Terry v. California State Board of Pharmacy

• Decision Date: 12 May 1975
• Docket Number: No. C-74-1091 RFP (SJ).,C-74-1091 RFP (SJ).
• Court: U.S. District Court — Northern District of California
• Parties: Shirley TERRY, Individually and on behalf of all others similarly situated, Plaintiffs, v. CALIFORNIA STATE BOARD OF PHARMACY et al., Defendants, Ellen Stern HARRIS et al., Plaintiffs in Intervention.

395 F. Supp. 94

Shirley TERRY, Individually and on behalf of all others similarly situated, Plaintiffs, v. CALIFORNIA STATE BOARD OF PHARMACY et al., Defendants Ellen Stern HARRIS et al., Plaintiffs in Intervention.

No. C-74-1091 RFP (SJ).

United States District Court, N. D. California.

May 12, 1975.

COPYRIGHT MATERIAL OMITTED

Robert A. Baines, Community Legal Services, San Jose, Cal., for plaintiff Shirley Terry, and others.

Steven M. Fleisher, Charles R. Drew, Health Rights Project, Phillip Neumark, California Rural Legal Assistance, San Francisco, Cal., and Stanton J. Price, National Health Law Program, Los Angeles, Cal., for plaintiffs in intervention.

Louis C. Castro, Deputy Atty. Gen., San Francisco, Cal., for defendants.

Before BROWNING, Circuit Judge, EAST, Senior District Judge, and PECKHAM, District Judge.

OPINION

PECKHAM, District Judge.

Plaintiffs and plaintiffs in intervention seek declarations of unconstitutionality and permanent injunctions against the enforcement of California Business and Professions Code Sections 651, 651.3 and 652.5 insofar as they prohibit media advertising of the retail price of prescription drugs.

The cause of action arises under 42 U.S.C. Section 1983, with jurisdiction conferred upon this court by 28 U.S.C. Section 1343(3). Since a permanent injunction is sought against the enforcement of these state statutes, a three-judge court has been convened pursuant to 28 U.S.C. Sections 2281 and 2284.

The named plaintiff, Shirley Terry, is a recipient of public assistance whose physician has prescribed certain maintenance drugs which she will be required to take for the rest of her life. She sues individually and on behalf of the class of persons who regularly purchase prescription drugs and wish to receive price information about these drugs from advertising.

Defendants are the California State Board of Pharmacy and the individual members of that board who are responsible for the regulation of the practice of pharmacy in California.

Plaintiffs in intervention are Ellen Stern Harris, the California Newspaper Publishers Association, the California Broadcasters Association, the Los Angeles County Health Rights Organization, the Committee for the Rights of the Disabled, the San Francisco Consumer Action Council, the California Legislative Council for Older Americans, and the Disabled and Blind Action Committee of California.

I. ABSTENTION

Plaintiffs attack the constitutionality of these statutes on several grounds. Before reaching the merits, however, this court must dispose of defendants' suggestion that we abstain from deciding the case until the issues have been presented to the California state courts for resolution. Abstention in this type of case is proper where the state law challenged is uncertain. Harman v. Forssenius, 380 U.S. 528, 534, 85 S.Ct. 1177, 14 L.Ed.2d 50 (1965). If the meaning of the statutes was unclear and the federal constitutional question presented would be materially altered or could be avoided by state court construction of the statutes, abstention might be appropriate. Lake Carriers Association v. MacMullan, 406 U.S. 498, 510, 92 S. Ct. 1749, 32 L.Ed.2d 257 (1972); Harrison v. NAACP, 360 U.S. 167, 79 S.Ct. 1025, 3 L.Ed.2d 1152 (1959).

In the present case, the precise scope of the class of persons who are prevented from advertising by the statutes is in dispute. It is clearly the intention of the statutes, however, to prohibit at least some persons from disseminating retail drug price information. Therefore, the federal constitutional question could only be avoided if the California courts either construed the statutes not to apply to anyone, a view not sustainable by the statutory language, or if they declared the statutes unconstitutional themselves. It is clear that we need not abstain when the only reason to do so would be to permit the California courts to have the first opportunity to assess the constitutionality of these statutes. State judicial remedies need not be exhausted under the federal civil rights acts. Lane v. Wilson, 307 U.S. 268, 59 S.Ct. 872, 83 L.Ed. 1281 (1939); Steffel v. Thompson, 415 U.S. 452, 472-73, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974). The contribution of federal courts to the development of constitutional law would be severely restricted by a doctrine that required deference to the state courts each time a case was presented in which both the state and federal courts had the jurisdiction and duty to examine the constitutionality of state legislation. Abstention is particularly inappropriate when the statutes are challenged on First Amendment grounds. See Procunier v. Martinez, 416 U.S. 396, 404, 94 S.Ct. 1800, 40 L.Ed.2d 224 (1974); Dombrowski v. Pfister, 380 U.S. 479, 85 S.Ct. 1116, 14 L.Ed.2d 22 (1965); Zwickler v. Koota, 389 U.S. 241, 88 S.Ct. 391, 19 L.Ed.2d 444 (1967). Accordingly, this court will proceed to the merits.

II. SECTION 651.3 — FIRST AMENDMENT

California Business and Professions Code Section 651.3 provides:

No person, whether or not licensed under this division, shall advertise or cause or permit to be advertised, any representations in any form which in any manner, whether directly or indirectly, refer to the cost, price, charge, or fee to be paid for any commodity or commodities furnished or any service or services performed by any person licensed as a physician and surgeon, optometrist, pharmacist, or registered dispensing optician, when those commodities or services are furnished in connection with the professional practice or business for which he is licensed; provided, however, that the provisions of this section do not apply to the furnishing of information regarding benefits available, and charges therefor, under the coverage of any hospital or medical service or insurance plan.

This section shall not be construed to do any of the following:

(a) Modify or establish prices or fees or modify or affect in any manner any other provisions of this division;

(b) Prohibit advertising concerning the allowance of credit, time payments, budget terms, or the allowance of any other method of payment for a commodity or a service where the advertising contains no indication of cost, price, charge, or fee;

(c) Prohibit the advertising of any drug or device which does not require a prescription.¹

Plaintiffs contend that Section 651.3 violates their First Amendment right as consumers of prescription drugs to receive information concerning the price pharmacies charge for prescription drugs. The parties have stipulated that information as to the price which pharmacies charge for prescription drugs is health essential in that it can allow persons on limited income to purchase necessary prescription drugs at the lowest possible price; that wide disparities in price are found among competing pharmacies; that without information on lowest possible drug price, persons such as plaintiff Terry purchasing the drugs at higher prices will have to sacrifice some other necessities; that to senior citizens, in particular, who have a per capita expenditure for prescription drugs four times greater than that of persons under 65, said information is essential.

This same First Amendment claim was recently upheld in Virginia Citizens Consumer Council v. State Board of Pharmacy, 373 F.Supp. 683 (E.D.Va. 1974) (three-judge court), prob. juris. noted, 420 U.S. 971, 95 S.Ct. 1389, 43 L. Ed.2d 650 (1975). There, a three-judge court permanently enjoined the enforcement of a Virginia statute that labeled as "unprofessional conduct" the advertising or discounting by pharmacies of the prices of retail prescription drugs.

The freedoms of speech and the press contained in the First Amendment are fundamental rights which are safeguarded against infringement by the states through the due process clause of the Fourteenth Amendment. DeJonge v. Oregon, 299 U.S. 353, 364, 57 S.Ct. 255, 81 L.Ed. 278 (1937). It is also clear that the First Amendment protects the hearer of the speech and the reader of the article fully as much as it protects the speaker and the author. Kleindienst v. Mandel, 408 U.S. 753, 762-64, 92 S.Ct. 2576, 33 L.Ed.2d 683 (1972); Stanley v. Georgia, 394 U.S. 557, 564, 89 S.Ct. 1243, 22 L.Ed.2d 542 (1969).

A. Inapplicability of Commercial Speech Exception to First Amendment.

The precise information which the plaintiffs claim a right to receive is the price of prescription drugs, the dissemination of which is prohibited by the challenged statutes. Defendants, relying heavily on Valentine v. Chrestensen, 316 U.S. 52, 62 S.Ct. 920, 86 L.Ed. 1262 (1942), contend that the distribution of this information is properly labeled advertising which, as commercial speech, should not be entitled to First Amendment protection. It is perhaps appropriate here to state carefully again exactly what is at issue in this case. The plaintiffs seek an injunction against the enforcement of these statutes only insofar as they prohibit price advertising. The plaintiffs are not asserting a right to receive information concerning the quality, effectiveness or capabilities of the drugs, information which tends more directly to promote the product. Thus, the narrow issue before this court is whether low-income consumers of prescription drugs are entitled under the First Amendment to receive information consisting of the retail price at which pharmacies sell prescriptions drugs.

It is clear that speech is not rendered commercial and stripped of First Amendment protection by the mere fact that it relates to an advertisement. Pittsburgh Press Co. v. Pittsburgh Commission on Human Relations, 413 U.S. 376, 384, 93 S.Ct. 2553, 37 L.Ed.2d 669, rehearing denied, 414 U.S. 881, 94 S.Ct. 30, 38 L.Ed.2d 128 (1973); New York Times v. Sullivan, 376 U.S. 254, 266, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). But it is equally clear that some commercial speech is subject to a greater degree of regulation than noncommercial speech. Valentine v. Chrestensen, sup...