Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_02-cv-01464/USCOURTS-caed-2_02-cv-01464-18/pdf.json

Nature of Suit Code: 950
Nature of Suit: Contitutionality of State Statutes
Cause of Action: 28:1331 Federal Question: Other Civil Rights

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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

NATIONAL ASSOCIATION OF

OPTOMETRISTS & OPTICIANS;

LENSCRAFTERS, INC; and EYE NO. CIV. S-02-1464 LKK/DAD

CARE CENTERS OF AMERICA, INC.,

Plaintiffs,

v.

EDMUND G. BROWN, JR., in his 

official capacity as Attorney 

General of the State of California; 

and CHARLENE ZETTEL, in her official O R D E R

capacity as Director of the

Department of Consumer Affairs,

Defendants.

 /

This case concerns the constitutionality of certain

California statutes and regulations. These statutes and

regulations prohibit optical companies from offering

prescription eyewear at the same location in which eye

examinations are provided and from advertising that eyewear and

eye examinations were available in the same location.

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Several motions to seal were filed by parties concerning the 1

briefs and exhibits in these motions. The court addresses these

motions in a concurrently filed order. 

2

Plaintiffs, an association of optometrists and opticians and two

out-of-state optical companies, contend that these statutes and

regulations violate the dormant Commerce Clause because their

burden on interstate commerce excessively outweighs the local

benefits of the law. Plaintiffs and defendants each bring crossmotions for summary judgment. For the reasons described below,

plaintiffs’ motion is denied and defendants’ motion is granted.

I. BACKGROUND1

In 2002, plaintiffs, the National Association of

Optometrists and Opticians (“NAOO”) and two out-of-state optical

companies, LensCrafters, Inc. (“LensCrafters”) and Eye Care

Centers of America, Inc. (“ECCA”), filed a complaint against

defendants, the Attorney General of California and the Director

of the California Department of Consumer Affairs, seeking

declaratory and injunctive relief. Plaintiffs challenge Sections

655, 2556, and 3130 of California’s Business & Professions Code

and their companion regulations, 16 California Code of

Regulations, Title 16, Sections 1399.251 and 1514. These

provisions prohibit 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 at the same locations. Optometrists and

ophthalmologists who are unaffiliated with optical companies,

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however, may offer prescription eyewear at the same location in

which eye examinations are provided and may advertise these

services. 

Plaintiffs allege that these statutes and regulations

violate the dormant Commerce Clause because local optometrists

and ophthalmologists may offer “one-stop shopping” of both

eyewear and eye examinations, which they contend is the

preferred or dominant business model, and out-of-state optical

companies are prohibited from providing the same one-stop

shopping. Defendants argue that these statutes and regulations

do not violate the dormant Commerce Clause because they promote

the health of Californians by protecting the optometric

profession from being taken over by large business interests. 

In 2003, plaintiffs and defendants filed their first crossmotions for summary judgment. On March 10, 2004, before the

court issued an order on these motions, the case was stayed

pending resolution of People v. Cole, 38 Cal. 4th 964 (2006).

This court then granted plaintiffs’ motion for summary judgment

and denied defendants’ motion on the ground that “the challenged

laws substantially effect and discriminate against interstate

commerce and therefore are subject to strict scrutiny under the

dormant Commerce Clause.” Nat’l Ass’n of Optometrists &

Opticians v. Lockyer (“Lockyer”), 463 F. Supp. 2d 1116, 1138

(E.D. Cal. 2006). This court continued to hold that, “Although

California has legitimate interests in regulating the provision

of health services, defendants have failed to meet [their]

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burden of showing that [they have] no other means to advance

[their] interests.” Id. As such, this court concluded that the

laws and regulations violate the dormant Commerce Clause.

Defendants appealed. On May 28, 2009, the Ninth Circuit

reversed this court’s decision and remanded the case for the

court to conduct the Pike v. Bruce Church, Inc., 397 U.S. 137,

142 (1970), balancing test. Nat’l Ass’n of Optometrists &

Opticians v. Brown (“Brown”), 567 F.3d 521, 528 (9th Cir. 2009).

The Ninth Circuit held that the challenged laws and regulations

are not discriminatory under the dormant Commerce Clause because

opticians, including optical chains like LensCrafters, are not

similarly situated to optometrists and ophthalmologists. 

The Ninth Circuit first concluded that “the dormant

Commerce Clause is applicable to this case because the retail

sale of eyewear involves and affects interstate commerce such

that Congress could regulate in that area.” Id. at 524. The

court continued, however, to reverse this court’s ruling that

the laws and regulations were discriminatory. Specifically, the

court reversed this court’s ruling (based upon the statement of

the chief sponsor of the challenged provisions) that the

regulatory scheme was intended as economic protectionism

favoring California business. Id. at 525. Rather, the Ninth

Circuit decided that, “[T]he statement is clear that the

sponsor’s objective was to protect California’s optometric

profession from being taken over by large business interests, as

had been experienced in eastern states.” Id. Thus, the Ninth

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Circuit held that the challenged provisions did not have a

discriminatory purpose.

The Circuit then looked to whether the laws and regulations

had a discriminatory effect on interstate commerce. This

question turned on the definition of similarly situated

entities. Plaintiffs argued, and this court held, that

optometrists and ophthalmologists were similarly situated to

opticians, including optical chains, because they “compete in

the same market, with the same produces, for the same

customers.” Lockyer, 463 F. Supp. 2d at 1129. The Ninth Circuit,

however, decided that optometrists and ophthalmologists are not

similarly situated with opticians. That court held that, “As

health care providers, optometrists and ophthalmologists clearly

have special responsibilities that opticians do not, and as

commercial concerns, opticians have business structures

available to them that optometrists and ophthalmologists do

not.” Brown, 567 F.3d at 527. 

The Court of Appeals continued to apply Exxon Corp. v.

Governor of Maryland, 437 U.S. 117, 125-26 (1978), to conclude

that optometrists and ophthalmologists are not similarly

situated to opticians. This court previously held that Exxon “is

clearly distinguishable.” Lockyer, 463 F. Supp. 2d at 1127.

Specifically, this court reasoned, 

Unlike Exxon, in the instant case, California has

enacted a statutory scheme which has the practical

effect of barring all out-of-state entities from

offering one-stop shopping, while reserving for the

principal in-state competitors the right to provide

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the competitive advantage. [¶] In Exxon, the Court

found that interstate dealers were able to compete in

the same manner as in-state service station owners

under the Maryland law. Only gasoline refiners could

no longer compete in the Maryland retail market.

Unlike the case at bar, in Exxon, other interstate

firms could compete in the Maryland market. Under

these circumstances, the Court held, the dormant

Commerce Clause was not violated. 

Id. The Court of Appeals, however, found that Exxon is

controlling here and, as such, optometrists and ophthalmologists

are not similarly situated to opticians. The court interpreted

Exxon to “distinguish[] between . . . entities based on their

business structures, holding that a state may prevent businesses

with certain structures or methods of operation from

participating in a retail market without violating the dormant

Commerce Clause.” Brown, 567 F.3d at 527. Accordingly, the Ninth

Circuit held, “Because states may legitimately distinguish

between business structures in a retail market, a business

entity’s structure is a material characteristic for determining

if entities are similarly situated.” Id. The court then applied

Exxon to “reject LensCrafters’ argument that competition in the

same market renders it similarly situated to optometrists and

ophthalmologists.” Id. As such, “opticians are not the same as

optometrists or ophthalmologists. . . . Because the California

laws make no geographical distinctions between similarly

situated entities, they are not invalidated by the dormant

Commerce Clause.” Id. at 527-28.

When discussing the government interest in the challenged

provisions, this court previously held that, “defendants

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The parties dispute whether this court is bound by this 2

analysis. While this discussion is dicta, dicta from a higher

court, especially when it concerns the case at bar, should not be

treated lightly, because it serves as a "prophecy of what that

Court might hold." See McCalla v. Royal MacCabees Life Ins. Co.,

369 F.3d 1128, 1131 (9th Cir. 2004) (internal quotes and citations

omitted) (holding that court of appeals should not generally

disregard dicta of the Supreme Court).

7

fail[ed] to establish that the public's health is in greater

danger when receiving care from an optometrist affiliated with a

chain as compared to receiving care from a dispensing

optometrist” Lockyer, 463 F. Supp. 2d at 1136-37. The Court of

Appeals, however, disagreed with this analysis, and stated that

Here through the challenged laws, California has

sought to protect optometrists and ophthalmologists as

health care professionals from being affected by

subtle pressures from commercial interests. The

pressures of co-ownership and profit sharing

prohibited by the statutes are more obvious, but

potentially even a landlord-tenant relationship could

undermine health care quality if the landlord required

a certain level of performance to maintain the lease.

It is true that an optometrist or ophthalmologist

would still be bound by professional and ethical

standards. However, it is the subtle pressure to

conform to commercial desires that the statutes seek

to avoid. These subtle pressures would be difficult to

regulate as violations of professional or ethical

standards. Thus, the California laws in this case are

health regulations designed to prevent health care

providers from being unduly affected by commercial

interests. We must give deference to the State’s

choice to protect its citizens in this way.

Brown, 567 F.3d at 526. Accordingly, the Ninth Circuit 2

disagreed with this court’s analysis of the record that “there

is no evidence that the practices that defendants complain of

actually harm the public's health.” Lockyer, 463 F. Supp. 2d at

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1136. Rather, the Court of Appeals adopted defendant’s theory

that commercial optical companies subtly pressure co-locating

optometrists and ophthalmologist to conform their treatment of

patients with commercial goals. Such subtle pressures, if they

exist, are difficult, if not impossible to measure. Nonetheless,

the Circuit held that these pressures may negatively effect the

quality of health care provided by optometrists and

ophthalmologists working within such companies. 

At the conclusion of its analysis, the Ninth Circuit noted

that:

[D]espite LensCrafters’ claims that the ability to

offer one-stop shopping affords a sales advantage to

optometrists and ophthalmologists, there are other

sales advantages enjoyed by LensCrafters by virtue of

their size, such as lower cost purchasing and the

ability to offer a wider selection of eyewear. It is

important that LensCrafters is not precluded from

operating in California, which is the situation for

out-of-state entities in some dormant Commerce Clause

cases. LensCrafters is only deprived of one eyewear

sales method.

Id. at 528. 

The court then remanded the case to this court to conduct

the Pike balancing test. Under this test, plaintiffs “bear[] the

burden of proof in establishing the excessive burden [on

interstate commerce] in relation to the local benefits” of the

challenged laws and regulations. Id.

II. STANDARD

Summary judgment is appropriate when there exists no

genuine issue as to any material fact. Such circumstances

entitle the moving party to judgment as a matter of law. Fed. R.

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Civ. P. 56(c); see also Adickes v. S.H. Kress & Co., 398 U.S.

144, 157 (1970); Secor Ltd. v. Cetus Corp., 51 F.3d 848, 853

(9th Cir. 1995). Under summary judgment practice, the moving

party

always bears the initial responsibility of informing

the district court of the basis for its motion, and

identifying those portions of “the pleadings,

depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if

any,” which it believes demonstrate the absence of a

genuine issue of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed.

R. Civ. P. 56(c)).

If the moving party meets its initial responsibility, the

burden then shifts to the opposing party to establish the

existence of a genuine issue of material fact. Matsushita Elec.

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986);

see also First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S.

253, 288-89 (1968); Secor Ltd., 51 F.3d at 853. In doing so, the

opposing party may not rely upon the denials of its pleadings,

but must tender evidence of specific facts in the form of

affidavits and/or other admissible materials in support of its

contention that the dispute exists. Fed. R. Civ. P. 56(e); see

also First Nat’l Bank, 391 U.S. at 289. In evaluating the

evidence, the court draws all reasonable inferences from the

facts before it in favor of the opposing party. Matsushita, 475

U.S. at 587-88 (citing United States v. Diebold, Inc., 369 U.S.

654, 655 (1962) (per curiam)); County of Tuolumme v. Sonora

Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001). Nevertheless,

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it is the opposing party’s obligation to produce a factual

predicate as a basis for such inferences. See Richards v.

Nielsen Freight Lines, 810 F.2d 898, 902 (9th Cir. 1987). The

opposing party “must do more than simply show that there is some

metaphysical doubt as to the material facts . . . . Where the

record taken as a whole could not lead a rational trier of fact

to find for the nonmoving party, there is no ‘genuine issue for

trial.’” Matsushita, 475 U.S. at 586-87 (citations omitted).

III. ANALYSIS

The Ninth Circuit remanded this case to apply the Pike, 397

U.S. at 142, balancing test. Brown, 567 F.3d at 529. Under this

test, plaintiffs bear the burden of proof in establishing an

excessive burden to interstate commerce caused by the challenged

laws and regulations in relation to their putative local

benefits. Id. at 528. Local laws and regulations are rarely

struck down under the Pike test. See, e.g., W. Lynn Creamery,

Inc. v. Healy, 512 U.S. 186, 200 (1994) (“Nondiscriminatory

measures . . . are generally upheld, in spite of any adverse

effects on interstate commerce, in part because the existence of

major in-state interests adversely affected is a powerful

safeguard against legislative abuse.”) (internal quotation

omitted); Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520, 529

(1959) (“This is one of those cases – few in number - where

local safety measures that are nondiscriminatory place an

unconstitutional burden on interstate commerce.”). Under the

Circuit’s previous analysis, plaintiffs here are unable to

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demonstrate any burden to interstate commerce, let alone an

excessive one. Further, the Court of Appeals has held that the

challenged provisions serve local interests as “ health

regulations [that are] designed to prevent health care providers

from being unduly affected by commercial interests.” Brown, 567

F.3d at 526. As such, the laws and regulations at issue do not

excessively burden interstate commerce in relation to their

local benefits. Accordingly, plaintiffs’ motion for summary

judgment is denied and defendants’ motion for summary judgment

is granted.

Plaintiffs raise two arguments as to how the challenged

provisions burden interstate commerce. First, they argue that

they burden interstate commerce by restricting access to local

markets by out-of-state companies. Second, plaintiffs argue that

the substantial financial loss that interstate firms will incur

under the challenged laws and regulations is so great that it

constitutes a burden on interstate commerce. The court need not

consider the evidence supporting these theories of burden to

interstate commerce because both fail as a matter of law under

the Circuit’s ruling. Below, each argument will be addressed in

turn.

1. Restricted Access to Local Markets by Out-ofState Companies.

Plaintiffs argue that interstate commerce is burdened

because there is no way in which an interstate company can offer

one-stop shopping. According to plaintiffs, one-stop shopping is

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the “‘dominant form of retailing eyewear’ by all eyewear

sellers, including dispensing optometrists.” Pls. Mot. Summ. J.

9. Plaintiffs have presented some surveys that indicate that

about 80% of responding consumers purchased their eyeglasses at

the same location in which they obtained an eye exam. Id. at 9

n.6. Further, they state, the market share of retail chains

nationwide in 2001 is 40% and in California in 2003 is 26%. 

Id. at 9. They indicate that some retail chains decline to enter

California at all, and the ones that have entered are “simply

disappearing from the market.” Id. at 10. 

Plaintiffs then, in effect, ask this court to disregard the

analysis and reasoning of the Ninth Circuit in reversing this

very case. Plaintiffs argue that this court should distinguish

the case at bar from Exxon Corp. v. Governor of Maryland, 437

U.S. 117 (1978), as it did in its prior order. However, the

Ninth Circuit found Exxon binding upon the case and even relied

upon Exxon’s analysis under Pike in its order. Brown, 567 F.3d

at 527 (“[I]n Exxon, the Court distinguished between the

entities based on their business structures, holding that a

state may prevent businesses with certain structures or methods

of operation from participating in a retail market without

violating the dormant Commerce Clause.”). Accordingly, the court

applies Exxon to the case at bar.

In Exxon, the Supreme Court considered whether a Maryland

statute prohibiting producers or refiners from operating retail

services stations within the state violated the dormant Commerce

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Clause. 437 U.S. at 119-20. This law was passed following the

1973 shortage of petroleum where evidence indicated that

“gasoline stations operated by producers or refiners had

received preferential treatment during the period of short

supply.” Id. at 121. The plaintiff refiners presented evidence

that “their ownership of retail service stations has produced

significant benefits for the consuming public.” Id. at 123. They

did not, however, present any evidence “that the total quantity

of petroleum products shipped into Maryland would be affected by

the statute.” Id. The refiners also presented evidence that “at

least three refiners will stop selling in Maryland” because of

the law. Id. at 127. After holding that the statute did not

discriminate against interstate commerce because it created “no

barriers whatsoever against interstate independent dealers” or

prohibit the flow of interstate goods, id. at 126, the Supreme

Court evaluated whether the law “impermissibly burdens

interstate commerce,” id. at 127 (emphasis in original). The

Supreme Court held that the Commerce Clause does not protect

“the particular structure or methods of operation in a retail

market.” Id. The court continued,

[T]he Clause protects the interstate market, not

particular interstate firms, from prohibitive or

burdensome regulations. It may be true that the

consuming public will be injured by the loss of highvolume, low-priced stations operated by the

independent refiners, but . . . that argument relates

to the wisdom of the statute, not to its burden on

commerce.

Id. at 127-28. Accordingly, as the Ninth Circuit explained when

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applying this analysis to the case at bar, “[A] state may

prevent businesses with certain structures or methods of

operation from participating in a retail market without

violating the dormant Commerce Clause.” Brown, 567 F.3d at 527

(citing Exxon, 437 U.S. at 127.).

As the Ninth Circuit stated, California here “merely”

prevents opticians to offer one-stop shopping as independent

optometrists and ophthalmologists may do. While the challenged

provisions may cause consumers to prefer independent

optometrists and ophthalmologists to chain optical retailers,

“interstate commerce is not subjected to an impermissible burden

simply because an otherwise valid regulation causes some

business to shift from one [retailer] to another.” Exxon, 437

U.S. at 127. 

Given that Exxon is not distinguishable on the grounds

reversed by the Ninth Circuit (e.g. that it is impossible for

any interstate company to sell eyewear under a one-stop shopping

model), plaintiffs seek to distinguish Exxon on the grounds that

one-stop shopping is the “dominant” method of doing business,

not a mere preferred method of doing business. Plaintiffs,

however, provide no authority in support of this theory that

prohibiting certain business structures from access to the

dominant method of selling eyewear is somehow different from

their prohibiting them from the preferred method of selling

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26 Assuming there is a meaningful distinction. 3

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eyewear. This is especially so given that the Court of Appeals 3

specifically questioned the significance of LensCrafters’

complaint that “one-stop shopping affords a sales advantage to

optometrists and ophthalmologists.” Brown, 567 F.3d at 528. The

circuit stressed that, “It is important that LensCrafters is not

precluded from operating in California . . . . LensCrafters is

only deprived on one eyewear sales method.” Id. Because

LensCrafters is only deprived of a method of doing business, and

because the Circuit has clearly held that such a deprivation

does not constitute a burden on interstate commerce, plaintiffs

have not shown that interstate commerce is burdened because

retail optical chains are unable to offer one-stop shopping in

California.

When a plaintiff has failed to demonstrate the presence of

a burden on interstate commerce, courts need not attempt to

balance whether a non-burden is excessively outweighed by the

putative local benefits of the law. See Exxon, 437 U.S. at 127-

29 (disposing of plaintiffs’ dormant Commerce Clause claims by

finding that the statute at issue does not burden interstate

commerce). 

Even if plaintiffs had demonstrated a burden to interstate

commerce, however, for a court to hold that a facially neutral

statute violates the Commerce Clause, “the burdens of the

statute must so outweigh the putative benefits as to make the

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Plaintiff heavily relies upon Yamaha Motor Corp. v. Jim’s 4

Motorcycle Inc., 401 F.3d 560 (4th Cir. 2005). Accordingly,

defendants spend significant pages of their briefs distinguishing

the case. Suffice to say, Yamaha is clearly distinguishable from

the case at bar due to the Ninth Circuit’s opinion reversing this

court’s prior order. Specifically, in Yamaha, the Fourth Circuit

concluded that a challenged law provided no local benefits, and

thus the difficulty imposed upon out-of-state firms to enter the

state market excessively outweighed its local benefits. Id. at 569-

74. The court reasoned that there were no local benefits because

the state had another law that served the same purpose, but did not

burden interstate commerce to nearly the same extent. Id. Because

the challenged law did not provide any benefit beyond the other

law, the challenged law served no local benefit. Id. Here, however,

the Ninth Circuit reasoned that the challenged provisions serves

a purpose of avoiding the subtle pressures upon health

professionals to conform with corporate interests to the detriment

of the health of their patients. Given this distinction, Yamaha

does not provide persuasive guidance to the case at bar.

16

statute unreasonable or irrational.” Alaska Airlines, Inc. v.

City of Long Beach, 951 F.2d 977, 983 (9th Cir. 1991) (holding

that district court’s close balancing of the burden on

interstate commerce with the local benefits of the challenged

ordinance was inappropriate). The court continued to hold that a

statute is unreasonable or irrational under this test “where the

asserted benefits of the statute are in fact illusory or relate

to goals that evidence an impermissible favoritism of in-state

industry over out-of-state industry.” Id. Further, the court

reasoned, that a regulation that has “some legitimate

justification would easily pass” the Pike test as applied in

Raymond Motor Transp., Inc. v. Rice, 434 U.S. 429 (1978)

(invalidating statute where the state was unable to offer any

evidence that the regulation did anything to advance its argued

purpose).4

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Pursuant to the tentative sealing orders in this case, the 5

court omits the specific amount of revenues LensCrafters estimates

it will lose.

17

In the instant case, the Ninth Circuit found that the

benefits of the challenged laws and regulations are not illusory

and do not evidence impermissible favoritism when it reasoned

that the provisions serve to protect consumer health by

preventing optical companies from exerting “subtle pressures”

upon optometrists and ophthalmologists. Brown, 567 F.3d at 526.

Given that plaintiffs have not shown any burden on interstate

commerce, and even if they did, that the burden must be so

extreme as to make the statute irrational to invalidate the laws

and regulation, the challenged provisions are valid under the

Pike test as to this theory of burden.

2. Substantial Financial Loss

Plaintiffs’ second argument is that the substantial

financial loss that interstate firms will incur under the

challenged laws and regulations is so great that it constitutes

a burden on interstate commerce. In support of this argument,

however, plaintiffs only present evidence of the predicted loss

in revenue plaintiff LensCrafters will incur if it is “required

to forgo the sale of eyewear at the same location where eye

exams are provided.” Pls. Mot. Summ. J. 11. The amount is

substantial. Whether LensCrafters’ loss of profits constitutes 5

a burden on interstate commerce requires resolution of a tension

between Pike and Exxon. Specifically, in Pike, which was decided

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in 1970, the Supreme Court held that interstate commerce was

burdened based upon an individual firm’s financial loss due to

the regulation. 397 U.S. 137, 145 (1970). Eight years later,

however, the Court held in Exxon that the Commerce Clause

“protects the interstate market, not particular interstate

firms, from prohibitive or burdensome regulations.” 437 U.S. 11,

127-28 (1978). 

Plaintiffs refer the court to Pioneer Military Lending v.

Manning, 2 F.3d 280 (8th Cir. 1993), which addresses this

tension and upon which this court has previously relied in a

previous case in granting a preliminary injunction, Pioneer

Military Lending v. DuFauchard, No. Civ. S-06-1445 LKK/PAN, 2006

WL 2053486, 2006 U.S. Dist. LEXIS 53973 (E.D. Cal. July 21,

2006). In Manning, the Eighth Circuit held that, “Exxon neither

overruled Pike, nor made irrelevant the burden that a state

regulation places on an individual business.” 2 F.3d at 283.

Rather, Exxon “emphasizes that the burden placed on any

individual firm should be regarded in the context of the overall

interstate market.” Id. Both Manning and DuFauchard concern

state regulations preventing the lender plaintiff from making

small loans to non-resident military borrowers. In Manning, the

court described plaintiff as a Nebraska company who adheres to

Nebraska laws when loaning funds to non-resident military

borrowers in Missouri. Id. at 281. The court then adopted the

district court’s finding that the volume of plaintiff’s business

in Missouri was not large enough for it to maintain a profitable

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service in the state if forced to comply with the Missouri’s

regulations. Id. at 282. Essentially, compliance “would have the

practical effect of closing [plaintiff’s] operation in

Missouri.” Id. The Eighth Circuit then considered the preclusive

costs plaintiff would face to do business in Missouri “[i]n the

context of the overall market for military loans.” Id. at 283-

84. Specifically, the court evaluated evidence that plaintiff,

while not the only company to provide loans to military

personnel in Missouri, “was the only company to provide loans to

personnel in the lowest pay grades.” Id. at 284. As such, the

Eighth Circuit concluded, plaintiff “serviced a unique niche in

the market and that the imposition of Missouri’s regulations

would force [plaintiff] to discontinue its operation, thereby

leaving a gap where that niche existed.” Id. 

The court then assessed the local benefits of these

regulations. Missouri argued that the state had “an interest (1)

in protecting its residents from usurious interest rates and

oppressive lending practices; (2) in protecting its reputation

as a state which provides equal protection; and (3) in

preventing [plaintiff] from obtaining a competitive advantage

over other companies making loans to military personnel.” Id. at

284. The Eighth Circuit, however, found these interests to be

weak. Specifically, as to the first interest, only non-residents

can obtain loans form plaintiff, so the regulations do not

protect residents. Id. As to the second interest, the court

adopted the district court’s factual finding that there was no

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evidence that Missouri’s reputation would be harmed by

plaintiff’s activities. Id. As to the final interest, the court

concluded that “[t]he interest of Missouri in preventing this

non-resident loan company from obtaining a competitive advantage

is slight on the record presented.” Id. at 285. Considering the

significant burden to interstate commerce and the minimal local

interest, the Eighth Circuit held that the regulations, as

applied to plaintiff, violated the dormant Commerce Clause. 

Here, plaintiffs have presented evidence that LensCrafters

will lose a substantial amount of profits due to California’s

regulations preventing it from operating one-stop shopping

retail stores in the state. Plaintiffs do not, however, present

any evidence as to how this loss of profits burdens interstate

commerce. California consumers are not in any way barred from

purchasing eyewear from LensCrafters. Further, there is no

evidence that California consumers, or a class of California

consumers, will purchase less or no eyewear because of the

regulations. Plaintiffs also argue that the burden on interstate

commerce becomes apparent when considering the impact the

regulations would have upon retail chains if every state were to

adopt them. This argument is similarly without weight because

plaintiffs have not shown that these regulations are a burden to

interstate commerce, but rather that they inhibit the business

model plaintiffs find to be most profitable.

Even if this court were to find that plaintiffs’ loss of

profits constitutes a burden on interstate commerce, the local

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benefits of the challenged provisions are said to be more

substantial than those in Manning. As discussed above, the

statutes and regulations at issue here are said to serve a

legitimate government purpose of preventing optometrists and

ophthalmologists from the subtle pressures exerted by optical

companies and, as such, they serve the goal of achieving a

higher level of consumer health care in California. Again, the

court balances a minimal, if any, burden on interstate commerce

against a significant local interest, and finds that the burdens

do not excessively outweigh the local benefit.

Thus, plaintiffs’ motion for summary judgment is denied,

and defendants’ motion for summary judgment is granted.

IV. CONCLUSION

For the foregoing reasons, plaintiffs’ motion for summary

judgment, Dkt. No 478, is DENIED and defendants’ motion for

summary judgment, Dkt. No. 499, is GRANTED.

IT IS SO ORDERED.

DATED: April 28, 2010.

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