Opinion
Argued November 21, 1973
Decided December 28, 1973
Appeal from the Appellate Division of the Supreme Court in the Third Judicial Department, LOUIS G. BRUHN, J.
Louis J. Lefkowitz, Attorney-General ( Thomas P. Zolezzi and Ruth Kessler Toch of counsel), for appellants.
No appearance for respondent.
The State Board of Pharmacy, Department of Education, and the Attorney-General, seek reversal of an Appellate Division order in an action for a declaratory judgment upholding the right of plaintiff retailer to use the name "Le Drugstore" even though it is not licensed as a pharmacy. They contend that the Education Law forbids an unlicensed business to be called a "drug store", regardless of public disclaimer that the enterprise does not sell or dispense drugs.
Special Term granted plaintiff summary judgment declaring it could conduct its business under the name "Le Drugstore" so long as no drugs were sold and an exterior sign stated "Not a Pharmacy". The court dismissed defendants' motion for summary judgment on their counterclaim for declaratory relief. The Appellate Division, with two dissenters, affirmed and an appeal was taken as of right by defendants based on the dissent (CPLR 5601, subd. [a]). While the appeal was pending, plaintiff closed its business and has moved to dismiss the appeal on grounds of mootness.
The motion to dismiss the appeal for mootness should be denied and the order of the Appellate Division reversed. Upon reversal, summary judgment should be granted in favor of defendants declaring that plaintiff retailer may not conduct business under the name "Le Drugstore" without being licensed as a pharmacy.
The appeal should not be disposed of on grounds of mootness because a novel question is presented that is likely to recur. On the merits, the Education Law expressly and unambiguously proscribes the use of the name "drug store" by other than a licensed pharmacy. Whether an exception should be created for the "Le Drugstore" merchandising technique is properly a matter for the Legislature.
From October, 1970 until February, 1973, plaintiff, Le Drugstore Etats Unis, Inc., and several subtenants, operated a retail business under the name "Le Drugstore". The business, modeled on a European merchandising technique, was a kind of "mini-department store" consisting of boutiques, a restaurant, and other shops. Apparently, "Le Drugstore" is the name applied to such businesses in Europe.
Concededly, neither plaintiff nor any of its subtenants sold drugs of any kind. Outside the store, prominently displayed, was a disclaimer that the business was "Not a Pharmacy". "Le Drugstore" never obtained a license as a pharmacy.
Financial difficulties forced plaintiff to close "Le Drugstore" in February, 1973. One month later, plaintiff changed its corporate name from Le Drugstore Etats Unis, Inc. to Drop Kick, Inc. Apart from making a motion to dismiss, plaintiff has made no effort to oppose defendants' appeal. Plaintiff did not appear on oral argument nor has it submitted a brief.
On its motion to dismiss, plaintiff contended that because it had closed "Le Drugstore" the appeal was moot. Where a novel and important question of statutory construction is presented, which is likely to recur, termination of business by one party to the controversy has been held not to render the appeal moot (see, e.g., Matter of 330 Rest. Corp. v. State Liq. Auth., 26 N.Y.2d 375; see, generally, East Meadow Community Concerts Assn. v. Board of Educ. of Union Free School Dist. No. 3, 18 N.Y.2d 129, 135; Matter of Plumbing, Heating, Piping Air Conditioning Contrs. Assn. v. New York State Thruway Auth., 5 N.Y.2d 420, 422, n. 1). Plaintiff, throughout this case, has urged that the "Le Drugstore" complex under that title is a merchandising technique found throughout the world that is becoming increasingly popular. Moreover, the more general question of whether, and under what circumstances, an unlicensed retailer may use the name "drug store" is of considerable continuing public importance. For that reason the appeal should not be dismissed as moot.
On the merits, subdivision 6 of section 6811 of the Education Law (formerly, until Sept. 1, 1971, Education Law, § 6804, subd. 3, par. q; L. 1971, ch. 987) provides that it shall be a misdemeanor for: "6. Any person to carry on, conduct or transact business under a name which contains as a part thereof the words 'drugs', 'medicines', 'drug store', 'apothecary', or 'pharmacy', or similar terms or combination of terms, or in any manner by advertisement, circular, poster, sign or otherwise describe or refer to the place of business conducted by such person, or describe the type of service or class of products sold by such person, by the terms 'drugs', 'medicine', 'drug store', 'apothecary', or 'pharmacy', unless the place of business so conducted is a pharmacy licensed by the department". On its face, the statute prohibits anyone from conducting a business establishment described as a "drug store" unless it is a licensed pharmacy.
Both Special Term and the Appellate Division majority were persuaded that an exception should be implied in the statute, despite its unequivocal language. Each concluded that there was no danger of deceiving the public because no drugs were sold and a large, exterior sign proclaimed that the store was "Not a Pharmacy". Each concluded that a "literal" application of the Education Law to "Le Drugstore" would produce an undesirable result, not intended by the Legislature.
The literal language of a statute will not always be controlling where it contravenes the legislative intent or leads to an unreasonable result ( Matter of Astman v. Kelly, 2 N.Y.2d 567, 572; McKinney's Cons. Laws of N.Y., Book 1, Statutes, § 111). But, the literal application of the Education Law, to bar plaintiff from using the name "Le Drugstore", would neither contravene public policy nor produce an unreasonable result.
The authority of the State to regulate the practice of pharmacy has long been recognized (e.g., State Bd. of Pharmacy v. Matthews, 197 N.Y. 353, 357; see Drugs — Prohibiting Advertising of Prices, Ann., 44 ALR 3d 1301, 1302). Statutes prohibiting use of the word "pharmacy" or similar words by unlicensed establishments, have been upheld as a valid exercise of the police power (see 28 C.J.S., Druggists, § 3, at pp. 502-503).
It is argued that plaintiff has misled no one by the use of "drug store" in its name. It does not follow, however, that it is unreasonable and of no importance that the prohibition of the statute be applied. The words "drug store" signify a place where drugs are dispensed by trained licensed individuals. To debase the significance of the term "drug store", by implying exceptions in the statute, might create unwarranted confusion in the public, if not in one instance, at least if the use proliferated (see State v. Collins, 61 N.M. 184; Commonwealth v. Dimas, 170 Pa. Super. 5; but see Pike v. Porter, 126 Mont. 482 ; see, generally, 25 Am. Jur., 2d, Drugs, Narcotics, and Poisons, § 12, at p. 293). If that be true, it may not be said that application of the statute according to its terms is unreasonable or arbitrary, or is not within the legislative intent.
In implying an exception in the statute, the Appellate Division relied on People v. Bernstein ( 237 App. Div. 270). There, under a predecessor to section 6811 of the Education Law, it was held that an unlicensed store, selling proprietary medicines, could properly advertise the medicines as "patent medicines". This was so despite statutory language prohibiting use of the term "medicine" by an unlicensed enterprise. It was there reasoned that "patent medicine" had a vastly different meaning to the public than "medicine". Moreover, the court emphasized that patent or propriety medicines had been expressly excluded from regulation under the Education Law (237 App. Div., at p. 273). This part of the holding in the Bernstein case classifies as one of many refusing to apply pharmacy regulation to the sale of patent medicines by unlicensed retailers who do not purport to be druggists (see Drugs — Sale by Nonpharmacists, Ann., 98 ALR 2d 1063, 1067). On the other hand, the court in the Bernstein case affirmed the conviction of defendant on the ground that he was not allowed to advertise "drug sundries", although it was lawful for him to sell the commodities in question because the statute properly forbade the use of the word "drug" except by licensed persons.
Consequently, it is concluded that plaintiff had no right to use the name "drug store" even though no drugs were sold and the conduct of a pharmacy was expressly and publicly disclaimed.
Accordingly, the motion to dismiss the appeal for mootness should be denied; the order of the Appellate Division reversed, without costs; and summary judgment should be granted in favor of defendants declaring that plaintiff retailer may not conduct business under the name "Le Drugstore" without being licensed as a pharmacy.
Chief Judge FULD and Judges BURKE, JASEN, GABRIELLI, JONES and WACHTLER concur.
Order reversed, etc.
Motion to dismiss appeal denied.