In re Adoption of N.J.A.C. 13:38-1.3(f)

341 N.J. Super. 536, 775 A.2d 629 (2001)

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In re Adoption of N.J.A.C. 13:38-1.3(f)

New Jersey Superior Court, Appellate Division
341 N.J. Super. 536, 775 A.2d 629 (2001)

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  • Written by Rich Walter, JD

Facts

A New Jersey statute sought to facilitate public access to healthcare by encouraging healthcare providers to lease space in retail centers. At the same time, the statute sought to shield healthcare providers from undue interference by their lay landlords. To implement the statute, the State Board of Optometrists (board) (defendant) adopted New Jersey Administrative Code Rule N.J.A.C. 13:38-1.3(f), which prohibited optometrists from agreeing to percentage leases. The board reasoned that a landlord with a financial stake in a lessee-optometrist’s success could try to control or influence the optometrist’s practice. Lenscrafters (plaintiff), a retail provider of optometry services, petitioned the board to repeal the rule. When the board turned down Lenscrafters’ petition, the company appealed to the New Jersey Superior Court, Appellate Division.

Rule of Law

Issue

Holding and Reasoning (Alley, J.)

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Casebooks

Property

Key Terms

  • Arbitrary and CapriciousDescribes a decision made according to whim and without regard to facts or law; the principal standard of review courts use when reviewing challenges to agency decisions.
  • Percentage LeaseA commercial lease, common in retail shopping centers, in which the lessee’s base rent increases in proportion to the lessee’s business success, as measured by the lessee’s gross income or some similar, objective standard.

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