TEXAS STATE BOARD OF EXAMINERS IN OPTOMETRY et al., Petitioners, v. Ellis CARP et al., Respondents.
No. A-11478.
Supreme Court of Texas.
Feb. 8, 1967.
412 S.W.2d 307
Price Daniel, Austin, Douglas E. Bergman, Dallas, Keith, Mehaffy & Weber, Quentin Keith, Beaumont, for respondents.
POPE, Justice.
Doctors Ellis Carp, S. J. Rogers, and N. Jay Rogers sued The Texas State Board of Examiners in Optometry and sought a declaratory judgment that the Professional Responsibility Rule adopted on December 21, 1959 by the Board was void. They also asked for a permanent injunction against the Board‘s enforcement of the rule. The trial court denied the relief prayed for and sustained the validity of the rule. The court of civil appeals held that although there was substantial evidence which supported the rule, the Board exceeded its delegated powers in promulgating it and therefore, the rule was invalid. 401 S.W. 2d 639. In our opinion the Board did not exceed its statutory powers in promulgating the rule. We reverse the judgment of the intermediate court and affirm that of the trial court.
The court of civil appeals held that the rule was not arbitrary or capricious and that there was substantial evidence of the relationship between the rule and the general welfare of the citizens of Texas. We too find that the rule is grounded upon substantial evidence. The necessity for such a rule was demonstrated by the general support it received from the members of the optometry profession and professional so-
The central question presented by the points before us is whether the Board exceeded its delegated powers in promulgating the Professional Responsibility Rule. In determining this issue, we must examine the general purposes of the Optometry Act as well as certain specific provisions of the act. The Legislature‘s primary purpose in passing the act was to assure and protect the personal and professional relationship between an optometrist and his patient. To make certain that this purpose was carried out, the act requires an optometrist to be licensed before he may practice within the state. The optometrist must evidence his identity and professional qualifications by registering and recording his license in any county in which he practices. Articles
“* * * The Board shall have the power to make such rules and regulations not inconsistent with this law as may be necessary for the performance of its duties, the regulation of the practice of optometry and the enforcement of this Act. * * * ”
“(a) That said applicant or licensee is guilty of gross immorality;
“(b) That said applicant or licensee is guilty of any fraud, deceit or misrepresentation in the practice of optometry or in his seeking admission to such practice;
“(c) That said applicant or licensee is unfit or incompetent by reason of negligence;
“(d) That said applicant or licensee has been convicted of a felony or a misdemeanor which involves moral turpitude;
“(e) That said applicant or licensee is an habitual drunkard or is addicted to the use of morphine, cocaine or other drugs having similar effect or has become insane or has been adjudged by a court of competent jurisdiction to be of unsound mind;
“(f) That said licensee has directly or indirectly employed, hired, procured, or induced a person, not licensed to practice optometry in this State, to so practice;
“(g) That said licensee directly or indirectly aids or abets in the practice of optometry any person not duly licensed to practice under this Act;
“(h) That said licensee directly or indirectly employs solicitors, canvassers or agents for the purpose of obtaining patronage;
“(i) That said licensee lends, leases, rents or in any other manner places his
license at the disposal or in the service of any person not licensed to practice optometry in this State;
“(j) That said applicant or licensee has wilfully or repeatedly violated any of the provisions of this Act.”
The questioned Professional Responsibility Rule, except for its severability clause, is copied in the footnote to Texas State Board of Examiners in Optometry v. Carp, 388 S.W.2d 409, 411-412 (Tex. 1965). The footnote to the opinion of the court of civil appeals, 401 S.W.2d 639, 640-641, is a good summary of section 1 of the rule, which we adopt. Section 1 provides that no optometrist shall:
“(a) Divide, share or split fees with any lay person, firm or corporation. However, it shall not be construed a violation of the Rule if an optometrist (1) pays an employee in the regular course of employment, or (2) leases space on a percentage or gross receipts basis; and (3) he may sell or assign accounts receivable.
“(b) Divide, share or split fees with another optometrist or physician except (1) on a division of services and (2) then only with the knowledge of the patient, but (3) the Rule will not be interpreted to prevent partnerships.
“(c) Practice under or use an assumed name in connection with his practice. However (1) partners may practice under their full or last names, and (2) optometrists employed by other optometrists may practice under their own names in an office listed in the names of their employers.
“(d) Use or allow his name or professional identity to be used on the door, window, wall or sign of any office or location where optometry is practiced unless said optometrist is actually present and practicing therein during office hours.
“(e) Practice in any office or location where any name or professional identification on any sign shall indicate that such office or location is owned, operated or supervised by any person not actually present and practicing therein during office hours.
“(f) Requirements (d) and (e) above shall be deemed satisfied if the optometrist is (1) physically present more than half the total hours the office is open for at least nine months of the year; or (2) physically present in such office at least one-half the time such person conducts, directs or supervises any practice of optometry; or (3) regularly makes personal examinations of eyes at such location or regularly directs or supervises such examinations.”
Section 2 of the rule provides that the wilful or repeated failure of an optometrist to comply with any provision of section 1 shall be considered prima facie evidence that such optometrist is guilty of a violation of law, and shall be grounds for filing charges to cancel, revoke, or suspend his license or to enjoin him from continuing such violation. Section 3 of the rule provides that if any part of the rule be held invalid, the intent of the Board was to promulgate the remainder of the rule.
The court of civil appeals in striking down the rule in its entirety, held that
Section 1(a) of the rule prohibits fee-splitting by a licensed optometrist with an unlicensed person. Since the Optometry Act forbids an unlicensed person to directly charge fees for optometric services, such a person cannot undermine the act by indirectly charging and collecting fees through the device of fee-splitting. The prohibition of fee-splitting with laymen is generally related to the personal and professional relationship between optometrist and patient which is requisite to the practice of optometry and is specifically related to
Section 1(b) of the rule prohibits a division of fees by a treating optometrist with another optometrist. This section is subject to some exceptions but even then the fee-splitting is permissible only with the knowledge of the patient. This section is relevant to the same provisions of the Optometry Act as section 1(a). Section 1(b) protects the same personal and professional relationship between the optometrist and his patient and that purpose runs through the whole act. The section is relevant to
Section 1(c) of the rule prohibits the practice of optometry under assumed or trade names. The reason for this section is that the trade or assumed name practice, like fee-splitting, disrupts the optometrist-patient relationship by concealing the identity and burying the responsibility of the licensed optometrist. The need for section 1(c) is clearly supported by substantial evidence some of which we shall now summarize since it demonstrates the relevance of this section to the provisions of
The practice of optometry under a trade name is a holding out to the public that the trade name is licensed. The result is that the identity of the licensed practicing optometrists is hidden behind the unlicensed trade name. Prescriptions belong to those operating the trade name business rather than the prescribing optometrist. The practice is confusing and misleading to the public. In Kee v. Baber, supra, this court upheld a Board rule which required an optometrist to separate his practice from the business operations of mercantile establishments, and did so on the grounds that it was a safeguard for the optometrist-patient relationship and would avoid confusion on the part of the public. The court there held that the rule which prohibited corporate practice of optometry was reasonably referable to
The practice of a profession under a trade name has often been regulated and prohibited by rules. Fisher v. Schumacher, 72 So.2d 804 (Fla.1954); Pearle Optical of Monroeville, Inc. v. Georgia State Board of Examiners in Optometry, 219 Ga. 364, 133 S.E.2d 374 (1963); State Board of Dental Examiners v. Bohl, 162 Kan. 156, 174 P.2d 998 (1946); Silverman v. Board of Registration in Optometry, 344 Mass. 129, 181 N.E.2d 540 (1962); Toole v. Michigan State Board of Dentistry, 306 Mich. 527, 11 N.W.2d 229 (1943); State Board of Optometry v. Orkin, 249 Miss. 430, 162 So.2d 883 (1964); Strauss v. University of State of N.Y., 2 N.Y.2d 464, 161 N.Y.S.2d 97, 141 N.E.2d 595 (1957); Strauss v. University of State of N.Y., 282 App.Div. 593, 125 N.Y.S.2d 821 (1953); Straus Inc. v. University of State of N.Y., 186 Misc. 242, 59 N.Y.S.2d 429 (Sup.Ct. 1945); 41 Am.Jur. Physicians and Surgeons § 52 (1942); 70 C.J.S. Physicians and Surgeons §§ 31, 33 (1951).
Sections 1(d), 1(e), and 1(f) of the rule require and assure the presence of an optometrist at the offices with which his name is identified and at which he holds himself out as a practitioner. Substantial evidence was presented to prove that such rules were needed to correct the evil of misleading representations to the public. Named optometrists have been identified with scores of widely separated offices in Texas, notwithstanding the fact that they have neither practiced at nor been inside many of the places with which their names are associated. Dr. Carp has advertised and practiced under the names of Douglas Optical, Shannon Optical, Pearl Optical, Lee Optical, Lee Optical Company and Dr. L. H. Luck. Those are the names of licensed optometrists who sold Dr. Carp their locations
Texas State Optical‘s advertising leaves the impression that one of the Doctors Rogers is present at a particular office. Actually they have neither been inside nor seen some of their eighty-two offices distributed generally over Texas. They list their names in phone books in cities where they do not purport to practice optometry and on plaques showing the names of the optometrists who serve particular offices though they do not in fact practice at such offices. Since such practices are deceptive and misleading, sections 1(d), 1(e), and 1(f) are relevant to
We conclude that the court of civil appeals erred in its holding that the Professional Responsibility Rule added new and inconsistent provisions to the Optometry Act. To the contrary, our opinion is that the rule‘s provisions are in harmony with the general objectives of the act and referable to and consistent with one or more of its specific proscriptions. We believe that the Legislature, by investing the Board with broad rule-making powers “[for] the enforcement of this Act” and “[for] the regulation of the practice of optometry,” contemplated that the Board would use these powers to correct the evils generally classified in
Respondents urge two additional reasons in support of the judgment of the court of civil appeals—the case of Southwestern Bell Tel. Co. v. Texas State Optical, 253 S.W.2d 877, (Tex.Civ.App. 1952, no writ) and the legislative history of the Optometry Act. In the Southwestern Bell Tel. Co. case the Doctors Rogers brought an injunction suit and compelled the telephone company to list Texas State Optical, the trade name, in the yellow pages of the Port Arthur telephone directory. At that time the Board had not yet undertaken to implement the act. The case did not come to this court, and the opinion contains a number of holdings that are inconsistent with our views expressed above. The court held that “[t]he fact that no license to practice optometry has been issued to ‘Texas State Optical’ is not material.” The decision reflects an absence of factual background about the evils of the trade name practice of optometry as evidenced by its holding that such practice is not against the public interest so long as the public by making a search can discover the persons using the name. We disapprove these holdings. Whether the telephone company should list an optometrist‘s trade name is not the same issue as that of the Board‘s power to make rules prohibiting practice under a trade name.
Respondents urge that the Legislature did not enact proposed legislation which would have prohibited trade name practice of optometry and fee-splitting. The argument is that the original Optometry Act, as introduced, had a provision which prohibited the practice of optometry under any name other than a licensee‘s own proper name and also had a provision which would have made it a penal offense to falsely impersonate any person licensed as an optometrist.
The Legislature did not adopt specific prohibitions of trade name practice and fee-splitting; however, any implications which might be derived from that action are overcome by the Legislature‘s express grant of broad rule-making powers to the Board. Kee v. Baber, supra. The Legislature expressly empowered the Board to make rules to regulate the practice of optometry and enforce the act. Rather than an implied limitation of Board powers, the act extended the powers of the Board. Instead of an implied grant of permission to practice under a trade name, the act‘s rule-making provision empowered the Board to make appropriate rules grounded upon substantial evidence of the evils against which the public should be protected. Gibbs v. United States Guarantee Co., 218 S.W.2d 522 (Tex.Civ.App.1949, writ ref.). In Kee v. Baber, supra, this court so treated the grant of rule-making powers and we sustained the rule which prohibited corporate practice of optometry on the reasoning that it implemented the Legislature‘s prohibition against placing an optometrist‘s license “in the service or at the disposal of unlicensed persons.” On similar reasoning, the Board had the power to prohibit the same result under a different scheme. The trade name entity is no more a licensee than a corporate entity. The Board passed its rule after substantial evidence showed that a widespread practice existed in Texas which undermined sections (b), (h), and (i) of
We reverse the judgment of the court of civil appeals and affirm the judgment of the trial court.
SMITH, J., dissenting.
DISSENTING OPINION
SMITH, Justice.
I respectfully dissent. The Legislature provided in
The Board contends and this Court seems to approve the contention that the rule under attack does not add new offenses to those listed in
“[W]e have said that the Board of Regents’ ‘specific supervisory powers over the practice of dentistry * * * enable it, within reasonable limits, to prescribe canons by which conduct deemed by it, in the exercise of fair judgment, to be unprofessional and objectionable may, in the interest of rescuing that profession from vulgar commercialism, be banned.’ Matter of Dr. Bloom Dentist, Inc., v. Cruise, 259 N.Y. 358, 363, 182 N.E. 16, 17. The field in which that power may be exercised is nonetheless subject to restriction by the Legislature, and even within the field in which the Legislature has delegated to the Board of Regents power to prescribe canons banning conduct which it deems unprofessional and objectionable, the Board of Regents cannot by the exercise of that power enlarge the causes for which the license of a dentist may be revoked or suspended, as defined in subdivision 2 of section 1311.
“* * *
“[T]he bill which had been introduced in the Legislature defining the grounds for the revocation of a dentist‘s license included as an additional ground ‘that the dentist has violated the rules of the regents governing advertising or any other rules.’ That ground was stricken out before the bill was passed.
“* * *
“[T]he Legislature has, itself, specified the grounds upon which a license to practice dentistry may be suspended or revoked. The Legislature has not delegated to the Board of Regents power to create offenses which shall furnish additional grounds.”
Here again, I wish to emphasize that the Court in the present case has misconstrued its holding in Kee v. Baber, supra. We simply held in that case that the Board may enact such rules and regulations as would be consistent with the power given it under the provisions of
To further demonstrate that the Board is seeking rule-making power in the field of license revocation regardless of statutory limitations, I take up its argument that the Board has the same license revocation powers as those given to the Supreme Court and the State Bar. In advancing this argument, the Board fails to distinguish between the fact that the Optometry Act enumerates the reasons for revocation of licenses, whereas the State Bar Act does not do so. Article
“From time to time as to the Court may seem proper, the Supreme Court of Texas shall prepare and propose rules and regulations for disciplining, suspending, and disbarring attorneys at law; for the operation, maintenance and conduct of the State Bar and prescribing a code of ethics governing the professional conduct of attorneys at law. * * * ”
The 46th Legislature enacted both the State Bar Act and the Optometry Act. The State Bar Act authorizes the Supreme Court to enumerate the grounds and procedures for suspension or cancellation of licenses and the means of enforcement. This is not true with the Optometry Act. Whatever its reasons for making this distinction might have been is beside the point; the fact remains that the Legislature in adopting the Optometry Act deliberately enumerated the grounds for cancellation and revocation and set up by penal statute the means of enforcement. Therefore, the Board has no authority to add new grounds and new procedures for license revocations under the general powers set out in
Respondents in their conditional application for writ of error and in a supplemental brief filed herein present additional points1 for declaring the rule under attack invalid. I think these points merit consideration. In my opinion the rule is arbitrary and capricious and bears no relationship to the health and well being of the citizens of Texas. The rule is invalid because there was no substantial evidence to support a finding
“Q. Now, Dr. Rogers, when a man is employed, an optometrist in your organization, do you have any standing instructions as to how he shall conduct the practice and to whom his first and primary allegiance and responsibility is?
“A. Yes, we do.
“Q. And what is that?
“A. Well, number one, the man, as I mentioned is solely responsible for his action with that patient, for his—whatever he does or doesn‘t do with regard to the patient and his sole allegiance, his sole responsibility, is to do what in his opinion is necessary or best or in the best interest of that patient or that patient‘s visual care. This is the basis upon which all of our offices operate and this is the way a man conducts himself, just as though he were in his own office.”
The Board wholly failed to establish its contention that a person employed by another optometrist in a trade-name organization lacks professional responsibility to this pa-tient. In fact this contention was refuted by the following testimony:
“Q. Now in all of your experience, Dr. Rogers, as an optometrist, and as a Board member, now something in excess of six years, I will ask you the point blank question, are optometrists practicing on a salary, or a compensatory basis, on a solely employed basis, and in a trade name organization such as yours, are they just as competent, just as sincere, just as diligent as those who practice solely or individually?
“A. Yes, I think so, I sincerely do.”
The Respondent, Dr. Carp, also testified:
“Q. Doctor, let me ask you this question: As an optometrist, who is the primary responsibility of an individual doctor associated with you in one of your offices where is his primary responsibility, to you or to the patient whose eyes he examines?
“A. By all means to the patient.”
There is a complete absence of testimony given by patients or others which even remotely suggested that the care given to patients in Respondents’ establishments located throughout the State was any less satisfactory to the patient, than the care given in the offices of individual practitioners. There is no evidence that the practice of optometry under trade or assumed names in multiple offices injuriously affects the public health.
It is argued that other jurisdictions have adopted rules similar to the one under consideration. Grant this is true, still the Board has made no showing that conditions were the same in each instance. There is no showing that the Legislatures in the other jurisdictions have refused to adopt the essential proscriptions contained in the rule under attack. On the other hand, it is clear that the Texas Legislature has consistently declined to include in its enactments the unconstitutional proscriptions
“Even if it can be said that the regulation adopted by the Board making the last payment due on the last day of the month next preceding the month in which the beneficiary dies has the effect of canceling the exceptions to the common-law rule against apportionment which would otherwise be applicable to this case, we are inclined to agree with appellee that the judgment must still be sustained because, as contended by her, the Board was without power to adopt and enforce the regulation. It has been held in this State that the Board of Insurance Commissioners can exercise only the authority conferred upon it by law ‘in clear and unmistakable terms, and will not be deemed to be given by implication, nor can it be extended by inference, but must be strictly construed.’ * * * ” Commercial Standard Ins. Co. v. Board of Insurance Com‘rs of Texas, Tex.Civ.App., 34 S.W.2d 343, 345, writ refused. And in like manner has the power of the Railroad Commission of Texas been construed.”
There is another reason which is perhaps greater than any reason thus far advanced to support the argument that the rule should be stricken down by the courts. The rule strikes at the fundamental right of an optometrist to lawfully engage in his profession. I agree with the Respondents that the rule impairs the obligation of contracts. Not only that, it is arbitrary and capricious in nature and has been adopted without regard to the law as enacted by the Legislature and in violation of both the state and federal constitutions. The rule amounts to a taking of Respondents’ property without due process of law. The rule has not been enacted for the benefit of the public, but to the contrary there is every indication that the rule has been adopted to protect the economic welfare of a few optometrists, despite the fact that the rule will place in jeopardy property rights which the Legislature has thus far chosen to safeguard. Some of the consequences of this unwarranted rule will be to prohibit the use of an assumed name in the practice of optometry and to impose strict limitations on the operation of multiple offices and the splitting of fees with employee-optometrists. The maintenance of 82 offices at many locations in Texas, at a cost of between $10,000.00 and $12,000.00 per office and at a cost of more than $1,000,000.00 in publicizing the assumed name “Texas State Optical”, so far as the record shows, means nothing to the relators, but it should have some significance to this Court in deciding the question of the validity of the rule. In this connection, I repeat that there is no evidence in the record which would tend to show any public need or necessity for the rule. To the contrary, the rule arbitrarily interferes with private business in that it imposes unnecessary restrictions upon the
The Courts should not hesitate to intervene to protect the property rights of a citizen when it is discovered from a record such as we have here that a Board has exceeded its powers under the guise of the exercise of the police power of the State. This Court in the case of Houston & T. C. R. Co. v. Dallas, 98 Tex. 396, 84 S.W. 648, 70 L.R.A. 850 (1905), in considering the exercise of the police power, has this to say:
“The power is not an arbitrary one, hut has its limitations. It is commensurate with, but does not exceed, the duty to provide for the real needs of the people in their health, safety, comfort, and convenience as consistently as may be with private property rights. As those needs are extensive, various, and indefinite, the power to deal with them is likewise broad, indefinite, and impracticable of precise definition or limitation. But as the citizen cannot be deprived of his property without due process of law, and as a privation by force of the police power fulfills this requirement only when the power is exercised for the purpose of accomplishing, and in a manner appropriate to the accomplishment of, the purposes for which it exists, it may often become necessary for courts, having proper regard to the constitutional safeguard referred to in favor of the citizen, to inquire as to the existence of the facts upon which a given exercise of the power rests, and into the manner of its exercise, and if there has been an invasion of property rights under the guise of this power, without justifying occasion, or in an unreasonable, arbitrary, and oppressive way, to give to the injured party that protection which the Constitution secures.”
This Court supported its position with a quotation from Lawton v. Steele, 152 U.S. 133, 14 S.Ct. 499 (1894) which reads:
“* * * [t]o justify the state in thus interposing its authority in behalf of the public, it must appear—First, that the interests of the public generally, as distinguished from those of a particular class, require such interference; and, second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals. The legislature may not, under the guise of protecting the public interests, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations.”
In the case of Smith v. Decker, 158 Tex. 416, 312 S.W.2d 632 (1958), this Court held unconstitutional a statute which deprived citizens of the right to earn a living, a property right. In holding void the act there involved, we said:
“Appellants having a vested property right in making a living, subject only to valid and subsisting regulatory statutes, and being prevented from performing their business otherwise lawful but for the statute in question, we believe that we are permitted under the rule announced in Kemp Hotel Operating Co. v. City of Wichita Falls, [141 Tex. 90, 170 S.W.2d 217], supra, to order the issuance of the injunction. There it was stated that courts of equity may be resorted to for the purpose of enjoining the enforcement of a criminal statute or ordinance when same is void and when its enforcement invades a vested property right of the complainant.”
The judgment of the Court of Civil Appeals should not only be affirmed, but this Court should go further and declare the rule unconstitutional.