Arkansas State Board of Optometry v. Keller

Citations: 218 Ark. 820; 239 S.W.2d 14; 1951 Ark. LEXIS 428Docket: 4-9484

Court: Supreme Court of Arkansas; April 30, 1951; Arkansas; State Supreme Court

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Holt, J. Appellant, representing the Arkansas State Board of Optometry, initiated legal action against D. P. Keller and five physicians to prevent violations of Act 94 of the General Assembly of 1941, which regulates optometry. Keller, unlicensed since 1932, managed the American Optical Company and engaged in the dispensing of spectacles, measuring patients for proper fitting until he resigned in February 1950. Subsequently, Keller and the physicians formed a partnership, "The Medical Arts Optical Service," to sell optical supplies and fill prescriptions, acquiring American Optical's assets. The complaint, filed on June 22, 1950, alleged the partnership's actions were unlawful as they enabled Keller to practice optometry without a license and that the physicians' acceptance of financial incentives constituted illegal collaboration. Despite these claims, the court found Keller had ceased unlawful practices upon legal advice and determined that the physicians had not conspired to assist him in violating optometry laws. Injunctive relief was denied, and the complaint was dismissed for lack of equity. The appellant contends that Keller continues to illegally practice optometry and the physicians are complicit by receiving kickbacks from the partnership’s activities.

Keller was responsible for fitting glasses by adjusting the nose-piece for patient comfort and collecting retail prices before rebating doctors involved. The Chancellor found no evidence contradicting his conclusions regarding the roles of Keller and the oculist. The process for obtaining glasses involved the oculist determining vision deficiencies and issuing a prescription that included lens specifications and facial measurements. Patients could take this prescription to Medical Arts Optical Service or any other optician, where Keller would present frame options and verify measurements if requested by the oculist. Any necessary corrections were the responsibility of the oculist. Keller's role included grinding lenses according to the prescription and ensuring proper fit, which might involve minor adjustments. According to Act 94 (Ark. Stats. 1947, 72-801, et seq.), prescribing, dispensing, adapting, or duplicating lenses constitutes the practice of optometry, with the act outlining three distinct steps: prescription by licensed professionals, lens manufacturing by opticians, and the adjustment of glasses, which also requires technical skill to prevent vision impairment. The court affirmed that Keller's actions did not constitute dispensing or adapting lenses and ruled that the physicians involved had not violated the optometry law through their partnership with Keller. The appellant's claim that the physicians violated the 'Unfair Practices Act' was not supported by the Chancellor's decision, which did not allow the introduction of related testimony.

No error was found regarding the application of Section 70-307, which prohibits secret rebates, refunds, commissions, or unearned discounts that harm competition. The statute classifies such practices as unfair trade and penalizes violators with misdemeanor charges under section 11 (70-311). The complaint does not claim that the alleged rebates or "kick-backs" were not universally extended to all purchasers under similar conditions, instead suggesting the opposite. The partnership agreement included in the complaint establishes a wholesale pricing structure and a standard dispensing fee for prescriptions, allowing all licensed oculists to share in retail profits, thus not restricting benefits to partners alone. Previous case law clarifies that not all rebates are illegal; for a rebate to violate the statute, it must be secret, not available to all customers under like terms, and must harm competition. The burden was on the appellee to demonstrate these conditions were met. The appellant did not adequately state a cause of action regarding the rebates, leading to the Chancellor's decision to exclude related testimony. The decree is affirmed, with concurrence from Chief Justice Green Smith.