N.D. State Bd. of Pharmacy v. Snyder's Drug Stores, Inc. - 414 U.S. 156, 94 S. Ct. 407 (1973)

Rule:

The Liggett case, Liggett Co. v. Baldridge, 278 U.S. 105, was a creation at war with the earlier constitutional view of legislative power. The Liggett case, being a derelict in the stream of the law, is hereby overruled. 

Facts:

Pursuant to a North Dakota statute requiring that a majority of the stock of a corporate applicant for a permit to operate a pharmacy must be owned by registered pharmacists in good standing, actively employed in and responsible for the management and operation of the pharmacy, the State Pharmacy Board denied a corporation's permit application because of failure to comply with the stock ownership requirement. Although an evidentiary hearing was not held, the Board also rested its denial on the applicant's failure to meet certain structural and safety standards. On appeal, the District Court, Burleigh County, North Dakota, entered summary judgment for the applicant, directing the Board to issue a permit. On appeal by the Board, the statutory stock ownership requirement was held to be unconstitutional by the Supreme Court of North Dakota, which relied on the United States Supreme Court's decision in Liggett Co. v Baldridge (1928) 278 US 105, 73 L Ed 204, 49 S Ct 57, holding unconstitutional a Pennsylvania statute which required that registered pharmacists own all of the stock of a corporation operating a pharmacy. However, the Supreme Court of North Dakota remanded the case so that the Board could conduct an administrative hearing, "sans the constitutional issue," with regard to the applicant's compliance with the structural and safety standards involved.

Issue:

Did the North Dakota statute violate the due process clause of the Fourteenth Amendment insofar as it required that registered pharmacists own a majority of the stock of a corporate applicant for a pharmacy permit?

Answer:

No.

Conclusion:

The court held that the case was final under 28 U.S.C.S. § 1257 because there were no other federal issues left to be determined. Thus, the court had jurisdiction to review the state court judgment. The court also held that the North Dakota statute did not violate the due process clause of the Fourteenth Amendment insofar as it required that registered pharmacists own a majority of the stock of a corporate applicant for a pharmacy permit. Liggett exalted substantive due process beyond the holdings in the court's prior decisions and the court's later ones. A state legislature had the power to legislate against injurious practices in its internal commercial affairs, and it was up to the state legislature to decide state public policy. Therefore, the court overruled Liggett as being a derelict in the stream of law.