Before Judges Pressler, Ciancia and Alley.
The opinion of the court was delivered by: Alley, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
On appeal from the adoption of an administrative rule by the New Jersey State Board of Optometrists.
Lenscrafters appeals from the adoption of an administrative rule by the State Board of Optometrists, in particular, N.J.A.C. 13:38-1.3(f). We hold that the regulation is contrary to the statute that purportedly authorized it and thus is invalid.
The Legislature has recognized optometry as a profession. N.J.S.A. 45:12-1. In a case we decided seventeen years ago, Matter of Kaufman, 194 N.J. Super. 124 (App. Div. 1984), we were concerned with charges that two optometrists were practicing their profession in violation of N.J.S.A. 45:12-11(u). We concluded that they were not. In our decision, we observed,
Some history of the conflict between optometrists and opticians may be found in New Jersey Optometric Assn. v. Hillman and Kohan, 144 N.J. Super. 411 (Ch. Div. 1976), aff'd 160 N.J. Super. 81 (App. Div. 1978). A source of tension between the two groups is that each is separately permitted to fabricate eyeglasses. This results in the potential for economic competition between the opticians and the optometrists. [194 N.J. Super. at 127].
The operation in this area of "conflict" and "tension" continues, and their manifestations include the adoption of and challenge to the regulation now before us.
Some background concerning Kaufman is appropriate. There, optometrists had a practice functioning as a department in a commercial building. Their practice was adjacent to an optician's facility in the same building, and the optician was the landlord of the optometrists. The only two operations in the building were those of the optician and the optometrists. The optometrists paid rent based on a percentage of gross receipts. A statute then in effect, but since repealed, N.J.S.A. 45:12- 11(u), prohibited the following:
Practicing optometry in any retail or commercial store or office not exclusively devoted to the practice of optometry or other health care professions where materials or merchandise are displayed pertaining to a business or commercial undertaking not bearing any relation to the practice of optometry or other health care professions; providing, however, that any optometrist practicing in premises of this type prior to January 1, 1963, shall be permitted to continue in his present location; but when and if any optometrist, who is a lessee or an employee of a lessee, vacates such premises no other optometrist shall be permitted to practice in said vacated premises. Practicing optometry under a false or assumed name, or upon a salary, commission, or any other basis of compensation, while directly or indirectly employed by or associated or connected as an optometrist with any person, association or corporation other than one who possesses a valid unrevoked certificate of registration as an optometrist or a physician licensed in and for the State of New Jersey and who has an actual legal residence within the State.
The State Board of Optometrists found that these optometrists had violated prohibitions of the statute. We disagreed, strictly construing the statute because we considered it generally penal in nature. Kaufman, supra, 194 N.J. Super. at 132-33. We rejected the Board's contention that there must be a physical separation between the establishments of an optometrist and an optician, found that they may be located within the same facility, adjacent to each other, and determined that an optometrist in that situation could dispense eyeglasses from his own office. We also set aside the Board's finding that appellants had violated N.J.S.A. 45:12-11(u)'s prohibition against "practicing optometry ... on a salary, commission or any other basis of compensation, while directly or indirectly employed by or associated or connected as an optometrist with any person, association or corporation other than one who holds a valid unrevoked certificate of registration as an optometrist ..." Id. at 135. We concluded,
The record does not support the Board's determination that appellants receive compensation from Eyelab. Indeed, the record establishes that appellants pay rent to their landlord, the opticians. We have considered the fact that appellants make use of the equipment, located on the rental premises in the additional space on the bottom floor of the building. That evidence is not sufficient to establish a violation of this penal statute.
Neither the existence of the landlord-tenant relationship here nor the use of the same advertising agency, similar logos or the same hours of operation compel an inference of "oneness." The Board's assertion of a violation of the statutory proscription is not supported by competent proof. We conclude that there is no sustainable basis for the Board's determination, and that it must be set aside as arbitrary, capricious and unreasonable. In re Suspension of Heller, 73 N.J. 292, 309 (1977) and Campbell v. Dept. of Civil Service, 39 N.J. 556, 562 (1963). [Ibid.]
As opposed to the procedural posture in Kaufman, which was an appeal from the Board's finding that optometrists had violated statutory prohibitions, this appeal is from the Board's adoption of a regulation, which the Board asserts was done pursuant to statute. The statute that the Board invokes as authority for the ...