In a unanimous decision, the California Supreme Court ruled that the current business structure of Pearle Vision and Pearle VisionCare is illegal.
Pearle Vision employs optometrists to provide exams and eye care through Pearle VisionCare, a separate company that is set up as an HMO.
The ruling upholds an earlier injunction obtained by the state attorney general that prohibits Pearle Vision from advertising eye exams. California law prohibits financial relationships between O.D.s and retail eyeglass sellers and bars retailers from advertising or providing the services of O.D.s.
The state Supreme Court ruling allows the attorney general to proceed with a lawsuit filed in 2002 against Pearle Vision. That suit accuses Pearle Vision of practicing optometry without a license and engaging in deceptive marketing and unfair business practices. The suit claims that Pearle Visions advertising falsely promoted that the company can and does provide optometric services and that Pearle Vision falsely told consumers that the O.D.s in or near its retail outlets were independent of the company.
The opinion did not address the legality of Pearle Visions business relationship with Pearle VisionCare, says Luxottica Retail, the parent company of Pearle Vision, as reported in Vision Monday. This case will return to the lower court for further legal proceedings. [This] decision is one of many steps in the legal process. Other legal proceedings challenging the regulatory restrictions in California continue and may affect the impact of [this] decision, the company says.LensCrafters, another subsidiary of Luxottica, filed a separate lawsuit against Mr. Lockyer in U.S. District Court charging that the California statutes are unconstitutional. That lawsuit is still pending.