Milligan v. Board of Registration in Pharmacy

CourtUnited States State Supreme Judicial Court of Massachusetts
Citation204 N.E.2d 504,348 Mass. 491
Parties. * Supreme Judicial Court of Massachusetts, Suffolk
Decision Date08 February 1965

David Lee Turner and David Berman, Asst. Attys. Gen., for Board of Registration in Pharmacy.

David A. Rakov, Boston (Sumner Z. Kaplan, Boston, with him) for John J. Milligan and another.

Harold Rosenwald, Boston (George W. Cashman, Boston, with him) for Martin Cohen and another.

John F. Zamparelli, Medford, for Massachusetts State Pharmaceutical Association, amicus curiae, submitted a brief.


CUTTER, Justice.

In each of these two cases we must determine whether there may be review under the State Administrative Procedure Act (G.L. c. 30A, § 14, as amended through St.1957, c. 193, § 1) of the board's denial of an application for a permit to conduct a retail dug store. See G.L. c. 112, § 38, as amended by St.1934, c. 236, 1 and § 39, as amended through St.1953, c. 281. Section 39 was amended after the hearing before the board on May 23, 1962, in the Cohen case (fn. 1), but before the board hearing on December 3, 1963, in the Milligan case. See St.1962, c. 695, and St.1963, c. 488. Portions of § 39, as amended in 1962, indicating changes from the earlier form of the section, are set out in the margin. 2

The first case is a petition, filed March 27, 1964, for review under c. 30A of the board's decision on February 27, 1964, denying an application by Milligan and Chester A. Baker, Inc. (Baker) for a permit to conduct a drug store at 520 Commonwealth Avenue, Boston. The application to the board was completed on May 9, 1963. Only after a petition for a writ of mandamus had been filed did the board assign the matter for a hearing on December 3, 1963. A request for the entry of a decree pro confesso on the petition for review was allowed on May 7, 1964. On July 3, 1964, the board filed a plea to the jurisdiction, which was then overruled. At the same time, a motion to vacate the decree pro confesso was denied. A final decree was entered that the board's decision 'unreasonably delayed the issuance of the permit * * * in violation of * * * [Milligan's] constitutional rights * * * [and] was unsupported by substantial evidence * * * based on error of law and * * * otherwise arbitrary and an abuse of discretion.' The board appealed. The foregoing facts are stated upon the basis of the pleadings. 3 In the second case, the board sought in the county court a writ of prohibition (fn. 1) to prevent the Superior Court from considering a petition by one Cohen and another for review (under c. 30A) of the board's denial of a permit to conduct a retail drug store in Hingham. The single justice permitted Cohen and Hingham Pharmacy, Inc. to intervene and answer. A demurrer was filed in behalf of the Superior Court. It was stipulated that the Superior Court had denied the board's plea to the jurisdiction of that court to entertain a petition under c. 30A. A single justice reserved the matter, without decision, for the consideration of the full court, upon the pleadings, the board's rules, the record before the full court in the earlier Cohen case (see fn. 1), and a stipulation. 4

1. General Laws c. 30A, § 1(1), defines '[a]djudicatory proceeding' as 'a proceeding before an agency in which the legal rights, duties or privileges of specifically named persons are required by constitutional right or by any provision of the General Laws to be determined after opportunity for an agency hearing' (emphasis supplied). The board, at least in respect of proceedings under c. 112, §§ 40 and 42A (see fn. 2, last sentence), is expressly authorized to conduct adjudicatory proceedings, and thus is clearly an '[a]gency' within the definition of c. 30A, § 1(2). It was so treated in the earlier Cohen case, see fn. 1. Chapter 30A, § 14, provides for 'judicial review,' in accordance with that section, of 'a final decision of any agency in an adjudicatory proceeding' (emphasis supplied). The principal issue is whether the proceedings before the board were adjudicatory proceedings.

Chapter 112, §§ 38 and 39, do not expressly require a hearing in respect of an application for a drug store permit. The hearings actually granted by the board upon the Cohen and Milligan applications probably took place pursuant to Rule 12 of the board's rules, giving the board discretion to 'require a hearing upon the merits of any application for * * * registration.' It thus must be decided whether, in any event, an 'opportunity for an agency hearing' upon such an application is 'required by constitutional right' within the meaning of c. 30A, § 1(1). If such a hearing is constitutionally necessary (see Fifth and Fourteenth Amendments of the Constitution of the United States, and the Constitution of Massachusetts, Declaration of Rights, arts. 1, 10 and 12), the proceeding is adjudicatory.

2. There is growing recognition (1) that administrative decisions on applications for licenses and permits to engage in a lawful occupation (either generally or at a particular place) directly affect the personal rights, property, or economic interests of the applicant, and (2) that fundamental considerations of fairness require such decisions (particularly those resting upon adjudications of facts) to be made objectively, under reasonable procedures, and with appropriate opportunity for judicial review. See Davis, Administrative Law Treatise (1958 Ed., herinafter Davis, op. cit.), §§ 7.01-7.20, revising an earlier article, The Requirement of a Trial-Type Hearing, 70 Harv.L.Rev. 193. The problem is important because of the increasingly large number of occupations now being subjected to administrative regulation. See Monaghan, The Constitution and Occupational Licensing in Massachusetts, 41 B.U.L.Rev. 157.

As Professor Davis has said (Davis, op. cit. § 7.02, p. 412), 'Judicial opinions have not crystallized any basic principle to guide the determination of when the method of trial should be required, either by due process, or by interpretation of a statutory requirement of 'hearing,' or by a kind of common law that often seems to operate in this area, unanchored to any constitutional or statutory provision. The one observation to which the courts most frequently pay lip service is that an agency can act legislatively but not judicially without a hearing, but that observation * * * is often unsatisfactory in various respects. The true principle is that a party who has a sufficient interest * * * at stake in a determination of governmental action should be entitled to an opportunity to know and to meet, with the weapons of rebuttal evidence, cross-examination, and argument, unfavorable evidence of adjudicative facts, except in the rare circumstance when some other interest, such as national security, justifies an overriding of the interest in fair hearing.' It is apparent that the applicants in the present cases have a significant 'interest * * * at stake.'

The general problem has been dealt with principally in respect of an applicant's opportunity to engage at all in a particular occupation, or a particular aspect of an occupation. In Goldsmith v. United States Bd. of Tax Appeals, 270 U.S. 117, 123, 46 S.Ct. 215, 217, 70 L.Ed. 494, it was stated that, since a citizen and certified public accountant was 'within the class of those entitled to be admitted to practice under the board's rules, he should not have been rejected upon charges of his unfitness without giving him an opportunity by notice for hearing and answer. The rules adopted by the board provide that 'the board may in its discretion deny admission, suspend or disbar any person.' But this must be construed to mean the exercise of a discretion to be exercised after fair investigation, with such a notice, hearing and opportunity to answer for the applicant as would constitute due process.' Willner v. Committee on Character and Fitness, 373 U.S. 96, 104-105, 83 S.Ct. 1175, 10 L.Ed.2d 224, held that one who had passed the New York bar examinations was entitled to notice of, and a hearing upon, the grounds for his rejection either before a bar committee or a court. The court said (p. 103, 83 S.Ct. p. 1180) that it was concerned 'with what procedural due process requires if the license [to practice law] is to be withheld.' After citing the Goldsmith case, the court went on to say, that 'procedural due process often requires confrontation and cross-examination of those whose word deprives a person of his livelihood.' 5 Somewhat comparable problems have been presented in other cases without express decision of the present issue. See e. g. Schware v. Board of Bar Examiners, 353 U.S. 232, 238-239, 77 S.Ct. 752, 1 L.Ed.2d 796 (where the evidence adduced at a trial type hearing was held insufficient to justify exclusion of an applicant from opportunity to take bar examinations); Re Application of Warren, 149 Conn. 266, 274-276, 178 A.2d 528. 6 See also Bratton v Chandler, 260 U.S. 110, 112-115, 43 S.Ct. 43, 67 L.Ed. 157; Konigsberg v. State Bar of Calif., 353 U.S. 252, 77 S.Ct. 722, 1 L.Ed.2d 810.

There may be nondiscriminatory (see Hall-Omar Baking Co. v. Commissioner of Labor & Indus., 344 Mass. 695, 703-708, 184 N.E.2d 344) regulation of lawful private occupations where there is a reasonable relation between the type of regulation undertaken and significant aspects of the public interest. Anton's of Reading, Inc. v. Town of Reading, 346 Mass. 575, 576-577, 195 N.E.2d 80. See McMurdo v. Getter, 298 Mass. 363, 365-370, 10 N.E.2d 139; Silverman v. Board of Registration in Optometry, 344 Mass. 129, 133-135, 181 N.E.2d 540. Thus, the Legislature may regulate pharmacists and drug stores in a manner reasonably designed and appropriate to insure competence and diligence on the part of pharmacists, cleanliness...

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