Amicus Curiae Brief — North Dakota Bd. of Pharmacy v. Snyder's Drug Stores, Inc.

Ocroser Term, 1973

No. 72-1176

Norts Daxora State Boarp oF PHARMACY,

Appellant

v.

Syyper’s Dave Storss, Ino.,

Appellee

On Writ of Certiorari to the Supreme Court of North Dakota

NATIONAL ASSOCIATION OF RETAIL DRUGGISTS

Arruur B. Hanson

RaupxH N. Arsricut, JR.

Hanson, O’Brien, Bmney,

Srickie & BUTLER

Counsel for Amici Curiae

888 17th Street, N.W.

Washington, D.C. 20006

Of Counsel

Smwney WALLER

WALLER AND WALLER

5787 North Lincoln Avenue

Chicago, Illinois 60659

Pusss or Brnow S. Apams Purine, Inc., Wasuurerom, D. C.

~

Page

Previminany STATEMENT ................000..0055. ae

Tormppet or THR AMIOE ..... 5... 6... cece cecucccoes 2

ARGUMENT:

Section 43-15-35(5) of the North Dakota Century

Code Is Rationally Related to the Public Health,

Baty Gee Wears ...... as sek se ald 5

A. Pharmacy Is a Profession With All the Public

Duties and Responsibilities Which That Status

MND 6s Si. SSE SAVER Cee Se oP lea

B. Non-Professional Ownership of Pharmacies Has

Resulted in Actual Control Over Pharmacists by

Lay Persons or Entities, Thereby Adversely

Affecting Their Professional Practice and Con-

sequently the Public Welfare .................. ll

C. The State in the Exercise of Its Police Power

May Properly Prohibit Corporations or Laymen

the Profession of P 16

ConcLusion PO Nec baseeeseub ee uWeekabe sen bivabs OER 22

TABLE OF CASES -

Cases: 6 :

Ezell v. Ritholz, 188 §.C. 39, 198 S.B. 419 (1938) ..... 19

Fuhs v. Barber, 140 Kan. 373, 36 P.2d 962 (1934) ..... 10

Griswold v. Connecticut, 381 U.S. 479 Se Piao ekae 6

Jones v. W: 0 et a Ee 2S 1932) .. 9

rer. 8 utson, 261 Minn. 144, 111 1.W. 2d 526 ~

Lee v. 7, 133 Fla. 749, 183 So. 4 (1988) 1117717!“

Liggett Co. v. Baldrige, 278 U.S. 105 (1938) ...... 7, 8,

21

McMurdo v. Getter, 298 Mass. 363, 10 N.E. 2d 139

PRM Bee ceks CAS Seas SOc ce es 20

Index Continued

Page

Megan Medical Clinic v. California State

Board of

ae ee re, OT Cal. 0 A. 178 (1588) 16

Neill vy. Gimbel Bros., Pa. 199 A. 178 735; 90, 21

Rite Aid of New Jersey, Inc. v. Board of ¢

of thy of Nee Sony AAS Reger

Mises... 7, 18

7

Tarleton v. Lagarde, 16 So. 180, 26 LRA 325 (1894) |. 9

_ SOR ce EOI ETE EERE CE ER

*

IN THE

Supreme Court of the United States

Oocroser Term, 1973

No. 72-1176

Norte Daxora Srare Boarp oF PHARMACY,

Appellant

Vv.

Snyper’s Drve Srorss, Ino.,

Appellee

On Writ of Certiorari to the Supreme Court of North Dakota

JOINT BRIEF AMICUS CURIAE OF THE AMERICAN

PHARMACEUTICAL ASSOCIATION

AND THE

NATIONAL ASSOCIATION OF RETAIL DRUGGISTS

PRELIMINARY STATEMENT.

The American Pharmaceutical Association-and the

National Association of Retail Druggists file this joint

brief amicus curiae, urging that the October 31, 1972,

decision and order of the Supreme Court of North

Dakota be reversed, and further urging that this

Court’s decision in Liggett Co. v. Baldrige, 278 U.S.

105 (1928) be overruled, to the extent that Baldrige

may apply to the facts of this case.

ee

2 .

INTEREST OF THE AMICI :

~ The American Pharmaceutical Association (APhA)

' is a non-profit, membership corporation organized and

existing under the laws of the District of Columbia

since 1852. It is the national professional society of

pharmacists in the United States, and its membership

consists of more than 39,000 practicing pharmacists

and pharmaceutical scientists and educators. Addi-

tionally, over 12,000 students enrolled in colleges of

pharmacy hold membership in APhA.

One of the fundamental purposes of the APhA is

the development, maintenance and enforcement of a

professional code of ethics. The current version of

the APhA Code of Ethics was adopted by vote of the

—

3

membership in August, 1969, and sets forth four canons

which are i y relevant to the public issues to

be decided by this Court in this case. Underlying these

four relevant canons is the membership philosophy

that a pharmacist is a professional whose acts and

practices affect the public interest and welfare and,

accordingly, whose acts and practices must be con-

ducted with the public interest foremost in mind. The

four canons provide:

Section 1

A pharmacist should hold the health and safety of

—— to be of first consideration; he should ren-

er to each patient the full measure of his ability

as an essential health practitioner.

Section 2

A. pharmacist should never knowingly condone the

dispensing, promoting or distributi of drugs or

national Uatiose or aetiet Chena: ae an ie

good quality, which do not meet standards required

by law or which lack therapeutic value for the

patient. 3

Section 3

A pharmacist should always strive to perfect and

celaves his professional pti ag He should

utilize and make available this knowledge as may

be required in accordance with his best profes-

sional judgment. :

Section 7

A pharmacist should not agree to practice under

terms or conditions which tend to interfere with

or impair the proper exercise of his professional

judgment and skill, which tend to cause a deteriora-

tion of the quality of his service or which require

him to consent to unethical conduct.

4

The other joint amicus, the National Association of

Retail Druggists (NARD), is a non-profit Illinois cor-

poration whose membership consists of about 40,000

practicing pharmacists who own and control community

pharmacies in the United States. Because it and its

membership have the same goal as the APhA in as-

suring that the profession of pharmacy continues to

conduct itself with the public interest and welfare fore-

most in mind, and because this Court’s decisidn in this

case will have major impact in attaining that goal, it

joins with the APhA as an amicus in this case. In

that regard, one of NARD’s purposes is to assure pro-

fessional control of the pharmacy by pharmacists.

Both the APhA and NARD, on behalf of their mem-

bers, believe that consistent with the modern concept

of federalism, the States are not precluded by out-

moded concepts of substantive Due Process from en-

acting pharmacy ownership statutes similar to the

North Dakota Statute involved in this case. It is sub-

mitted that the North Dakota legislature, in its wisdom,

was entitled to enact this reasonable ownership statute

to eliminate what the legislature found to be an evil.

We submit that this legislation should be sustained on

the ground that this Court cannot say that the statute

is not reasonably calculated to promote the public

health and welfare.

Indeed, your amici have found that control by lay

persons over the practice of pharmacy can be detri-

mental to the public interest. . The practicing phar-

‘Mmacist is subjected to continually increasing pressures

in many employment situations which leave him

squarely with the Hobson’s choice to be made between

the economic objectives of his non-pharmacist master

and his professional responsibilities such as those set

5

forth in the APhA Code of Ethics, as well as by his own

professional judgment. Thus, the interest of your

amici is directed at highlighting for the court the basic

social and legal policy issue of whether professional

ethics and performance are to be determined, con-

trolled or dictated by professions themselves, or

whether professional ethics and performance are to

be determined, controlled or dictated by lay persons

whose motivation may frequently be based not on pro-

_ fessional or public welfare considerations, but rather

on private economic interests. The State of North

Dakota has answered that question by insisting that

drug stores be controlled by professionals. That deci-

sion, we submit, the State is entitled to make under its

police power.

ARGUMENT :

SECTION 43-15-35(5) OF THE NORTH DAKOTA CENTURY CODE

IS RATIONALLY RELATED TO THE PUBLIC HEALTH,

SAFETY AND WELFARE.

The States have wide latitude in the exercise of their

police powers, both in determining what the interests

of the public require and in deciding on ‘‘reasonably

necessary’’ means for the protection of those interests.

Provided the legislative provision does not abridge a

specific constitutional right, this court has stated that

it will not substitute its judgment for that of the legis-

lature, As this Court noted in Williamson v. Lee Op-

tical of Oklahoma, 348 U.S. 483, 488 (1955), “‘it is

enough that there is an evil at hand for correction and

that it might be thought that the particular legislative

measure was a rational way to correct it.’

In the instant appéal, the evil at hand was the con-

trol of professional pharmacists by lay persons. The

clear intent of the North Dakota legislature in framing

6

Section 43-15-35(5) of the North Dakota Century Code

was to prevent the control of the profession of phar-

macy by laymen and to assure professional guidance

in the determination of pharmacy practices and poli-

cies. In the judgment of the legislature, the profession

of pharmacy required, for the public welfare and for

its own integrity, control over the exercise of its pro-

_fessional responsibilities to be vested in the profession

itself rather than in professionally disinterested out-

siders. Pharmacy is indeed a profession, and thus sub-

ject to far-reaching legislation under the state’s police

power. North Dakota, under its police power, was

entitled to conclude through such preventive legisla-

tion that public health, safety and welfare would be

furthered by a requirement that drug stores serving

citizens of the State must be controlled by licensed pro-

fessional pharmacists.

It is difficult to conclude with certainty that North

Dakota, by requiring at least 51 percent control of

es by professionals, will accomplish a perfect

cure of the lay ownership evil perceived by the State.

But as Justice Holmes recognized in his dissent in

* Baldrige, “‘the Constitution does not make it a condi-

tion of preventive legislation that it should work a

perfect cure.’’ 278 U.S. 105, 115 (1928). This Court

has wisely held that it does not sit as a “‘superlegisla-

ture’”’ to determine the wisdom, need, and propriety of

laws that touch economic problems, business affairs,

or social conditions. See, e.g., Griswold v. Connecticut,

381 U.S. 479, 482 (1965). For these reasons, we re-

spectfully submit that the Baldrige decision is a judi-

cial anachronism, no longer controlling or persuasive

on the issues presented by this appeal. Because ap-

pellant has covered these points in its brief, there is

7

*

no need for your amici to enlarge on them except to

state that APhA and NARD fully adopt and support

appellant’s position on this matter.

A. Pharmacy Is a Profession With All the Public Duties and

wsS Responsibilities‘Which that Status Entails.

This Court’s 1928 decision in Liggett v. Baldrige,

278 US. 105 (1928) appears’ to conceive of the practice

of pharmacy as a trade or occupation rather than a

profession vitally affecting the public welfare. The

Court concluded that the public interest in Pennsyl-

vania was adequately safeguarded by related State leg-

islation controlling the prescription, compounding, pur-

chase and sale of medicines. Usurping the function of

the State legislature, this Court concluded that owner-

ship of a pharmacy by lay persons was unrelated to the

public welfare, and therefore found that the statutory

proscription overstepped the bounds of the Fourteenth

Amendment’s Due Process -Clause.

The cases are legion that a State is empowered to

closely regulate a profession, particularly one closely

related to public health and safety. Pharmacy, with-

out question, is such a profession; and today many

States expressly recognize by statute the professional

status of pharmacy.’ Other States refer indirectly to

the status of pharmacy as a profession; and many

courts have concluded that pharmacy enjoys that

status? While it is possible that pharmacy may. not

1Colo. Rev. Stat. 1963, 48-1-25; Ill Rev. Stat. 1965, ch. 91,

§ 556.1; La. Rev. Stat. § 37: 1206 (Supp. 1960); Nev. Rev. Stat.

1957, 639.213; Okla. Stat. 1961, Title 59, § 353.2; Tex. Rev. Civ.

Stat. 1948, Art. 4542a, § 20; Va. Code Ann. § 54-399(a) (1967).

2 See, sii, Beperaiirbat Genertt’ Cory. v. Sills, 93 NJ. :

82, 295 A.2d 728 (1966); Lee v. Gaddy, 133 Fla. 749, 183 So. 4

(1938) ; and Sashthara v. State Bd. of Pharmacy, 8 Cal. App. 2d

69, 46 P.2a 804 (1935).

aoe

have been considered by this court as a profession in

Baldrige, the concept of a profession is not static. For

example, this court in United States v. Laws, 163 U.S.

258, 266 (1896) noted:

Bh caren” 6 theology, inks ‘oa medicine were

known professions; as the applications of

science and are extended to other depart-

from its pursuit for its own

An examination of the professional requirements for

the practice of pharmacy demonstrates that the North

Dakota classification of pharmacy as a profession is

accurate. A registered pharmacist must be a graduate

of one of the seventy-five accredited colleges of

pharmacy, whose five-year program encompasses sub-

jects such as organic chemistry, comparative anatomy,

biochemistry, microbiology, physiology, chemical

pharmacology, pharmacognosy, pharmaceutics, and

qualitative analysis. The North Dakota pharmacist

must have a year of practical experience as a pharmacy

intern and pass an examination set by the Board of

Pharmacy (N.D. Century Code § 43-15-15). Indeed,

similar internship requirements are a condition of

licensing in all states. A pharmacist must have ex-

tensive knowledge of a wide range of drugs, including

familiarity with the recommended safe dosages for

adults and children, storage requirements, quality

standards, and the administering problems a patient

might have. He must carefully comply with federal

and state regulations concerning the dispensing of

‘‘prescription-legend drugs,’’ those designated by the

Food, Drug, and Cosmetic Act as not safe for use ex-

cept under the professional supervision of the physi-

cian and pharmacist. 21 U.S.C. §353. Above all, he

must assure the propriety of and the complete accuracy

in the prescriptions he dispenses, whether these contain

prefabricated dosage forms or ingredients he must still

compound himself. An error of judgment as well as an

palpate A ai da hi cig

the patient.

A pharmacist may be held liable for errors resulting

from a failure to exercise “‘professional judgment.”

One of the most valuable professional services he can

render is to refuse to dispense a medication if in his

professional judgment he feels it would injure the

patient or violate a law. Tarleton v. Lagarde, 16 So.

180, 26 LRA 325 (1894). A pharmacist cannot neces-

sarily escape liability by claiming he filled the pre-

scription as written.

‘‘The instant contention [of non-liability] is pri-

eos ES

is obliged iptions.

Such is not the law. As a chemist be may know

that the sion nos creel in the besten

that to fill it might cause death or ay te

to the patient.”” Jones v. Walgreen Co., 265

App. (Ill. 1932)

He must exercise professional judgment concerning

the authenticity and accuracy of the prescription. In

addition, a pharmacist has been held liable for the con-

sequences of failing to advise a patient of the dj

of using a particular drug in conjunction with

the pharmacist knows the patient is using. He has

10

a basie legal and ethical duty to advise the patient

concerning the proper use and possible side effects of

the medication. Fuhs v. Barber, 140 Kan. 373, 36 P.2d

962 (1984) ; and Krueger v. Knutson, 261 Minn. 144,

111 N.W.2d 526 (1961).

- ‘There is a category of drugs to be dispensed per-

sonally by a pharmacist at his discretion at the request

of the patient (subject to state law), such as a number

For example, he cannot legally or ethically delegate his

professional judgment in this area. The advice of a

pharmacist to a patient concerning self-medication with

non-prescription products is also a vital service clearly

affecting the public interest and welfare.

Many pharmacists maintain, as a professional serv-

ice, patient medication record systems in which indi-

vidual patient information, including allergies, idio-

syneracies and patient age, is retained and in which

each prescription is entered. The system is used as a

monitoring device to ensure that the prescription is

appropriate for the particular patient and that the

various drugs a patient is taking are not contra-

indicated. Such a problem could arise if the patient

were seeing several physicians for different complaints.

This service is now required by a New Jersey Board

of Pharmacy regulation to be provided by all New

Jersey pharmacies. (N.J.A.C. 13:39-15). The New

Jersey “patient profile record system’’ allows the im-

ll

mediate retrieval of all data concerning prior medica-

tions and allergies of the patient. The pharmacist is

required to check the record before dispensing the

Medical College :

“He said by keeping records of all purchases, stay-

ing abreast ofthe Intet reports of taxi, noting

iduals

one i the could become

one of the Ro iortant members of health

team.’’ Rite Aid of New Jersey, Inc. v. Board o

Pharmacy of the State of New Jersey, — N.J.

Super. — (App. Div. 1973) (Case #A-1966-71)

duct of pharmacies have frequently been unduly influ-

enced by commercial considerations. These abuses

12 -

range from the creation of an unprofessional environ-

ment and adverse working conditions to serious in-

fringements on the pharmacist’s responsibility for the

control and dispensing of drugs.

‘The most serious abuses concern actual interference

ve disp Gx pisbalsiliat Revlon Feanbting tn pn obri-

sas tid cisions baalls ak In other cases, owners, for

the sake of economy, have limited the drugs in stock

to those which are subject to high volume. ‘This policy

require pharmacist compounding.

of the inventory is a threat to those patients who need

such infrequently used drugs. It is an indisputable

fact that the owners of a pharmacy have considerable

influence in determining what quality and amount of

and stock will be ordered. Professional

control of the pharmacy is needed to reduce that possi-

bility that such abuses may occur.

Justice Holmes in his dissent in Liggett Co. v.

Baldrige stated that:

“A standing criticism of the use of éorporations

in business is that it causes such business to be

owned who do not know anything about

it. has not been su necessary to

— the divorce between ing of drags and

knowledge is an evil. The of drugs

ae knowledge in

pions calle for pnnetion 4 oucles of aos

how oapoheleayceenrm, Sarg tag Aan

shall not be allowed.” 278 U.S. at 114.

The divoree between control and professional knowl-

edge leads to a lack of accountability for improper

that he merely hired. Tudinads; 34 fo tens diab Sioaneas

agement is not supervise adequately the

professional staff. shi” h puidichar’ puatndae's lies

petency could go unnoticed. Or the unlicensed em-

ployer could ereabe w situation thwarting ie ‘liasina.

With scibjal of ie ‘Gadus MARRIES en

pharmacist is often unable to establish policy or react

to established policy over the pharmacy department

itself. He finds himself forced into an employee role

in which, fearing for job security, he is unable to pro-

test practices which in his professional judgment are

not aimed at the public welfare. Under Section 1 of

the APhA Code of Ethics, a pharmacist must hold the

health and safety of patients to be of first considera-

tion; he should render to each patient the full measure

of his ability as an essential health practitioner.

Overriding commercial and profit goals and dilution

of the pharmacist’s attention with non-professional

duties create an atmosphere where professionalism is

adversely affected. In addition, abiding by Section 2 is

likely to bring the pharmacist in direct confrontation

with commercial pressures :

—— harmacist should never knowingly condone

the , promoting, or distribution of drugs

or cal devices, or assist therein, which are not

quired by Jaw ce which lack thernpqutie. value for

patient.”

— TY

~-

“a. -

A store’s practice of large scale promotions with

Bee eg Se me nea ga aR

into both unethical conduct and conduct injurious to

the public.

While arguably less serious than practices opening

up the possibility of unethical conduct, abuses have

also occurred in the area of working conditions. These

too pose a public health hazard serious enough to be

condemned by Section 7 of the APhA Code of Ethics:

**A pharmacist should not to practice under

terms and + can which stp ngree with

or impair exercise

aca Sa evan

judgment

ration of the quality of his service or which require

As a practical matter, however, pharmacists are often.

powerless to object to such conditions. APhA has re-

shifts and thirteen consecutive days. The files of |

APhA contain additional unfortunate cases of pharma- ;

cists forced to other parts of the store and spend |

time on such chores as refunding soda bottle deposits.

While such abuses may occur under pharmacist own-

ers, the likelihood of commercial pressures and insensi-

tivity to the need for the pharmacist to be alert and

responsive to the patient is far greater under non-

ist owners; at least it should be clear that a

15

State, in considering preventive legislation, is entitled

to so conclude. |

(1965). The report noted that patients have been

told, directly or indirectly by the prescribing physician,

to have their preseription filled in the pharmacy in.

which the doctor has an ownership interest. This is

accomplished by transmitting the prescription directly

to the pharmacy via a direct telephone line, writing the

prescription in code, advertising the pharmacy on the

prescription form, or orally instructing the patient.

The danger is the temptation to charge higher prices

for drugs, to overprescribe or to write

prescriptions. A monopoly develops which deprives

6

the patient of any choice in his health care. A physi-

cian has total authority to prescribe any medication

dictating the brand and amount; should his prescription

mean economic benefit to him, both an unethical situa-

tion and a very real health hazard could easily arise.

California has met this problem with a statute for-

bidding physician ownership of pharmacies. Cal. Bus.

& Prof. Code, Sec. 654. See Megan Medical Clinic v.

California State Board of Medical Examiners, 57 Cal.

Rptr. 256 (1967) holding the statute constitutional.

Pennsylvania and Maryland empower the State Board

of Pharmacy to sanction pharmacists who are associ-

ated with a pharmacy in which a medical practitioner

has an interest. Pa. Stat. Ann., Tit. 63 § 390-5(9)

(xii) (Supp. 1964); Md. Ann. Code, Art. 73, § 266A

(ce) (4) iii) (Supp. 1964).

C. The State in the Exercise of Its Police Power May Properly

Prohibit Corporations or Laymen From Controlling the

Profession of Pharmacy.

It is well established that the regulation of a pro-

fession is a proper exercise of the state’s police power.

Depending on the needs of society in relation to each

profession, the state may refuse to allow non-profes-

sional corporations to practice professions. Medicine

and iW are the traditional examples. (Professional

corporations are required by state statutes to have pro-

fessional control and personal liability in order to pro-

tect the public). The Illinois Supreme Court, in up-

holding the constitutionality of a statute prohibiting

corporations from practicing dentistry said :

“*... The law is well settled that the state may

deny to corporations the t to practice profes-

sions and may insist upon the personal obligation

The Supreme Court, in Semler v. Oregon State Board

of Mental Examiners, 294 U.S. 608 (1935), reached the

identical conclusion. The Court stressed the impor-

tance of professional standards:

“‘We do not doubt the authority of the State to

estimate the baleful effects of such methods and

to put a stop to them. The legislature was not

don ie <eith: beaded fe saneatte but with the

Lin tog tna deal ble

ession } an Zz :

standards of conduct from those which are tradi-

tion against those who would prey upon a public

peculiarly susceptible to imposition eg: allur- -

ing promises of And com-

munity is concerned in providing safeguards not

enlarge the opportunities of the least scrupulous.

What is generally called the ‘ethics’ of the pro-

fession is but the consensus of expert opinion as

a necessity of such standards.’’ 294 US. at

A state’s concern that a profession is demeaned and

demoralized by lay control is therefore a highly legiti-

mate reason for legislation—and not merely ‘“‘ration-

ally related’’ to the objective.

18

The Supreme Court in Williamson v. Lee Optical of

Oklahoma, 348 U.S. 483 (1965), discussed a statute

similar to North Dakota’s pharmacy ownership provi-

sion and found the state’s ‘‘attempt to free the pro-

fession [optometry], to as great an extent as possible,

from all taints of commercialism’’ to be a rational o

jective. The statute in this case read: ie

“No person, or corporation in the

business of vetaitiing merchandise to general

ee ee er oe -egrsgiha

otherwise permi m purpo 0 eye

examinations or in’ agg to oceupy space in rich

retail store.” 348 U.S. at 490-91.

The Court, following Semler, interpreted this statute

as similar to a denial to a corporation of the right to

practice dentistry, It concluded that:

“Geographical location may be an important con-

sideration in a legislative program which aims to

raise the treatment of the human eye to a strictly

rofessional level. We cannot say that the regu-

tion has no rational relation to that objective and

an gee is beyond constitutional bounds.’’ 348

a ;

Thus, for a number of rational reasons, a state may

deny a corporation the right to practice a particular

profession. As a necessary corollary, a corporation may

also be forbidden to exercise indirectly control it is

forbidden to exercise directly. Were this not the case,

an unlicensed party would be directing the professional

activities of a licensed party and in effect ‘‘practicing

without a license’’.

The most common evils which arise when a corpora-

tion acts as employer of such professionals include the

strong possibility of undue influence, the disconnection

19

of the. professional relationship between client or

patient and the practitioner, and the corruption of the

practitioner’s motivations. The South Carolina Su-

preme Court in Fzell v. Rithole, 188 8.0. 39, 198 S.E.

419 (1938) commented on personal or. individual re-

sponsibility as the ethical basis of any profession:

“One who a profession is responsible

directly to patient or his client. Hence, he

cannot a, act in the practice of his vocation

as an agen Sea tae tet ee,

ship whose interests in the very nature of the case

are commercial in character.’”” 198 §.H. at 424. -

The Pennsylvania Supreme Court held in Neill v.

Gimbel Bros., 330 Pa, 213, 199 A. 178 (1988), that the

vital importance to the public of the profession of

optometry justified the state in regulating its proper

practice. The statute prohibited corporations from

practicing optometry ; the corporation retail store was

found to be practicing optometry since it controlled the

optometrists. In Gimbel, an optical company operated

an optical department in a retail store. The optome-

trists were hired and paid by the company but were

under the control of the store; fees were set and col-

lected by the store. The department store was held to

be illegally engaged in the practice of optometry. The

court rejected the contention that optometry was merely

an incident to the corporate merchafdising practice

and held it rather to be a real science directed to the

measurement, accommodation and refraction of the

eye. Detailing the required curriculum and examina-

tion for a license, the court acknowledged it as an im-

portant profession. It noted that when a professional

practitioner is the employee of a non-professional, sub-

ject to his control and dependent on him for a salary,

the likelihood is increased that the welfare of the

patient will not be the sole criterion applied by the

practitioner in rendering services to him. Quoting the

Massachusetts Supreme Court in McMurdo v. Getter,

298 Mass. 363, 10 N.E.2d 139, 140 (1937), it noted that:

“The rule is recognized that a licensed

tioner of a mote Ah may not lawfully prac-

ice his profession among the public as the servant

of an unlicensed person or a corporation; and that,

if he does so, the unlicensed person or ny 2 ysaneng

practi t pro-

em him is of

page, Pa — A corpora nm as such

professional trained, and duly ayo erie rowrgane

owe their p allegiance and

their employer rather than to the clients or patients

of their employer. The rule stated the

necessity of immediate and unbroken relationship

between a professional man and those who engage

his services.”” 199 A. at 181.

The Court in Gimbel found optometry to be a pro-

fession affected with a public interest.

“. .. That case [Liggett] does not support the

s ition that a lice practitioner of a pro-

on mey be employed at a salary to render

professional services to the customers of a person,

partnership, or corporation, where the contractual

relationship of the client or customers is, not with

the practitioner, but with the latter’s employer,

and the chancellor decided as before noted that

optometry is a profession. If a corporation hired

a lawyer to render legal services under such ar-

rangements, it would clearly be engaged in the

ractice of law. The legislature has the right to

orbid such practice as contrary to public policy,

which is properly concerned with the maintenance

21

Certainly sinee pharmacy affects the public interest

to the same, if not a greater degree, as optometry, it

should be clear that a State under its police power may

eliminate what it finds to be the evil of lay control.

The court’s reasoning in Gimbel as to the inapplic-

ability of Baldrige to optometry demonstrates the un-

derlying fallacies of the Baldrige rationale. North

Dakota has the right to fo lay control of pharma-

cies as contrary to public policy. The State has sound

public policy reasons for exercising that right. The

maintenance of professional standards, ethical re-

quirements, professional dignity, the need for a

close professional-patient relationship, and the require-

ment of unfettered and unprejudiced professional

judgment justify the State’s conclusion that unquali-

fied and unlicensed persons and corporations be pro-

hibited from controlling the activities of the profes-

sional pharmacist.

It is anticipated that opponents of the contested

North Dakota ownership statute will argue that by

upholding the statute’s constitutionality, this Court will

cause economic losses to the chain drug stores. Of

course, the short answer to this is that financial conse-

quences do not determine the parameters of the exer-

cise of the State’s police power. Surely, if this were a

determining factor, a plethora of remedial legislation

would fall. For example, many of the standards (42

U.S.0. § 1857f-1 et seg.) governing emissions of sub-

stances from automobile engines and many of the pro-

tections of the Federal Food, Drug and Cosmetic Act

(21 U.S.C. § 301 e¢ seg.) would fall if economics were

the sole criterion. The expected ad terrorem arguments

of the chains on the economic issue, we submit, are of

little importance when compared with what North

Dakota was entitled to find was the overriding public

interest in divesting lay control from the profession of

pharmacy.

For the reasons stated herein and in appellant's

brief, the American Pharmaceutical Association and

the National Association of Retail Druggists respect-

fully urge that the October 31, 1972 decision and order

of the Supreme Court of North Dakota be reversed.

Respectfully submitted,

Arruour B, Hanson

Rapa N. AusricHt, JR.

Hanson, O’Brren, Birney,

Strickite & BurtEr

Counsel for Amici Curiae