No. 80-417
California Attorney General Opinion No. 80-417
Cite as Cal. Op. Att'y Gen. No. 80-417
_________________________
________________________________________________________________________
TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
GEORGE DEUKMEJIAN
Attorney General
:
OPINION
:
No. 80-417
:
of
:
MARCH 4, 1981
:
GEORGE DEUKMEJIAN
:
Attorney General
:
:
Ronald M. Weiskopf
:
Deputy Attorney General
:
:
The Honorable Willie L. Brown, Jr., Speaker of the Assembly, has requested
an opinion on the following questions:
1.
When the 1979 amendment to Business and Professions Code section
655 becomes operative on January 1, 1983, will it prohibit an optician from leasing
adjoining office spaces from a landlord and later unconditionally assigning the lease on
one of them to an optometrist?
2.
With regard to the office space so assigned to an optometrist, would a
clause in the original lease with the landlord providing the optician with the right of first
refusal to lease the office on default or vacation of it by the optometrist, violate section 655
as amended?
3.
When the amended provisions of Business and Professions Code
section 655 become operative on January 1, 1983, will they apply to all such lease and
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sublease arrangements then existing between opticians and optometrists or only those
entered into after that date?
CONCLUSIONS
1.
When it becomes operative on January 1, 1983, the amended version
of section 655 of the Business and Professions Code will prohibit an optician from leasing
adjoining business office spaces from a landlord and later unconditionally assigning the
lease on one of them to an optometrist, the absence of patient referrals between them
notwithstanding.
2.
With regard to the office space so assigned to an optometrist, a clause
in the original lease with the landlord providing the optician with the right of first refusal
to least that business office on default or vacation by the optometrist, will also violate
section 655 as amended.
3.
The amended provision of Business and Professions Code section 655
will apply to all such business lease and sublease arrangements that may exist between
opticians and optometrists on January 1, 1983.
ANALYSIS
Under California law the right to dispense, sell or furnish prescriptions for
eyeglasses and kindred optical products is limited exclusively to licensed physicians and
surgeons, licensed optometrists, and registered dispensing opticians. (Bus. & Prof. Code,
§ 2543.)1 Of these however, only physicians and surgeons or optometrists may determine
the need for or prescribe lenses, since section 2540 provides that no person other than they
“may measure the powers or range of human vision or determine the accommodative and
refractive status of the human eye or the scope of its functions in general or prescribe
ophthalmic or contact lenses.” (§ 254O.)2 “Dispensing opticians” are licensed under
Chapter 5.5 of Division 2 of the Code by the Division of Allied Health Professions of the
Board of Medical Quality Assurance, to:
“[fill] prescriptions of physicians and surgeons licensed by the
Division of Licensing of the Board of Medical Quality Assurance or
1 All statutory references are to the Business and Professions Code unless stated otherwise.
2 An ophthalmic lens is “any lens which has a spherical, cylindrical or prismatic power or
value.” (§ 3001.)
Ophthalmic and contact lenses are included within the broader definition of “prescription lens,”
which is “any device ordered by a physician and surgeon or optometrist, that alters or changes the
visual powers of the human eye.” (§ 2541.)
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optometrists licensed by the State Board of Optometry for prescription lenses
and kindred products, and, as incidental to the filling of such prescriptions,
[to do] any or all of the following acts, either singly or in combination with
others, taking facial measurements, fitting and adjusting such lenses and
fitting and adjusting spectacle frames . . .” (§ 2550.)
Only upon registration with the Division of Allied Health Professions and upon being
issued of a “certificate of dispensing optician” by that Division, may a person engage in
the business just described. (§ 2553; cf. § 2550.)
Optometrists are licensed under Chapter 7 of Division 2 of the Code by the
State Board of Optometry. Their certificate of registration entitles them to engage in the
practice of optometry (§ 3040) which is defined in section 3041 as the doing of any or all
of the following:
“(a) The examination of the human eye or eyes, or its or their
appendages, and the analysis of the human vision system, either subjectively
or objectively.
“(b) The determination of the powers or range of human vision and
the accommodative and refractive states of the human eye or eyes, including
the scope of its or their functions and general condition.
“(c) The prescribing or directing the use of, or using, any optical
device in connection with ocular exercises, visual training, vision training,
or orthoptics.
“(d) The prescribing of contact and spectacle lenses for, or the fitting
or adaptation of contact and spectacle lenses to the human eye, including
lenses which may be classified as drugs by any law of the United States or
of this state.
“(e) The use of topical pharmaceutical agents for the sole purpose of
the examination of the human eye or eyes for any disease or pathological
condition. The State Board of Optometry, with the advice and consent of the
Division of Allied Health Professions of the Board of Medical Quality
Assurance, to be provided within six months of the effective date of this
section, shall designate the specific topical pharmaceutical agents, known
generically as mydriatics, cycloplegies and topical anesthetics, to be used.”
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Completing the troika, physicians and surgeons are licensed by the Board of
Medical Quality Assurance under Chapter 5 of Division 2 of the Code. The practice of
medicine is defined within its section 2052 which provides:
“Any person, who practices or attempts to practice, or who advertises
or holds himself out as practicing, any system or mode of treating the sick or
afflicted in this state, or who diagnoses, treats, operates for, or prescribes for
any ailment, blemish, deformity, disease, disfigurement, disorder, injury or
other mental or physical condition of any person, without having at the time
of so doing a valid, unrevoked certificate as provided in this chapter, or
without being authorized to perform such act pursuant to a certificate
obtained in accordance with some other provision of law, is guilty of a
misdemeanor.” (See also § 2053, formerly § 2141.5; Bowland v. Municipal
Court (1976) 18 Cal. 3d 483, 485, 492–494.)
The definition perforce embraces the practice of optometry. This is
recognized by section 3042 which provides that the provisions of Chapter 7 of Division 2
“do not prevent a duly licensed physician and surgeon from treating or fitting glasses to
the human eye, or from doing any act within the practice of optometry.” (Cf. In re Rust
(1919) 181 Cal. 73.)
In short then, ‘[a]n ophthalmologist is a duly licensed physician who
specializes in the care of the eyes.[3] An optometrist examines eyes for refractive error,
recognizes (but does not treat) diseases of the eye, and fills prescriptions for eyeglasses.
The optician is an artisan qualified to grind lenses, fill prescriptions, and fit frames.”
(Williamson v. Lee Optical Co. (1955) 348 U.S. 483, 486.)
Section 654 of the Code prohibits certain arrangements between dispensing
opticians and physicians and surgeons,4 and section 655, the subject of this opinion, does
the same between dispensing opticians and optometrists. That section currently provides
as follows:
3 “Ophthalmology” is defined as a branch of medical science concerned with the structure,
function and diseases of the eye. (Webster’s Third New International Dictionary, at p. 1582.)
4 The section reads in full as follows:
“No person licensed under Chapter 5 (commencing with Section 2000) of this division may
have any membership, proprietary interest or co-ownership in any form in or with any person
licensed under Chapter 5.5 (commencing with Section 2550) of this division to whom patients,
clients or customers are referred or any profit-sharing arrangements.” (§ 654.)
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“No person licensed under Chapter 7 (commencing with Section
3000) of this division [i.e., no optometrist] may have any membership,
proprietary interest, co-ownership, landlord-tenant relationship, or any
profit-sharing arrangement in any form, directly or indirectly, either by stock
ownership, interlocking directors, trusteeship, mortgage, trust deed, or
otherwise, (a) with any person licensed under Chapter 5.5 (commencing with
Section 2550) of this division [i.e., with any dispensing optician] to whom
patients, clients or customers are referred by such person licensed under
Chapter 7 (commencing with Section 3000) [i.e., by an optometrist], or who
refers patients, clients, or customers to such person licensed under Chapter 7
(commencing with Section 3000) [i.e., to such optometrist] or (b) with any
person who is engaged in the manufacture, sale, or distribution to physicians
and surgeons, optometrists, or dispensing opticians of lenses, frames, optical
supplies, optometric appliances or devices or kindred products.
“The provisions of subdivision (b) do not apply to any corporation all
of the shares of which are, and have been, wholly owned for more than one
year immediately preceding April 8, 1969, by persons licensed under Chapter
7 (commencing with Section 3000) of this division [i.e., by optometrists] or
by any spouse of such person or to any person so licensed if such corporation
or licentiate has been engaged in the manufacture, sale, or distribution to
physicians and surgeons, optometrists, or dispensing opticians of lenses,
frames, optical supplies, optometric appliances or devices, or kindred
products in the State of California continuously for more than one year
immediately preceding April 8, 1969. That exception shall be effective as to
any corporation so owned only so long as all shares thereof continue to be
wholly owned by any person licensed under Chapter 7 (commencing with
Section 3000) of this division or his spouse or issue, provided that such
spouse or issue are not persons within the definitions and limitations set forth
in subdivision (a) or (b).
“Any violation of this section constitutes a misdemeanor as to such
person licensed under Chapter 7 (commencing with Section 3000) of this
division and as to any and all persons, whether or not so licensed under this
division, who participate with such licensed person in a violation of any
provision of this section.”
In 1979 however, the section was substantially amended by the Legislature
to read as follows effective January 1, 1983:
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“(a) No person licensed under Chapter 7 (commencing with Section
3000) of this division [i.e., no optometrist] may have any membership,
proprietary interest, coownership, landlord-tenant relationship, or any profit-
sharing arrangement in any form, directly or indirectly, with any person
licensed under Chapter 5.5 (commencing with Section 2550) of this division
[i.e., with any dispensing optician].
“(b) No person licensed under Chapter 5.5 (commencing with Section
2550) of this division [i.e., no dispensing optician] may have any
membership,
proprietary
interest,
co-ownership,
landlord-tenant
relationship, or any profit-sharing arrangement in any form directly or
indirectly with any person licensed under Chapter 7 (commencing with
Section 3000) of this division [i.e., with any optometrist].
“(c) No person licensed under Chapter 7 (commencing with section
3000) of this division [i.e., no optometrist] may have any membership,
proprietary interest, coownership, landlord-tenant relationship, or any profit-
sharing arrangement in any form, directly or indirectly, either by stock
ownership, interlocking directors, trusteeship, mortgage, trust deed, or
otherwise with any person who is engaged in the manufacture, sale, or
distribution to physicians and surgeons, optometrists, or dispensing opticians
of lenses, frames, optical supplies, optometric appliances or devices or
kindred products.
“Any violation of this section constitutes a misdemeanor as to such
person licensed under Chapter 7 (commencing with Section 3000) of this
division and as to any and all persons, whether or not so licensed under this
division, who participate with such licensed person in a violation of any
provision of this section.” (Stats. 1979, ch. 975, § 1, pp. 3669–3670.)
Section 3 of the Act provided: “This act shall become operative January 1, 1983.” (Id., §
3, p. 3670.) Briefly summarized the amendment will change existing law in the following
respects germane to this opinion:
(1) Whereas section 655 currently prohibits an optometrist from having the
specified arrangements with any dispensing optician to whom patients, clients or customers
are referred, or who refers patients, clients or customers to the optometrist, as amended,
the statute will prohibit all such arrangements, referrals notwithstanding. (§ 655, subd. (a).)
(2) Whereas existing law only provides that optometrists could not have
those specified arrangements with dispensing opticians, as amended, the law will
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specifically prohibit dispensing opticians from having them with optometrists. (§ 655,
subd. (b).)5
(3) Whereas existing law provides that an optometrist could have certain
enumerated business and proprietary interests with a corporation engaged in the
manufacture, sale or distribution of lenses, frames, optical supplies or kindred products to
dispensing opticians if the optometrist or his spouse owned all the shares of such entity for
one year preceding April 8, 1969, or the entity was so operating at that time, the amendment
removes that exemption, and will totally prohibit the relationship. (§ 655, subd. (c).)
Again, the Legislature has specifically directed that the terms of the amended
section “become operative January 1, 1983.” (Stats. 1979, ch. 975, p. 3670, § 3.)
We are asked three questions regarding the effect the new law will have on
certain lease arrangements between dispensing opticians and optometrists. Specifically we
are asked whether it will prohibit an optician from leasing adjoining office spaces from a
landlord and later unconditionally assigning the lease on one of them to an optometrist. We
are also asked whether section 655 as amended would prohibit an optician from entering
into such a lease with a landlord but with a clause therein giving the optician a right of first
refusal to lease the office on default or vacation of it by the optometrist. Finally we are
asked whether the section will apply to all leases existing on January 1, 1983 (when it takes
effect), or just to leases entered into thereafter.
We conclude that as of January 1, 1983, the amended version of section 655
will prohibit an optician from leasing adjoining office spaces from a landlord and thereafter
unconditionally assigning the lease on one of them to an optometrist, that a clause in the
original lease giving the optician a right of first refusal to lease the office on default or
vacation by the optometrist does not change that result, and that the prohibitions in section
655 will apply to all such lease and sublease arrangements existing on that date.
5 Subdivision (b) might appear superfluous but was added in light of the Legislature’s being
informed through the Senate Committee on Business and Professions Staff’s Analysis and AB
1125, that it had been argued that a dispensing optician could be the landlord of an optometrist
tenant and engage him in referrals, under its current terms, and that a superior court had ruled in
1976 “that only a ‘licensed optometrist may be in violation of [section 655]’.” (Staff Analysis,
supra, at pp. 1–2.) (Cf. Alter v. Michael (1966) 64 Cal. 2d 480, 482–483 (“Statutes are to be
interpreted by assuming that the Legislature was aware of the existing judicial decisions.
[Citation.]”); see also People v. St. Martin (1970)1 Cal. 3d 524.) If it was not a concurrence in the
validity of that argument and interpretation of section 655, the addition of subdivision (b) would
at least be an attempt by the Legislature to clarify the meaning of the section as it understood it.
(Koenig v. Johnson (1945) 71 Cal. App. 2d 739, 753.)
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In so concluding, we are careful to emphasize that two important limitations
are inherent in the questions posed, namely that the arrangement that is entered into
between the dispensing optician and the optometrist is business related and that it is formed
on an active, willing, conscious and voluntary basis. Our answers to the questions are
similarly limited.
Section 655 describes the types of relationships which it prohibits (i.e.,
common memberships, common proprietary interests, co-ownerships, landlord-tenant
relationships and profit sharing arrangements) but it does not specify “in what area” they
are proscribed. We perceive serious constitutional problems to arise were Section 655,
which has penal implications, to be read open-endedly and applied in a broad context. For
example, the section could be read to prohibit a dispensing optician and an optometrist
from having a common membership in the same church, lodge, or other organization, and
it could be read to apply immediately to the situation where a dispensing optician becomes
a landlord of an optometrist because of a testamentary devise or other bequest (Prob. Code
§ 28; Mears v. Jeffry (1947) 80 Cal. App. 2d 610, 617) thus making them involuntary
misdemeanants without opportunity for divestiture or other adjustment. But such a
construction, which the questions posed do not admit, goes too far in restricting private
activity and its prohibitions have no rational relationship to a valid state concern. Thus,
even without the two limitations appearing in the questions posed, we would be forced to
read the statute and adopt an interpretation that, consistent with the statutory language and
purpose, (a) eliminates doubts as to its constitutionality (In re Kay (1970) 1 Cal. 3d 930,
940–942; see also Braxton v. Municipal Court (1972) 10 Cal. 3d 138, 145), (b) favors its
validity (Conservatorship of Hofferber 980) 28 Cal. 3d 161, 175; Turner v. Board of
Trustees (1976) 16 Cal. 3d 818, 827; County of Madera v. Gendrou (1963) 59 Cal. 2d 798,
801; cf. Code of Civ. Proc. § 1866) and (c) avoids the constitutional issue inherent in a
contrary construction (Department of Corrections v. Workers’ Comp. Appeals Bd. (1979)
23 Cal. 3d 197, 207; cf. Cemetery Board v. Telophase Society of America (1978) 87 Cal.
App. 3d 847, 857). Therefore, although section 655 does not specifically require that the
relationships involved be consciously and voluntarily created or that they be business
related and have some connection with an activity for which the professional license was
issued, were the issue squarely raised we would imply those requirements as intended
elements of the statute to preserve its constitutionality. (Cf. Braxton v. Municipal Court,
supra, at pp. 145–146, 150; In re Kay, supra, at p. 946; In re Rudolfo A. (1980) 110 Cal.
App. 3d 845, 851, fn. 3.)
I
We are first asked whether the amendment to Business and Professions Code
section 655 will prohibit an optician from leasing adjoining office spaces from a landlord
and later unconditionally assigning the lease on one of them to an optometrist. We conclude
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that it will.
It is the fundamental principle of statutory construction that the primary and
controlling consideration in the construction of a statute is the determination of and the
giving effect to the legislative intent behind its enactment. (Friends of Mammoth v. Board
of Supervisors (1972) 8 Cal. 3d 247,256; Great Lakes Properties, Inc. v. City of El Segundo
(1977) 19 Cal. 3d 152, 163; Select Base Materials v. Board of Equal (1959) 51 Cal. 2d
640, 645.) The words in question must be construed with the nature and purpose of the
statute in mind. (West Pico Furniture Co. v. Pacific Finance Loans (1970) 2 Cal. 3d 594,
608; Rich v. State Board of Optometry (1965) 235 Cal. App. 2d 591, 604.) Toward this end
both the legislative history of a statute and the wider historical circumstances surrounding
its enactment are legitimate and valuable aids in divining the statutory purpose (California
Mfrs. Assn. v. Public Utilities Com. (1979) 24 Cal. 3d 836, 844; citing Steilberg v. Lackner
(1977) 69 Cal. App. 3d 780, 785; Alford v. Pierno (1972) 27 Cal. App. 3d 682, 688; Kelly
v. Kane (1939) 34 Cal. App. 2d 588, 591–592; see also Grannis v. Superior Court (1905)
146 Cal. 245, 248 and People v. Ventura Refining Co. (1928) 204 Cal. 286, 291) and this
is particularly true where, as here, a statute is amended to abolish an evil or “mischief” and
to correct an undesirable practice (Koenig v. Johnson (1945) 71 Cal. App. 2d 739, 750–
751; County of San Diego v. Milotz (1953) 119 Cal. App. 2d Supp. 87 1, 881). The original
purpose and object of the legislation must be considered, and it must then be read and
liberally construed to give those effect. (County of San Diego v. Milotz, supra, at p. 880;
People v. Ventura Refining Co., supra, at p. 292.)
We do have clear indication of the reasons for the Legislature amending
section 655: it was “prompted by a 1975 Attorney General’s Task Force report on
Inflationary Effects Upon Eye Care Services . . . [which] suggested statutory reform to
preclude relationships between optometrists and registered dispensing opticians.” (Staff
Analysis for AB 1125, Senate Committee on Business and Professions, “History,” p. 1.)
That Report thus constitutes a valuable source for ascertaining the legislative purpose in
amending section 655 (cf. Van Arsdale v. Hollinger (1968) 68 Cal. 2d 245, 249; Kaplan v.
Superior Court (1971) 6 Cal. 3d 150, 157–158 & 158, fn. 4; People v. Wiley (1976) 18
Cal. 3d 162, 171) and we therefore refer to it. With regard to arrangements between
opticians and optometrists, it stated:
“SEPARATION OF OPTOMETRISTS AND OPTICIANS
“Evidence received at this committee’s hearings indicates the need to
strengthen the statutes intended to guarantee the total separation and
independence between registered dispensing opticians and optometrists.
Section 2556 currently prohibits a registered dispensing optician from
directly or indirectly employing or maintaining an optometrist on or near the
premises used for optical dispensing. Section 655 prohibits any proprietary
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interest or landlord-tenant relationship or profit sharing arrangement between
registered dispensing opticians and optometrists, but only if there are
referrals between the optician and the optometrist. It is the opinion of this
committee that the potential harm to the consumer inherent in any such
relationship between optician and optometrist is so great that proof of any
specific referral should not be a requisite to the prohibition of such
relationships. Elimination of the “referral” requirement of section 655(a) will
strengthen the statute immensely. Endless litigation over the existence of a
referral operation will be avoided, and the situation whereby an optician and
a captive optometrist have a financial interest in the optometrist issuing a
prescription which will be filled by his landlord-optician will be expressly
prohibited.” (Id., Majority Report at pp. 10–1l.) (Emphases added.)
From this history we safely presume that the Legislature enacted the
amended version of section 655 to prohibit the enumerated business relationships between
dispensing opticians and optometrists in order to eliminate the potential conflicts of interest
inherent in them. It is against this background that our analysis proceeds.
Turning first to the words of the amendment itself (People v. Knowles (1950) 35
Cal. 2d 175, 182), we are reminded that “when a statute is amended to abolish an evil or
correct an undesirable practice in existence, effect must be given to each section phrase
and word of the amendment.” (County of San Diego v. Milotz, supra, 119 Cal. App. 2d
Supp. at p. 881.) Since we are also reminded in conjunction with this that the previous
state of legislation on a particular subject is most helpful in construing a remedial statute
(Mooney v. Pickett (1971) 4 Cal. 3d 669, 677, fn. 9; County of Los Angeles v. Frishie (1942)
19 Cal. 2d 634, 639) we set forth a comparative text:
“655. (a) No person licensed under Chapter 7 (commencing with
Section 3000) of this division [i.e., no optometrist] may have any
membership, proprietary interest, coownership, landlord-tenant relationship,
or any profitsharing arrangement in any form, directly or indirectly, either by
stock ownership, interlocking directors, trusteeship, mortgage, trust deed, or
otherwise, (a) with any person licensed under Chapter 5.5 (commencing with
Section 2550) of this division [i.e., with any dispensing optician] to whom
patients, clients or customers are referred by such person licensed under
Chapter 7 (commencing with Section 3000), or who refers patients,, clients,
or customers to such person licensed under Chapter 7 (commencing with
Section 3000) or (b) with any person who is engaged in the manufacture,
sale, or distribution to physicians and surgeons, optometrists, or dispensing
opticians of lenses, frames, optical supplies, optometric appliances or devices
or kindred products.
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“The provisions of subdivision (b) do not apply to any corporation all
of the shares of which are, and have been, wholly owned for more than one
year immediately preceding April 8, 1969, by persons licensed under Chapter
7 (commencing with Section 3000) of this division or by any spouse of such
person or to any person so licensed if such corporation or licentiate has been
engaged in the manufacture, sale, or distribution to physicians and surgeons,
optometrists, or dispensing opticians of lenses, frames, optical supplies,
optometric appliances or devices, or kindred products in the State of
California continuously for more than one year immediately preceding April
8, 1969. That exception shall be effective as to any corporation so owned
only so long as all shares thereof continue to be wholly owned by any person
licensed under Chapter 7 (commencing with Section 3000) of this division
or his spouse or issue, provided that such spouse or issue are not persons
within the definitions and limitations set forth in subdivision (a) or (b).
“(b) No person licensed under Chapter 5.5 (commencing with Section
2550) of this division [i.e., no dispensing optician] may have any
membership,
proprietary
interest,
coownership,
landlord-tenant
relationship, or any profits sharing arrangement in any form directly or
indirectly with any person licensed under Chapter 7 (commencing with
Section 3000) of this division [i.e., with any optometrist].
“(c) No person licensed under Chapter 7 (commencing with Section
3000) of this division [i.e., no optometrist] may have any membership,
proprietary interest, coownership, landlord-tenant relationship, or any
profit-sharing arrangement in any form, directly or indirectly, either by stock
ownership, interlocking directors, trusteeship, mortgage, trust deed, or
otherwise with any person who is engaged in the manufacture, sale, or
distribution to physicians and surgeons, optometrists, or dispensing
opticians of lenses, frames, optical supplies, optometric appliances or
devices or kindred products.
“Any violation of this section constitutes a misdemeanor as to such
person licensed under Chapter 7 (commencing with Section 3000) of this
division [i.e., as to such optometrist] and as to any and all persons, whether
or not so licensed under this division, who participate with such licensed
person in a violation of any provision of this section.”
We thus see that the amended version of section 655 prohibits any
optometrist from having “any . . . proprietary interest, coownership, [or] landlord-tenant
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relationship . . . in any form directly or indirectly with any [dispensing optician]” (§ 655,
subd. (a)), and vice versa (§ id., subd. (b))—the absence of patient referrals between them
notwithstanding. Looking at these words and the changes that were made, we perceive the
deletion of the requirement that there be patient referrals for the described relationships
between dispensing opticians and optometrists to be proscribed (indicating a repealer
thereof (1 A Sutherland, Statutory Construction (4th ed.) § 23.12, p. 236)), coupled with
the continued use of the indefinite adjective “any” to describe those proscribed
relationships, to mean that the amendment “was intended, as were the other amendments
made at the same time, to broaden the Act’s coverage or to assure its broad coverage. . . .
(United States v. Brown (1947) 333 U.S. 18, 25 (“any sentence”).) So too do we perceive
the addition of the seemingless superfluous subdivision (b). As noted before, by its addition
the Legislature intended either to rectify an erroneous limited interpretation that had been
given to the section, or to clarify its original broader meaning. (See fn. 5, ante.) The
deletion of the exemption for optometrists who previously held stock in corporations
previously engaged in the manufacture and distribution of optical products from having an
interest in those operations, is also evidence of a legislative intention to broaden the scope
of proscription on the optician-optometrist connection. And, we are also ever mindful that
the historical circumstances surrounding the enactment of Assembly Bill 1125 require that
the amended version of section 655 be liberally construed to fully ameliorate those
mischiefs to which the amendment was directed. (County of San Diego v. Milotz, supra, 19
Cal. App. 2d Supp. at p. 880; People v. Ventura Refining Co., supra, 204 Cal. at p. 292;
Koenig v. Johnson, supra, 71 Cal. App. 2d 739, 750–75 1; West Pico Furniture Co. v.
Pacific Finance Loans, supra, 2 Cal. 3d at p. 608; Rich v. State Board of Optometry, supra,
235 Cal. App. 2d at p. 604.) Given the amendment’s wording and its history we conclude
that an assignment of an office lease by a dispensing optician to an optometrist falls within
the statute’s prohibition on the establishment of a landlord-tenant relationship between
them.
An assignment of a leasehold has been described as “a transaction whereby
a lessee transfers his entire interest in demised premises, or a part thereof, for the unexpired
term of the original lease, thereby parting with all of the reversionary estate on the property.
. . . (42 Cal. Jur.3d, Landlord and Tenant, § 184, p. 220.) At first blush it may be thought
that the assignment of an office by a dispensing optician to an optometrist would be
permitted because it would transfer all of the dispensing optician’s interest for the
unexpired term of the lease, and would terminate the privity of estate originally existing
between him and the lessor (42 Cal. Jur. 3d Landlord and Tenant, supra, § 187, at p. 222;
Barkhaus v. Producers Fruit Co. (1923) 192 Cal. 200, 203), thus making him a person
supposedly no longer “interested” in those premises. But this is not the case; the dispensing
optician would still remain very much involved with the office-property after his
assignment of it to the optometrist, which involvement we perceive to be within the rubric
of the landlord-tenant relationship the statute prohibits.
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Following an assignment, a lessee-assignor has continuing obligations to his
lessor-landlord (Meredith v. Dardarian (1978) 83 Cal. App. 3d 248, 252) with whom he
continues to remain in privity of contract (Schebr v. Berkey (1913) 166 Cal. 157, 160), and
to whom he remains a primary obligor under his lease (DeHart v. Allen (1945) 26 Cal. 2d
829, 832; Meredith v. Dardarian, supra; Lopizich v. Salter (1920) 45 Cal. App: 446, 449).
He does not “by assigning his lease rid himself of liability under the covenants [with the
landlord]” (Samuels v. Ottinger, supra, 169 Cal. at p. 212 quoting Brosnan v. Kramer
(1901) 135 Cal. 36, 39) and he still remains a proper and necessary party to any action
taken by the landlord for a breach of the lease by the assignee (Peiser v. Mettler (1958) 50
Cal. 2d 594, 602).6 As was said in Lobzich v. Salter, supra:
“Upon default [the landlords] were entitled to stand upon the terms
of the lease and the contract made between the lessee and his assignee for the
lessor’s benefit, and sue both parties . . . in the same manner and to the same
extent as though both parties were the original obligors under the terms of
the lease.” (45 Cal. App. at pp. 449–450.) (Emphasis added.)
Needless to say under such circumstances the assignor-optician would still be very-much
involved vis-a-vis the office property with the assignee-optometrist for by virtue of the
assignment he becomes a guarantor for the latter’s performance of his obligations under
the assignment (Lopzich v. Salter, supra; Samuels v. Ottinger (1915) 169 Cal. 209, 212)
which would include at the very least, an obligation to pay rent (Bonetti v. Treat (1891) 91
Cal. 223, 229). Surely we must conclude that that coeval relationship between the assignor-
lessee optician and the assignee-optometrist would be within the ambit of the landlord-
tenant relationship proscribed by section 655.
Again, that section forbids any dispensing optician from having “any
landlord-tenant relationship . . . in any form directly or indirectly” with an optometrist, and
vice versa. While the relationship created by an assignment may not be literally one of
landlord-tenant, in the situation described it would bear those incidents of the latter which
spawn the evils the amendment was designed to prevent. In this regard, we must not forget
that “[t]he complexities of the social problems dealt with by the Legislature require that a
practical construction be given to the language employed by the draftsmen of legislation
lest their purposes be too easily nullified by overrefined inquiries into the meanings of
6 Should the landlord accept the “assignment” and relieve the assignor-optician of all his
obligations under his lease, we no longer would have a true assignment, but rather a novation
which rescinds the old lease between the landlord and the optician and establishes a new one
between the landlord and the assignee-optometrist. (Douglas v. Schlindler (1930) 209 Cal. 616,
619–620; Beckjord v. Slusher (1937) 22 Cal. App. 2d 559, 566–567.) We do not consider this
possibility to be within the framework of the question asked.
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words.” (People v. Deibert (1953) 117 Cal. App. 2d 410, 418.) Constrained as we are to
construe the terms of the ameliorative statute broadly to promote its purpose, we believe
that the conflict inherent in the intertwined relationship between a dispensing optician and
an optometrist created by an assignment between them is sufficiently akin to that created
by a lease between them, as to be brought within the embrace of the “landlord-tenant
relationship” the statute prohibits being created “in any form directly or indirectly.”
Accordingly, we conclude that when the amended version becomes operative on January
1, 1983, it will prohibit a dispensing optician from leasing adjoining business office spaces
from a landlord and later unconditionally assigning the lease on one of them to an
optometrist, patient referrals between them notwithstanding.
II
We are next asked, with regard to the office space so assigned whether a
clause in the original lease providing the dispensing optician with the right of first refusal
to lease the office on default or vacation of it by the optometrist, would violate section 655
as amended. We conclude that it would.
In answering the first question we concluded that section 655 would preclude
a dispensing optician from leasing adjoining business office spaces from a landlord and
thereafter assigning one of them to an optometrist, for such an assignment would be
tantamount to the landlord-tenant relationship proscribed by the statute. A clause in the
original lease which would give the dispensing optician a right of first refusal to possess
the premises on their surrender or vacation by the optometrist would not produce a different
result. The initial assignment would be proscribed, and the additional clause would not cure
the violation. Indeed, such a provision would make it more pronounced for now the
dispensing optician’s involvement in the property would be further enhanced by the
original lease itself. By ensuring him a possibility of actual (re)possession of the premises,
the lease would grant the dispensing optician a “proprietary” or “ownership” interest in
them which would exist at the same time as the optometrist’s possession.
Strictly speaking, a transaction whereby the optician would reserve a right of
first refusal to lease the office on its vacation or surrender by the optometrist in the original
lease, would not constitute an assignment but instead a sublease, because rather than
transferring the whole of his unexpired term, the dispensing optician would be reserving a
contingent reversionary interest in the form of a right of reentry for breach of conditions.
(Hartman Ranch Co. v. Associated Oil Co., (1937) 10 Cal. 2d 232, 243; accord, Kendis v.
Cohn (1928) 90 Cal. App. 41, 58–59; Williams v. Hinkley (1930) 109 Cal. App. 574, 575–
576.) As was explained in Barkhaus v. Producers Fruit Co. (1923) 192 Cal. 200, for a
transfer to constitute an assignment [t]he term to be transferred . . . must be for a period of
time at least equal to the remainder of the term of the original lease. . . . If by the terms of
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the conveyance, be it in the form of a lease or an assignment, new conditions with a right
of entry or new causes of forfeiture are created, then the tenant holds by different tenure,
and a new leasehold interest arises, which cannot be treated as an assignment or a
continuation to him of the original term.” (192 Cal. at p. 206; emphases added.) It is instead,
a sublease. (Hartman Ranch Co. v. Associated Oil Co., supra.) In any event, we are not
concerned with the designation given the instrument by which the dispensing optician’s
and the optometrist’s respective rights would be defined, but must look to the substance
thereof. (Kendis v. Cohn, supra, 90 Cal. App. 41, 58; cf. In re City and County of San
Francisco, 195 Cal. 426; Mahoney v. San Francisco, 201 Cal. 248, 258.) “When we do, it
is quite apparent that [they would each be] vested with a valuable interest in [the] property.”
(Estate of Pitts (1933) 218 Cal. 184, 191.) Therefore, whatever its designation, we conclude
that the transaction would be proscribed by section 655 as amended.
Again, section 655 prohibits a dispensing optician from having “any
proprietary interest [or] co-ownership . . . in any form, directly or indirectly with any
optometrist.” Webster’s Third New International Dictionary defines “own” as “to have or
hold as property” or to “have a rightful title whether legal or natural” (p. 1612), and it
defines “proprietary” as having “characteristics of or appropriate to an owner” (p. 1819).7
With more particularity, the Civil Code defines “ownership of property” as “the right of
one or more persons to possess it and use it to the exclusion of others” (Civ. Code § 654)
and provides that such ownership may be either absolute or qualified (id., § 678). It is
absolute “when a single person has the absolute dominion over it, and may use it or dispose
of it according to his pleasure subject only to general laws” (id., § 679), and is qualified
when it is shared with one or more persons, when the time of enjoyment is deferred or
limited, or when the use is restricted (id., § 680).
Section 688 of the Civil Code provides that, with respect to the time of its
enjoyment, an interest in property may be either present or future (id., § 688). A present
interest entitles the owner to the immediate possession of the property (id., § 689), while a
future interest entitles him to its possession only at a future period (id., § 690). Although
no future interest in property is recognized by the law except as it may be defined in
Division 2 (§§ 654–1426) of the Civil Code (§ 703), that Division recognizes that a future
estate may be limited by the act of the parties to commence in possession at a future day,
either without the intervention of a precedent estate, or on the termination, by lapse of time
or otherwise, of a precedent estate created at the same time (id., § 767) and it specifically
recognizes that the time when the enjoyment of property is to begin may be upon condition,
i.e., it may be made to depend on events (§ 707). In this regard conditions are precedent
7 The original Restatement of Torts defines, for conversion purposes, a proprietary interest as”
any right in relation to a chattel which enables a person to retain its possession indefinitely or for
a period of time.” (Restatement of Torts, § 223, Comment (d).)
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when they fix the beginning of the right and are subsequent when they fix its ending
(§ 708). Section 1046, relating to transfer of interests, provides that “a right of reentry, or
of repossession for breach of conditions subsequent, can be transferred.” (§ 1046; see also
§ 1085.)
A right of first refusal for the dispensing optician to reenter the property on
its surrender or vacation by the optometrist gives him, as we have seen, a contingent
reversionary interest in the property. (Hartman Ranch Co. v. Associated Oil Co., supra.) It
permits actual possession. While it is true that that possession will only occur at a future
time when the optometrist perforce will no longer be on the premises—still the dispensing
optician’s right to avail himself of it is a recognizable present and transferable interest in
the property which is created and exists at the same time as the optometrist’s possession.
(See Verrall, “Future Interests in California,” published in West’s Annotated California
Codes, Civil, Vol. 7, at pp. 5,15–17, cited in Alamo School District v. Jones (1960) 182
Cal. App. 2d 180, 183–184.) As we have also seen, the ownership of property may be
shared (Civ. Code § 654) and is deemed qualified when it is so shared or when the time of
enjoyment of its use is deferred (id., §§ 678, 680). The dispensing optician’s future estate
created by a lease that would give him a right of first refusal to reenter the office on an
optometrist’s vacating or surrendering it, thus gives him a qualified “ownership” interest
in the premises and a “proprietary” interest in them that is created and shared concurrently
with the “ownership” and proprietary interest of the optometrist. The existence of those
concurrent interests fall within the proscriptions of section 655.
III
We turn now to the final question of whether the amended version of section
655 will apply to all lease and sublease arrangements for business offices that may still
exist between dispensing opticians and optometrists when it becomes operative on January
1, 1983, or only those entered into after that effective date. We conclude that the statute
will apply to all such lease and sublease arrangements remaining between dispensing
opticians and optometrists on January 1, 1983.
Two issues must be addressed in answering this question:—first, whether the
1979 amendment to section 655 (AB 1125) was intended to apply to all remaining office
lease arrangements that might still exist on January 1, 1983, or only to those entered into
thereafter8—and second, whether there is any legal impediment to the Legislature effecting
the former result if that was its desire. (Industrial Indem. Co. v. Teachers’ Retirement Bd.
8 There is no question that the Legislature had the power to prescribe that the act go into effect
on a date subsequent to the date when legislative enactments ordinarily become effective (People
v. Sterling Refining Co. (1927) 86 Cal. App. 558, 569.)
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(1978) 86 Cal. App. 3d 92,97.)
We first address the issue of statutory construction: was the amendment to
section 655 meant to govern office lease and sublease arrangements between dispensing
opticians and optometrists existing on its effective date, or only those entered into
thereafter? In this regard, as before in interpreting the substantive meaning of the
amendment, ascertainment of the intent of the Legislature is our primary task. The
considerations for so doing with respect to the retroactivity of legislation9 were succinctly
stated by our Supreme Court in In re Marriage of Bouquet (1976) 16 Cal. 3d 583, thus:
“Although legislative enactments are generally presumed to operate
prospectively and not retroactively (Interinsurance Exchange v. Ohio Cas.
Ins. Co. (1962) 58 Cal. 2d 142, 149 [23 Cal. Rptr. 592, 373 P. 2d 640],
DiGenoza v. State Board of Education (1962) 57 Cal. 2d 167, 176 [18 Cal.
Rptr. 369, 367 P. 2d 865]), this presumption does not defy rebuttal. We have
explicitly subordinated the presumption against the retroactive application of
statutes to the transcendent canon of statutory construction that the design of
the Legislature be given effect. (Mannheim v. Superior Court (1970) 3 Cal.
3d 678, 686 [9] Cal. Rptr. 585, 478 P. 2d 17].) The central inquiry, therefore,
is whether the Legislature intended the amendment to section 5118 to operate
retroactively. [¶] . . . In In re Estrada, supra, 63 Cal. 2d 740, we clothed an
amendment to the Penal Code with retroactive effect despite the silence of
its language on the issue and the presumption against retroactive application.
We explained: ‘The rule of construction, however, is not a straightjacket.
Where the Legislature has not set forth in so many words what it intended,
the rule of construction should not be followed blindly in complete disregard
9 While it will not take effect until a future date, the legislation will have a “retroactive’ effect
at that time. A statute is said to have a retroactive or retrospective effect “when it is construed so
as to relate back to a previous transaction and give the transaction a legal effect different from that
which prevailed under the law when it occurred [Citation].” (Industrial Indem. Co. v. Teachers’
Retirement Bd., supra, 86 Cal. App. 3d at p. 97; see also 58 Cal. Jur. 3d, Statutes § 23
(Retroactivity) p. 336, (“A retrospective or retroactive statute is one that operates on matters that
occurred, or on rights, obligations, and conditions that existed, before the time of its enactment,
giving them an effect different from that which they had under previously existing law.”).)
Such will certainly be the case of the operation of the amended version of section 655 on any
remaining relationships between dispensing opticians and optometrists which it prohibits, when it
becomes operative on January 1, 1983, (Stats. 1979, ch. 975. p. 3670. § 3; cf. Kennelly v. Lowery
(1944) 64 Cal. App. 2d 903. 904–905). For example, whereas lease arrangements between a
dispensing optician and an optometrist who do not engage in mutual patient referrals may be
permissible now under the current version of section 655, on January 1, 1983, they will no longer
be permitted, and the contractual arrangements establishing them will become illegal.
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of factors that may give a que to the legislative intent. It is to be applied only
after, considering all pertinent factors, it is determined that it is impossible
to ascertain the legislative intent.’ (63 Cal. 2d 740, at p. 746 (italics added);
accord City of Sausalito v. County of Mann (1970) 12 Cal. App. 3d 550, 557
[90 Cal. Rptr. 8431.)
“Consistent with Estrada’s mandate, we must address ‘all pertinent
factors’ when attempting to divine the legislative purpose. A wide variety of
factors may illuminate the legislative design, ‘such as context, the object in
view, the evils to be remedied, the history of the times and of legislation upon
the same subject, public policy, and contemporaneous construction.’ (Alford
v. Pierno (1972) 27 Cal. App. 3d 682, 688 [104 Cal. Rptr. 110]; Estate of
Ryan (1943) 21 Cal. 2d 498 [133 P. 2d 6261.) The issue in the present case
is a close one, but we conclude that the Legislature did intend the amendment
to section 5118 to apply retroactively.” (16 Cal. 3d at pp. 586–587.) (Fns.
omitted.)
(See also Mannheim v. Superior Court (1970) 3 Cal. 3d 678, 686–687; Industrial Indem.
Co. v. Worker’s Comp. Appeals Bd. (1978) 85 Cal. App. 3d 1028, 1031.)
Unlike Bouquet, we do not perceive the issue in our case to be a close one,
for a consideration of the pertinent factors can only lead us to conclude that the statute was
intended to apply retroactively on its effective date to all lease and sublease agreements
that might remain between dispensing opticians and optometrists on January 1, 1983. When
Assembly Bill 1125 was originally introduced in the Legislature it made no provision for
an effective date of operation. When it was amended in the Senate on August 28, 1979
however, its section 3 was added to provide that “This act shall become operative January
1, 1983.” (Stats. 1979, ch. 975, p. 3670, § 3.) This legislative history gives us our first que
that the Legislature intended the operative date of the statute to have some special
significance. (California Mfrs. Assn. v. Public Utilities Com., 24 Cal. 3d 836, 844.)
Moreover, we must also note that this pronouncement stood in stark contrast to the
expression of legislative intent which accompanied the passage of the current version of
section 655 in 1969, where it was specifically stated that:
“It is not the intention of the Legislature to destroy any business
relationships which might have existed in this state when the proposal to
regulate this area was first proposed to the Legislature.” (Stats. 1969, ch.
1333, p. 2681, § 2.)
And it is also noteworthy that while in 1969 the terms of the statute specifically exempted
optometrists who owned corporations engaged in optical manufacture for the year
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preceding April 8, 1969, from its prohibition on their having the proscribed financial and
proprietary interests with those manufacturers, that exemption was deleted by Assembly
Bill 1125. These comparisons between the wording of Assembly Bill 1125 and the previous
legislation is useful to our construing the Legislature’s intention for the former’s operation
(Mooney v. Pickett (1971) 4 Cal. 3d 669, 677, fn. 9; County of Los Angeles v. Frisbie (1942)
19 Cal. 2d 634, 639) and from the differences in wording between them we may assume
that the Legislature meant them to have different operative effects. (Safer v. Superior
Court, supra, 15 Cal. 3d 230, 238; In re Dees (1920) 50 Cal. App. 11, 19; McCarthy v.
Board of Fire Commrs. (1918) 37 Cal. App. 495, 498.) From those differences we glean
another indication that, unlike the situation in 1969 where the Legislature did not intend to
interfere with certain business relationships between dispensing opticians and optometrists
existing at the time of the passage of the current version of section 655, the Legislature did
expect that its passage of AB 1125 would interfere with those relationships remaining on
the date it takes effect.
Considerations of the objective of the legislation, the evils and mischief to
which it was addressed, the public policy vindicated by its enactment, and the historical
circumstances surrounding its enactment (In re Marriage of Bouquet, supra, 16 Cal. 3d at
pp. 586–587; West Pico Furniture Co. v. Pacific Finance Loans, supra, 2 Cal. 3d at p. 608;
People v. Ventura Refining Co., supra, 204 Cal. at p. 292; County of San Diego v. Milotz,
supra, 119 Cal. App. 2d Supp. at p. 880) also compels the conclusion that the Legislature
meant for the amendatory and ameliorative provisions of Assembly Bill 1125 to apply to
business lease and sublease arrangements between dispensing opticians and optometrists
existing on its effective date. We quickly recall that the geneses of the bill were findings
that business, financial and proprietary relationships between those licensees that were and
are presently permitted, were producing harmful effects on the consumers of this State by
creating a situation where optometrists were placed in a position of having to deal with the
potentially conflicting interests of their patients on the one hand and the proprietor-
opticians to whom they would be beholden, on the other. Assembly Bill 1125 was passed
to prevent the situation from arising in the first place.
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While it has been said that “something more than a desirable social objective
served by the Legislation is . . . required if we are to infer a legislative intent of retroactivity.
. . . (Industrial Indem. Co. v. Worker’s Comp Appeals Bd., supra, 85 Cal. App. 3d at p.
1032) the foregoing indicates that we do have that “something more.” Further, it is
inconceivable that the Legislature intended the four year delay in the operation of the
statute to allow licensees time to make long term arrangements which would nullify its
purpose. Rather, we believe the Legislature provided that delay in order to enable
dispensing opticians and optometrists who would be affected by its provisions to extricate
themselves from any relationship which its terms would prohibit.10 Viewing it as such
further confirms our conclusion that the Legislature did in fact intend to have the statute
apply to all such lease and sublease relationships existing on its effective date. Further, had
the Legislature not meant to regulate the pre-January 1, 1983 lease relationships it could
easily have prohibited their formation after January 1, 1983, rather than prohibiting their
existence altogether. Or, it could have provided a “grandfather clause” exemption, as it did
in 1969, for proprietary relationships existing on a certain date. But it did not do so.
In light of all of these factors we can but conclude that the Legislature
intended the amendments to section 655 to apply to all office lease and sublease
arrangements (and to all other relationships which its terms prohibit) between dispensing
opticians and optometrists, that will exist on January 1, 1983. Any such business
arrangement extant on that date when the statute becomes operative will be in violation of
law.
Having deduced that the Legislature did in fact intend for the amended
version of section 655 to apply to all lease and sublease arrangements between dispensing
opticians and optometrists for business office spaces that might still exist on January 1,
1983, the presumption against its retroactivity becomes “completely irrelevant” (In re
Marriage of Bouquet, supra, 16 Cal. 3d at p. 591, & p. 591, fn. 6) and we must now address
the remaining issue of whether there is any constitutional impediment to its so applying.
When they become operative on January 1, 1983, the amended provisions of
section 655 will “impair” contractual arrangements then existing between dispensing
opticians and optometrists which it prohibits (Home Bldg. & L. Assn. v. Blaisdell (1934)
10 This is not an uncommon use of a future effective date in drafting a statute (2 Sutherland,
Statutory Construction, supra, § 33.07 at p. 12: “The purpose of the future effective date is to
inform persons of the provisions of a statute before it becomes effective in order that they may
take steps to protect their rights and discharge their obligations” (fn. omitted); but see
Commonwealth v. Griffin (Pa. 1959) 149 A. 2d 656, 658; “An Act which fixes a future day as its
effective date stamps its prospective character on its face”). As we shall also see, a future effective
date avoids constitutional impediments to a statute’s being applied retroactively.
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290 U.S. 398, 431) as well as any “vested rights” secured by them (cf. In re Marriage of
Bouquet, (1976) 16 Cal. 3d 583, 592, fn. 9). Constitutional considerations come to mind:
the United State Constitution prohibits the states from passing any law “impairing the
obligation of contracts or from depriving a person of property without due process of law,
and the California Constitution contains like prohibitions. (Compare U.S. Const., art. I,
§ 10 with Cal. Const., art. I, § 9; and compare U.S. Const., Amend. XIV with Cal. Const.,
art. I, § 7, respectively.) “But,” as the California Supreme Court said recently with respect
to the Contract Clause,
“the fact that the state has impaired the obligations of these
agreements by enactment of section 16280 is the beginning rather than the
end of our analysis, for it has long been settled that although the
constitutional provision, literally read, proscribes ‘any’ impairment of
contract it is ‘not an absolute one and is not to be read with literal exactness
like a mathematical formula.’ (Home Building & Loan Assn. v. Blaisdell
(1934) 290 U.S. 398, 428 [78 L. Ed. 413, 423, 54 S. Ct. 231, 88 A.L.R.
1481].) The state’s police power remains paramount, for a legislative body
“cannot ‘bargain away the public health or the public morals.’” (Id., at p.
436 [78 L. Ed. at p. 4281.)11 Obviously, however, if the contract clause is to
have any effect, it must limit the exercise of the police power to some degree.
Our inquiry, then, concerns not whether the state may in some cases impair
the obligation of contracts, but the circumstances under which such
impairment is permissible.” (Sonoma County Organization of Public
Employees v. County of Sonoma (1979) 23 Cal. 3d 296, 305.)
Similarly the “due process” clauses have been held not to constitute an
absolute bulwark against retroactive legislation that affects “vested property rights.” As
was said by the California Supreme Court in another recent matter:
“The vesting of property rights . . . does not render them immutable.
“‘Vested rights, of course, may be impaired “with due process of law” under
many circumstances. The state’s inherent sovereign power includes the so-
called “police power” right to interfere with vested property rights whenever
reasonably necessary to the protection of the health, safety, morals, and
general well being of the people . . . The constitutional question, on principle,
therefore, would seem to be, not whether a vested right is impaired by a
marital property law change, but whether such a change reasonably could be
believed to be sufficiently necessary to the public welfare as to justify the
impairment.’” (Addison v. Addison, [1965] 62 Cal. 2d at p. 566. (In re
11 “See also Allied Structural Steel Co v. Spannaus (1978) 438 U.S. 234, 240.
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Marriage of Bouquet, supra, 16 Cal. 3d at p. 592.))
The issue in both instances thus involves the question of whether the
Legislature, by its exercise of the “police power” in amending section 655 and making it
applicable to all business lease and kindred arrangements between dispensing opticians and
optometrists on January 1, 1983, was justified in “impairing” the contractual obligations
and property rights inherent in those arrangements that might exist on that date. We believe
that it was.
As alluded to above, justification for retroactive application of a statute
which would have the effect of impairing existing contractual arrangements or vested
property rights has been readily found where the Legislature, in the exercise of the police
power of a state, enacts legislation that it deems necessary to ameliorate or redress an
unwanted condition proven to be inimical to the public at large, and where the legislation
is reasonable and necessary to serve that important public purpose. As was said in the
seminal case in the area:
“Not only is the constitutional provision qualified by the measure of
control which the State retains over remedial processes, but the State also
continues to possess authority to safeguard the vital interests of its people. It
does not matter that legislation appropriate to that end ‘has the result of
modifying or abrogating contracts already in effect. Stephenson v. Binford,
287 U.S. 251, 276. Not only are existing laws read into contracts in order to
fix obligations as between the parties, but the reservation of essential
attributes of sovereign power is also read into contracts as a postulate of the
legal order. The policy of protecting contracts against impairment
presupposes the maintenance of a government by virtue of which contractual
relations are worth while,—a government which retains adequate authority
to secure the peace and good order of society. This principle of harmonizing
the constitutional prohibition with the necessary residuum of state power has
had progressive recognition in the decisions of this Court.”
(Home Bldg. & L. Assn. v. Blaisdell, supra, 290 U.S. 398, 434–435 (contract clause).
Accord, Allied Structural Steel Co. v. Spannaus (1978) 438 U.S. 234, 242–244 (contract
clause); United States Trust Co. v. New Jersey (1977) 431 U.S. 1, 22, 25 (contract clause);
Sonoma County Organization of Public Employees v. County of Sonoma, supra, 23 Cal. 3d
at pp. 305–307 and cases cited therein (contract clause); Addison v. Addison, supra, 62 Cal.
2d at p. 566 (due process clause); In re Marriage of Walton, supra, 28 Cal. App. 3d
108,112–113 (contract clause-due process clause); In re Marriage of Bouquet, supra, 16
Cal. 3d at p. 592 (due process clause); 59 Ops. Cal. Atty. Gen. 542, 543–544 (1976).)
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Moreover, review of legislation enacted pursuant to “the police power” is
limited in scope: “Courts do not sit as super-legislatures to determine the wisdom,
desirability or propriety of statutes enacted by the Legislature. (Griswold y. Connecticut,
381 U.S. 479, 482 [14 L. Ed. 2d 510, 513, 85 S. Ct. 1678, 1680]; People v. Hurd, 5 Cal.
App. 3d 865, 877 [85 Cal. Rptr. 718].) Having determined that the statutory scheme serves
a legitimate state purpose and that the classification made has a rational relationship to that
purpose, the court’s function is at an end.” (Estate of Horman (1971) 5 Cal. 3d 62, 77.)
Thus “[i]t is enough that there is an evil at hand for correction, and that it might be thought
that the particular legislative measure was a rational way to correct it.” (Williamson v. Lee
Optical Co. (1955) 348 U.S. 483, 487–488; accord, Ferguson v. Skrupa (1963) 372 U.S.
726, 730; Liggett Co. v. Baldridge (1928) 278 U.S. 105, 111–112; In re Okahara, 191 Cal.
353, 363; Magan Medical Clinic v. Cal. State Bd. of Medical Examiners (1967) 249 Cal.
App. 2d 124, 131–132.) Further, while the question of whether particular legislation is meet
in the premises is a factor in determining whether it can withstand constitutional attack, “in
reviewing economic and social regulation . . . [where the government is not attempting to
modify its own obligations,] courts properly defer to legislative judgment as to [its]
necessity and reasonableness . . . East New York Savings Bank v. Hahn, 326 U.S. 230
(1945).” (United States Trust Co. v. New Jersey, supra, 431 U.S.at pp. 22–23; accord El
Paso v. Simmons (1965) 379 U.S. 497, 508–509; cf. Sonoma County Organization of
Public Employees v. County of Sonoma, supra, 23 Cal. 3d 296, 310.)
Retroactive legislation that has impaired private contractual obligations or
vested property rights has been particularly upheld where the law in question was addressed
to an inimical situation involving a profession already subject to government regulation, or
another relationship already “infused with a substantial public interest.” (In re Marriage of
Walton (1972) 28 Cal. App. 3d 108, 112; Magan Medical Clinic v. Cal. State Bd. of
Medical Examiners (1967) 249 Cal. App. 2d 124, 131; Castleman v. Scudder (1947) 81
Cal. App. 2d 737, 740.) As was said in Marriage of Walton:
“When persons enter into a contract or transaction creating a
relationship infused with a substantial public interest, subject to plenary
control by the state, such contract or transaction is deemed to incorporate and
contemplate not only the existing law but the reserve power of the state to
amend the law or enact additional laws for the public good and in pursuance
of public policy, and such legislative amendments or enactments do not
constitute an unconititutional impairment of contractual obligations. (Home
Building & Loan Assn. v. Blaisdell, 290 U.S. 398, 434–438 [78 L. Ed. 413,
426–429, 54 S. Ct. 231, 88 A.L.R. 1481]; Castleman v. Scudder, 81 Cal. App.
2d 737, 740[12] [185 P.2d 35]; Phelps v. Prussia, 60 Cal. App. 2d 732, 741
12 [P]etitioners having qualified as licensees in a business already regulated under the police
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[141 P.2d 440]; State etc. Bur. v. Pomona etc. Assn., 37 Cal. App. 2d Supp.
765, 768–770 [98 P. 2d 829].) [¶]. . . . [Further, a vested) interest, however it
be classified, [is] subject to the reserve power of the state to amend the law
or enact additional laws for the public good and in pursuance of public policy.
(Phelps v. Prussia, supra, 60 Cal. App. 2d at p. 742; cf. Home Building &
Loan Assn. v. Blaisdell, supra, 290 U.S. at pp. 434–438 [78 L. Ed. at pp.
426–429]; Castleman v. Scudder, supra, 81 Cal. App. 2d at p. 740; State etc.
Bur. v. Pomona etc. Assn., supra, 37 Cal. App. 2d Supp. at pp. 768–770.)”
(28 Cal. App. 3d at pp. 112–113.)
The State of California has an undeniable substantial interest in, and the right
to regulate the conduct of, the professions of optometry and optical manufacture within its
borders. (Williamson v. Lee Optical Co., supra, 348 U.S. 483,488; Rich v. State Board of
Optometry, supra, 235 Cal. App. 2d 591, 604–611 (number of offices); Pennington v.
Bonnelli (1936) 15 Cal. App. 2d 316, 319; cf. McNaughton v. Johnson 242 U.S. 344, 347
(ophthalmology); Magan Medical Clinic v. Cal. State Bd. of Medical Examiners, supra,
249 Cal. App. 2d at p. 131.) In so doing it exercises that “residuum of state power” found
in the “police power” that is inherent in its sovereignty to safeguard the welfare of its
citizens. (Home Bldg. & L. Assn. v. Blaisdell, supra, 290 U.S. at p. 434–43 5; Allied
Structural Steel Co. v. Spannaus, supra, 438 U.S. at p. 244; Manigualt v. Springs (1905)
199 U.S. 473, 480.) And, as the court said in Magan Medical Clinic v. Cal. State Bd. of
Medical Examiners, supra:
“The police power is the broadest in scope of any field of government
authority and is the power to prevent, an anticipation of danger to come . . .
and restrain individual tendency. [Citations.] There must, of necessity, be a
very great discretion vested in the Legislature to the end that changing needs
and conditions can be met.” (249 Cal. App. 2d at p. 131.)
Since the ultimate purpose of professional licensing statutes is to protect the consumer-
public (Borror v. Department of Investment, 15 Cal. App. 3d 531, 540 (1971); Cornell v.
Reilly, 127 Cal. App. 2d 178, 184 (1954); 59 Ops. Cal. Atty. Gen. 537, 542 (1976)), in the
exercise of this facet of its police power, the Legislature “may impose such proper
restrictions [upon the practice of the professions] as it deems necessary for the protection
of the public” (Pennington v. Bonnelli, supra, 15 Cal. App. 2d at p. 320). These may
include restrictions which insure that a sufficient degree of professional integrity and
quality will be maintained (see e.g., Liggett Co. v. Baldridge, supra, 278 U.S. at pp. 111–
power of the state, they thereby accepted such licenses subject to the possibility of further
regulatory legislation upon the same subject matter. (Veix v. Sixth Ward Bldg. & L. Assn. 310 U.S.
32 [60 S. Ct. 792, 84 L. Ed. 1061])”
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112;13 Dent v. West Virginia (1889) 129 U.S. 114, 122–123; Hawker v. New York (1898)
170 U.S. 189, 195; Williamson v. Lee Optical Co., supra, 348 U.S. at pp. 487–488; Magan
Medical Clinic v. Cal. State Bd. of Medical Examiners, supra, 249 Cal. App. 2d at pp. 131–
134) as well as those which will protect the citizenry from untoward business
interrelationships between professionals. As was said in Castleman v. Scudder, supra:
“[T]here can be no question of the power of the Legislature to ‘restrict
or prohibit trade practices which upon reasonable grounds it determines are
predatory, vicious, unfair and anti-social’ (Wholesale Tobacco Dealers
Bureau v. National Candy & T. Co., 11 Cal. 2d 634, 658 [82 P. 2d 3, 118
A.L.R. 4861) . . . . (81 Cal. App. 2d at p. 740.)
Regulation in the area we have is certainly “infused with, a substantial public interest,” if
not a public necessity, and may constitutionally have the effect of impairing contractual
obligations. (See e.g., United States Trust Co. v. New Jersey, supra, 431 U.S. at p. 22 (“The
States must possess broad power to adopt general regulatory measures without being
concerned that private contracts will be impaired, or even destroyed, as a result.”); Home
Bldg. & L. Assn. v. Blaisdell, supra, 290 U.S. at p. 437 (“The interests of the State may
justify the exercise of its continuing and dominant protective power notwithstanding
interference with contracts.”); see also In re Marriage of Walton, supra, 28 Cal. App. 3d
at pp. 112–1 13 and cases cited.)
In Magan Medical Clinic v. Cal. State Bd. of Medical Examiners, supra, a
case involving a situation very akin to that with which we are presented, the court upheld
against constitutional attack the 1963 amendment to Business and Professions Code section
654 which provided that after June 1, 1967, no physician could have any “membership,
proprietary interest or co-ownership in a pharmacy.” (Stats. 1963, ch. 1303, p. 2829, § 1.)
With a review of constitutional cases similar to that we have undertaken, the court said:
“The question is, is it in the public welfare to prohibit a physician who
prescribes medicines from having an interest in an establishment which fills
13 In Liggett the High Court declared a Pennsylvania statute prohibiting anyone other than a
pharmacist from owning a pharmacy, to be unconstitutional (278 U.S. at pp. 108, 114) since it
created an unreasonable and unnecessary restriction on private business (id., at p. 113) and invaded
property rights guaranteed by the Constitution (id., at p. 111). In so holding, the court found as it
had to that the law did not bear ‘a real and substantial relation to the public health, safety, morals
or . . . other phase of the general welfare” (id., at p. 112) because no/acts were presented to it (and
apparently none were to the Legislature which enacted the statute) to justify a different conclusion.
(Id., at p. 113.) Were that bearing demonstrated, the law would have been upheld. (Id., at pp. 111–
112.)
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prescriptions? We think it was reasonable for the Legislature to declare, in
effect, that such a statute would be for the public welfare. True it is that the
statute may leave much to be desired. The question is a debatable one upon
which reasonable men may differ, and under such circumstances, it is not the
duty or the province of this court to substitute its judgment for that of the
Legislature. The court can interfere only when the statute clearly interferes
with the Constitution. The law need not be in every respect logically
consistent with its aims to be constitutional.” (249 Cal. App. 2d at p. 134.)
(See also Rich v. State Board of Optometry, supra, 235 Cal. App. 2d 591, 611 (the
Legislature may regulate the number of optometrist’s branch offices).)
Against that same constitutional background, amplified by subsequent cases,
we reach our conclusion that neither the “contract clause” nor the “due process” clause of
either the federal constitution or the state constitution prohibits the Legislature from having
made the amended version of section 655 apply to all lease and sublease arrangements for
business office space that may still exist between dispensing opticians and optometrists on
January 1, 1983.
In Allied Structural Steel Co. v. Spannaus, supra, the High Court pointed to
five factors which it had earlier found to be significant to its upholding Minnesota’s
mortgage moratorium law against a constitutional (contract clause) attack in Home Bldg.
& L. Assn. v. Blaisdell, supra, 290 U.S. 398:
“First, the state legislature had declared in the Act itself that an
emergency need for the protection of homeowners existed. Id., at 444.
Second, the state law was enacted to protect a basic societal interest, not a
favored group. id., at 445. Third, the relief was appropriately tailored to the
emergency, that it was designed to meet. Ibid.
Fourth, the imposed
conditions were reasonable. Id., at 445–447. And, finally, the legislation was
limited to the duration of the emergency. Id., at 447.” (438 U.S. at p. 242.)
It also noted that in Veix v. Sixth Ward Building & Loan Assn., 310 U.S. 32, 38, it had taken
into account still another consideration in upholding a state law against a Contract Clause
attack: the petitioner had “purchased into an enterprise already regulated in the particular
to which he now objects.” (438 U.S. at pp. 242–243, fn. 13.) “Similar factors have been
applied in California decisions.” (Sonoma County Organization of Public Employees v.
County of Sonoma, supra, 23 Cal. 3d at pp. 306–307.)
The factors permitting retroactive legislation to scale the bulwark of the due
process clause are similar:
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“In determining whether a retroactive law contravenes the due process
clause, we consider such factors as the significance of the state interest served by the law,
the importance of the retroactive application of the law to the effectuation of that interest,
the extent of reliance upon the former law, the legitimacy of that reliance, the extent of
action taken on the basis of that reliance, and the extent to which the retroactive application
of the new law would disrupt those actions. [Citations.] . . . [A]mended section 5118 can
be applied retroactively if such a retroactive application is necessary to subserve a
sufficiently important state interest. (See Addison v. Addison, supra, 62 Cal. 2d 558; see
generally Boyd v. Oser (1944) 23 Cal. 2d 613, 623 [145 P.2d 312] (Traynor, J., concurring);
In re Marriage of Bouquet, supra, 16 Cal. 3d at pp. 592–593.)
As in the Allied Structural Steel Co. in applying these principles to the situation
before us,
“the first inquiry must be whether the state law has, in fact, operated
as a substantial impairment of a contractual relationship [for t]he severity of
the impairment measures the height of the hurdle the state legislation must
clear. Minimal alteration of contractual obligations may end the inquiry at its
first stage. Severe impairment, on the other hand, will push the inquiry to a
careful examination of the nature and purpose of the state legislation.” (438
U.S. at pp. 244–245. See also, Sonoma County Organization of Public
Employees v. County of Sonoma (1979), supra, 23 Cal. 3d at pp. 307–308.)
We have accepted the fact that any remaining contracts between dispensing opticians and
optometrists that the amended version of section 655 prohibits, will be impaired when that
section becomes operative on January 1, 1983. Here the problem of course is with those
arrangements which were made before the section was amended in 1979; those entered into
after the section was amended can find no succor in the contract clause (Hudson County
Water Co. v. McCarter (1908) 209 U.S. 349, 357 (“One whose rights, such as they are, are
subject to state restriction, cannot remove them from the power of the state by making a
contract about them”)), nor can they find protection in the “due process clause” since
justifiable reliance would be lacking (cf. In re Marriage of Bouquet, supra, 16 Cal. 3d at
pp. 592–593). Nevertheless, even the “careful examination of the nature and purpose of the
state legislation” required by a “severe impairment” of contractual obligations leads us to
conclude that the statute may be retroactively applied to those pre-1979 arrangements
without constitutional interdiction. The legislation in question was addressed to a general
problem of vital interest to society as a whole, involving as it did the public health and
welfare, and was in an area already subject to pervasive regulation by the state, professional
activity. While the conditions prompting its enactment may not have constituted an
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“emergency” approaching the Great Depression,14 they were such as to be a concern to a
state exercising the residuum of its inherent sovereign power to protect the common wealth.
(Cf. Allied Structural Steel Co. v. Spannaus, supra, 438 U.S. at p. 241; Home Bldg. & L.
Assn. v. Blaisdell, supra, 290 U.S. at pp. 434–437; Addison v. Addison (1965) 62 Cal. 2d
558, 566.) And while the exercise of that power in “[l]egislation adjusting the rights and
responsibilities of contracting parties must be upon reasonable conditions and of a
character appropriate to the public purpose justifying its adoption. . . .” (United States
Trust Co. v. New Jersey, supra, 431 U.S. at p. 22), in the case of the 1979 adoption of the
amendments to section 655 we can surely say that an evil was at hand for correction and
that the legislative measure as we have construed it was a rational way to correct it (cf.
Williamson v. Lee Optical Co., supra, 348 U.S. at p. 488): The Legislature was presented
with evidence that certain relationships between dispensing opticians and optometrists
were still causing harmful effects on the health care the public was receiving, despite its
having tried, for over a decade, the less drastic method of avoiding that result by prohibiting
only those relationships when patient referrals were involved. The Legislature therefore
decided to address the root of the problem and it determined that a total prohibition on
those relationships was necessary to prevent the dangerous result to the public that was
ensuing from the “individual tendency” they were breeding. Even if we were not compelled
by a “severe impairment” to give complete deference to that legislative determination, its
correctness would be enhanced by the historical fact that a lesser prohibition had not
worked. (United States Trust Co. v. New Jersey, supra, 431 U.S. at pp. 29–31; cf. Magan
Medical Clinic v. Cal. State Bd. of Medical Examiners, supra, 249 Cal. App. 2d at p. 128.)
Clearly, the means now chosen were appropriate to the end, and were reasonably tailored
to the situation that it was designed to meet.15
As alluded to above, the United States Supreme Court has “accepted as a
commonplace that the Contract Clause does not operate to obliterate the police power of
the States” (Allied Structural Steel Co. v. Spannaus, supra, 438 U.S. at p. 241) and that
“[t]he States must possess broad power to adopt general regulatory measures without being
concerned that private contracts will be impaired, or even destroyed, as a result.” (United
14 We note, as did the United States and California Supreme Courts, that the existence of an
emergency is but one factor in determining the constitutionality of retroactive legislation; it is not
an absolute requirement to sustain its validity nor is it essential in every case. (United Sates Trait
Co. v. New Jersey, supra, 431 U.S. at pp. 22–23, fn. 19, citing Veix v. Sixth Ward Building & Loan
Assn. (1940) 310 U.S. 32. 39–40 for the proposition that an emergency need not be declared and
the relief measure need not be temporary; Sonoma County Organization of Public Employees v.
County of Sonoma, supra. 23 Cal. 3d at p. 310, fn. 13.)
15 Since the question posed involves one of dispensing opticians and optometrists having a
relationship in proximate offices (see also § 2556), we do not consider if a greater degree of
separation involved would pose due process problems.
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States Trust Co. v. New Jersey, supra, 431 U.S. at p. 22; Manigualt v. Springs, supra, 199
U.S. 473, 480.) We have also seen that there are of course limits “upon the power of the
State to abridge existing contractual relationships, even in the exercise of its otherwise
legitimate police power.” (Allied Structural Steel Co. v. Spannaus, supra, 438 U.S. at p.
242.) In balancing the factors in the situation presented, we conclude that the California
Legislature acted well within those constitutional limitations when it amended section 655
and made it applicable to all existing business leases and similar arrangements that it
prohibits which may still exist between dispensing opticians and optometrists on January
1, 1983.
With similar result, a review of the factors to be considered in determining
whether a retroactive law contravenes the due process clause leads us to the conclusion that
the retroactive application of the law does not offend “due process”: significant state
interests are subserved by the law, and its retroactive application on January 1, 1983, is
necessary to effect the, lest those relationships between dispensing opticians and
optometrists that were found to spawn the evils to which the statute was directed be
entrenched yet further. Reliance on the current “loophole” of the absence of mutual patient
referrals is only well taken in the case of relationships that existed before the amendment
was adopted in 1979, and even as to them that reliance is tempered by the four year notice
the Legislature has provided those affected. In any event, those relying do so in an area
infused with a substantial public interest, which was already subject to pervasive state
regulation. Thus, when any such pre-1979 arrangements were made, the Legislature had
already spoken to their parameters and inherent in any contemplated expectations at the
time was the possibility of further regulatory legislation upon the same subject matter.
Just as the bulwarks of the due process and contract clauses would not shield
a spouse from a retroactive application of a change in the law regarding the grounds for
dissolution of marriage (In re Marriage of Walton, supra), or a change in the law allocating
marital property (In re Marriage of Bouquet, supra, Addison v. Addison, supra), or a
physician from a law requiring him to divest himself by a certain date of interests in a
pharmacy (Magan Medical Clinic v. Cal. State Bd. of Medical Examiners, supra), so we
find that they do not stand as constitutional impediments to the Legislature having had the
amended version of section 655 apply to all relationships between dispensing opticians and
optometrists which it prohibits that may still exist on January 1, 1983.
Summarizing then, when the amended version of section 655 becomes
operative on January 1, 1983, it will apply to all the (business) relationships which it
prohibits between dispensing opticians and optometrists that may still exist on that date.
Specifically it will prohibit a dispensing optician from leasing two business office spaces
from a landlord and thereafter unconditionally assigning the lease on one of them to an
optometrist, as well. as the variation on that arrangement by which the dispensing optician
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reserves a right of reentry in the premises so assigned/sublet in the event of their vacation
or surrender by the optometrist
*****
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