                              @ffice of tly ~ttornep @merat
                                           &ate     of Qexae
DAN MORALES                                 September 24,1992
 4TTORSEY
       GEXERAL



     Clinton M. DeWolfe, O.D.                          Opinion No. DM-170
     Chairman
     Texas Optometry Board                             Re: Construction      of V.T.C.S. article
     9101 Bumet Road, Suite 214                        45525.11 of the Texas Optometry Act,
     Austin, Texas 78758                               and related questions   (RQ-396)

     Dear Dr. DeWolfe:

             You have asked us to construe V.T.C.S. article 4552-5.11(a) and (b) of the
     Texas Optometry Act (the act), V.T.C.S. article 4552-1.01 et seq., chapter 10. As
     background material, you provide a hypothetical set of facts. You state that the
     hypothetical facts are similar to an actual circumstance involving a particular
     optometrist practicing in the State of Texas, but you also state that the facts are not
     unique to this particular optometrist. The hypothetical situation you set forth is as
     follows:

                      Dr. Smith (hypothetical name) is a licensed optometrist in
                  the State of Texas. Dr. Smith and one other optometrist have
                  formed a partnership (legal entity) for the practice of optometry
                  and also for the sale and dispensing at retail of optometric
                  goods’ at a given location in Texas. Dr. Smith and his partner
                  are 100% owners of the office in which optometry is practiced
                  and in which optometric goods are dispensed and sold ‘It retail.
                  The partnership practices under a trade name or assumc,i name.

                        Dr. Smith has similar partnerships for the practice of
                   optometry and for the sale and dispensing at retail of
                   ophthalmic goods at approximately      fifteen (15) additional
                   offices located throughout Texas. Each office practices under


                ‘You have explained that you used the term “optometricgoods”as a synonym for “ophthalmic
      goods.”




                                                   p. 891
Clinton M. &Wolfe, O.D. - Page 2 (~170)




          the same trade name or assumed name. With respect to each
          office, Dr. Smith has formed a partnership (legal entity) with
          one other different optometrist. In other words, Dr. Smith has a
          partnership interest in approximately fifteen (15) offices in
          Texas where ophthalmic goods are sold at retail. In addition,
          Dr. Smith has three locations in Texas where optometry is
          practiced and ophthalmic goods are sold and dispensed at retail
          which are 100% owned and operated by Dr. Smith, individually.
          Dr. Smith also has an ownership interest in a chain of stores
          where optical goods2 are dispensed and sold at retail. [Emphasis
          in original.] [Footnotes added.]

You have informed us that you do not know whether Dr. Smith has actual
partnership agreements with all of the other optometrists, or whether he has some
other kind of investment arrangement with some of the other optometrists. Thus,
you have not used the word “partnership” in its technical, legal sense, but simply to
refer to any kind of arrangement whereby Dr. Smith has become a co-owner of a
business where optometry is practiced and ophthalmic goods are sold.

        You believe that article 4552-5.11 of the act prohibits Dr. Smith from, among
other things, controlling or attempting to control the professional judgment, manner
of practice, or practice of an optometrist. Article 4552-5.11 states in pertinent part
as follows:

              (a) Any person who is a manufacturer, wholesaler, or
         retailer of ophthalmic goods is prohibited from:

              (1) directly or indirectly controlling or attempting to control
              the professional judgment, the manner of practice, or the
              practice of an optometrist or therapeutic optometrist; or

              (2) directly or indirectly employing or hiring or contracting
              for the services of an optometrist or therapeutic optometrist
              if any part of such optometrist’s or therapeutic optometrist’s
              duties involve the practice of optometry or therapeutic
              optometry; or

      *oat have explained that you used the term ‘optical goods” as a syncqm for ‘ophthalmic
w




                                         p. 892
Clinton M. DeWolfe, O.D. - Page 3 (m17o)




            (3) directly or indirectly making any payment to an
            optometrist or therapeutic optometrist for any service not
            actually rendered.

             (h) For purposes of this section “controlling or ~attempting
        to control the professional judgment, the manner of practice, or
        the practice of an optometrist or therapeutic optometrist” shall
        include but not be limited to:

            (1) setting or attempting to influence the professional fees
            of an optometrist or therapeutic optometrist;

            (2) setting or attempting to influence the office hours of an
            optometrist or therapeutic optometrist;

            (3) restricting or attempting to restrict an optometrist’s or
            therapeutic optometrist’s freedom to see patients on an
            appointment bask,

            (4) terminating or threatening to terminate any lease,
            agreement, or other relationship in an effort to control the
            professional judgment, manner of practice, or practice of an
            optometrist or therapeutic optometrist;

            (5) providing, hiring, or sharing employees or business
            services or similar items to or with an optometrist or
            therapeutic optometrist; or

            (6) making or guaranteeing a loan to an optometrist or
            therapeutic optometrist in excess of the value of the
            collateral securing the loan.

             (c) It is the intent of the legislature to prevent
        manufacturers, wholesalers, and retailers of ophthalmic goods
        from controlling or attempting to control the professional
        judgment, manner of practice, or the practice of an optometrist
        or therapeutic optometrist, and the provisions of this section
        shall be liberally construed to carry out this intent.

            . . . .




                                     p. 893
Clinton M. DeWolfe, O.D. - Page 4 (n++l70)




                (g) This section shall not apply where the mamrfacturer,
           wholesaler, or retailer of ophthalmic goods is a licensed
           optometrist, therapeutic optometrist, or physician or legal entity
           100 percent owned and controlled by one or more licensed
           optometrists, therapeutic optometrists, or physicians; however,
           the exception set forth in this subsection shall not apply where
           the optometrist, therapeutic optometrist, or legal entity has
           offices at more than three locations.

        The legislature amended article 4552-5.11 in 1981 to read substantially as it
does now.3 See Acts 1981, 67th Leg., ch. 758, 9 2, at 2807-08. The legislature
designed the 1981 amendment to prohibit “any person who is a manufacturer,
wholesaler, or retailer of ophthalmic goods from controlling an optometrist, from
hiring an optometrist to perform optometry and from paying for services not
rendered.” House Comm. on Gov’t Organization, Bill Analysis, S.B. 109,67th Leg.
(1981). Apparently, the legislature amended article 4552-5.11 in response to a
common situation in which a mamrfacturer, a wholesaler, or a retailer of ophthalmic
goods pressured an optometristi to recommend to the optometrist’s patients that
they purchase certain ophthalmic products produced or sold by the manufacturer,
wholesaler, or retailer. The Texas Optometry Act: Hearings on S.B. 109 Before the
Senate Comm. on Hum. Res., 67th Leg. (Mar. 25, 1981) (statement of Larry
Niemann, representative of and attorney for Texas Optometric Association) (copy
on file with Senate Staff Services). For example, a manufacturer might offer an
optometrist favorable lease terms on equipment or office space. Id. However, the
contract between the manufacturer and optometrist would contain a provision
authorizing the manufacturer to cancel the lease without cause upon thirty days
notice. Id. In practice, the manufacturer would exercise the cancellation clause if
the optometrist failed to charge fees that the manufacturer felt were “reasonable,”
failed to keep hours the manufacturer “suggested,”or if a certain percentage of the


         3Priorto amendment in 1981, article4552-5.11restrictedoptometists’ use of window displays
and signs. In 1991 the legislamre again amended article45525.11, but at tbat time the legislature only
added the term “therapeuticoptometrist’to subsecti”ns(a)-(c), (g). Acts 199&?2d Lc& &I.588, 5 18,
at 2113.

         ‘Article 4552-5.11applies to both optometristsand therapeuticoptometrists. See V.T.C.S. art.
4552-l.Oyl), (7) (dctining “praciiceof optometry”and “practiceof therapeuticoptome~). Through-
out this “pini- we will u.sctbe tcrlua“0pt0metriat”or “0pt”metrists”to refer to both lzIasscati”“s of
praditionera.




                                               p.   894
Clinton M. DeWolfe, O.D. - Page 5          (1x4-170)




optometrist’s patients did not purchase their ophthalmic goods from the
manufacturer. Id.; see also Sworn Statement of Morris M. Morgan, Jr. (Aug. 26,
1980) (referred to in Hearings in S.B. 109 Before the Senate Comm. on Hum. Res.,
67th Leg. (Mar. 25, 1981)) (on file with Senate Comm. on Health and Hum.
Services); Sworn Statement of James Shamburger (Aug. 12, 1980) (referred to in
Heatings on S.B. 109 Before the Senate Comm. on Hum. Res., 67th Leg. (Mar. 25,
1981)) (on file with Senate Comm. on Health and Hum. Services). The legislature’s
statement of intention, found in article 4552-5.11(c), clearly expresses the
legislature’s desire that this kind of economic coercion stop, and that an optometrist
or therapeutic optometrist be free to recommend to his or her patients the best
products for each particular patient. See supm (quoting text of art. 4552-5.11(c));
The Texas Optometry Act: Hearings on S.B. 109 Before the Senate Comm. on Hum.
Res., 67th Leg. (Mar. 25, 1981) (statement of Larry Niemann, representative of and
attorney for Texas Optometric Association) (copy on file with Senate Staff
Services); r$ V.T.C.S. art. 4552-5.13 (containing professional responsibility require-
ments for optometrists); id. art. 4552-5.14 (restricting optometrists’ authority to
lease space from mercantile establishments); rif. art. 4552-5.15 (requiring
optometrists to practice completely and totally separate from dispensing opticians).

       You ask how to define “retailer of ophthalmic goods” in the context of article
4552-5.11. The act defines neither “retailer” nor “ophthalmic goods.” However, the
act defines “ophthalmic dispenser” as “a person not licensed as an optometrist,
therapeutic optometrist, or physician who sells or delivers to the consumer
fabricated and finished spectacle lenses, frames, contact lenses, or other ophthalmic
devices” that an optometrist, therapeutic optometrist, or physician has prescribed.
V.T.C.S. art. 4552-1.82(5). We believe that the kinds of goods an ophthalmic
dispenser sells or delivers are “ophthalmic goods.

       To determine the meaning of “retailer,” we turn to the common
understanding of the term. See Gov’t Code 9 312.002(a) (providing that, in general,
words used in statute shall be given their ordhmry meaning). A “retailer” is “a
person engaged in making sales to ultimate consumers.” BLACK’SLAW DIC-
TIONARY1182 (5th ed. 1987). We do not understand “retailer,” as article 4552-5.11
uses the term, to refer only to a human person but also to include legal entities such
as corporations or partnerships. See V.T.C.S. art. 4552-5.11(g). Thus, a “retailer of
ophthalmic goods” is a person or legal entity that sells to ultimate consumers
spectacle lenses, frames, contact lenses, and other ophthalmic devices.




                                      p.     895
Clinton M. DeWolfe, O.D. - Page 6 (m170)




        Clearly, all of the businesses that Dr. Smith wholly owns or in which he has
an ownership interest are “retailers of ophthalmic goods.” As to those businesses
Dr. Smith does not wholly own, the question becomes whether Dr. Smith is a
retailer of ophthalmic goods simply by virtue of his ownership interest in the
businesses. We conclude that his ownership interest does make him a “retailer of
ophthalmic goods” for purposes of article 4552-5.11. Dr. Smith’s ownership interest
in a business engaged in selling ophthalmic goods puts him in a position to exercise
control over the professional judgment, mamter of practice, or practice of the
optometrist who is Dr. Smith’s co-owner and who practices optometry at the
business.

        Subsection (c) instructs us liberally to construe the act to prevent the exercise
of control over optometrists. Accordingly, for purposes of V.T.C.S. article
4552-5.11, we believe “retailer of ophthalmic goods”must include any person with an
ownership interest in a business that sells ophthalmic goods. In general, of course, a
retailer of ophthahnic goods is subject to the restrictions that article 4552-5.11(a)
and (b) articulate.

        We note, however, that article 4552-5.11(g) exce.pts from these restrictions a
retailer of ophthalmic goods who is a licensed optometrist or that is a legal entity
wholly owned and controlled by one or more licensed optometrists, so long as the
optometrist or legal entity has offices at fewer than four locations. In our opinion,
“office”indicates a place where ophthalmic goods are so1d.s Under the hypothetical


         %e act does not d&e ‘of8ces.~ AddithaUy, WChave not found any legislative history
iadicatiag how the legidahue meant to use the term. GntsequenUy, we refer to the common
understandingof the word. See G&t Code 0 312002(a) (providing that, in general, words used in
statute shall be given their ordinarymeaning). Here, we construe the term “offices”after cxamkdq
case law and other sources. Accord chhzdo State Civil Sew. Employs A&n Y. Low, 448 P2.d 624,
630 (Cd”. EM) (&thing “office’as ‘place of bushe.& ); WEEiSTf!R’         Ntivtw
                                                                          S      NE%’COLW;~AT!!
DIC~ONARY820 (1990) (defining “office” as “place where a particular kind of business is
lmll!3actcd...as . ..tIu place in which a professional person conducts his or her professional
business”);see Bigham v. State, 20 S.W. 5T, m (Tee Grim.App. IS%?),own&d m”thmgracndr,
V+VhmsonY.S&h?,44 S.W. 1107 (Tcx GrimApp. 1898) (defiohg ‘office”as “placewhere a particular
kiud of business . . . is transacted”);I$ OnfikowskiY. Sbmh, 228 N.Y.S.2d 497, 49g (N.Y. App. Div.
1962) (detining ‘office”as “a room or any part of a building in ticb a person carries on his usual
“ccupatiou”); Red Aat!s Imprw~mnr ch’b, Inc. Y. Burkhalter, 241 s.w.zd 921, 925 (Temh. 1951)
(dching ‘office’as “roomor building in which a person trauacts his busiacs w cani- on his stated
“CCUpatiOO”).




                                           p. 896
Clinton M. DeWolfe, O.D. - Page 7 M-170)




you have set up, Dr. Smith wholly owns offices at three locations in Texas at which
ophthalmic goods are sold. Additionally, he has an ownership interest in offices at
approximately fifteen other locations at which ophthaJmic goods are sold. In our
opinion, Dr. Smith has “offices at more than three locations” and thus is subject to
the restrictions section article 4552-5.11(a) and (b) articulates.6

         Your second question asks whether, if Dr. Smith is a “retailer of ophthalmic
goods” for purposes of article art. 4552-5.11(a) and (b), he may maintain an
exception under article 4552-5.11(g) with respect to the three offices he wholly
owns. You contend that he may not. We agree. Once an optometrist has more
than three offices at which ophthalmic goods are .sold, all offices are subject to the
restrictions set out in subsections (a) and (b).


                                      SUMMARY

               Any person with an ownership interest in a business selling
           ophthalmic goods is a “retailer of ophthalmic goods” for
           purposes of V.T.C.S. article 4552-5.11 of the Texas Optometry
           Act. An optometrist who is also a retailer of ophthalmic goods
           and who has offices at fewer than four locations is excepted from




        %Venote that article 4552-53(c) authorizes an optometristto “engageia the business of a
dispensingoptician, own stock in a corporationengagedin the business of a dispensingoptician,or be a
partner iu a firm engaged in the business of a dispensing opti% so long as certaio condition ax
met. The act dches “dispensingoptician”as synonymouswith “opbthaJmicdispenser.’V.T.CS. art.
4552-l.U2(5);see nrpm p.6 (quoting dehition of “ophthalmicdispenser”). In other words, both a
dispmsing opticku and an ophthalmicdispenser sell or deliverto a consumer spedacle lenses, frames,
and contact lensw. V.T.C.S. art. 4552-l.U2(5). Wbik article 4552-53 places no limit oo the number
of buskmcs dispensiag optical goods in which au optometristmay hold an ovmcmbipinterest, article
4552-5.11restrictsan optometristwho has ownershipinterestsin more.tbau three oftiw at which oph-
thabuic goods arc.sold. We believe tbat an optometristwho has ownershipinterestsin more than tbrcc
busheses at which optical gocds are sold is subjectto the restrictionsarticulatedin article4552-5.11.




                                               p. 897
Clinton M. DeWolfe, O.D. - Page 8       W-170)




         the restrictions listed in article 4552-5.11. Such an optometrist
         who has offices at four or more locations is subject to the
         rkktions     established in article 4552-5.11(a) and (b) as to all of
         his or her offices.




                                                   DAN      MORALES
                                                   Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

RENBAHICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Kymberly K. Oltrogge
Assistant Attorney General




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