South Carolina Eyeglasses

South Carolina Clamps Down On Online Medicine to Protect Profits of Established Businesses

Chicago-based startup Opternative offers a simple promise: Get a new prescription for glasses or contacts from the comfort of your own home. Opternative’s technology allows doctors to provide faster and better service to more people by using computers and smartphones to conduct the kind of routine exam that doctors use to determine most glasses prescriptions. But not in South Carolina. In 2016, the state Legislature voted to ban Opternative’s innovative technology in order to protect the profits of existing storefront businesses, even overriding the governor’s veto.

In vetoing the bill that bans Opternative, Gov. Nikki Haley was frank about what the law does: “I am vetoing this bill,” she wrote, “because it uses health practice mandates to stifle competition for the benefit of a single industry, . . . putting us on the leading edge of protectionism, not innovation.” Unfortunately, Gov. Haley’s message went unheeded and the Legislature overrode her veto.

But Gov. Haley was right: The bill presented a simple choice between new technologies that expand access to care and protectionist legislation that preserves the profits of established businesses. The Legislature chose the wrong option.

State courts across the country have struck down laws that exist solely to protect established businesses from competition. South Carolina’s courts—which recently reaffirmed that the state’s Constitution provides substantial protections for individual liberty—can be expected to follow their example in this case.

South Carolina’s ban on online eye exams serves no real public purpose. Online eye exams like Opternative’s are not comprehensive eye exams—they do not look for signs of disease or other health problems. The American Academy of Ophthalmology recommends that otherwise healthy adults ages 18 to 39 get a comprehensive eye-health exam every five to 10 years and that otherwise healthy adults ages 40 to 54 get one every two to four years. However, prescriptions for glasses and contacts in South Carolina expire after only one year, leaving a gap for prescription services. Opternative’s services are not meant to replace comprehensive eye exams; they are meant to expand access to care by allowing doctors to write new prescriptions without forcing people to drive to optometrist storefronts. That is good for both doctors and patients. In fact, it is good for everyone—except the people who own optometrist storefronts.

That is why Opternative has teamed up with the Institute for Justice to file a major constitutional challenge to South Carolina’s law, asking the state’s courts to stand up for innovation and medical autonomy—and to stand against economic protectionism.

South Carolina Eyeglasses

Date Filed

October 20, 2016

Original Court

South Carolina Court Of Common Pleas, Fifth Judicial Circuit

Current Court

South Carolina Court Of Common Pleas, Fifth Judicial Circuit

Case Status

Open

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Timeline and Case Documents

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Key Facts

  1. Telemedicine is generally legal in South Carolina, but there is a flat ban on using technology like Opternative’s to prescribe corrective lenses. Opternative is legal in most states—but not in South Carolina, which has placed itself on the cutting edge of legislative protectionism.
  1. The American Academy of Ophthalmology recommends a comprehensive eye-health exam every five to 10 years for otherwise healthy patients ages 18 to 39 and every two to four years for otherwise healthy patients ages 40 to 54. But glasses and contacts prescriptions in South Carolina expire after only one year.
  1. Eyeglasses and contacts are big business: According to the American Optometric Association, some 202 million Americans require some kind of vision correction like eyeglasses or contacts. And according to Euromonitor International, which publishes the world’s most comprehensive market research on the eye care industry, Americans spend more than $34 billion every year on spectacles (a category that includes corrective and non-corrective glasses) and contacts.[i] South Carolina’s law has nothing to do with protecting public health and everything to do with who gets to profit from selling glasses and contacts.

Opternative: Online Eye Exams in the Comfort of Your Own Home

Aaron Dallek is a lifelong entrepreneur who is passionately committed to using technological innovation to expand ordinary Americans’ access to medical care. Co-founding Opternative—and the tremendous backlash he has faced from existing optometry businesses whose profit margins are threatened by his innovation—has given him firsthand experience of the importance of economic liberty and the dangers posed by economic protectionism.

Opternative is a Chicago-based internet startup that offers consumers a simple promise: Get a new prescription for glasses or contacts from the comfort of your own home. In most states, Opternative’s technology allows doctors to provide faster and better service to more people—but not in South Carolina.

In practice, Opternative’s innovation is surprisingly simple. The traditional method of determining a patient’s corrective-lens prescription is familiar to anyone who has ever needed glasses: The patient sits in a chair looking at a series of letters or pictures, reporting what they see to a doctor as different lenses are used to adjust their vision (usually using a device called a phoropter). Opternative provides an exam that works essentially the same way—just using a patient’s home computer to display images and a smartphone to record the patient’s responses. These responses, along with the patient’s responses to basic medical-history questions, are sent through Opternative’s secure platform to a participating, state-licensed ophthalmologist, who reviews everything and, if appropriate for the patient, writes a prescription. And

Opternative’s system works: A clinical trial showed that the Opternative eye exam was as accurate as a traditional refractive exam performed by an optometrist or ophthalmologist using a phoropter. Patients reported essentially the same level of satisfaction with prescriptions generated by Opternative’s online exam as they did with traditional in-person exams.[ii]

Despite having launched its product only in 2015, Opternative has quickly found a customer base nearly nationwide because the company is filling a real need. While in-person comprehensive eye exams are important, they are only required periodically—every five to 10 years for otherwise healthy patients ages 18 to 39 and every two to four years for otherwise healthy patients ages 40 to 54, according to the American Academy of Ophthalmology. But prescriptions for glasses and contacts in nearly every state expire far more quickly than that, frequently in as little as one year. Opternative bridges that gap by allowing customers to access their up-to-date prescription when they need it, from the comfort of their own home. The result is greater access to care for patients, greater ease of practice for ophthalmologists, and a valuable experience for consumers.

South Carolina Uses Public Power to Protect Private Profits

Opternative’s technology is expanding access to care for patients across the country, but it is also presenting a real threat to the bottom line of many practicing optometrists. Optometrists are in the business of performing eye exams and prescribing corrective lenses (though, unlike ophthalmologists, they are not medical doctors), but they also generate large amounts of revenue by selling frames.

Opternative’s online exams pose a clear threat to this business model. Instead of bringing patients into a storefront where they can easily be sold frames, Opternative breaks the link between the exam and the frames. Opternative’s customers walk away with an electronic copy of their prescription that they can use to buy glasses anywhere—in person or online.

Unsurprisingly, then, the American Optometric Association has fought back, pushing for laws that would ban online exams like Opternative’s—and meeting with success in several states, including South Carolina.[iii] In spring of 2016, the South Carolina Legislature adopted the so-called Eye Care Consumer Protection Law (ECCPL),[iv] a law designed to shut down Opternative (and businesses like it) by making it illegal to write corrective-lens prescriptions based on refractive data or information—essentially outlawing telemedicine for corrective lenses.

On May 16, 2016, Governor Nikki Haley vetoed the bill, and she was frank about her reasons for doing so:

I am vetoing this bill because it uses health practice mandates to stifle competition for the benefit of a single industry. . . .

During my administration, South Carolina has expanded access to health care, including mental health services, to rural and underserved regions of our state using telemedicine. Unfortunately, a small group of eyecare professionals is seeking to block new technologies that expand low-cost access to vision correction services. . . .

If [the ECCPL were] allowed to become law, South Carolina would become the eighth state to impose such a ban, putting us on the leading edge of protectionism, not innovation. This is the wrong message to send to the business community. I urge you to continue promoting South Carolina’s use of innovative technologies to expand access to medical care and sustain this veto.[v]

Gov. Haley was right: South Carolina’s proposed ban on online eye exams presented a simple choice between innovative technology that expands access to medical care on the one hand and protectionist legislation that preserves the profits of established businesses on the other. The Legislature chose protectionism—and then chose it again, voting to override the veto in May of 2016.[vi]

The Eye Care Consumer Protection Law has nothing to do with consumer protection—as explained more fully below, it does not require any particular health examination before writing a corrective-lens prescription. It simply outlaws the collection of refractive data or information using technologies like Opternative’s for use in prescribing glasses or contacts to patients. And it stands in stark contrast to South Carolina’s generally welcoming approach to telemedicine: On June 3, 2016, the state adopted the South Carolina Telemedicine Act, which legalizes telemedicine throughout the state, allowing doctors to use online tools to provide medical services as long as they otherwise meet the relevant standard of care.[vii] In other words, doctors in South Carolina are free to use their training and judgment to incorporate online tools into their practice—unless they are ophthalmologists prescribing eyeglasses or contact lenses.

That is why Opternative has teamed up with the Institute for Justice to file a constitutional challenge to South Carolina’s ban on its technology, standing up for both the rights of entrepreneurs to earn an honest living free from protectionist government regulation and the rights of doctors and patients to use modern technology to enhance access to care.

The Legal Challenge: Defending Economic Liberty

The Eye Care Consumer Protection Law violates the South Carolina Constitution in two separate ways.  First, Article 1, Section 3, of the Constitution forbids the state government from depriving anyone of “life, liberty, or property without due process of law”—a provision that the state’s courts have consistently interpreted as prohibiting arbitrary regulations or restrictions of liberty that are not premised on some real threat to the public health or safety.[viii] Second, that same section forbids the state from depriving anyone of the “equal protection of the laws,” which requires the government to regulate even-handedly, treating similar people and similar problems similarly.[ix]

The Eye Care Consumer Protection Law fails both these tests.

The Law violates the state’s due-process requirement because it is arbitrary; the ban on online eye exams serves no public health or safety purpose. To be sure, online eye exams like Opternative’s are not comprehensive eye exams—they do not look for signs of disease or other health problems. But Opternative’s technology is not meant to be (and does not need to be) a replacement for a comprehensive eye exam. Comprehensive eye exams are important: In fact, Opternative refuses to allow customers to use its service for four years in a row without providing proof that the customer has gotten an in-person comprehensive exam. This requirement is more stringent than what doctors actually recommend.

The problem is that, while doctors say otherwise healthy adults ages 18 to 39 should get a comprehensive eye exam every five to 10 years and otherwise healthy adults ages 40 to 54 every two to four years, prescriptions for glasses and contacts in South Carolina expire after one year. Online services like Opternative help bridge the gap between comprehensive exams for people who want to update their prescriptions—either because they want to see whether their prescription has changed or simply because they broke their glasses more than one year after they bought them. Allowing doctors to write prescriptions in these situations using online services helps expand access to care for people who otherwise would not be able to get new prescriptions. That is good for doctors and good for patients—but it is bad for established businesses that make their money selling eyeglasses. And it is these established businesses (and only them) that benefit from banning online eye exams like Opternative’s.

The law’s disconnect from any public-safety concerns are only underscored by what the law does not do: It does not require any particular health examination before a doctor writes a corrective-lens prescription. A doctor who examines a patient and looks only to determine what prescription will correct their vision has not violated the Eye Care Consumer Protection Law. But a doctor who does the same thing, only using online technology like Opternative’s to gather a patient’s responses instead of doing it in person, has broken the law. In other words, in practice, the law does nothing to require health examinations and everything to promote exactly the kind of economic protectionism courts across the country have labeled as illegitimate.[x]

But violating the due-process guarantees of the South Carolina Constitution is only part of the story: The ban on online eye exams also fails the South Carolina Constitution’s test for the equal protection of the laws: In June of 2016, the state adopted the South Carolina Telemedicine Act, which makes it legal for doctors across a whole range of specialties to use online tools to provide medical care, so long as they otherwise meet the relevant standard of care.[xi] Eyeglasses and contacts are the exception to the rule. But there is simply no reason to believe that it is more dangerous to let an ophthalmologist conduct exams over the internet than it is to let a dermatologist do so. South Carolina’s rule to the contrary is merely the result of the state Legislature’s catering to the whims of a favored private interest. And that is not just wrong; it is unconstitutional.

A Broader Trend of Protectionism in the Face of Technology

This case is about a simple choice between new technologies that expand access to care and protectionist legislation that preserves the profits of established businesses. And South Carolina is hardly the only state to face such a choice—or the only state to make the wrong decision in the face of pressure from self-interested business groups.

In Texas, for example, veterinarian Ron Hines (also represented by IJ) was forced to file suit against the state veterinary board after it threatened to revoke his license for the crime of writing people emails about their pets. Dr. Hines started a website where he gives advice to people around the world after his mobility became restricted. But the state veterinary board believed this website violated a Texas law prohibiting veterinarians from giving any advice about an animal they had not physically examined—essentially a flat ban on veterinary telemedicine.

This conflict—new technology versus established businesses, and patients’ and doctors’ right to manage health care decisions versus governments’ desire for untrammeled power—is playing out in state legislatures and courtrooms across the country. Fortunately, while legislatures all too frequently give in to private industry’s demand for protection from competition, courts have proven far more willing to stand up against regulations that prevent competition instead of protecting the public health or safety.

This is particularly true of state courts: State courts across the country have increasingly struck down laws that lack any provable connection to protecting the public, and South Carolina’s courts are well positioned to follow suit. The leading case in the area comes out of Texas: In Patel v. Texas Department of Licensing and Regulation, a case also litigated by the Institute for Justice, Texas’ highest court struck down onerous licensing requirements the state had imposed on eyebrow threaders.[xii] Relying on a constitutional provision whose language and history closely tracks a similar provision in the South Carolina Constitution, the Texas Supreme Court held that Texas’ state Constitution requires greater protection for individual rights than does the U.S. Constitution—and specifically, that economic regulations had to be justified by real evidence that they were protecting the public from a legitimate threat.[xiii] And in 2016, a plurality of South Carolina’s Supreme Court took a very similar route in invalidating a restriction on the practice of physical therapists.[xiv] In sum, state courts—emphatically including South Carolina’s—have sent a strong message in recent years that they will not sit idly by while regulators and legislators hand out special protections to favored established businesses.

The promise of online innovation for expanding access to medicine is clear—every bit as clear as the willingness of entrenched businesses to use government power to prevent new technology from disturbing their profit margins. Fortunately, a rising tide of judicial precedent provides an essential counterweight to this kind of economic protectionism—which is exactly the role South Carolina’s courts can be expected to play in this case.

Litigation Team

IJ Attorneys Robert McNamara and Joshua Windham represent Opternative in the lawsuit. They are joined by local counsel Miles Coleman and Matt Bogan of the law firm Nelson Mullins Riley & Scarborough LLP.

About the Institute for Justice

The Institute for Justice is the national law firm for liberty and the nation’s leading advocate for economic liberty. IJ has spent 25 years fighting for the right of entrepreneurs to earn an honest living, free from unreasonable government interference.

For more information, contact:

Shira Rawlinson
Assistant Director of Communications
(703) 682-9320
srawlinson@ij.org

[i] See http://www.euromonitor.com/eyewear-in-the-us/report.

[ii] C. Thomas Dowd, M.D, Clinical Trial Summary Report, available at https://www.opternative.com/clinical-study.

[iii] See generally American Optometric Association Strategy Webinar (on file with the Institute for Justice).

[iv] South Carolina Code §§ 40-24-10(9), and 40-24-20(C) and (D).

[v] Letter from Gov. Nikki Haley to Senate President Henry D. McMaster, May 16, 2016, available at http://governor.sc.gov/ExecutiveOffice/Documents/R.178,%20S.1016%20-%20Eye%20Care.pdf.

[vi] See http://openstates.org/sc/bills/2015-2016/S1016/

[vii] South Carolina Code § 40-47-37.

[viii] See Worsley Co., Inc. v. Town of Mount Pleasant, 528 S.E.2d 657, 660 (S.C. 2000) (“Substantive due process protects a person from being deprived of life, liberty or property for arbitrary reasons.”)

[ix] Dunes W. Golf Club, LLC v. Town of Mt. Pleasant, 737 S.E.2d 601, 608 (2013).

[x] See, e.g., St. Joseph Abbey v. Castille, 712 F.3d 215 (5th Cir. 2013); Merrifield v. Lockyer, 547 F.3d 978, 991 n.15 (9th Cir. 2008) Craigmiles v. Giles, 312 F.3d 220 (6th Cir. 2002).

[xi] South Carolina Code § 40-47-37.

[xii] Patel v. Texas Department of Licensing and Regulation, 469 S.W.3d 69 (Tex. 2015).

[xiii] Id.

[xiv] Joseph v. South Carolina Department of Labor, Licensing, and Regulation, No. 27666, 2016 S.C. LEXIS 271 (S.C. Sept. 14, 2016).

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