A federal appeals court yesterday overturned a Federal Trade Commission ruling that would have prevented states from banning such operations as shopping mall stores that combine optometric practice with eyeglass sales.
"An agency may not exercise authority over states as sovereigns unless that authority has been unambiguously granted to it," wrote Circuit Judge James Buckley of the U.S. Court of Appeals for the District of Columbia.
The FTC "acted beyond its statutory authority" in its so-called Eyeglasses II ruling last year, he wrote in an opinion agreed to by Chief Judge Patricia Wald and Circuit Judge Douglas H. Ginsburg.
If the court were to "uphold Eyeglasses II in the face of congressional silence, we would short-circuit the protections offered states by the political process," Buckley wrote.
FTC attorney Lawrence DeMille-Wagman said no decision had been reached on whether the commission would appeal. The fact that the decision was unanimous is "certainly a factor we'll have to take into account," he said.
While DeMille-Wagman said he was not surprised by the ruling, California Deputy Attorney General Thomas S. Lazar, who argued the case for the states, sounded ecstatic when he heard the news.
"No kidding! We won the case," he shouted to co-workers in his San Diego office.
The FTC's ruling of March 1989 never took effect because the California State Board of Optometry and others sought and received a stay from the appellate court moments after the ruling would have become effective last Sept. 1, Lazar said.
The states had imposed restrictions that, in the words of the court decision, "tended to discourage the 'commercial practice' of optometry -- such as partnerships between optometrists and laymen, use of trade names and chain operations combining the practice of optometry with the sale of eyeglasses in shopping centers -- in favor of 'traditional optometric practice' typified by sole practitioners operating in professional office buildings under their own names."
The FTC started investigating the state-imposed restrictions in the mid-1970s. The commission's findings, published in 1980, "indicated that these restrictions resulted in higher prices and reduced the quality of eye care available to the public," Buckley's opinion noted.
Lazar said California and 44 other states that imposed restrictions on optometric practices never moved against the type of eyeglass stores that exist in malls everywhere.
What the states opposed were storefront operations in which non-optometrists were writing and filling the prescriptions or where optometrists had an economic interest in selling eyeglasses.