Lenscrafters, Inc. v. Wadley, 3:98-0150.

• Decision Date: 16 January 2003
• Docket Number: No. 3:98-0150.,No. 3:00-0096.,3:98-0150.,3:00-0096.
• Citation: 248 F.Supp.2d 705
• Parties: LENSCRAFTERS, INCORPORATED, Plaintiff, v. Fredia WADLEY, in her Official capacity as Commissioner of the Tennessee Department of Health, et al., Defendants. U.S. Vision, Cole Vision Corporation, and National Association of Optometrists and Opticians, v. Fredia Wadley, in her Official capacity as Commissioner of the Tennessee Department of Health, et al., Defendants.
• Court: U.S. District Court — Middle District of Tennessee

Page 705

248 F.Supp.2d 705

LENSCRAFTERS, INCORPORATED, Plaintiff, v.Fredia WADLEY, in her Official capacity as Commissioner of the Tennessee Department of Health, et al., Defendants.

U.S. Vision, Cole Vision Corporation, and National Association of Optometrists and Opticians, v.Fredia Wadley, in her Official capacity as Commissioner of the Tennessee Department of Health, et al., Defendants.

No. 3:98-0150.

No. 3:00-0096.

United States District Court, M.D. Tennessee, Nashville Division.

January 16, 2003.

Order Granting in Part, Denying in Part Motion to Amend OpinionFebruary 26, 2003.

COPYRIGHT MATERIAL OMITTED

Barbara Jean Moss, Wyatt, Tarrant & Combs, Nashville, TN, Stacey Leigh Jarrell, Julie A. Maloney, Thorp, Reed &amp Armstrong, Pittsburgh, PA, Thorp, Reed & Armstrong, Pittsburgh, Barry Friedman, New York, NY, Kenneth Edward Pringle, Pringle, Quinn & Anzano, Belmar, NJ, for Lenscrafters, Inc., pltf.

Eugene N. Bulso, Jr., Barbara Hawley Smith, Melissa R. Ballengee, Boult, Cummings, Conners & Berry, Nashville, TN, for defts.

Raoul A. Renaud, Vision Service Plan, Rancho Cordova, CA, for Vision Service Plan.

Richard M. Smith, Smith & Cashion, PLC, Nashville, TN, for Gary Collins.

MEMORANDUM

TRAUGER, District Judge.

Pending before the court are cross-Motions for Summary Judgment(DocketNos. 163, 169) and responses thereto (DocketNos. 197, 200) For the reasons discussed herein, the defendants' motion will be granted, and plaintiffs' motion will be denied.

I.FACTUAL BACKGROUND AND PROCEDURAL HISTORY

A.Evidentiary Matters

As an initial matter, plaintiffs refer to a number of documents in support of their Motion for Summary Judgment, as well as their Response to the defendant's Motion for Summary Judgment, that defendants have objected to as inadmissible under Federal Rules of Evidence 802 and 901.(Docket No. 197at pp. 1-2).Because some of these objections are well founded, the court will not consider the inadmissible documents, except to the extent that they are incorporated into plaintiffs' expert testimony.

In addition, defendants have moved to strike (DocketNo. 209)Plaintiffs Statement of Material Facts in Support of Response to Motion for Summary Judgment(DocketNo. 202), or in the alternative for relief from LocalRule 8(b)(7), which the plaintiffs have opposed (DocketNo. 211).The court finds that the Plaintiffs Statement of Material Facts is not a concise statement of additional facts (being 202 pages in length) and is redundant with regard to many of the facts set forth in Plaintiffs's Statement of Undisputed Facts in support of their own Motion for Summary Judgment.However, in lieu of striking Plaintiffs' Statement of Material Facts in Support of Response to Motion for Summary Judgment, the court will grant defendants' relief from the Local Rule and will consider the additional facts set forth by the plaintiffs only to the extent the court is certain that those facts could not be disputed.

Finally, plaintiffs have filed a Motion to Supplement the Record(Docket 212), which defendants have opposed (DocketNo. 219).Because this evidence has been proffered subsequent to the close of discovery, plaintiffs' motion will be denied.

B.Parties¹

Interstate optical firms, such as the plaintiffs, are businesses that employ licensed opticians.²The purpose of their businesses is to sell optical goods to consumers at the retail level.Plaintiffs operate retail optical stores in several states, including Tennessee.³In some states plaintiffs sublet space and/or diagnostic equipment inside of their stores to licensed optometrists.In Tennessee, plaintiffs are prohibited from doing so by Tenn.Code. Ann. § 63-8-113(c)(6), which provides that:

(c) It is unlawful for any licensed optometrist to:

(1) Advertise optometric services or ophthalmic materials, except as provided in subsection (d);

(2) Practice optometry as an employee of any person or business or organization not engaged primarily in health care delivery;

(3) Practice optometry under a name other than the optometrist's own unless board approved;

(4) Appoint agents or other persons to take orders for optometric services or ophthalmic materials;

(5) Split or share fees with any person or organization in return for solicitation of customers by that person or organization;

(6) Practice 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.Any licensed, registered optometrist practicing in premises of such type prior to April 17, 1967, shall be permitted to continue the independent practice in that optometrist's present location, or in such new location to which the retail store or other commercial establishment might move, but when any such optometrist vacates any such premises, no other optometrist shall be permitted to practice in such vacated premises; or

(7) Engage in practice in any temporary or mobile office except as authorized by the board, or any office which does not have the appropriate instrumentation for diagnosis and treatment for the practice of optometry as established by the board.

Defendants Richt, Spivey, Hendrickson, Abernathy, Foster, and Browder are members of the Tennessee State Board of Optometry.Defendant Browder is the consumer member of the Board.The remaining members of the Board are Tennessee licensed optometrists.⁴Defendant Wadley is the Commissioner of the Tennessee Department of Health.All defendants are sued in their official capacities.

With respect to the Board's authority, Tenn.Code.Ann. § 63-8-112 provides in pertinent part:

The board is given authority to:

(1) Make rules, regulations, policies and procedures not inconsistent with the laws of this state, for the proper performance of its duties to carry out the purposes, and to enforce the provisions of this chapter;

(2) Provide a standard of efficiency as to the moral, educational and experience qualifications and fitness of all persons who desire to practice optometry in Tennessee, in conformity with the provisions of this chapter;

. . . . .

(5) Investigate possible violations of and enforce the provisions of this chapter;

. . . . .

(7) Seek injunctions to prevent violations of this chapter.Such actions shall be brought in the chancery court of Davidson County or the chancery court of the county in which the defendant resides or does business.Such actions may be brought by ten (10) or more licensed optometrists or a state association of optometrists as well as by the board[.]

The Department of Health is organized into divisions, among them the Division of Health Related Boards, which, concurrent with the Board of Optometry, is charged with enforcing the state's optometry laws.

C.Retail Optical Market

Prescription optical goods are sold from a number of outlets in Tennessee.These outlets include interstate optical stores, local optical stores, health maintenance organizations (HMOs), and dispensaries operated by optometrists and ophthalmologists incident to their practice.Plaintiffs refer to the optometrists and ophthalmologists who operate such dispensaries as dispensing optometrists and ophthalmologists.For ease of reference, the court will as well, even though the term has no legal significance.Plaintiffs economic expert, Dr. Daniel L. Rubinfeld, estimates that the share of the retail market occupied by the different outlets is as follows:

Dispensing Optometrists     39.2%
                Dispensing Ophthalmologists 12.6%
                Chains                      34.5%
                Local optical stores        10.9%
                HMOs                         2.9%
                

(Docket No. 163, Ex. 2at p. 10)Dr. Rubinfeld's estimates are based upon data provided by Jobson's.⁵Defendants have offered unrefuted evidence that this data is often unreliable.(Docket No. 197at pp. 17-19)

D.Practice of Optometry in Tennessee

Tennessee regulates and licenses optometrists, ophthalmologists, and opticians.SeeTenn.Code.Ann. §§ 63-8-101(optometrists), 63-6-101 (ophthalmologists), and 63-14-101 (opticians).Optometrists are required to have earned a doctor of optometry (O.D.) degree to obtain licensure in Tennessee.Upon being licensed, optometrists are authorized to examine eyes, prescribe corrective lenses, diagnose eye disease, and prescribe drugs to treat eye disease.⁶Optometrists are also authorized to dispense optical goods incident to their practice of optometry.As stated, those who do so will be referred to herein as dispensing optometrists.Those who do not dispense optical goods incident to their practice will be referred to as prescribing optometrists.

Ophthalmologists are medical doctors who have specialized in the diagnosing and treating of the eye.In addition to performing the functions carried out by optometrists, ophthalmologists are authorized to perform eye surgery.

According to the Tennessee Supreme Court's decision in Lenscrafters, Inc. v. Sundquist,33 S.W.3d 772(Tenn.2000), Tennessee licensed optometrists are health care providers.⁷Retail optical goods establishments are not health care providers.Rather, they are deemed "dispensing opticians" under Tenn.Code Ann. § 63-14-102.As such, plaintiffs are "allowed to prepare, adapt, and dispense lenses, spectacles, eye glasses, frames, and optical devices."Id. at 777.Businesses "in the practice of dispensing opticians" are also allowed to employ persons licensed as opticians, as long as the optician is "under the actual and personal supervision of partners, officers, managers or stockholders who possess valid unrevoked licenses as dispensing opticians entitled to practice in [Tennessee]."Id.(citingTenn.Code Ann. § 63-14-103(d)(1997)).Thus, plaintiffs may sell ophthalmic lenses and frames and may employ opticians who dispense ophthalmic lenses and frames.

E.Legislative History of Tenn.Code. Ann. § 63-8-113(c)(6)

The prohibition on optometric practice in or in conjunction with retail establishments...