Nat'l Ass'n of Optometrists & Opticians v. Harris

• Citation: 682 F.3d 1144,2012 Daily Journal D.A.R. 7801,12 Cal. Daily Op. Serv. 6450
• Decision Date: 13 June 2012
• Docket Number: No. 10–16233.,10–16233.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Parties: NATIONAL ASSOCIATION OF OPTOMETRISTS & OPTICIANS; LensCrafters, Inc.; Eye Care Centers of America, Inc., Plaintiffs–Appellants, v. Kamala D. HARRIS, in her official capacity as the Attorney General of the State of California; Denise Brown, in her official capacity as the Director of the Department of Consumer Affairs, Defendants–Appellees.

682 F.3d 1144

12 Cal. Daily Op. Serv. 6450

2012 Daily Journal D.A.R. 7801

NATIONAL ASSOCIATION OF OPTOMETRISTS & OPTICIANS; LensCrafters, Inc.; Eye Care Centers of America, Inc., Plaintiffs–Appellants,

v.Kamala D. HARRIS, in her official capacity as the Attorney General of the State of California; Denise Brown, in her official capacity as the Director of the Department of Consumer Affairs, Defendants–Appellees.

No. 10–16233.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 23, 2012.

Filed June 13, 2012.

Rebekah E. Kaufman, Morrison & Foerster LLP, San Francisco, CA; Deanne E. Maynard, Morrison & Foerster LLP, Washington, D.C., for the appellants.

Sherry L. Ledakis, Deputy Attorney General, San Diego, CA, for the appellees.

Appeal from the United States District Court for the Eastern District of California, Lawrence K. Karlton, Senior District Judge, Presiding. D.C. No. 2:02–cv–01464–LKK–DAD.

Before: PROCTER HUG, JR., RICHARD A. PAEZ, and MARSHA S. BERZON, Circuit Judges.

OPINION

HUG, Senior Circuit Judge:

I. INTRODUCTION

This case concerns the constitutionality of certain California statutes and regulations. These statutes and regulations prohibit licensed opticians ¹ from offering prescription eyewear at the same location in which eye examinations are provided and from advertising that eyewear and eye examinations are available in the same location. The National Association of Optometrists and Opticians, LensCrafters, Inc., and Eye Care Centers of America, Inc. (collectively “Plaintiffs”) maintain that these California statutes and regulations violate the dormant Commerce Clause.² On remand from this Court, Plaintiffs filed a motion for summary judgment, contending that the statutes and regulations place a burden on interstate commerce that excessivelyoutweighs the local benefits of the law. California's Attorney General and Department of Consumer Affairs (collectively “the State”) filed a cross-motion for summary judgment. The district court denied Plaintiffs' motion for summary judgment and granted the State's motion for summary judgment. Plaintiffs timely appealed. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

II. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs filed a complaint alleging that California's Business & Professions Code sections 655, 2556 and 3103, and two companion regulations, 16 Cal.Code of Regs, Title 16 sections 1399.251 and 1514 (collectively “challenged laws”) violate the dormant Commerce Clause. Plaintiffs challenge these laws to the extent they prohibit opticians and optical companies from offering prescription eyewear at the same location in which eye examinations are provided and from advertising that eyewear and eye examinations are available in the same location. Section 655 prohibits opticians and optical companies from having “any membership, proprietary interest, co-ownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly” with ophthalmologists or optometrists.³Cal. Bus. & Prof.Code § 655. Section 2556 prohibits optical companies from furnishing, employing, or maintaining optometrists and ophthalmologists on their premises. Cal. Bus. & Prof.Code § 2556. In addition, opticians may not advertise the services of optometrists or ophthalmologists. Cal. Bus. & Prof.Code § 3103; Cal.Code Regs. tit. 16, §§ 1399.251, 1514.

Plaintiffs challenged these California laws primarily because optometrists and ophthalmologists may set up a practice where patients may receive both eye examinations and prescription eyewear, but opticians may offer only the sale of eyewear, not eye examinations, and therefore are unable to offer the convenience of “one-stop shopping” in California. The restrictions on one-stop shopping apply to all opticians and optical companies when they sell eyewear in California, regardless of whether their stores are entirely owned by California entities or are owned by companies incorporated outside of California.

Plaintiffs moved for summary judgment, and the State opposed the motion. The district court granted Plaintiffs' motion for summary judgment on the grounds that the challenged laws discriminate against interstate commerce and that the State failed to provide sufficient evidence that there are no other means to address its legitimate interest in protecting public health. Nat'l Ass'n of Optometrists & Opticians v. Lockyer, 463 F.Supp.2d 1116 (E.D.Cal.2006). The State appealed.

We reversed, holding that the challenged laws were not discriminatory on their face, in their purpose, or in their effect.⁴See Nat'l Ass'n of Optometrists & Opticians v. Brown, 567 F.3d 521, 524–28 (9th Cir.2009). Although we concluded that the challenged laws were not discriminatory,we recognized that this holding was not necessarily the end of the dormant Commerce Clause analysis and remanded to the district court to determine whether the challenged laws violate the dormant Commerce Clause even though they are not discriminatory. Id. at 528.

On remand, the parties filed cross-motions for summary judgment. The district court denied Plaintiffs' motion for summary judgment and granted the State's motion for summary judgment. Nat'l Ass'n of Optometrists & Opticians v. Brown, 709 F.Supp.2d 968 (E.D.Cal.2010). The court effectively concluded that, based on the facts and the law, there were no genuine issues of material fact. Plaintiffs argued that the challenged laws impermissibly burdened interstate commerce because: 1) the challenged laws preclude an interstate company from offering one-stop shopping, which is the dominant form of eyewear retailing; and 2) interstate firms would incur a great financial loss as a result of the challenged laws. Id. at 974–78. The district court concluded that it need not consider the evidence supporting these theories because both theories failed as a matter of law. Id. In reaching this conclusion, the court reasoned that, because there was no cognizable burden on interstate commerce, it need not attempt to balance the “non-burden” against the putative local interests under the test derived from Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970). Id. at 975. Plaintiffs timely appealed, and that appeal is now before us.

III. STANDARD OF REVIEW

We review a district court's grant of summary judgment de novo. Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 992 (9th Cir.2001). Therefore, our review is governed by the same standard used by the district court under Federal Rule of Civil Procedure 56(a). Id.Rule 56(a) provides that a court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The substantive law determines which facts are material; only disputes over facts that might affect the outcome of the suit under the governing law properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). We may affirm a grant of summary judgment on any ground supported by the record. Video Software Dealers Ass'n v. Schwarzenegger, 556 F.3d 950, 956 (9th Cir.2009).

IV. ANALYSIS

A. The Dormant Commerce Clause and Pike

An understanding of Pike and of the purpose and scope of the dormant Commerce Clause informs our determination of whether, as a matter of law, Plaintiffs have provided sufficient evidence of a violation of the dormant Commerce Clause. “Although the Commerce Clause is by its text an affirmative grant of power to Congress to regulate interstate and foreign commerce, 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, 87, 104 S.Ct. 2237, 81 L.Ed.2d 71 (1984); see also Oregon Waste Sys., Inc. v. Dep't of Envtl. Quality of State of Or., 511 U.S. 93, 98, 114 S.Ct. 1345, 128 L.Ed.2d 13 (1994) (“Though phrased as a grant of regulatory power to Congress, the Clause has long been understood to have a ‘negative’ aspect that denies the States the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce.”). This limitation on state power has come to be known as the dormant Commerce Clause. See Dep't of Revenue v. Davis, 553 U.S. 328, 337, 128 S.Ct. 1801, 170 L.Ed.2d 685 (2008).

Modern dormant Commerce Clause jurisprudence primarily “is driven by concern about economic protectionism—that is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors. Id. at 337–38, 128 S.Ct. 1801 (internal quotation marks and citations” omitted). “The principal objects of dormant Commerce Clause scrutiny are statutes that discriminate against interstate commerce.” CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 87, 107 S.Ct. 1637, 95 L.Ed.2d 67 (1987). “The central rationale for the rule against discrimination is to prohibit state or municipal laws whose object is local economic protectionism,” because these are the “laws that would excite those jealousies and retaliatory measures the Constitution was designed to prevent.” C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 390, 114 S.Ct. 1677, 128 L.Ed.2d 399 (1994). Thus, a corollary concern of the dormant Commerce Clause is that “this Nation is a common market in which state lines cannot be made barriers to the free flow of both raw materials and finished goods.” Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 803, 96 S.Ct. 2488, 49 L.Ed.2d 220 (1976).

Given the purposes of the dormant Commerce Clause, it is not surprising that a state regulation does not become vulnerable to invalidation under the dormant Commerce Clause merely because it affects interstate commerce. See S. Pac. Co. v. State of Ariz., 325 U.S. 761, 767, 65 S.Ct. 1515, 89 L.Ed. 1915 (1945). A...