
2.
The discriminatory Utah law cannot survive strict scrutiny.
Where, as here, a law is discriminatory on its face or in its effects, the

law is per se invalid, save in a narrow class of cases in which the state can carry
its burden of showing that the statute survives strict scrutiny. See C & A
Carbone, 511 U.S. at 392 (explaining that the state must demonstrate that it has
no other means to advance a legitimate local interest); Or. Waste, 511 U.S. at
100-01 (holding that a discriminatory statute faces a virtual per se rule of
invalidity and must be struck down unless, under the strictest scrutiny, the state
can prove that it advances a legitimate local purpose that cannot be adequately
served by reasonable nondiscriminatory alternatives); Kleinsmith, 571 F.3d at
1040 (A discriminatory law is virtually per se invalid.) (internal quotation marks
omitted).
Neither the AG nor either of the intervenors carried their burden to
show that the discriminating terms and effects of the Utah law can survive strict
scrutiny. Indeed, they made no real effort to do so, which is sufficient by itself to
establish Alcons and B+Ls likelihood of success on the merits and warrant
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reversal. See Or. Waste, 511 U.S. at 100-08 (invalidating discriminatory state
statute that failed to pass strict scrutiny).
The district court appears to have rationalized any competitive
advantage the Utah law confers on Utah retailers by observing that the Utah law is
nothing more than a state antitrust statute, tailored to a specific industry, which
the state has the power to enact. (A-769.) But the Utah law has nothing in
common with ordinary state antitrust laws of general application and any analogy
between it and those statutes cannot save the Utah law. State antitrust laws, like
state laws on any other subject, must comply with the Commerce Clause. Thus,
valid antitrust statutes regulate evenhandedly and do not favor in-state businesses
over out-of-state businesses. None of the cases cited by the district court in
analogizing the Utah law to state antitrust laws held otherwise. For example,
Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 993 (9th Cir. 2000),
involved, inter alia, a constitutional challenge to Californias antitrust statute, the
Cartwright Act, as applied to an alleged conspiracy to manipulate the price of
cheese and milk, involving both in-state and out-of-state activity. The court of
appeals held that California may apply its antitrust and unfair competition statutes
[to the alleged misconduct] consistent with the Commerce Clause citing, inter
alia, to a treatise collecting [c]ases holding that nondiscriminatory state economic
regulation may be imposed despite an impact on interstate commerce. Id. at 994
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& n.11 (emphases added). Notably, Knevelbaard was a private action in which the
plaintiffs were exclusively California sellers who were allegedly victims of a pricefixing conspiracy, whereas the commerce regulated by the Utah law involves
overwhelmingly transactions (1-800 Contactss transactions, to be precise) with
out-of-state consumers.
California v. ARC America Corp., 490 U.S. 93, 102 (1989), was not a
Commerce Clause case at all and stands for the unremarkable proposition that
under the pre-emption doctrine federal antitrust laws . . . supplement rather than
displace[] state antitrust remedies. In contrast to the antitrust laws of general
application upheld in those casesi.e., existing state laws that prohibit agreements
in restraint of tradethe Utah law protects only in-state retailers, and not out-ofstate retailers, from manufacturer policies. That violates the Commerce Clause,
and the statute is not rendered any less discriminatory merely by being
characterized as a purported antitrust law.
Similarly, any reliance by the district court upon Exxon Corp. v.
Governor of Maryland, 437 U.S. 117 (1978), to conclude that the Utah law is
constitutional is also misplaced. The law upheld in that case was an ordinary state
law of general application and did not discriminate between in-state and out-ofstate actors. In Exxon, two aspects of a Maryland statute regulating in-state
petroleum retailing were challenged: a prohibition on petroleum refiners or
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producers (all of which were out-of-state actors) operating retail service stations
within the state, and a requirement that refiners and producers extend certain
voluntary price reductions to all the service stations they supplied. Id. at 119-120.
Unlike the Utah law (as construed by the AG), the Maryland statute did not
discriminate on its face; nor did it distinguish between in-state and out-of-state
companies in the retail market. Id. at 126 (emphasis added). Indeed, the
Supreme Court noted that the absence of such discrimination distinguished the
Maryland statute from discriminatory state statutes such as the law struck down in
Hunt because it favored the in-state dealer in the local market. Id. Further,
unlike the Utah law, under the Maryland law out-of-state refiners remained free to
choose to withdraw entirely from the Maryland market without penalty. Id. at
127. Here, by contrast, withdrawing from commerce with Utah generally or with
individual Utah contact lens retailers exposes out-of-state contact lens
manufacturer to a penalty under the Utah laws antidiscrimination provisions.
Thus, the district court was simply incorrect to conclude that the Utah law appears
to be no more restrictive than the statute upheld in Exxon (A-769), and there is
nothing in that case that can sustain the constitutionality of the Utah law once its
discriminatory effects are appreciated.
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The manufacturers pre-enforcement challenge was proper.
As its final reason for concluding that the Utah law was not likely to
be found discriminatory, the court reasoned that the Utah Attorney Generals
Office has not had the opportunity to offer its interpretation of the statute in
connection with an actual enforcement action. (A-770) Here too, the district
courts reasoning was faulty as a matter of fact and as a matter of law.
As a matter of fact, the Utah Attorney General made clear, through its
brief, how it intended to enforce the law. By narrowing the law so as to apply only
to discrimination/action against Utah retailers, the AG made clear that any
enforcement action it took would necessarily benefit Utah retailers at the expense
of non-Utah retailers. And although it is true that [a]t oral argument, the Attorney
Generals representative expressed some uncertainty as to how and to what extent
the law will be enforced, (A-770-71) the uncertainty concerned only whether, in
enforcing the law with respect to sales to Utah retailers only, the AG would
enforce it with respect to that retailers Utah sales only, or its sales to out-of-state
consumers as well.
THE COURT: Now, if they sell out of state and these
manufacturers attempt to impose their retail price program on
them, because they are doing something that they claim affects
interstate commerce, and they have the right in that connection
to do what Section 1 seems to forbid, will the Utah Attorney
Generals Office seek to punish them and to cite them and to
get civil penalties from them for violating this Act?
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MR. DOUGLAS: I will answer

would depend on the facts of the
upon where the sale took place.
regulate sales outside of Utah.6
64:3).)
Page: 56
that with a perhaps, but it

case, and it would depend
I dont think that we can
(A-847-48 (OA Tr. 63:17-
In other words, the only uncertainty related to the extent to which the law would
be enforced in a discriminatory fashion and over what territory, not over whether
the proposed enforcement would be discriminatory or not. On that question, there
is no way to read the Utah law in the way the AG has and conclude that its
enforcement will not result in the precise form of discrimination against out-ofstate actors that the Commerce Clause targets. Accordingly, there was no basis
upon which the court could presume[] the Utah Attorney General will enforce the
statute in a manner that does not violate the Commerce Clause. (A-771.) On the
construction proffered, there was no way to presume otherwise.
And to the extent that there is any material ambiguity in the planned
enforcement of the law, the district court should have resolved all doubts in favor
of the parties challenging the statutes enforcement. Indeed, as a matter of law, the
courts lets wait and see approach essentially deprived the manufacturers of the
right to pre-enforcement review of unconstitutional legislation, including
6
The apparent concession that Utah could not regulate sales outside Utah was
not as significant as might appear. 1-800 Contacts takes the position that sales
occur where the seller is located. (A-455 (1-800 Contacts Oppn to Contact Lens
Mfrs. Prelim. Inj. Mot. at 29).) Hence, sales by 1-800 Contacts to consumers
outside Utah were Utah sales, rather than interstate sales, in the AGs view.
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Commerce Clause-violating legislation, that numerous Supreme Court and Tenth

Circuit cases recognize. See Holder v. Humanitarian Law Project, 561 U.S. 1, 1516 (2010) (pre-enforcement as-applied challenge); Gonzales v. Carhart, 550 U.S.
124, 167 (2007) (same); ACLU v. Johnson, 194 F. 3d 1149, 1153-55 (10th Cir.
1999) (pre-enforcement facial challenge); see also Kan. Judicial Review v. Stout,
519 F.3d 1107, 1118 (10th Cir. 2008). Any pre-enforcement challenge will be
vulnerable to the charge that it occurs before the enforcing agency has made clear
how it chooses to read the law and exercise its discretion in enforcing it. Yet the
attitude of the courtthat the manufacturers should sit back and wait until one of
them gets sued (in state court)not only violates their right to pre-enforcement
review, but indeed vitiates their entitlement to review in federal court altogether.
For once a state prosecution is underway, Younger v. Harris, 401 U.S. 37 (1971),
directs a federal court to abstain from adjudicating the federal constitutionality of
the state statute that is the basis for prosecution.
C.
The Utah Law Imposes Excessive Burdens on Interstate Commerce.

Finally, the Utah law violates the Commerce Clause (and Alcon and
B+L are thus likely to prevail) because the Utah law imposes a burden on interstate
commerce that is clearly excessive in relation to the putative local benefits.
A state statute that does not discriminate or have impermissible
extraterritorial effects nevertheless violates the Commerce Clause if it imposes
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burdens on interstate commerce that are clearly excessive in relation to the

putative local benefits. Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).
This inquiry requires the Court to consider (1) the nature of the putative local
benefits advanced by the Ordinance; (2) the burden the Ordinance imposes on
interstate commerce; (3) whether the burden is clearly excessive in relation to the
local benefits; and (4) whether the local interests can be promoted as well with a
lesser impact on interstate commerce. Blue Circle Cement, Inc. v. Bd. of Cnty.
Commrs, 27 F.3d 1499, 1512 (10th Cir. 1994).
The putative local benefitslower prices in Utah on some contact
lens productsare benefits the AG made no attempt to substantiate before the
district court. In contrast, the Utah law imposes considerable burdens on interstate
commerce, including commerce by non-Utah consumers, which is the
overwhelming majority of the commerce affected by the Utah law. Indeed, about
99% of contact lens sales to Utah retailers are made to 1-800 Contacts, and 99% of
sales by 1-800 Contacts are to customers outside of Utah. (See A-296 (Angelini
Aff. 10, 11).) Under the Commerce Clause, Utah is not authorized to enact
legislation primarily for those non-Utahns benefit.
Moreover, every manufacturer subject to penalty under the Utah law
is located outside Utah. The Utah law compels all four out-of-state contact lens
manufacturers to participate in interstate commerce with Utah retailers, under
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circumstances in which they otherwise might choose not to, by obliging them to
supply products from out-of-state to contact lens retailers in Utah. Moreover, even
under the AGs narrowing construction, the Utah law interferes with the
manufacturers pricing policies as they apply to retail sales (by Utah retailers like
1-800 Contacts) in all 50 states. These effects on interstate commerce are clearly
excessive in relation to the putative local benefits.
The district court dismissed these burdens on interstate commerce as
being no greater than the burden imposed by any other state antitrust law.
(A-772.) But as shown above, the Utah law is unlike any other state antitrust
lawor any other state statute upheld under the Commerce Clausebecause it
directly (not merely incidentally) regulates interstate commerce and discriminates
in favor of in-state actors. The Utah law imposes far greater burdens on interstate
commerce than ordinary antitrust laws in that it predominantly reaches transactions
with out-of-state manufacturers and consumers, whereas ordinary state antitrust
laws predominantly regulate commerce within the state.
The district court also sought to minimize the imbalance between the
laws local benefits and its burdens on interstate commerce, by observing that any
advantages Utah retailers will enjoy under the law will be negated if other states
enact similar antitrust laws of their own. (A-772.) While it is true that if all 50
states (or Congress) enacted the law the Utah legislature enacted, this interstate
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commerce-burdening/discriminatory aspect of the Utah law would evaporate. But

to say that is only to underscore how burdensome/discriminatory the Utah law is
when evaluated by itself. It also underscores how it violates one important policy
of the Dormant Commerce Clause: to prevent the economic Balkanization, see
Hughes v. Okla., 441 U.S. 322, 325-26 (1979), that occurs when some, but not all,
states adopt trade regulations that affect commerce among the 50 states. To date,
only Utah has enacted a law such as Section 58-16a-905.1. And although others
are evaluating such laws, the possibility that the Utah law will become uniform
throughout the country appears, at the moment, remote. It is axiomatic that the
antitrust laws were passed for the protection of competition, not competitors,
Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 224
(1993) (emphasis in original) (internal quotation marks omitted), and a state
antitrust law that confers a competitive advantage upon in-state actors that can only
be negated if other state legislatures follow suit cannot survive constitutional
scrutiny. See Healy, 491 U.S. at 336 ([T]he practical effect of the statute must be
evaluated not only by considering the consequences of the statute itself, but also by
considering how the challenged statute may interact with the legitimate regulatory
regimes of other States and what effect would arise if not one, but many or every,
State adopted similar legislation.). Because the district court failed to understand
that the burdens imposed by the Utah statute are real, and the local benefit it
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procures (largely for 1-800 Contacts) are protectionist and constitutionally

impermissible, its Pike balancing analysis should be reversed.
II.
ALCON AND B+L WILL SUFFER IRREPARABLE INJURY

ABSENT AN INJUNCTION.
In addition to erring in finding that Alcon and B+L were not likely to
succeed on the merits, the district court erred in concluding that the Utah law will
not result in irreparable harm. The district court dismissed the injuries the Utah
law will visit upon Alcon and B+L as speculative and hypothetical. (A-77273.) Although it is true that the harms Alcon and B+L identified were those they
would suffer in the future, that was only because Alcon and B+L brought their
challenges to the law before it went into effect.7 Alcons and B+Ls necessarily
predictive statements that they would suffer harm in the future were neither
speculative nor hypothetical. They were supported by written testimony of an
executive from each company, whose testimony no adversary sought to challenge.
The district courts statement that Alcons and B+Ls injuries were not sufficiently
imminent to warrant a finding of irreparable injury is difficult to understand.
The law was scheduled to go into effect on the very day after the court made that
statement, and there was a credible threat of prosecution of Alcon and B+L, two
7
As was proper. See Humanitarian Law Project, 561 U.S. at 15-16 (preenforcement as-applied challenge); Gonzales, 550 U.S. at 167 (same); Johnson,
194 F. 3d at 1153-55 (pre-enforcement facial challenge); see also Kan. Judicial
Review, 519 F.3d at 1118.
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of the four major contact lens manufacturers, and this conferred standing upon
Alcon and B+L to seek injunctive relief before the law was enforced.8 See, e.g.,
Steffel v. Thompson, 415 U.S. 452, 459 (1974) ([I]t is not necessary that [the
challenger] first expose himself to actual arrest or prosecution to be entitled to
challenge a statute that he claims deters the exercise of his constitutional rights.);
ANR Pipeline Co. v. Corp. Commn of State of Okla., 860 F.2d 1571, 1578 (10th
Cir. 1988) (Once the gun has been cocked and aimed and the finger is on the
trigger, it is not necessary to wait until the bullet strikes to invoke the Declaratory
Judgment Act.).
Unless the Utah law is enjoined, Alcon and B+L will suffer at least
three forms of irreparable injury:
(1)
Alcon and B+L will suffer a deprivation of rights guaranteed by
the Commerce Clause. Johnson, 194 F.3d at 1163 (holding [d]eprivation of

the rights guaranteed under the Commerce Clause constitutes irreparable
injury) (alterations in original) (internal quotation marks omitted);
Indeed, and as noted above, supra Part I.B.3, had Alcon and B+L waited for
the AG to bring enforcement action against either of them before asking a federal
court to enjoin the Utah law, the court would have abstained from acting under the
doctrine of Younger v. Harris, 401 U.S. 37 (1971) (federal court should abstain
from assessing constitutionality of state statute while state prosecution is
underway).
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Alcon and B+L will suffer financial loss for which they cannot
obtain compensation. The Utah laws interference with Alcons UPP will
cause some ECPs to stop educating their patients about UPP products, which
will result in a drop in sales of those products. (A-245 (Weisbarth Decl.
44.) The Utah laws interference with Alcons ability to operate other
nationwide programs (such as fit rebates and other rebate programs for
ECPs) will result in further lost sales. (Id. 50-51 (A-247).) Enforcement
of the Utah law will also damage B+L by barring it from using the tool that,
in its business judgment, best positions its innovative products for success.
(A-323-24 (Guglielmino Aff. 12-13).) Alcon and B+L will not be able to
obtain compensation from any source for these losses, because Utah, the
entity responsible for that injury, enjoys sovereign immunity from suits for
damages. See Toomer v. Witsell, 334 U.S. 385, 392 (1948) (holding
Commerce Clause challenge to enforcement of state law gives rise to
irreparable injury when enforcement would result[] in a substantial loss of
business for which no compensation could be obtained.).
(3)
Alcon and B+L also will suffer intangible and unquantifiable
harm to their goodwill and capacity for product innovation. By hindering

Alcons efforts to adopt UPPs for new products, the Utah law will make it
more difficult for Alcon to promote new and better products, which will, in
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turn, suppress Alcons incentives and ability to invest in research and

development. (A-245-47 (Weisbarth Decl. 43-51).) Alcons lost
opportunities to innovate and market new products will be irreparable. As a
result of these and other effects of the Utah law, consumer access to UPP
products will be reduced and consumers will be deprived of opportunities to
learn about UPP products and the benefits and outcomes they provide. (Id.
46-47 (A-246).) In addition, the Utah laws interference with Alcons
programs other than the UPP will result in a loss of product awareness and
goodwill associated with those programs, which will also diminish Alcons
incentives to engage in research and development of new products sold
under these programs. (Id. 50-51 (A-247).) Likewise, enforcement of the
statute would lead to disruption and uncertainty in B+Ls business
arrangements, causing harm to its relationships with eye care professionals,
retailers, and contact lens wearers. (A-323-24 (Guglielmino Aff. 13).) As
a result, even if damages could be recovered from the State in litigation
which they could not beB+L would be irreparably harmed because the
damages are both intangible and unquantifiable.
Absent an injunction, the Utah law confronts Alcon and B+L with the
immediate and stark choice of either modifying their programs and incurring noncompensable losses or risking enforcement action by the AG under a statute with
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the unconstitutional effects demonstrated above. These injuries are not

speculative.
III.
THE THREATENED INJURY TO ALCON AND B+L OUTWEIGHS

ANY PUBLIC HARM THE INJUNCTION WOULD CAUSE, AND
THE PUBLIC INTEREST WOULD NOT BE ADVERSELY
AFFECTED.
While the final two preliminary injunction factors are distinct in cases
involving exclusively private parties and require separate analyses, these factors
merge in cases where the non-movant is a public official or agency charged with
representing the public interest. See Nken, 556 U.S. at 435; Drakes Bay Oyster
Co. v. Jewell, 747 F.3d 1073, 1092 (9th Cir. 2013); Minard Run Oil Co. v. U.S.
Forest Serv., 670 F.3d 236, 256 (3d Cir. 2011). Here, the public interest
represented by the defendant in this action will not be adversely affected by entry
of a temporary, preliminary injunction, and is, in any event, less than the
irreparable injury Alcon and B+L will suffer in the injunctions absence while this
action is pending.
[I]t is always in the public interest to prevent the violation of a
partys constitutional rights. Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d
1114, 1147 (10th Cir. 2013) (quoting Awad v. Ziriax, 670 F.3d 1111, 1132 (10th
Cir. 2012)), affd sub. nom. Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751
(2014); Citizens United v. Gessler, 773 F.3d 200, 218 (10th Cir. 2014); Evans v.
Utah, 21 F. Supp. 3d 1192, 1211 (D. Utah 2014). If Alcon and B+L are right (as is
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likely, see supra Section I), the national public interest in preventing state
interference in the regulation of interstate commercethe interest recognized and
served by the Commerce Clause, see generally Dennis v. Higgins, 498 U.S. 439,
448-50 (1991)will be furthered by the entry of a preliminary injunction. And
even if the threatened violation of Alcons and B+Ls constitutional rights is not
clear to the Court at this initial juncture, the balance of hardships and public
interest would still favor an injunction because the injunction Alcon and B+L
request will be only temporary. If Alcon and B+L are wrong that the Amendment
is unconstitutional, the preliminary injunction will ultimately be dissolved. By
contrast, if Alcon and B+L are right, the absence of an injunctionand perhaps the
passage of similar laws in other states while this action is pendingwill have the
effect of jettisoning legal marketing and promotional programs that Alcon and B+L
have sponsored for many years. This will deprive the public of the recognized
procompetitive benefits of such programs, including the enhanced flow of
information (to and from ECPs) that those programs generate. (See A-245-47
(Weisbarth Decl. 43-51).)
The district courts decision, nonetheless, reasoned that the balance of
hardships and public interest factors in this case weigh against granting a
preliminary injunction because the Utah law was enacted by the elected
representatives of the people of Utah after a determination that it was in their best
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interest. (A-774.) That is an argument against judicial review of the

constitutionality of state legislation, for the same will be true of any state statute
that violates the Commerce Clause. It is not an argument why a statute should not
be enjoined for the period during which its constitutionality is subject to judicial
review. Here, the national public interest in preventing state interference in the
regulation of interstate commerce will be furthered by maintaining the status quo
until the constitutionality of the Utah law is resolved.
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CONCLUSION
For the foregoing reasons, the district courts decision denying
plaintiffs motions for a preliminary injunction should be reversed and remanded
with instructions to enter a preliminary injunction in favor of plaintiffs. Oral
argument on this appeal has been requested and scheduled for August 27, 2015.
June 26, 2015

by
/s/ David R. Marriott
David R. Marriott
David Greenwald
Members of the Firm
825 Eighth Avenue
New York, NY 10019-7475
(212) 474-1430
Attorneys for Appellant,
Alcon Laboratories, Inc.
Of Counsel:
Amy F. Sorenson
Amber M. Mettler
SNELL & WILMER LLP
Gateway Tower West
(801) 257-1900
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SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

by
/s/ Clifford M. Sloan
Clifford M. Sloan
Steven C. Sunshine
Maria Raptis
1440 New York Avenue, NW
(202) 371-7000
Attorneys for Appellant,
Bausch & Lomb Incorporated.
Of Counsel:
One Utah Center
P.O. Box 45898
(801) 532-1234
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/s/ Amy F. Sorenson

Amy F. Sorenson
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ATTACHMENTS
Document
Page
Order Denying Motions for Preliminary Injunction, dated May 11, 2015.. 1
Utah Code Section 58-16a-905.1. 20
Case 2:15-cv-00252-DB Document 60 Filed 05/11/15 Page 1 of 19

Appellate Case: 15-4073 Document: 01019451242 Date Filed: 06/26/2015 Page: 74
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
ALCON LABORATORIES, INC.,
ORDER
Plaintiff,
Case No. 2:15cv252-DB
v.
District Judge Dee Benson
SEAN D. REYES, Attorney General of
Utah,
Defendant.
JOHNSON & JOHNSON VISION CARE,
Plaintiff,
Case No. 2:15cv257-CW
v.
District Judge Clark Waddoups
Utah,
Defendant.
BAUSH & LOMB,

Plaintiff,
Case No. 2:15cv259-DAK
v.
District Judge Dale A. Kimball
Utah,
Defendant.
This case is before the court on Plaintiffs Alcon Laboratories, Inc.s (Alcon) (Dkt. No.
5), Johnson & Johnson Vision Care, Inc.s (JJVC) (Dkt. No. 27), and Bausch & Lomb, Inc.s
(B&L) (Dkt. No. 28) (collectively Plaintiffs) motions for preliminary injunction. Plaintiffs

consolidated motions ask this court to enjoin enforcement of recently enacted Utah Code Section
58-16a-905.1 (section 905.1 or the statute) pending final adjudication of its constitutionality.
Plaintiffs assert that section 905.1 is an unconstitutional overreach of state legislative powers in
that it impermissibly interferes with the nationwide contact lens market in violation of the
Commerce Clause of the United States Constitution. Absent an injunction, section 905.1 is
scheduled to take effect on May 12, 2015.
The court heard argument on the Plaintiffs preliminary injunction motions on May 5,
2015. At the hearing, Plaintiff Alcon was represented by David R. Marriott, Jared Jenson, Amy
Sorenson and Amber Mettler. Plaintiff JJVC was represented by Jonathan F. Cohn, Kwaku
Akowuah and Tim Conde. Plaintiff B&L was represented by Clifford M. Sloan and Erik
Christiansen. Defendant Sean D. Reyes, in his official capacity as Attorney General of Utah
(Utah), was represented by Parker Douglas. Intervenor 1-800 CONTACTS, Inc. (1-800")
was represented by Paul G. Cassell, Brent Hatch, Garth Vincent and Greg Sergi. Intervenor
Costco Wholesale Corporation (Costco) was represented by Shylah R. Alfonso and Mark
Bettilyon.
At the conclusion of the hearing the court took the matter under advisement. Since then,
the court has further considered the law and facts relating to the motions and the arguments
presented by counsel. Now, being fully advised, the court issues the following Memorandum
Decision and Order.
BACKGROUND
The contact lens industry in the United States is roughly a $4 billion dollar-per-year
industry. (Alcon Mem. in Supp. at 5.) It is controlled by four primary contact lens

manufacturers Alcon, JJVC, B&L, and CooperVision, Inc. (collectively the Manufacturers)
who maintain an almost 100% market share of the industry. (Costco Oppn at viii.) None of the
four manufacturers are located in Utah.
The contact lens industry has two features that make it particularly susceptible to
anticompetitive conduct. First, contact lenses may be sold only pursuant to a valid prescription
from an eye care professional (ECP), and each prescription from the ECP is brand and model
specific. Except in limited circumstances, neither the consumer nor a contact lens retailer has the
power to substitute an alternative or cheaper option to the prescribed brand, such as a generic
equivalent. Second, [u]nlike medical doctors who are prohibited from selling the drugs they
prescribe, [ECPs] . . . are able to fill the contact lens prescriptions they write. (1-800 Oppn at
2-3.) In other words, an ECP is both a contact lens prescriber and a contact lens retailer. H.R.
Rep. No. 108-318, at 5 (Fairness to Contact Lens Consumers Act) (Oct. 15, 2003). In almost no
other medical context does the prescriber of a medical device have the power to control both the
brand the patient must use and also sell the particular medical device in the same breath.
(Costco Oppn at ix.)
Once prescribed, however, contact lenses may be purchased from either the prescribing
ECP or from eye care retailers (e.g., LensCrafters), mass merchandise retailers (e.g., Costco,
Wal-Mart), internet retailers (e.g., 1-800 Contacts), pharmacies, or any other person who sells
the prescribed lenses.1 However, because non-ECP retailers are unable to compete with ECPs by
providing a different brand of contact lens than prescribed (such as a generic equivalent), the
Under Federal law, the ECP is required to give the patient her prescription so the patient can purchase the contact
lenses from the retailer of her choice based on price and convenience, among other factors. 15 U.S.C. 7601(a); 16
C.F.R. 315.3.

non-ECP retailers only means of competing with an ECP retailer is to offer lower prices on the
same brands and types of lenses.
Non-ECP retailers, such as Intervenors 1-800 and Costco, assert that because ECPs are
the only contact lens retailers that are dual-positioned to both prescribe and sell contact lenses to
consumers, ECPs can leverage their control over prescriptions and brand selection to also
control and monopolize contact lens sales. (Costco Oppn at x.) The non-ECP retailers further
assert that because of this control over the market, contact lens manufacturers have a strong
interest in incentivizing ECPs to prescribe their brands by assisting in various methods of
shielding ECPs from retail competition by discounters. (1-800 Oppn at 3.)
Conversely, the Manufacturers claim that they, alone, are burdened with the task of
educating ECPs about innovative products and developments in the industry so that the ECPs can
pass that information along to their patients. Accordingly, to foster good relationships with the
ECPs, the Manufacturers have invested in programs that are extended only to ECPs and retailers
associated with ECPs. These programs include but are not limited to manufacturer rebates, free
trial lenses for ECPs, and launching new products exclusively with ECPs. (See Alcon Mem. in
Supp. at 7.) According to the Manufacturers, these programs improve patient access to better
information and new technologies, and enhance access to better eye care. (Id.)
Prior Legislation and Litigation
Given the unique features of the contact lens business, the industry has a significant
history of litigation and legislation. For example, in the 1990s, attorneys general from 32 states
(including Utah) and a national class of consumers brought actions against the American
Optometric Association and the contact lens manufacturers for conspiring with ECPs and others

to restrain competition with alternative retailers such as online companies, pharmacies and big
box retailers. See In re Disposable Contact Lens Antitrust Litig., MDL No. 1030, 2001 WL
493244 (M.D. Fla Feb. 1, 2001). In 2001 after nearly seven years of litigation MDL 1030
culminated in a settlement, with the contact lens manufacturers paying a substantial cash
settlement to consumers and agreeing to broad injunctive relief requiring the Manufacturers to
sell contact lenses to non-ECP retailers in a commercially reasonable and nondiscriminatory manner for at least five years. (See 1-800 Oppn at 4.) After the injunctive
provisions of the consent decree expired, the Utah Legislature, in 2006, essentially codified the
anti-discrimination provisions of the MDL through the enactment of Utah Code Section 5816a-904. See Utah Code Ann. 58-16a-904 (providing a manufacturer of contact lenses doing
business in the state shall certify contact lenses to be made available in a commercially
reasonable and nondiscriminatory manner).
The business practices of the contact lens industry have also yielded federal legislation.
In 2003, in response to allegations that the Manufacturers and ECPs were impeding consumers
ability to purchase contact lenses from discounters by (1) preventing consumers from obtaining
copies of their prescriptions to purchase lenses elsewhere, and (2) erecting obstacles to non-ECP
retailers attempts to verify prescriptions, Congress enacted the Fairness to Contact Lens
Consumers Act (FCLCA).2 The FCLCA requires that a contact lens prescriber, whether or
not requested by the patient, shall provide to the patient a copy of the contact lens prescription,
and establishes a prescription verification process allowing retailers to sell lenses if the ECP does
not respond to a verification request within a certain time period. 15 U.S.C. 7601 & 7603.
2
See H.R. Rep. No. 108-318, at 4; Pub. L. 108-164, Fairness to Contact Lens Consumer Act (2003), codified at 15
U.S.C. 7601 et seq.

Manufacturer Uniform Pricing Policies (UPPs)

Approximately two years ago, the Manufacturers began implementing unilateral resale
pricing policies (UPPs). 3 These UPPs set a minimum retail price below which retailers may
not sell certain contact lenses to consumers. If a retailer thereafter sells or prices that particular
contact lens below the manufacturers UPP, the manufacturer punishes the retailer by
terminating supply of contact lenses for one year.
The Manufacturers claim that the UPPs benefit everyone by allow[ing] [ECPs] to
refocus the critical doctor/patient conversation on eye health and product performance, rather
than cost. (Angelini Letter). According to Alcon, the Manufacturers face the challenge of
educating ECPs, who alone are authorized to write prescriptions, about the attributes of the
products, and of encouraging them, in turn, to inform patients of their potential benefits. (Alcon
Mem. in Supp. at 7.) Alcon suggests that ECPs may be reluctant to undertake these efforts if,
once the patient receives a prescription, it may be filled by a low-cost contact lens reseller whose
business model does not include those investments and who free rides on the professional
services the ECPs provide. (Id.) Additionally, the Manufacturers claim the UPPs are beneficial
because they eliminate[] the need for discussions with eye doctors about other retailers prices.
Consumers are assured that if their [ECP] or any other retailer is charging the minimum price,
there is no need to shop around for a better bargain. (JJVC Mem. in Supp. at 4.)
Non-ECP retailers, such as Intervenors Costco and 1-800, contend that the practical and
intended effect of the UPPs is to divert sales from more efficient, lower-cost retailers. (Costco
Oppn at xiv.) They claim that by restricting retail price competition, consumers now have fewer
3
The State of Utah and the Intervenors refer to the Plaintiffs UPPs as minimum resale price maintenance (RPM)
policies.

product choices and must pay higher prices, resulting in less competition and higher margins for
ECPs. (Costco Oppn at xv.) They claim that the Manufacturers justifications for implementing
the UPPs are pretextual given that the UPPs do not require or even encourage ECPs to invest in
tangible or intangible services or promotional efforts that might improve patient care. (Costco
Oppn at xvi.)
Since implementation, the Manufacturers UPPs have generated scrutiny. On July 30,
2014, the U.S. Senate Committee on the Judiciary, Subcommittee for Antitrust, Competition
Policy and Consumer Rights held a hearing to examine the use of resale price maintenance
programs (or UPPs) in the contact lens industry. The Committee noted their intent to revisit the
issue once further evidence develops showing the impact of such policies on competition and
consumer pricing. (1-800's Oppn at 8 (providing citation to Senates website for video
recording of Senate hearing).) Additionally, in recent months roughly 40 consumer class action
complaints have been filed, across the United States, against the Manufacturers, alleging
violations of federal and/or state antitrust laws by engaging in an unlawful conspiracy to fix
contact lens prices.4
Section 905.1
On March 10, 2015, the Utah Legislature amended the Contact Lens Consumer
Protection Act through the addition of section 58-16a-905.1. In doing so, Utah became the first
state to enact legislation attempting to restrict UPPs for contact lenses. Similar legislation has
been proposed in Mississippi, Washington, Arizona, Florida, New York, Idaho, Oregon, Illinois
and California. (Costco Oppn at xviii.)
4
There are motions pending to coordinate or consolidate the actions into a multidistrict litigation forum. In re
Disposable Contact Lens Antitrust Litigation, MDL No. 2626 (2015).

Section 905.1 of the Contact Lens Consumer Protection Act provides as follows:
(1) take any action, by agreement, unilaterally, or otherwise, that has the effect of fixing
or otherwise controlling the price that a contact lens retailer charges or advertises for
contact lenses; or
(2) discriminate against a contact lens retailer based on whether the contact lens retailer:
(c) is a person authorized by law to prescribe contact lenses; or
(d) is associated with a person authorized by law to prescribe contact lenses.
Utah Code Ann. Section 58-16a-905.1.
The Utah Legislature also amended section 58-16a-906, to provide that the attorney
general may bring a civil action or seek an injunction and a civil penalty against any person
who violates section 58-16a-905.1. Id. Before approving section 905.1, the Utah Legislature
held hearings with views presented from the various conflicting interests, including Alcon and
JJVC, various Utah retailers, the Utah Real Merchants Association, the Utah Manufacturers
Association, and the Utah Optometric Association.
The Present Lawsuit
On April 13, 2015, Alcon initiated a declaratory judgment action seeking to have section
905.1 declared unconstitutional. Alcon accompanied the filing of its declaratory judgment action
with the instant motion for preliminary injunctive relief. (Dkt. Nos. 2 & 5, respectively.) The
next day, JJVC and B&L filed similar lawsuits and requests for injunctive relief. On April 21,
2015, the three separate actions were consolidated. (Dkt. No. 26.)
The State of Utah and Intervenors 1-800 and Costco assert that section 905.1 which
they perceive as simply prohibiting Plaintiffs from fixing the retail price of contact lenses in
Utah merely restores fair competition and will result in lower contact lens prices for

consumers. They claim section 905.1 is akin to countless state statutes enacted pursuant to the
traditional powers in the area of antitrust and unfair competition to regulate conduct that directly
affects in-state consumers and business. (1-800 Oppn at 2.)
The Manufacturers assert that section 905.1 violates the Commerce Clause of the United
States Constitution because it impermissibly interferes with commercial conduct outside of Utah,
discriminates against interstate commerce, and imposes an excessive burden on interstate
commerce. (Alcons Mem. in Supp. at 13-20.) They claim section 905.1 will have the effect of
removing Utah-based retailers, and only Utah-based retailers, from the scope of national policies
like the UPP, allowing in-state retailers to sell at lower prices than out-of-state retailers who try
to serve Utah customers. (See Alcons Mem. in Supp. at 3.) The Manufacturers assert that
section 905.1 is unconstitutional and the injuries they will suffer when section 905.1 goes into
effect will be irreparable. Accordingly, the Manufacturers assert they are entitled to a
preliminary injunction, to have effect only for so long as is necessary for this court to issue a
final judgment.
DISCUSSION
[A] preliminary injunction is an extraordinary remedy; it is the exception rather than the
rule. General Motors Corp. v. Urban Gorilla, LLC, 500 F.3d 1222, 1226 (10th Cir. 2007)
(internal quotation marks omitted). The movant must show: (1) a substantial likelihood of
success on the merits; (2) irreparable harm to the movant if the injunction is denied; (3) [that] the
threatened injury outweighs the harm that the preliminary injunction may cause the opposing
party; and (4) [that] the injunction, if issued, will not adversely affect the public interest. Id.
The party seeking the preliminary injunction must show that the . . . factors weigh heavily and

compellingly in its favor and [t]he right to relief in a preliminary injunction must be clear and
unequivocal. VR Acquisitions LLC v. Wasatch County, 2015 WL 417895, at *7 (D. Utah Jan.
30, 2015) (internal quotation marks omitted). In the context of a request for a preliminary
injunction against enforcement of a state law, enacted in the public interest, these alreadydemanding standards are applied rigorously. See Heideman v. South Salt Lake City, 348 F.3d
1182, 1189 (10th Cir. 2003).
1. Likelihood of Success on the Merits
Plaintiffs have failed to convince the court that they are likely to succeed on the merits of
this case. Plaintiffs argue that section 905.1 clearly violates the Commerce Clause, which grants
Congress the exclusive power to regulate interstate commerce. (Alcon Reply at 6.) Specifically,
Plaintiffs assert that the statute has impermissible extraterritorial effects, impermissibly
discriminates against out-of-state economic interests, and imposes excessive burdens on
interstate commerce. (Id.)
Extraterritorial Effects
The court is not persuaded that Plaintiffs are likely to succeed in demonstrating that
section 905.1 has impermissible extraterritorial effects. The United States Supreme Court
summarized what constitutes impermissible extraterritorial effects in Healy v. Beer Inst., 491
U.S. 324, 336 (1989): [T]he Commerce Clause . . . precludes the application of a state statute
to commerce that takes place wholly outside of the States borders, whether or not the commerce
has effects within the State. Id. (quoting Edgar v. MITE Corp., 457 U.S. 624, 642-43 (1982)).
Any assertion that section 905.1 would impose such effects is circumvented by the Utah
Supreme Courts recent explanation that, [u]nder a deeply rooted and longstanding canon of
10

construction, statutes are presumed not to have extraterritorial effect. This presumption is a
gapfiller, operating under a clear statement rule. It provides that unless a statute gives a clear
indication of an extraterritorial application, it has none. Nevares v. M.L.S., 345 P.3d 719, 727
(Utah 2015) (quoting Morrison v. Natl Austl. Bank Ltd., 561 U.S. 247, 262-65 (2010)) (internal
citation omitted). The court sees no clear indication of an extraterritorial application in the
statute at issue here and, thus, no such application can be assumed at this point in the case.
Discrimination
Similarly, the court is not persuaded that Plaintiffs are likely to succeed in demonstrating
that section 905.1 inappropriately discriminates against out-of-state economic interests. The
United States Supreme Court has stated that state laws are discriminatory and violate the
Commerce Clause if they mandate differential treatment of in-state and out-of-state economic
interests that benefits the former and burdens the latter. Granholm v. Heald, 544 U.S. 460, 472
(2005) (quoting Oregon Waste Systems, Inc. v. Department of Environmental Quality of Ore.,
511 U.S. 93, 99 (1994); see also New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 273
(1988) (This negative aspect of the Commerce Clause prohibits economic protectionism that
is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state
competitors.) However, [n]ot every benefit or burden will suffice only one that alters the
competitive balance between in-state and out-of-state firms. Kleinsmith v. Shurtleff, 571 F.3d
1033, 1041 (10th Cir. 2009).
Plaintiffs concede that read literally, [section 905.1] applies to manufacturers and
distributors both within and outside Utah . . . . (Alcon Mem. in Supp. at 19.) See Assn des
Eleveurs de Canards et dOies du Quebec v. Harris, 729 F.3d 937, 948 (9th Cir. 2013), cert.
11

denied, 135 S. Ct. 398 (2014) (A statute that treats all private companies exactly the same
does not discriminate against interstate commerce. . . . This is so even when only out-of-state
businesses are burdened because there are no comparable in-state businesses.) (citing United
Haulers Assn, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 342 (2007);
Exxon Corp. v. Gov. of Maryland, 437 U.S. 117, 119, 125)). Plaintiffs argue instead that the
statute is discriminatory because it protects a [Utah] contact lens retailer, but not a non-Utah
contact lens retailer, from manufacturer pricing policies . . . [and] entitles a [Utah] contact lens
retailer, but not a non-Utah contact lens retailer, to manufacturer programs that are designed for
some kinds of retailers and not others. (Alcon Reply at 10.)
However, the record before the court supports Defendants claim that the fact that retail
sales outside of Utah could be higher because of the [UPPs] is entirely the result of Plaintiffs
pricing policiesnot any action taken by Utah. (Costco Oppn at 14.) Indeed, the purported
burden that out-of-state retailers face as a result of the statute is simply that they may continue to
be subject to UPPs and other policies implemented by contact lens manufacturers, whereas instate retailers will not. Section 905.1 in no way requires or anticipates that out-of-state retailers
will continue to be subject to UPPs. Instead, the statute merely protects Utah retailers and
consumers from activity that the State of Utah believes violates principles of fair competition.
Antitrust law is an area traditionally regulated by the States. California v. ARC
America Corp., 490 U.S. 93, 101 (1989). Congress intended the federal antitrust laws to
supplement, not displace, state antitrust remedies. Id. at 102. As such, federal antitrust law sets
a floor below which states cannot go, but states are free to legislate and regulate certain
transactions more aggressively. See, e.g., Exxon Corp. v. Gov. of Maryland, 437 U.S. 117, 129-
12

32 (1978). The statute at issue here is nothing more than a state antitrust statute, tailored to a
specific industry, which the state has the power to enact. Id. at 133-34.
In Exxon, the Maryland legislaturein response to evidence that oil producers and
refiners were favoring company-operated gasoline stations during the 1973 petroleum shortage
enacted a statute prohibiting petroleum producers and refiners from operating retail service
stations within the State of Maryland and requiring that all temporary price reductions be
extended uniformly to all service stations supplied within the state. Id. at 117. The plaintiffs in
Exxon argued, similarly to Plaintiffs in the present case, that the Maryland statute discriminated
against interstate commerce, unduly burdened interstate commerce, and imposed controls on a
commercial activity of such an essentially interstate character that it [was] not amenable to state
regulation. Id. at 125. The United States Supreme Court rejected all three arguments, holding
that the statute did not violate the Commerce Clause. Id. at 125-29. The Court noted that the
Commerce Clause does not protec[t] the particular structure or methods of operation in a retail
market nor does it invalidate a duly enacted state statute simply because the statute causes
some business to shift from one interstate supplier to another. Id. at 127. As in Exxon, the
statute at issue here attempts to remedy a significant market issueretail price fixing by contact
lens manufacturers.
Based on the record before the court, section 905.1 appears to be no more restrictive than
the statute upheld in Exxon. In Exxon, the statute required producers to provide uniform
discounts to all service stations. Here, the statute merely requires that manufacturers refrain
from mandating price fixing within the state of Utah and from discriminating against Utah
retailers for reasons related to price fixing. This Utah statute, like the statute in Exxon, appears
13

to be an appropriately tailored antitrust statute within the legislative authority of the state. See
ARC America Corp., 490 U.S. at 101-02; see also Knevelbaard Dairies v. Kraft Foods, Inc., 232
F.3d 979, 993-94 (9th Cir. 2000) (holding that California may apply its antitrust and unfair
competition statutes consistent with the Commerce Clause to a price fixing scheme in
Wisconsin that affected prices in California).
Plaintiffs argue that the legislation at issue here is unique because unlike traditional state
antitrust, consumer protection, and public safety laws, . . . [the statute] forces out-of-state
manufacturers and distributors who want to withdraw from commerce with a state residentto
continue engaging in interstate commerce with them. (Alcon Reply at 7.) Plaintiffs assert that
Section 2 of the statute, which prohibits discrimination against retailers, essentially instructs
the Attorney General to penalize a manufacturer for deciding not to ship contact lenses to Utah . .
. . (Id.) At this early stage of the proceedings, a pre-enforcement request for preliminary
injunction, Plaintiffs constitutional concerns are premature and speculative.
First, a Utah statute that has been in effect since 2006 already expressly penalizes contact
lens manufacturers that fail to make contact lenses available to retailers in a nondiscriminatory
and commercially reasonable manner. Utah Code Ann. 58-16a-904. Plaintiffs have
presumably complied with this statute since 2006, and nothing in the record before this court
indicates that the statute has been enforced in a way that impermissibly compels or effects
interstate commerce.
Second, because section 905.1 has not yet taken effect, the Utah Attorney Generals
Office has not had the opportunity to offer its interpretation of the statute in connection with an
actual enforcement action. At oral argument, the Attorney Generals representative expressed
14

some uncertainty as to how and to what extent the law will be enforced. At this early stage, the
court presumes the Utah Attorney General will enforce the statute in a manner that does not
violate the Commerce Clause. See, e.g., Nevares v. M.L.S., 345 P.3d 719, 727 (Utah 2015)
(providing that duly enacted state statutes are presumed to be constitutional). At this stage, the
court does not find that Plaintiffs have established that this statute is significantly different from
other state antitrust statutes that have been upheld.
Burden on Interstate Commerce
The court is also unpersuaded that Plaintiffs are likely to succeed in demonstrating that
the burden imposed on interstate commerce by the statute is clearly excessive in relation to the
putative local benefits. Even if a state statute does not improperly discriminate or have
impermissible extraterritorial effects, it will violate the Commerce Clause if it imposes a burden
on interstate commerce that is clearly excessive in relation to the putative local benefits. Pike
v. Bruce Church, Inc., 397 U.S. 137, 142 (1970). This inquiry requires the court to consider (1)
the nature of the putative local benefits advanced by the Ordinance; (2) the burden the Ordinance
imposes on interstate commerce; (3) whether the burden is clearly excessive in relation to the
local benefits; and (4) whether the local interests can be promoted as well with a lesser impact on
interstate commerce. Blue Circle Cement, Inc. v. Bd. of Cnty Commrs, 27 F.3d 1499, 1512
(10th Cir. 1994).
The putative local benefit is that section 905.1 would return intrabrand competition to
the Utah contact lens marketplace, allowing Utah contact lens retailers to provide lower prices to
Utah consumers. (Costco Oppn at 13.) As discussed above, this is exactly the type of benefit
states are permitted to advance through state antitrust laws.
15

The purported burden on interstate commerce is that out-of-state manufacturers would

have to participate in interstate commerce, under circumstances which they otherwise would
choose not to . . . and that retailers in Utah, but not retailers in the other 49 States, would be
exempt from certain manufacturer policies. (Alcon Reply at 13-14.) This purported burden
appears to be no greater than the burden imposed by any other state antitrust law. Indeed, as
with apparent competitive advantages that may be gained by in-state businesses through other
state antitrust laws, any competitive advantages obtained by Utah contact lens retailers through
this statute will be negated if other states enact similar antitrust laws of their own. As noted
above, such legislation is presently under consideration in at least 9 states. Consequently,
Plaintiffs are not likely to demonstrate that the burden on interstate commerce imposed by the
statute is clearly excessive in relation to the local benefits.
2. Irreparable Harm if the Injunction is Denied
Similarly, Plaintiffs have failed to convince the court that they will suffer irreparable
harm if the injunction is denied. Establishing irreparable harm is not an easy burden to fulfill.
Greater Yellowstone Coalition v. Flowers, 321 F.3d 1250, 1258 (10th Cir. 2003). To constitute
irreparable harm, an injury must be certain, great, actual and not theoretical. Heideman v.
South Salt Lake City, 348 F.3d 1182, 1189 (10th Cir. 2003).
Plaintiffs claim they will suffer two primary forms of irreparable harm absent an
injunctionconstitutional injury and economic injury. (Alcon Mem. in Supp. at 22.) Plaintiffs
claimed constitutional injury is the [d]eprivation of the rights guaranteed under the Commerce
Clause[.] Am. Civil Liberties Union v. Johnson, 194 F.3d 1149, 1163 (10th Cir. 1999). As
discussed in detail above, these constitutional injuries are speculative at this stage and, as such,
16

Plaintiffs have failed to establish injuries that are certain, actual and imminent, as required for a
preliminary injunction. See Heideman, 348 F.3d at 1189 ([T]he party seeking injunctive relief
must show that the injury complained of is of such imminence that there is a clear and present
need for equitable relief to prevent irreparable harm.).
Plaintiffs claimed economic injuries include financial loss that cannot be recovered
because of the states sovereign immunity from suits for damages and the possibility that the
Plaintiffs inability to enforce UPPs will suppress [Plaintiffs] incentives and ability to invest in
research and development. (Alcon Mem. in Supp. at 23.) These injuries, like Plaintiffs
claimed constitutional injuries, rely on Plaintiffs speculation, both as to the monetary amounts
of such injuries, and how section 905.1 will be enforced. Such hypothetical injuries are
insufficient to constitute irreparable harm. See Goldammer v. Fay, 326 F.2d 268, 270 (10th Cir.
1964) (Injunction is a drastic remedy to be exercised with caution, and should be granted only is
cases where the necessity therefore is clearly established.); Voile Mfg. Corp. v. Dandurand, 551
F. Supp. 2d 1301, 1307 (D. Utah 2008) (holding that a probable loss in market share was not
the type of damage that amounts to irreparable harm). Accordingly, the court concludes that
Plaintiffs have failed to meet their burden of establishing irreparable harm.
3. The Balance of Hardships & Public Interest
Finally, the balance of hardships and public interest factors also weigh against granting a
preliminary injunction in this case. Utahs ability to enact and enforce measures it deems to be
in the public interest is [] an equity to be considered in the balance of hardships. Heideman,
348 F.3d at 1191. Entering an injunction in this case would prevent enforcement of a law that
the Utah Legislature determined was necessary to protect consumers and promote free
17

competition in the retail market for contact lenses. Indeed, according to Costco, the UPPs have
forced Costco to raise contact lens prices by as much as 35%, while undermining Costco
Wholesales business model, reducing product choice, foreclosing retail competition, and
damaging its goodwill. (Costco Oppn at 16.) In contrast, as the court has previously
explained, any alleged harm to Plaintiffs is speculative.
Similarly, although Plaintiffs appeal to the public interest of upholding the Constitution
as a basis for granting the preliminary injunction, as explained by the court more fully above,
Plaintiffs have failed to persuade the court that they are likely to succeed on their claim that
section 905.1 is, in fact, unconstitutional.
Section 905.1 was enacted by the elected representatives of the people of Utah after a
determination that it was in their best interest. See Utah Gospel Mission v. Salt Lake City Corp.,
316 F. Supp. 2d 1201, 1223 (D. Utah 2004), affd, 425 F.3d 1249 (10th Cir. 2005) (denying
motion for preliminary injunction and finding public interest would be impaired because it would
undermine the public process by nullifying the decision . . . [by] elected officials. The
[democratic] process . . . was extensive, time consuming, very public and often wrenching and
divisive. A compromise was reached through democratic means, and it would not be in the
public interest to set this process aside.). After extensive public hearings and legislative
debates, wherein Plaintiffs were provided a fair opportunity to present their positions, the people
of Utah chose to enact section 905.1 to eliminate price fixing in favor of free competition.
For these reasons, Plaintiffs have failed to satisfy the court that enjoining section 905.1
would be in the best interests of the public.
18

CONCLUSION
Based on the foregoing, Plaintiffs consolidated motions for preliminary injunction are
DENIED. Plaintiffs have failed to satisfy the court that they have met the requirements for a
preliminary injunction. Specifically and significantly, the court is not persuaded at this stage in
the litigation that the Plaintiffs are likely to succeed on the merits.
Dated this 11th day of May, 2015.
___________________________________
Dee V. Benson
United States District Court Judge
19
CONTACT LENS CONSUMER PROTECTION ACT..., 2015 Utah Laws Ch....
Document: 01019451242
Page: 93
2015 Utah Laws Ch. 293 (S.B. 169)

UTAH 2015 SESSION LAWS
61st LEGISLATURE, 2015 GENERAL SESSION
Additions are indicated by Text; deletions by
Text .
Vetoes are indicated by Text ;
stricken material by Text .
Ch. 293
S.B. 169
CONTACT LENS CONSUMER PROTECTION ACT AMENDMENTS
2015 GENERAL SESSION

STATE OF UTAH
Chief Sponsor: Deidre M. Henderson
House Sponsor: John Knotwell
LONG TITLE
General Description:
This bill amends the Contact Lens Consumer Protection Act.
Highlighted Provisions:
This bill:
. prohibits a contact lens manufacturer or a contact lens distributor from:
* taking certain actions to control the price that a contact lens retailer charges or advertises for contact lenses; or
* discriminating against a contact lens retailer under certain circumstances;
. addresses the penalty for a violation of a provision of this bill; and
. makes technical changes.
Money Appropriated in this Bill:

None
Other Special Clauses:

None
20
2015 Thomson Reuters. No claim to original U.S. Government Works.
CONTACT LENS CONSUMER PROTECTION ACT..., 2015 Utah Laws Ch....
Document: 01019451242
Page: 94
Utah Code Sections Affected:

AMENDS:
5816a906, as enacted by Laws of Utah 2006, Chapter 245
ENACTS:
5816a905.1, Utah Code Annotated 1953
Be It enacted by the Legislature of the state of Utah:
Section 1. Section 5816a905.1 is enacted to read:

<< UT ST 5816a905.1 >>
5816a905.1 Contact lens manufacturer or distributorProhibited conduct
(1) take any action, by agreement, unilaterally, or otherwise, that has the effect of fixing or otherwise controlling the
price that a contact lens retailer charges or advertises for contact lenses; or
(2) discriminate against a contact lens retailer based on whether the contact lens retailer:
(c) is a person authorized by law to prescribe contact lenses; or
(d) is associated with a person authorized by law to prescribe contact lenses.
Section 2. Section 5816a906 is amended to read:

<< UT ST 5816a906 >>
5816a906 Penalties for violations
(1) Knowingly A person who knowingly and intentionally violating violates a provision of Section 5816a904 is guilty
of a class A misdemeanor.
(2) The attorney general may bring a civil action or seek an injunction and a civil penalty against a any person, entity, or
manufacturer who violates a provision of Section 5816a904 or 5816a905.1.
Effective May 12, 2015.
Approved March 27, 2015
End of Document
21

Alcon Laboratories, Bausch & Lomb Appeal To 10th Circuit Court

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Alcon Laboratories, Bausch & Lomb Appeal To 10th Circuit Court

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Appellate Case: 15-4073

Date Filed: 06/26/2015

Nos. 15-4072, 15-4073

ON APPEAL FROM AN ORDER OF THE UNITED STATES DISTRICT COURT

Attorneys for Appellant Alcon Laboratories, Inc.

Appellate Case: 15-4073

Date Filed: 06/26/2015

Attorneys for Appellant Bausch & Lomb Incorporated

Appellate Case: 15-4073

Date Filed: 06/26/2015

RULE 26.1 CORPORATE DISCLOSURE STATEMENT

Appellate Case: 15-4073

Date Filed: 06/26/2015

Contact Lenses Within the United States. ............................................. 8

Contact Lens Manufacturers. ................................................................ 9

The Utah Statute. ................................................................................. 13

Course of Proceedings. ........................................................................ 16

The District Courts Ruling. ................................................................ 17

SUMMARY OF THE ARGUMENT ...................................................................... 21

ALCON AND B+L ARE LIKELY TO SUCCEED ON THE

The Utah Law Directly Regulates Interstate Commerce and Has

Appellate Case: 15-4073

Date Filed: 06/26/2015

The Utah Law Impermissibly Discriminates Against Interstate

The Utah law discriminates facially and in its effects. ............. 34

The discriminatory Utah law cannot survive strict

The manufacturers pre-enforcement challenge was

The Utah Law Imposes Excessive Burdens on Interstate

ALCON AND B+L WILL SUFFER IRREPARABLE INJURY

THE THREATENED INJURY TO ALCON AND B+L

Appellate Case: 15-4073

Date Filed: 06/26/2015

Appellate Case: 15-4073

Date Filed: 06/26/2015

Edgar v. MITE Corp.,

Appellate Case: 15-4073

Date Filed: 06/26/2015

Appellate Case: 15-4073

Date Filed: 06/26/2015

28 U.S.C. 1331 ........................................................................................................ 1

Appellate Case: 15-4073

Date Filed: 06/26/2015

CERTIFICATION PURSUANT TO TENTH CIRCUIT RULE 31.3(A)

Attorneys for Appellant Alcon Laboratories, Inc.

Attorneys for Appellant Bausch & Lomb Incorporated

Appellate Case: 15-4073

Date Filed: 06/26/2015

Attorney General of the State of Utah

Bausch & Lomb Incorporated

Eye Care Professional

Food and Drug Administration

Johnson & Johnson Vision Care, Inc.

Unilateral Retail Pricing Policy

Appellate Case: 15-4073

Date Filed: 06/26/2015

STATEMENT OF RELATED CASES

Appellate Case: 15-4073

Date Filed: 06/26/2015

Appellate Case: 15-4073

Date Filed: 06/26/2015

STATEMENT OF THE ISSUES

Whether a state law directly regulates interstate commerce or has

impermissible extraterritorial effects, in violation of the Commerce Clause of the