Court Opinion

ID: 9719248
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:46:30.572989+00
Date Added: 2024-06-11T18:24:05.437379
License: Public Domain

*1035REYNOSO, J. —
I dissent. Plaintiff has been deprived of his First Amendment right to advertise.
There appears to be no dispute that plaintiff is being discriminated against by CVS based solely on his exercise of his First Amendment right. It is not surprising that a “private corporation” whose members are a part of the optometrical profession would seek to discourage advertising by members. Private discrimination, however, is not unconstitutional. (Moose Lodge No. 107 v. Irvis (1972) 407 U.S. 163 [32 L.Ed.2d 627, 92 S.Ct. 1695].) The narrow issue is whether the discrimination engaged in by CVS may be characterized as an action by the state. I conclude that it can and that unconstitutional state action is present.
The involvement by the state in this case is two-fold. First, the state is responsible for the policy prohibiting advertising by professionals, including optometrists. Second, the state agency (board) whose task it is to supervise CVS in order to assure compliance with the provisions of Corporations Code section 9201, has failed to act to compel CVS to do away with its membership criteria. That action, the lack of supervision, has had the result of infringing the constitutional rights of optometrists and consumers. (See Va. Pharmacy Bd. v. Va. Consumer Council (1976) 425 U.S. 748 [48 L.Ed.2d 346, 96 S.Ct. 1817].)
The state action is seen in the legislative scheme which prohibits certain types of advertising by optometrists. (Bus. & Prof. Code, §§ 3104, 3129, 3130.) The scheme (or policy), I emphasize, is legislative and not private. The policy is not limited to optometrists. In historical fact, the state for many years has prohibited advertising by numerous professional groups. (See e.g., Bus. & Prof. Code, §§ 651.3, 1680, 2556, 3020; see also rule 2-101, Rules Prof. Conduct of State Bar.) Thus, CVS is merely prescribing a standard of conduct for its member-optometrists consonant with the state’s policy. That policy, however, recently has been deemed impermissible. Advertising by professionals, like that involved in this case, is now regarded as constitutionally protected speech. (See Bates v. State Bar of Arizona (1977) 433 U.S. 350 [53 L.Ed.2d 810, 97 S.Ct. 2691].) California statutes prohibiting advertising by optometrists were declared unconstitutional. (Board of Medical Examiners v. Terminal-Hudson Electronics, Inc. (1977) 73 Cal.App.3d 376, 387 [140 Cal.Rptr. 757]; Bus. & Prof. Code, §§ 651.3, 2556.)
The statutory history shows that the impetus for the discriminatory membership criteria imposed comes from that long-standing state policy *1036prohibiting advertising by professionals, such as optometrists. The United States Supreme Court stated: “[W]here the impetus for the discrimination is private, the State must have ‘significantly involved itself . ..’ to fall within the ambit of the constitutional prohibition.” (Moose Lodge No. 107 v. Irvis, supra, 407 U.S. at p. 173 [32 L.Ed.2d at p. 637].) However, as I have noted, the impetus for the discrimination here is with the state itself. Accordingly, it is not necessary to find the “significant involvement” by the state to find state action. The United States Supreme Court has not articulated what lesser degree of involvement constitutes state action. I am convinced that the historical impetus provided by the state and its continuing supervisorial duties may suffice.
I have discussed the historical impetus. I turn to the supervisorial duties. The State Board of Pharmacy is mandated by section 9201 in unambiguous terms to assure that “[membership in the corporation .. . [is] available to all licensed members of the ... profession.” (Corp. Code, § 9201, subd. (b); italics added.) 1
*1037In Reitman v. Mulkey (1967) 387 U.S. 369 [18 L.Ed.2d 830, 87 S.Ct. 1627], the United States Supreme Court ruled that Proposition 14, which had the intent of overturning state laws that bore on the right of private sellers and lessors to discriminate, was unconstitutional because, while neutral on its face, the law had the effect of encouraging private discrimination. The events which led to the passage of the initiative as well as the “milieu in which that provision would operate,” convinced the court of its non-neutral effect. (387 U.S. at p. 378 [18 L.Ed.2d at pp. 836-837].) Here, no statute is being attacked. The act of discrimination is not one done directly by the state. It is a private nonprofit corporation that is the actor. Nonetheless, this private act is the result of encouragement by state government. Unlike the situation in Reitman, the state has not remained “neutral.” Rather, by not fulfilling the mandate of section 9201, the state has achieved its public policy opposing advertising by optometrists, albeit indirectly through CVS.
Irrespective of the motives of CVS or the State Board of Optometry, the effect of this membership criteria is twofold: (1) it limits the exercise of First Amendment rights by optometrists who desire the economically beneficial association with CVS, and (2) it deprives all California consumers of the benefit of this advertising. The evils present in Reitman are present.
I would affirm the judgment of the trial court. Its conclusion that the statutory scheme proscribes discrimination against plaintiff is correct. Further, the Constitution, too, proscribes such discrimination.

The majority, like the parties, have focused on the statutory interpretation of Corporations Code section 9201. The critical issues presented by this case, the impact on many California consumers, has thereby been ignored. Those interests have not been presented despite the participation in this litigation of the State Board of Optometry, a division of the Department of Consumer Affairs.
We deal with a nonprofit corporation that provides group vision service to nearly 1 million California consumers. Yet it withholds membership from optometrists who choose to advertise their services. The trial court, by a different route, reached the correct decision respecting the legislative scheme. The Legislature has determined that it is in the best interest of our economy and thus ultimately for consumers, that competition be encouraged. Any conduct which has the effect of restraining this competition shall be unlawful. (Bus. & Prof. Code, § 16720 et seq. (Cartwright Act). CVS is subject to the Cartwright Act. (Cf. California Physicians’ Service v. Garrison (1946) 28 Cal.2d 790 [172 P.2d 4, 167 A.L.R. 306], with Manasen v. California Dental Services (N.D.Cal. 1976) 424 F.Supp. 657.) The state has specifically authorized the type of advertising which plaintiff has utilized since he only advertises his location and not his price. (Bus. & Prof. Code, § 3129.) The membership criteria has the effect of reducing competition among optometrists by reducing the flow of information to the consumers. (See Terminal-Hudson Electronics v. Dept. of Con. Aff. (C.D.Cal. 1976) 407 F.Supp. 1075, 1082 (infringement of First Amendment resulted in “flagrant anti-competition.”) This evil flows from the actions of CVS and from the failure of the State Board of Optometry to supervise CVS as it is required to do by statute. (See Corp. Code, § 9201.)
I disagree with the majority’s summary conclusion that Marin County Bd. of Realtors, Inc. v. Palsson (1976) 16 Cal.3d 920 [130 Cal.Rptr. 1, 549 P.2d 833], does not apply. Palsson involved a membership criteria set up by a board of realtors which excluded from membership a realtor because he was not primarily engaged in the real estate business. (Id., at p. 924.) As a result of this exclusion, the realtor was not permitted access to the board’s multiple listing service, which resulted in serious economic consequences to the realtor and a reduced ability for him to serve his clients. The court held the membership criteria to be in violation of the Cartwright Act. In the case before us, we have a similar exclusion from membership, except that here it is on the basis of an optometrist’s act of advertising. It appears to me that both of the concerns expressed by the California *1037Supreme Court in Palsson are present in this case. The expressed concerns were (1) the practitioner must suffer from economic harm, and (2) the consumer must be inconvenienced. First, there is evidence in the record that one optometrist lost approximately $15,000 in one year’s earnings as a direct result of losing her association with CVS. Second, a consumer who is a member of CVS must either visit an optometrist who is a member of CVS or pay the fees of a non-CVS optometrist (and later seek reimbursement from CVS).
While this case was not tried under the Cartwright Act, and consequently no evidence bore directly on Cartwright concerns, the trial court correctly analyzed the obligation of the State Board of Optometry and its failure to protect the public. Sufficient evidence appears in the record to support the judgment.