A U.S. judge has dismissed most of a consumer lawsuit accusing Idexx Laboratories (IDXX.O) of driving up the cost of animal health services. The lawsuit, filed in 2022, was brought by pet owners from 14 states, including New York, California, Florida, Massachusetts, and Illinois, and accused the Maine-based veterinary diagnostic testing manufacturer of abusing its market power. The plaintiffs alleged that Idexx used exclusive and long-term contracts with veterinary practices across the country, which led to inflated prices being passed on to pet owners.
On Friday, Chief U.S. District Judge Stacey Neumann ruled that the plaintiffs did not have legal standing to pursue many of their claims under various state laws. While the judge dismissed the majority of the state-law claims, she allowed some to proceed under the laws of Minnesota, North Carolina, and Missouri. These claims focus on the alleged overpricing of diagnostic testing devices, including heartworm tests, which are used by veterinarians to diagnose illnesses in pets.
The judge’s decision came after a previous ruling in which she dismissed federal antitrust claims. Last year, Neumann found that the plaintiffs were not direct or indirect purchasers of the diagnostic products at issue in the lawsuit, which are known as “point-of-care” testing products. These are devices used by veterinary clinics to obtain fast test results for animal health conditions. As a result, the plaintiffs were not deemed to have standing to pursue the federal claims, which led to the narrowing of the case.
The lawsuit represents the interests of thousands of would-be class members who allege that they were overcharged by Idexx through inflated prices passed on by veterinary practices that were bound by exclusive contracts with the company. These exclusive arrangements allegedly restricted the availability of certain diagnostic products and contributed to the higher costs charged to pet owners.
Idexx, which employs over 10,300 people and generated about $3.9 billion in revenue last year, has denied any wrongdoing in the case. The company had previously faced scrutiny over its business practices, settling U.S. Federal Trade Commission (FTC) antitrust claims in 2013. As part of the settlement, Idexx agreed to stop certain exclusive arrangements with three national distributors of point-of-care testing products. However, the company did not admit liability in that case.
Attorneys for both the plaintiffs and Idexx did not immediately respond to requests for comment following the ruling. Judge Neumann directed Idexx to formally respond to the remaining claims by April 11. The outcome of the case could have significant implications for the veterinary diagnostic market, as it highlights ongoing concerns about pricing practices and market dominance in the pet healthcare sector.
