## Facts

- The State Board of Optometrists adopted N.J.A.C. 13:38-1.3(f), a rule governing business and contractual relationships between licensed optometrists and commercial optical retailers.
- The rule, in substance, prohibited or sharply limited certain arrangements (including lease, employment, or related contractual relationships) that the Board viewed as implicating the corporate/commercial practice of optometry.
- LensCrafters, a commercial optical retailer that operated stores where optometrists might practice on-site (including through space-leasing arrangements), appealed directly from the rule’s adoption.
- The dispute arose in a context of economic competition between optometrists and opticians/optical retailers, including overlapping roles in providing eyeglasses.
- The Board asserted the rule was authorized by New Jersey’s optometry statutes (N.J.S.A. 45:12-1 to -22) and was necessary to protect professional responsibility and independence.
- The Appellate Division reviewed the rule’s validity on the administrative rulemaking record, not after a trial.

## Issues

1. Whether N.J.A.C. 13:38-1.3(f) was a valid exercise of the Board’s delegated rulemaking authority under the optometry statutes.
2. Whether the rule conflicted with the statutory scheme regulating optometry, including legislative choices about corporate practice restrictions.
3. Whether the Board could, by regulation, prohibit commercial relationships previously treated as permissible under existing statutory interpretation.

## Decision

- The Appellate Division held N.J.A.C. 13:38-1.3(f) invalid.
- The court concluded the regulation was contrary to the statute the Board claimed authorized it and exceeded the Board’s delegated authority.
- The court rejected the Board’s attempt to use rulemaking to impose broad restrictions on optometrist–retailer relationships not found in the statutory text.
- The court relied in part on prior precedent (including Matter of Kaufman) interpreting similar statutory provisions as permitting certain lease and percentage-based arrangements.
- The regulation was set aside and rendered unenforceable.

## Legal Principles

- Courts generally defer to agency expertise in rulemaking, but must invalidate a regulation that is inconsistent with the enabling statute or that alters statutory terms or legislative policy.
- An agency may regulate professional standards and conduct within the scope of delegated authority, but may not restructure legal rights and prohibitions the Legislature has defined, limited, or repealed.
- An agency cannot use regulation to negate or circumvent prior judicial construction of the governing statute; changing the statute’s operative effect is for the Legislature (or statutory amendment), not administrative rulemaking.
- Regulatory measures aimed primarily at controlling economic competition require clear statutory authorization; general authority to regulate a profession does not, by itself, permit broad market-structuring prohibitions.

## Conclusion

The Appellate Division invalidated N.J.A.C. 13:38-1.3(f) because the Board’s restrictions on optometrist relationships with commercial optical retailers conflicted with the optometry statute and exceeded the Board’s rulemaking authority, including by re-imposing limitations not supported by legislative enactment or prior statutory interpretation.


In re Adoption of N.J.A.C. 13:38-1.3(f), 341 N.J. Super. 536, 775 A.2d 629 (N.J. Super. Ct. App. Div. 2001)