North Dakota State Board of Pharmacy v. Snyder's Drug Stores, Inc.

Background

The case involves a North Dakota pharmacy board that denied a permit to Snyder’s Drug Stores because all its common stock was owned by Red Owl Stores and it was not shown that a majority of the stockholders were registered pharmacists in good standing. North Dakota law required that an applicant be a registered pharmacist, a partnership of active registered pharmacists, or a corporation whose majority stock is owned and controlled by registered pharmacists responsible for managing the pharmacy. A state trial court granted Snyder’s summary judgment. The North Dakota Supreme Court held the ownership rule unconstitutional under an older 1928 decision (Liggett) and remanded for an administrative hearing without deciding the constitutional issue.

Reasoning

The Supreme Court first held the state court’s judgment was final and reviewable because the licensing process could not preserve the constitutional question on remand. On the merits, the Court concluded that the Liggett decision, which had struck down pharmacy ownership restrictions, belonged to an older approach that invalidated many business regulations. Citing later decisions that gave state legislatures more leeway to regulate business, the Court overruled Liggett. The result reversed the North Dakota decision and remanded the case so state courts and agencies could proceed without being bound by Liggett.

Real world impact

Pharmacy owners, state licensing boards, and corporations with non-pharmacist investors are directly affected: the Court’s decision allows states more room to defend ownership or management rules for pharmacies. The ruling does not decide whether North Dakota’s law is ultimately valid; it only removes Liggett as a barrier and sends the case back for further proceedings under modern standards.