North Dakota State Board of Pharmacy v. Snyder Drug Stores, Inc 8212 1176

• Decision Date: 05 December 1973
• Docket Number: No. 72,72
• Citation: 38 L.Ed.2d 379,94 S.Ct. 407,414 U.S. 156
• Parties: NORTH DAKOTA STATE BOARD OF PHARMACY, Petitioner, v. SNYDER'S DRUG STORES, INC. —1176
• Court: U.S. Supreme Court

414 U.S. 156

94 S.Ct. 407

38 L.Ed.2d 379

NORTH DAKOTA STATE BOARD OF PHARMACY, Petitioner,

v SNYDER'S DRUG STORES, INC.

No. 72—1176.

Argued Nov. 6, 1973.

Decided Dec. 5, 1973.

Syllabus

The North Dakota Supreme Court, relying on Liggett Co. v. Baldridge, 278 U.S. 105, 49 S.Ct. 57, 73 L.Ed. 204, held unconstitutional a state statute, under which respondent had been denied a pharmacy operating permit, requiring that an applicant for such a permit be 'a registered pharmacist in good standing,' or 'a corporation or association, the majority stock in which is owned by registered pharmacists in good standing, actively and regularly employed in and responsible for the management, supervision, and operation of such pharmacy.' The court remanded the case so that petitioner Board could conduct an administrative hearing 'sans the constitutional issue,' on respondent's alleged failure to meet certain structural and safety standards on which petitioner had also rested its permit denial. Held:

1. This Court does not lack jurisdiction to review the State Supreme Court's judgment, which is 'final' within the meaning of 28 U.S.C. § 1257, for it is not apparent how petitioner Board would be able to preserve the constitutional issue now ready for adjudication without defying the State Supreme Court. Pp. 159—164.

2. The North Dakota statutory requirements for permitting the operation of a pharmacy do not violate the Due Process Clause of the Fourteenth Amendment. In enacting the challenged legislation the State was well within its authority 'to legislate against what (it) found to be injurious practices in (its) internal commercial and business affairs,' Lincoln Federal Labor Union v. Northwestern Iron and Metal Co., 335 U.S. 525, 536, 69 S.Ct. 251, 257, 93 L.Ed. 212, and this Court will not substitute its own judgment for what the State feels is reasonable necessary to protect the interests of the public. Liggett Co. v. Baldridge, supra, overruled. Pp. 164 167.

202 N.W.2d 140, reversed and remanded.

A. William Lucas, Bismarck, N.D., for petitioner.

Mart R. Vogel, Fargo, N.D., for respondent.

Mr. Justice DOUGLAS delivered the opinion of the Court.

North Dakota passed a statute¹ that requires that the applicant for a permit to operate a pharmacy be 'a registered pharmacist in good standing' or 'a corporation or association, the majority stock in which is owned by registered pharmacists in good standing, actively and regularly employed in and responsible for the management, supervision, and operation of such pharmacy.'

Petitioner Board denied a permit to Snyder's Drug Stores, Inc., because it did not comply with the stock-ownership requirements of the statute, it appearing that all the common stock of Snyder's was owned by Red Owl Stores and it not being shown if any Red Owl shareholders were pharmacists registered and in good standing in North Dakota. On apprepeal to the state district court, summary judgment was granted Snyder's. On appeal to the Supreme Court of North Dakota, that court held² that the North Dakota statute was unconstitutional by reason of our decision in 1928 in Liggett Co. v. Baldridge, 278 U.S. 105, 49 S.Ct. 57, 73 L.Ed. 204. That case involved a Pennsylvania statute that required that 100% of the stock of the corporation be owned by pharmacists. The North Dakota statute, however, requires only that a majority of the stock be owned by pharmacists. But the North Dakota Supreme Court held that the difference did not take this case out from under the Liggett case because under both statutes control of the corporation having a pharmacy license had to be in the hands of pharmacists responsible for the management and operation of the pharmacy. That court therefore remanded the case, so that the Board could conduct 'an administrative hearing on the application, sans the constitutional issue, pursuant to our Administrative Agencies Practice Act,' 202 N.W.2d 140, 145 (Italics added).

The case is here on a petition for certiorari which we granted, 411 U.S. 947, 93 S.Ct. 1926, 36 L.Ed.2d 408.

I

We are met at the outset with a suggestion that the judgment of the Supreme Court of North Dakota is not 'final' within the meaning of 28 U.S.C. § 1257 which restricts our jurisdiction to review state court decisions.³

The finality requirement of 28 U.S.C. § 1257, which limits our review of state court judgments, serves several ends: (1) it avoids piecemeal review of state court decisions; (2) it avoids giving advisory opinions in cases where there may be no real 'case' or 'controversy' in the sense of Art. III; (3) it limits review of state court determinations of federal constitutional issues to leave at a minimum federal intrusion in state affairs.

Mr. Justice Frankfurter, writing for the Court in Radio Station WOW v. Johnson, 326 U.S. 120, 124, 65 S.Ct. 1475, 1478, 89 L.Ed. 2092, summarized the requirement by Congress that in appeals from federal district courts as well as in review of state court decisions the judgments be 'final':

'This requirement has the support of considerations generally applicable to good judicial administration. It avoids the mischief of economic waste and of delayed justice. Only in very few situations, where intermediate rulings may carry serious public consequences, has there been a departure from this requirement of finality for federal appellate jurisdiction. This prerequisite to review derives added force when the jurisdiction of this Court is invoked to upset the decision of a State court. Here we are in the realm of potential conflict between the courts of two different governments. And so, ever since 1789, Congress has granted this Court the power to intervene in State litigation only after 'the highest court of a State in which a decision in the suit could be had' has rendered a 'final judgment or decree.' § 237 of the Judicial Code, 28 U.S.C. § 344(a). This requirement is not one of those technicalities to be easily scorned. It is an important factor in the smooth working of our federal system.'

But, as he pointed out, this concept of 'finality' has a 'penumbral area.' Ibid. Speaking for the Court in that case, he held that Nebraska's ruling on the legality of a radio license issued by the Federal Communications Commission could be reviewed even though the state court had not yet determined the final accounting. He stated: 'Of course, where the remaining litigation may raise other federal questions that may later come here . . . to allow review of an intermediate adjudication would offend the decisive objection to fragmentary reviews.' Id., at 127, 65 S.Ct. at 1480.

Mills v. Alabama, 384 U.S. 214, 86 S.Ct. 1434, 16 L.Ed.2d 484, involved the constitutionality of a state statute in effect making it a crime for a newspaper editor on election day to urge people to vote a certain may on the issues being submitted. The state court held the act did not violate the Federal Constitution and remanded the case for trial. It was argued that the judgment was not 'final' for purposes of 28 U.S.C. § 1257. We noted that the point had 'a surface plausibility, since it is true the judgment of the State Supreme Court did not literally end the case.' 384 U.S., at 217, 86 S.Ct., at 1436. We held it 'final,' however, because if the Act were constitutional the editor would in reality have no defense. Since conviction seemed likely, we concluded that to deny review at that stage would 'result in a completely unnecessary waste of time and energy in judicial systems already troubled by delays due to congested dockets.' Id., at 217—218, 86 S.Ct., at 1436.

In Hudson Distributors, Inc. v. Eli Lilly & Co., 377 U.S. 386, 84 S.Ct. 1273, 12 L.Ed.2d 394, the question on the merits was whether the require- ment of a state act setting minimum retail prices was consonant with federal law. The state court held the state act constitutional under both the State and the Federal Constitutions and remanded the case for further proceedings. In reliance on Curry and on Langdeau⁴ we held that the fact that there were to be further proceedings in the state court did not render the state judgment 'nonfinal or unappealable within the meaning of 28 U.S.C. § 1257.' Id., at 389 n. 4, 84 S.Ct., at 1276.

The exceptions noted⁵ have a long lineage dating back to Mr. Chief Justice Taney's opinion in Forgay v. Conrad, 6 How. 201, 12 L.Ed. 404, where the Court held 'final' an interlocutory decree requiring a litigant 'to deliver up property which he claims,' even though a final accounting has yet to be made. Id., at 205. Unless that interlocutory order was deemed 'final,' Mr. Chief Justice Taney pointed out, the 'right of appeal is of very little value to him and he may be ruined before he is permitted to avail himself of the right.' Ibid.

It is equally important that we treat the judgment in the instant case as 'final,' for we have discovered no way which the licensing authority in North Dakota has of preserving the constitutional question now ripe for decision.

The Board here denied respondent's application without an evidentiary hearing since the application showed that under the North Dakota Act respondent could in no way qualify for a license. The State Supreme Court held that Act unconstitutional and that thus an applicant failing to meet the requirements of the state statute is nevertheless entitled to consideration for a license. As previously noted, the State Supreme Court, indeed, directed the Board on remand to reconsider the application 'sans' the constitutional question.

There were state law questions to be considered on the remand, for the state board had also rested its denial of a permit on the failure of Snyder's to meet certain structural and safety standards. The Supreme Court remanded for an administrative hearing on those other issues.

If we deny review at this point, respondent has no constitutional barrier to the grant of a license.

The state licensing authority might, of course, after an...