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People v. Cole11/26/2003
CERTIFIED FOR PUBLICATION
This action was brought by The People of the State of California against Pearle Vision, Inc. (Pearle), Pearle VisionCare, Inc. (Pearle VisionCare), alleged officers and directors Jeffrey A. Cole, Peggy J. Deal, Joseph Gaglioti, Stephen L. Holden, Dennis C. Osgood, Larry Pollack, David J. Sherriff, and David Stefko (collectively, Management), as well as various related entities and officers and directors.
The People's complaint charged Pearle, an optician and retailer of eyeglasses; Pearle VisionCare, a provider of optometry services; and Management with violating California law governing the practice of optometry that prohibits opticians and eyeglass retailers from advertising optometric services, forbids opticians and eyeglass retailers from having financial connections with optometrists, and prohibits optometrists from charging a fee for "dispensing" therapeutic drugs.
The People filed a motion for preliminary injunction, seeking to enjoin Pearle from advertising eye exams and to enjoin Pearle VisionCare from charging a fee for dilating patients' eyes with eye drops. Management brought a motion to quash service of summons, arguing that they were residents of Ohio who had insufficient contacts with California to support personal jurisdiction over them.
The court granted Management's motion to quash. The court found that Management lacked minimum contacts with California sufficient for the exercise of jurisdiction over those individuals. The court further found that the alleged violations of California law were the acts of the corporate entities, not Management in their individual capacities. The court made its order without prejudice to the People conducting further discovery to establish facts supporting personal jurisdiction over Management.
The court granted the People's request for a preliminary injunction, prohibiting Pearle from disseminating advertising in California that would mislead consumers into believing that it employed optometrists. The order further provided that Pearle could still mention eye examinations, doctors and optometrists in its advertisements as long as they contained a disclaimer that Pearle did not employ optometrists or provide eye exams in California. The court also enjoined Pearle VisionCare from charging a fee for dilating patients' eyes with eye drops.
Pearle and Pearle VisionCare appealed from the order granting the preliminary injunction, asserting that (1) the People had not shown a reasonable probability of success on the merits of their claim attacking Pearle's advertising; and (2) they also did not show a reasonable probability of success on their claim again Pearle VisionCare for charging for dilation of patients' eyes.
The People also appealed from the court's order granting preliminary injunction, contending that the court (1) failed to rule upon the People's contention that Pearle's advertising was illegal; (2) improperly allowed Pearle to continue to advertise eye exams as long as they provided a disclaimer; (3) issued an order that was ambiguous because it did not specify how it affected Pearle VisionCare's advertisements or whether Pearle VisionCare could charge fees for eye drops if they disguised such fees under another name; and (4) issued an order that did not apply to any successors-in-interest or related parties of Pearle and Pearle VisionCare.
The People have also appealed from the order granting Management's motion to quash, asserting that (1) the court improperly considered the merits of their action against Management in granting the motion; (2) the People demonstrated a violation of California law by Management; (3) the Peo
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