Lenscrafters, Inc. v. Robinson

• Decision Date: 14 April 2005
• Docket Number: No. 03-5512.,03-5512.
• Citation: 403 F.3d 798
• Parties: LENSCRAFTERS, INC.; U.S. Vision; Cole Vision Corporation; National Association of Optometrists and Opticians, Plaintiffs-Appellants, v. Kenneth S. ROBINSON, in his official capacity as Commissioner of the Tennessee Department of Health; Jerry A. Richt, O.D.; Scott L. Spivey, O.D.; Terry L. Hendrickson, O.D.; Brian Browder; Jeff Foster, O.D.; Eddie Abernathy, O.D., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

403 F.3d 798

LENSCRAFTERS, INC.; U.S. Vision; Cole Vision Corporation; National Association of Optometrists and Opticians, Plaintiffs-Appellants, v. Kenneth S. ROBINSON, in his official capacity as Commissioner of the Tennessee Department of Health; Jerry A. Richt, O.D.; Scott L. Spivey, O.D.; Terry L. Hendrickson, O.D.; Brian Browder; Jeff Foster, O.D.; Eddie Abernathy, O.D., Defendants-Appellees.

No. 03-5512.

United States Court of Appeals, Sixth Circuit.

Argued: November 2, 2004.

Decided and Filed: April 14, 2005.

COPYRIGHT MATERIAL OMITTED

ARGUED: Barry Friedman, New York University Law School, New York, New York, for Appellants. Eugene N. Bulso, Jr., Boult, Cummings, Conners & Berry, Nashville, Tennessee, for Appellees. ON BRIEF: Barry Friedman, New York University Law School, New York, New York, Julie A. Maloney, Stacey L. Jarrell, Thorp, Reed & Armstrong, Pittsburgh, Pennsylvania, Daniel H. Bromberg, Jones Day, Washington, D.C., Alan N. Greenspan, Jackson Walker, L.L.P., Dallas, Texas, for Appellants. Eugene N. Bulso, Jr., Melissa R. Ballengee, Barbara Hawley Smith, Boult, Cummings, Conners & Berry, Nashville, Tennessee, for Appellees. Roger A. Fairfax, Alissa Starzak, O'Melveny & Myers, Washington, D.C., for Amicus Curiae.

Before: MARTIN and BATCHELDER, Circuit Judges; JORDAN, Senior District Judge.^*

BOYCE F. MARTIN, JR., Circuit Judge.

LensCrafters, along with several other interstate optical companies and their national trade association, appeal the district court's summary judgment upholding the constitutionality of a Tennessee state statute, Tenn.Code Ann. § 63-8-113(c)(6), which, as interpreted by the Tennessee Supreme Court, essentially prohibits optical companies from leasing space to optometrists to perform eye exams in their retail eyewear stores. On appeal, LensCrafters claims that the provision violates the Commerce, Equal Protection, and Due Process Clauses of the United States Constitution. For the following reasons, we AFFIRM the summary judgment of the district court.

I.

On April 17, 1967, Tennessee Code Annotated Section 63-8-113(c)(6) was signed into law. This provision, the constitutionality of which is at issue in this case, provides that it is unlawful for any licensed optometrist to "[p]ractice or offer to practice optometry in, or in conjunction with, any retail store or other commercial establishment where merchandise is displayed or offered for sale." At the time that the law was passed, proponents argued that the prohibition was necessary to "upgrade the profession" and to protect the doctor-patient relationship from interference by commercial interests. Kenneth Robinson in his capacity as Commissioner of the Tennessee Department of Health and henceforth referred to as the State, claims that the law was enacted to prevent the harm that may occur if optometrists are subjected to the control of optical retail stores.

The plaintiffs in this case, collectively referred to as "LensCrafters," argue that the statute was passed as a protectionist measure, aimed at preventing large out-of-state retail stores from competing with local optometrists in the retail eyewear market. To support its claim, they point to Tennessee Optometric Association documents that seemingly refer to a "top secret" campaign to rid Tennessee of commercialism in discount optometric stores. LensCrafters also claims that the legislative history of the law suggests that the provision had discriminatory purposes since at least some members of the Tennessee legislature criticized the bill at the time of its passage as lacking any public purpose.

LensCrafters generally prefers to provide "one-stop shopping," whereby it leases space in its retail eyewear superstores to optometrists who perform eye exams. Section 63-8-113(c)(6), as interpreted by the Tennessee Supreme Court, essentially outlaws this practice. See LensCrafters, Inc. v. Sundquist, 33 S.W.3d 772 (Tenn.2000) (holding that Section 63-8-113(c)(6) applies to businesses, such as LensCrafters, that primarily sell ophthalmic materials). Consequently, LensCrafters claims that Section 63-8-113(c)(6) violates the Commerce, Equal Protection, and Due Process Clauses of the United States Constitution because it allows in-state optometrists to provide "one-stop shopping" while prohibiting optical companies from doing the same.

II.

LensCrafters filed the original action challenging Section 63-8-113(c)(6) on February 19, 1998, in the District Court for the Middle District of Tennessee. On August 3, 1999, the district court certified a question to the Tennessee Supreme Court, seeking an interpretation of whether an entity engaged primarily in the business of selling lenses and frames is a "retail store or other commercial establishment" under Section 63-8-113(c)(6). The Tennessee Supreme Court, in an opinion entered on December 13, 2000, held that such establishments did fall within Section 63-8-113(c)(6)'s prohibition. See Sundquist, 33 S.W.3d at 778. In its opinion, the court noted that the statute applies only to "non-health care profession commercial entities," suggesting that optometrists are allowed to sell lenses and frames within their own practice. Id. (internal quotation marks omitted).

On January 15, 2003, the district court denied LensCrafters's motion for summary judgment and granted the State's motion for summary judgment, holding that Section 63-8-113(c)(6) does not violate the Commerce Clause, the Equal Protection Clause, or the Due Process Clause. The court rejected LensCrafters's Equal Protection and Due Process challenges, finding that the statute was rationally related to a legitimate state interest, particularly in light of the United States Supreme Court's rejection of similar challenges in Williamson v. Lee Optical, 348 U.S. 483, 75 S.Ct. 461, 99 L.Ed. 563 (1955). The court also upheld the statute on the dormant Commerce Clause claim, holding that the statute was not discriminatory and did not impose a burden on interstate commerce "clearly excessive to the putative benefits" of the statute. On January 31, LensCrafters filed a motion to alter or amend the judgment under Federal Rule 59, requesting that the district court reconsider its finding that some of their exhibits were inadmissible hearsay. On February 24, the district court revised its evidentiary rulings on four exhibits, but refused to alter or amend its judgment. LensCrafters timely appealed the district court's decision on March 25.

III.

This Court reviews de novo a district court's grant of summary judgment. Gribcheck v. Runyon, 245 F.3d 547, 550 (6th Cir.2001). Summary judgment is appropriate where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A court considering a summary judgment motion considers the facts in the light most favorable to the nonmoving party and draws all reasonable inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

LensCrafters claims on appeal that the district court erred in holding that Section 63-8-113(c)(6) does not violate the dormant Commerce Clause, the Equal Protection Clause, or the Due Process Clause. We will address each claim in turn.

IV.

We first consider whether the district court erred in rejecting LensCrafters's claim that Section 63-8-113(c)(6) is violative of the Commerce Clause. In short, LensCrafters claims that the challenged provision impermissibly discriminates against interstate commerce by giving Tennessee optometrists a competitive advantage over their out-of-state competitors in the retail eyewear market.

"Although the Commerce Clause is by its text an affirmative grant of power to Congress, the Clause has long been recognized as a self-executing limitation on the power of the States to enact laws imposing substantial burdens on such commerce." South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 82, 104 S.Ct. 2237, 81 L.Ed.2d 71 (1984). This limitation — known as the "negative" or "dormant" Commerce Clause — prevents states from advancing their own economic interests by frustrating the movement of articles of commerce into or out of the state. In analyzing the constitutionality of a statute under the dormant Commerce Clause, this Court engages in a two-step inquiry. First, we determine "whether the statute directly burdens interstate commerce or discriminates against out-of-state interests." E. Ky. Res. v. Fiscal Court of Magoffin County, Ky., 127 F.3d 532, 540 (6th Cir.1997). If the statute is found to be discriminatory, it is virtually per se invalid and the Court applies the "strictest scrutiny." Or. Waste Sys., Inc. v. Dep't of Envtl. Quality of the State of Or., 511 U.S. 93, 101, 114 S.Ct. 1345, 128 L.Ed.2d 13 (1994). If, on the other hand, the statute is not discriminatory, we proceed to the second step to determine whether "the burdens on interstate commerce are `clearly excessive in relation to the putative local benefits.'" E. Ky. Res., 127 F.3d at 540 (quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970)). If the burdens are "clearly excessive," then the statute violates the Commerce Clause.

A.

The threshold question is whether Section 63-8-113(c)(6) is discriminatory. This Court has noted that a "statute can discriminate against out-of-state interests in three different ways: (a) facially, (b) purposefully, or (c) in practical effect." E. Ky. Res., 127 F.3d at 540 (citing Wyoming v. Oklahoma, 502 U.S. 437, 454-55, 112 S.Ct. 789, 117 L.Ed.2d 1 (1992)). The statute at issue here is not discriminatory on its face, so the only issues are whether the statute either purposefully, or in practical effect, discriminates against out-of-state interests.

Discriminatory Purpose

The burden of establishing that a challenged statute has a discriminatory purpose under the Commerce Clause falls on the...