Court Opinion

ID: 2972986
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:56:43.171385+00
Date Added: 2024-06-11T12:47:44.892316
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                         File Name: 05a0824n.06
                          Filed: October 7, 2005

                                     No. 04-1870

                       UNITED STATES COURT OF APPEALS
                            FOR THE SIXTH CIRCUIT

BRIGHTON OPTICAL, INC., a Michigan                 )
corporation; JOHN BIRCHMEIER, O.D.; NICHOLS        )
OPTICAL, INC., a Michigan corporation;             )
ELIZABETH NICHOLS, O.D.; DAVID CANNON,             )
O.D.; GERALD SKIBA II, O.D.; JULIE                 )
RUNSTROM, O.D.; ERIC J. SIESEL, O.D.;              )
GERALD ROZANOFF, O.D., P.C., a Michigan            )
corporation; LORO INVESTMENTS, INC., a             )   ON APPEAL FROM THE
Michigan corporation; GERALD ROZANOFF, O.D.;       )   UNITED STATES DISTRICT
MICHAEL NORTH, O.D.; DOUGLAS                       )   COURT FOR THE EASTERN
SCHNEIDER, O.D., P.C., a Michigan corporation;     )   DISTRICT OF MICHIGAN
DOUGLAS SCHNEIDER, O.D.; MARIEBETH                 )
BANGERT, O.D.; MACOMB VISION CLINIC,               )         OPINION
INC., a Michigan corporation; THOMAS STONE,        )
O.D.; SUDBURY VISION ASSOCIATES, INC., a           )
Massachusetts corporation; TWENTY-TWENTY           )
VISION, INC., a Massachusetts corporation;         )
HAROLD F. CURTIN III, O.D.; RALPH W. EAVES,        )
O.D.; SHANNON D. FOWLER, O.D., P.A., a Florida     )
professional association; TOSS OPTOMETRY, INC.,    )
a Michigan corporation; JON P. WEBB, O.D.;         )
RANDY WATSKY, O.D., P.C., a Michigan               )
corporation; and RANDY WATSKY, O.D.,               )
                                                   )
      Plaintiffs-Appellants,                       )
                                                   )
v.                                                 )
                                                   )
VISION SERVICE PLAN, a California corporation,     )
                                                   )
      Defendant-Appellee.                          )

BEFORE: BOGGS, Chief Judge; NORRIS and COOK, Circuit Judges.
No. 04-1870
Brighton Optical, Inc. v. Vision Serv. Plan

         PER CURIAM. Plaintiffs are licensed optometrists from Michigan, Massachusetts, and

Florida who have been participating providers in a vision insurance plan administered by defendant

Vision Service Plan (“VSP”), a non-profit California corporation.1 Although the complaint asserts

several causes of action, the core of the dispute revolves around defendant’s decision to terminate

plaintiffs as “member doctors” for allegedly breaching the Member Doctor Agreement (“MDA”),

which provides in part as follows: “Member Doctor shall have, or be employed by another VSP

Member Doctor who has, majority ownership and complete control of all aspects of his/her practice,

including dispensary.” According to VSP, the franchise agreements entered into by plaintiff

optometrists violated the “ownership and control” requirement. For their part, plaintiffs contend that

they were terminated as members because VSP wished to consolidate its dominance of the managed

vision care insurance market.

         The six-count complaint was filed on December 10, 2003. First, it alleges that VSP violated

plaintiffs’ due process rights under California law: “VSP is prevented under California law from

terminating its members arbitrarily and before affording such members due process or fair

procedures, and any termination must be conducted in good faith and in a fair and reasonable

manner.” Complaint at ¶ 345. Second, it invokes the federal Declaratory Judgment Act, 28 U.S.C.

§ 2201, and asks the district court to resolve whether the franchise agreements “interfere with the

practitioner plaintiffs’ exercise of independent professional judgment in the operation of their

respective optometric practices, including dispensaries.” Complaint at ¶ 351. Third, the plaintiffs

   1
     The complaint also names as plaintiffs the businesses controlled by these individual optometrists, which are
either Pearle Vision or D.O.C. Optics Corporation franchises.

                                                        -2-
No. 04-1870
Brighton Optical, Inc. v. Vision Serv. Plan

allege breach of contract—specifically, wrongful termination under the terms of their respective

MDAs. Counts four and five allege attempted monopolization of the prepaid primary vision care

services and insurance markets under the Sherman Act, 15 U.S.C. § 2. The final count invokes the

Michigan Antitrust Reform Act, Mich. Comp. Laws § 445.701 et seq.

        When they filed their complaint, plaintiffs also filed a motion for preliminary injunction.

It is the ruling with respect to this motion that is at issue in this appeal. The district court adopted

a magistrate judge’s proposed findings of fact and conclusions of law which recommended denying

plaintiffs a preliminary injunction. This interlocutory appeal followed. The resolution of this appeal

hinges upon our standard of review. This court recently summarized the requirements for a

preliminary injunction, as well our standard of review, in these terms:

                 Whether a preliminary injunction should be granted is a decision left to the
        sound discretion of the district court. Allied Sys., Ltd. v. Teamsters Nat’l Auto.
        Transporters Indus. Negotiating Comm., 179 F.3d 982, 985-86 (6th Cir. 1999). A
        district court, in deciding whether to grant an injunction, “abuses its discretion when
        it applies the incorrect legal standard, misapplies the correct legal standard, or relies
        upon clearly erroneous findings of fact.” Schenck v. City of Hudson, 114 F.3d 590,
        593 (6th Cir. 1997). The following factors are to be considered by a district court in
        deciding whether to grant a preliminary injunction:

                (1) whether the plaintiff has established a substantial likelihood or
                probability of success on the merits; (2) whether there is a threat of
                irreparable harm to the plaintiff; (3) whether issuance of the
                injunction would cause substantial harm to others; and (4) whether
                the public interest would be served by granting injunctive relief.

        Nightclubs, Inc. v. City of Paducah, 202 F.3d 884, 888 (6th Cir. 2000). Deja Vu of

Cincinnati, L.L.C. v. Union Twp. Bd. of Trustees, 411 F.3d 777, 782 (6th Cir. 2005) (en banc).

While the first of these factors is reviewed de novo, Tumblebus Inc. v. Cranmer, 399 F.3d 754, 760

                                                  -3-
No. 04-1870
Brighton Optical, Inc. v. Vision Serv. Plan

(6th Cir. 2005), cert. denied, 73 U.S.L.W. 3734 (U.S. Oct. 3, 2005) (No. 04-1684) (citing N.A.A.C.P.

v. City of Mansfield, 866 F.2d 162, 169 (6th Cir. 1989)), “the district judge’s weighing and balancing

of the equities should be disturbed on appeal only in the rarest of cases.” Id. (quoting N.A.A.C.P.

at 166).

       Our independent review of the substantive issues reveals a number of close questions,

which include the extent to which California law governs the termination procedures used by VSP;

whether, if California law governs, those procedures comport with that law; and the meaning of

the phrase “complete control of all aspects of his/her practice, including dispensary” as used in

the MDAs at issue. However, simply because the claims at issue are closely contested does not

mean that the district court abused its discretion in denying a preliminary injunction. Plaintiffs

must show a substantial likelihood of success on the merits; here they have only shown the

possibility of success. Particularly when the three remaining factors are considered, we cannot

conclude that this is one of those “rarest of cases” that require us to reverse the district court’s

balancing of the equities.

       The order of the district court denying the motion for a preliminary injunction is affirmed.

                                                -4-