CALIFORNIA STATE BOARD OF OPTOMETRY, PETITIONER,
v.
FEDERAL TRADE COMMISSION, RESPONDENT, NATIONAL ASSOCIATION OF OPTOMETRISTS AND OPTICIANS, INTERVENOR
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The court denied petitions for rehearing, finding the FTC's rule fundamentally flawed and an unlawful exercise of rulemaking authority.
The FTC and an industry association petitioned for rehearing after a ruling that their "Eyeglasses II" rule violated the state action doctrine. They a…
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PER CURIAM.
On consideration of the petitions for rehearing filed by respondent Federal Trade Commission and intervenor National Association of Optometrists and Opticians, and the supplemental briefs filed with respect thereto, it is
ORDERED by the court that the petitions for rehearing are denied for the reasons set forth in the attached memorandum.
MEMORANDUM
The Federal Trade Commission and the National Association of Optometrists and Opticians have petitioned for rehearing. They claim, in part, that despite our holding that the challenged rule, “Eyeglasses II,” violates the state action doctrine enunciated in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), 910 F. 2d 976, the Commission may nonetheless disallow those regulations issued by state and local governmental entities that lie outside the scope of the Parker exemption, citing Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 57-65, 105 S.Ct. 1721, 1726-27, 85 L.Ed.2d 36 (1985); California Retail Liquor Dealers Ass ’n v. Midcal Aluminum, Inc., 445 U.S. 97, 105-06, 100 S.Ct. 937, 943-44, 63 L.Ed.2d 233 (1980); and City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 394-97, 98 S.Ct. 1123, 1127-29, 55 L.Ed.2d 364 (1978).
These parties contend that the rule should therefore be remanded for clarification.
We agree that the cited cases, which were brought under the Sherman Act, apply with equal force to challenges to FTC rules. We nevertheless deny the petitions for rehearing because the rule is fundamentally flawed. Eyeglasses II is explicitly directed at state action: “The Federal Trade Commission issues a final rule that removes restraints imposed by state law on certain specified forms of commercial ophthalmic practice.” 54 Fed.Reg.
10285. Its primary focus is on “state-imposed and state-enforced restrictions,” id. at 10288, and its lengthy rulemaking was conducted entirely without regard to the possibility that any of the regulations and policies it would condemn as unfair might be shielded by Parker. Because Eyeglasses II represents, in essential part, an unlawful exercise of rule-making authority, and because its rulemak-ing failed to take the limitations on that authority into account, we do not believe a remand is warranted. Our order, of course, does not bar the FTC from initiating a new rulemaking or proceeding by adjudication to challenge, within the limits of its proper authority, any practice that it believes to be unfair.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Parker v. Brown, 317 U.S. 341 (U.S. 1943)
- City of Lafayette v. La. Power & Light Co., 435 U.S. 389 (U.S. 1978)
- California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U.S. 97 (U.S. 1980)
- S. Motor Carriers Rate Conf., Inc. v. United States, 471 U.S. 48 (U.S. 1985)
- Cal. State Bd. OF Optometry v. Fed. Trade Comm'n, 910 F.2d 976 (D.C. Cir. 1990)