Brighton Optic,et al v. Vision Service Plan , 145 F. App'x 549 ( 2005 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 05a0824n.06
Filed: October 7, 2005
No. 04-1870
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
BRIGHTON OPTICAL, INC., a Michigan )
corporation; JOHN BIRCHMEIER, O.D.; NICHOLS )
OPTICAL, INC., a Michigan corporation; )
ELIZABETH NICHOLS, O.D.; DAVID CANNON, )
O.D.; GERALD SKIBA II, O.D.; JULIE )
RUNSTROM, O.D.; ERIC J. SIESEL, O.D.; )
GERALD ROZANOFF, O.D., P.C., a Michigan )
corporation; LORO INVESTMENTS, INC., a ) ON APPEAL FROM THE
Michigan corporation; GERALD ROZANOFF, O.D.; ) UNITED STATES DISTRICT
MICHAEL NORTH, O.D.; DOUGLAS ) COURT FOR THE EASTERN
SCHNEIDER, O.D., P.C., a Michigan corporation; ) DISTRICT OF MICHIGAN
DOUGLAS SCHNEIDER, O.D.; MARIEBETH )
BANGERT, O.D.; MACOMB VISION CLINIC, ) OPINION
INC., a Michigan corporation; THOMAS STONE, )
O.D.; SUDBURY VISION ASSOCIATES, INC., a )
Massachusetts corporation; TWENTY-TWENTY )
VISION, INC., a Massachusetts corporation; )
HAROLD F. CURTIN III, O.D.; RALPH W. EAVES, )
O.D.; SHANNON D. FOWLER, O.D., P.A., a Florida )
professional association; TOSS OPTOMETRY, INC., )
a Michigan corporation; JON P. WEBB, O.D.; )
RANDY WATSKY, O.D., P.C., a Michigan )
corporation; and RANDY WATSKY, O.D., )
)
Plaintiffs-Appellants, )
)
v. )
)
VISION SERVICE PLAN, a California corporation, )
)
Defendant-Appellee. )
BEFORE: BOGGS, Chief Judge; NORRIS and COOK, Circuit Judges.
No. 04-1870
Brighton Optical, Inc. v. Vision Serv. Plan
PER CURIAM. Plaintiffs are licensed optometrists from Michigan, Massachusetts, and
Florida who have been participating providers in a vision insurance plan administered by defendant
Vision Service Plan (“VSP”), a non-profit California corporation.1 Although the complaint asserts
several causes of action, the core of the dispute revolves around defendant’s decision to terminate
plaintiffs as “member doctors” for allegedly breaching the Member Doctor Agreement (“MDA”),
which provides in part as follows: “Member Doctor shall have, or be employed by another VSP
Member Doctor who has, majority ownership and complete control of all aspects of his/her practice,
including dispensary.” According to VSP, the franchise agreements entered into by plaintiff
optometrists violated the “ownership and control” requirement. For their part, plaintiffs contend that
they were terminated as members because VSP wished to consolidate its dominance of the managed
vision care insurance market.
The six-count complaint was filed on December 10, 2003. First, it alleges that VSP violated
plaintiffs’ due process rights under California law: “VSP is prevented under California law from
terminating its members arbitrarily and before affording such members due process or fair
procedures, and any termination must be conducted in good faith and in a fair and reasonable
manner.” Complaint at ¶ 345. Second, it invokes the federal Declaratory Judgment Act, 28 U.S.C.
§ 2201, and asks the district court to resolve whether the franchise agreements “interfere with the
practitioner plaintiffs’ exercise of independent professional judgment in the operation of their
respective optometric practices, including dispensaries.” Complaint at ¶ 351. Third, the plaintiffs
1
The complaint also names as plaintiffs the businesses controlled by these individual optometrists, which are
either Pearle Vision or D.O.C. Optics Corporation franchises.
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No. 04-1870
Brighton Optical, Inc. v. Vision Serv. Plan
allege breach of contract—specifically, wrongful termination under the terms of their respective
MDAs. Counts four and five allege attempted monopolization of the prepaid primary vision care
services and insurance markets under the Sherman Act, 15 U.S.C. § 2. The final count invokes the
Michigan Antitrust Reform Act, Mich. Comp. Laws § 445.701 et seq.
When they filed their complaint, plaintiffs also filed a motion for preliminary injunction.
It is the ruling with respect to this motion that is at issue in this appeal. The district court adopted
a magistrate judge’s proposed findings of fact and conclusions of law which recommended denying
plaintiffs a preliminary injunction. This interlocutory appeal followed. The resolution of this appeal
hinges upon our standard of review. This court recently summarized the requirements for a
preliminary injunction, as well our standard of review, in these terms:
Whether a preliminary injunction should be granted is a decision left to the
sound discretion of the district court. Allied Sys., Ltd. v. Teamsters Nat’l Auto.
Transporters Indus. Negotiating Comm., 179 F.3d 982, 985-86 (6th Cir. 1999). A
district court, in deciding whether to grant an injunction, “abuses its discretion when
it applies the incorrect legal standard, misapplies the correct legal standard, or relies
upon clearly erroneous findings of fact.” Schenck v. City of Hudson, 114 F.3d 590,
593 (6th Cir. 1997). The following factors are to be considered by a district court in
deciding whether to grant a preliminary injunction:
(1) whether the plaintiff has established a substantial likelihood or
probability of success on the merits; (2) whether there is a threat of
irreparable harm to the plaintiff; (3) whether issuance of the
injunction would cause substantial harm to others; and (4) whether
the public interest would be served by granting injunctive relief.
Nightclubs, Inc. v. City of Paducah, 202 F.3d 884, 888 (6th Cir. 2000). Deja Vu of
Cincinnati, L.L.C. v. Union Twp. Bd. of Trustees, 411 F.3d 777, 782 (6th Cir. 2005) (en banc).
While the first of these factors is reviewed de novo, Tumblebus Inc. v. Cranmer, 399 F.3d 754, 760
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No. 04-1870
Brighton Optical, Inc. v. Vision Serv. Plan
(6th Cir. 2005), cert. denied, 73 U.S.L.W. 3734 (U.S. Oct. 3, 2005) (No. 04-1684) (citing N.A.A.C.P.
v. City of Mansfield, 866 F.2d 162, 169 (6th Cir. 1989)), “the district judge’s weighing and balancing
of the equities should be disturbed on appeal only in the rarest of cases.” Id. (quoting N.A.A.C.P.
at 166).
Our independent review of the substantive issues reveals a number of close questions,
which include the extent to which California law governs the termination procedures used by VSP;
whether, if California law governs, those procedures comport with that law; and the meaning of
the phrase “complete control of all aspects of his/her practice, including dispensary” as used in
the MDAs at issue. However, simply because the claims at issue are closely contested does not
mean that the district court abused its discretion in denying a preliminary injunction. Plaintiffs
must show a substantial likelihood of success on the merits; here they have only shown the
possibility of success. Particularly when the three remaining factors are considered, we cannot
conclude that this is one of those “rarest of cases” that require us to reverse the district court’s
balancing of the equities.
The order of the district court denying the motion for a preliminary injunction is affirmed.
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