States Shouldn’t Discriminate Against Out‐of‐State Retailers
The National Association of Optometrists & Opticians represents eyewear manufacturers and distributors in California, where state officials have been myopic with respect to business regulation.
Under California's Business and Professions Code, state-licensed optometrists and ophthalmologists are allowed to conduct eye exams and sell glasses at their place of business, while commercial retailers---such as the national eyewear chains represented by the NAOO---are barred from furnishing onsite optometry services. Since consumers have a strong preference for "one stop shopping"---buying their glasses at the same place where they have their eye exams---California's law gives instate retailers a crucial competitive advantage. Businesses that cannot co-locate their services have quickly vanished from the market.
The NAOO thus sued California officials for discriminating against out-of-state retailers in violation of the "dormant" Commerce Clause, which prohibits states from imposing unjustifiable burdens on interstate commerce. The district court ruled in the group's favor, concluding that the relevant statutes have a widespread and unjustified discriminatory effect that can't be reconciled with Supreme Court precedent. The U.S. Court of Appeals for the Ninth Circuit reversed, however, holding that state-licensed optometrists and out-of-state retailers aren't similarly situated competitors---even though they compete for the same customers in the same market.
On the case's second round in the Ninth Circuit, the court scrutinized the California law under a more lenient balancing test and again upheld the ban on co-location by out-of-staters. Cato now joins the Opticians Association of America and five individual optometrists on an amicus brief urging the Supreme Court to take the case (supporting a petition for review filed by former solicitor general Paul Clement).
We argue that California's laws are unconstitutional because their true purpose---as revealed through legislative history and the scheme's hollow public health rationale---was merely to protect in-state business interests. California's protectionist regime also has an adverse impact on poor and minority consumers, who confront increased costs and diminished access to eye care while also being disproportionately afflicted with visual impairments.
Not only does the Ninth Circuit's ruling stifle competition, restrict consumer choice, and increase prices, it also encourages state and local governments to evade scrutiny of discriminatory regulations by relying on superficial distinctions between in- and out-of-state businesses that warp the meaning of "similarly situated competitors." The Supreme Court should intervene to prevent any further erosion of its dormant Commerce Clause jurisprudence and uphold the anti-protectionism principles envisioned by the Founders when they abandoned the Articles of Confederation in favor of the Constitution.
The Court will decide whether to take up National Association of Optometrists & Opticians v. Harris later this year or in early 2013.
