The North Dakota Supreme Court, relying on Liggett Co. v.
Baldridge, 278 U. S. 105
held unconstitutional a state statute under which respondent had
been denied a pharmacy operating permit, requiring that an
applicant for such a permit be "a registered pharmacist in good
"a corporation or association, the majority stock in which is
owned by registered pharmacists in good standing, actively and
regularly employed in and responsible for the management,
supervision, and operation of such pharmacy."
The court remanded the case so that petitioner Board could
conduct an administrative hearing "sans
issue," on respondent's alleged failure to meet certain structural
and safety standards on which petitioner had also rested its permit
1. This Court does not lack jurisdiction to review the State
Supreme Court's judgment, which is "final" within the meaning of 28
U.S.C. § 1257, for it is not apparent how petitioner Board would be
able to preserve the constitutional issue now ready for
adjudication without defying the State Supreme Court. Pp.
414 U. S.
2. The North Dakota statutory requirements for permitting the
operation of a pharmacy do not violate the Due Process Clause of
the Fourteenth Amendment. In enacting the challenged legislation,
the State was well within its authority "to legislate against what
[it] found to be injurious practices in [its] internal commercial
and business affairs," Lincoln Union v. Northwestern Co.,
335 U. S. 525
335 U. S. 536
and this Court will not substitute its own judgment for what the
State feels is reasonably necessary to protect the interests of the
public. Liggett Co. v. Baldridge, supra,
414 U. S.
, reversed and remanded.
DOUGLAS, J., delivered the opinion for a unanimous Court.
Page 414 U. S. 157
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
North Dakota passed a statute [Footnote 1
] that requires that the applicant for a permit
to operate a pharmacy be
Page 414 U. S. 158
"a registered pharmacist in good standing" or
"a corporation or association, the majority stock in which is
owned by registered pharmacists in goof standing, actively and
regularly employed in and responsible for the management,
supervision, and operation of such pharmacy."
Petitioner Board denied a permit to Snyder's Drug Stores, Inc.,
because it did not comply with the stock ownership requirements of
the statute, it appearing that all the common stock of Snyder's was
owned by Red Owl Stores, and it not being shown if any Red Owl
shareholders were pharmacists registered and in good standing in
North Dakota. On appeal to the state district court, summary
judgment was granted Snyder's. On appeal to the Supreme Court of
North Dakota, that court held [Footnote 2
] that the North Dakota statute was
unconstitutional by reason of our decision in 1928 in Liggett
Co. v. Baldridge, 278 U. S. 105
That case involved a Pennsylvania statute that required that 100%
of the stock of the corporation be owned by pharmacists. The North
Dakota statute, however, requires only that a majority of the stock
be owned by pharmacists. But the North Dakota Supreme Court held
that the difference did not take this case out from under the
case, because, under both statutes, control of the
corporation having a pharmacy license had to be in the hands of
pharmacists responsible for the management and operation of the
pharmacy. That court therefore remanded the case so that the Board
could conduct "an administrative hearing on the application,
sans the constitutional issue,
pursuant to our
Administrative Agencies Practice Act," 202
, 145 (italics added).
The case is here on a petition for certiorari which we granted,
411 U.S. 947.
Page 414 U. S. 159
We are met at the outset with a suggestion that the judgment of
the Supreme Court of North Dakota is not "final" within the meaning
of 28 U.S.C. § 1257 which restricts our jurisdiction to review
state court decisions. [Footnote
The finality requirement of 28 U.S.C. § 1257, which limits our
review of state court judgments, serves several ends: (1) it avoids
piecemeal review of state court decisions; (2) it avoids giving
advisory opinions in cases where there may be no real "case" or
"controversy" in the sense of Art. III; (3) it limits review of
state court determinations of federal constitutional issues to
leave at a minimum federal intrusion in state affairs.
Mr. Justice Frankfurter, writing for the Court in Radio
Station WOW v. Johnson, 326 U. S. 120
326 U. S. 124
summarized the requirement by Congress that, in appeals from
federal district courts as well as in review of state court
decisions, the judgments be "final":
"This requirement has the support of considerations generally
applicable to good judicial administration. It avoids the mischief
of economic waste and of delayed justice. Only in very few
situations, where intermediate rulings may carry serious public
consequences has there been a departure from this requirement of
finality for federal appellate jurisdiction. This prerequisite to
review derives added force when the jurisdiction of this Court is
invoked to upset the decision of a State court. Here, we are in the
realm of potential conflict between the courts of two different
governments. And so, ever since 1789, Congress has granted this
Court the power to intervene
Page 414 U. S. 160
in State litigation only after 'the highest court of a State in
which a decision in the suit could be had' has rendered a 'final
judgment or decree.' § 237 of the Judicial Code, 28 U.S.C. §
344(a). This requirement is not one of those technicalities to be
easily scorned. It is an important factor in the smooth working of
our federal system."
But, as he pointed out, this concept of "finality" has a
"penumbral area." Ibid.
Speaking for the Court in that
case, he held that Nebraska's ruling on the legality of a radio
license issued by the Federal Communications Commission could be
reviewed even though the state court had not yet determined the
final accounting. He stated:
"Of course, where the remaining litigation may raise other
federal questions that may later come here . . . to allow review of
an intermediate adjudication would offend the decisive objection to
at 326 U. S.
Mills v. Alabama, 384 U. S. 214
involved the constitutionality of a state statute in effect making
it a crime for a newspaper editor on election day to urge people to
vote a certain way on the issues being submitted. The state court
held the act did not violate the Federal Constitution, and remanded
the case for trial. It was argued that the judgment was not "final"
for purposes of 28 U.S.C. § 1257. We noted that the point had "a
surface plausibility, since it is true the judgment of the State
Supreme Court did not literally end the case." 384 U.S. at
384 U. S. 217
We held it "final," however, because, if the Act were
constitutional, the editor would, in reality, have no defense.
Since conviction seemed likely, we concluded that to deny review at
that stage would "result in a completely unnecessary waste of time
and energy in judicial systems already troubled by delays due to
congested dockets." Id.
at 384 U. S.
In Hudson Distributors, Inc. v. Eli Lilly & Co.,
377 U. S. 386
question on the merits was whether the requirement
Page 414 U. S. 161
of a state act setting minimum retail prices was consonant with
federal law. The state court held the state act constitutional
under both the State and the Federal Constitutions, and remanded
the case for further proceedings. In reliance on Curry
we held that the fact that there were to be further proceedings in
the state court did not render the state judgment "nonfinal or
unappealable within the meaning of 28 U.S.C. § 1258." Id.
at 377 U. S. 389
The exceptions noted [Footnote
] have a long lineage dating back
Page 414 U. S. 162
to Mr. Chief Justice Taney's opinion in Forgay v.
6 How. 201, where the Court held "final" an
interlocutory decree requiring a litigant "to deliver up property
which he claims," even though a final accounting has yet to be
at 47 U. S. 205
Unless that interlocutory order was deemed "final," Mr. Chief
Justice Taney pointed out, the "right of appeal is of very little
value to him, and he may be ruined before he is permitted to avail
himself of the right." Ibid.
It is equally important that we treat the judgment in the
instant case as "final," for we have discovered no way which the
licensing authority in North Dakota has of preserving the
constitutional question now ripe for decision.
The Board here denied respondent's application without an
evidentiary hearing, since the application showed that, under the
North Dakota Act, respondent could in no way qualify for a license.
The State Supreme Court held that Act unconstitutional, and that,
thus, an applicant failing to meet the requirements of the state
statute is nevertheless entitled to consideration for a license. As
previously noted, the State Supreme Court, indeed, directed the
Board on remand to reconsider the application "sans
There were state law questions to be considered on the remand,
for the state board had also rested its denial of a permit on the
failure of Snyder's to meet certain structural and safety
standards. The Supreme Court
Page 414 U. S. 163
remanded for an administrative hearing on those other
If we deny review at this point, respondent has no
constitutional barrier to the grant of a license.
The state licensing authority might, of course, after an
administrative hearing, reinstate its earlier findings that the
respondent does not meet the necessary structural and safety
standards. If respondent is denied a license for that reason, the
denial will obviously be on a state ground. If respondent is
granted a license, the battle over the constitutionality of the new
Act will be lost as far as this case is concerned.
There is no suggestion that "the remaining litigation may raise
other federal questions," Radio Station WOW v. Johnson,
326 U.S. at 326 U. S. 127
"such as is true of eminent domain cases." Ibid.
those cases, the federal constitutional question embraces not only
a taking, but a taking on payment of just compensation. A state
judgment is not final unless it covers both aspects of that
integral problem. See Grays Harbor Co. v. Coats-Fordney
Co., 243 U. S. 251
243 U. S.
It would appear that, as a matter of North Dakota procedure, the
only way in which the Board could preserve the constitutional issue
would be to defy its own State Supreme Court and deny the
application on the ground of failure to meet the ownership
requirement. The state Administrative Agencies Practice Act
provides that "Any party to any proceeding heard by an
administrative agency" may appeal from the decision of the agency.
N.D.Cent.Code § 28-32-15. The statute appears to treat the agency
as a tribunal, and not as a "party" able to appeal its own
If the Board thus grants the license in accordance with the
State Supreme Court decision, and then seeks to appeal its own
grant on the basis of the validity of the state ownership
requirement, the appeal may well be
Page 414 U. S. 164
dismissed and the dismissal would rest on the independent state
ground that state procedural law does not provide the agency the
right to appeal.
decided in 1928, belongs to that vintage of
decisions which exalted substantive due process by striking down
state legislation which a majority of the Court deemed unwise.
has, to date not been expressly overruled. We
commented on it disparagingly, however, in Daniel v. Family
Security Life Ins. Co., 336 U. S. 220
which concerned the constitutionality of a state statute providing
that life insurance companies and their agents may not operate an
undertaking business, and undertakers may not serve as agents for
life insurance companies. We noted that Liggett
it was "clear" that
"mere stock ownership in a corporation, owning and operating a
drug store, can have no real or substantial relation to the public
health, and that the act in question creates an unreasonable and
unnecessary restriction upon private business,"
278 U.S. at 278 U. S. 113
however, we stated that "a pronounced shift of
emphasis since the Liggett
case," 336 U.S. at 336 U. S. 225
had deprived the words "unreasonable" and "arbitrary" of the
meaning which Liggett
ascribed to them. We had indeed held
in Lincoln Union v. Northwestern Co., 335 U.
, that a State had power, so far as the Due
Process Clause of the Fourteenth Amendment was concerned, to
legislate that no person should be denied the opportunity to obtain
or retain employment because he was or was not a member of a labor
union. After reviewing Nebbia v. New York, 291 U.
, Adair v. United States, 208 U.
, and Coppage v. Kansas, 236 U. S.
, we said:
"This Court, beginning at least as early as 1934, when the
case was decided, has steadily
Page 414 U. S. 165
rejected the due process philosophy enunciated in the
line of cases. In doing so, it has
consciously returned closer and closer to the earlier
constitutional principle that states have power to legislate
against what are found to be injurious practices in their internal
commercial and business affairs, so long as their laws do not run
afoul of some specific federal constitutional prohibition, or of
some valid federal law. . . . Under this constitutional doctrine,
the due process clause is no longer to be so broadly construed that
the Congress and state legislatures are put in a strait jacket when
they attempt to suppress business and industrial conditions which
they regard as offensive to the public welfare."
335 U.S. at 335 U. S.
We reached the same result in Ferguson v. Skrupa,
372 U. S. 726
where we sustained the constitutionality of a state law prohibiting
persons other than lawyers from engaging in the business of debt
adjusting and debt pooling. We said:
"We conclude that the Kansas Legislature was free to decide for
itself that legislation was needed to deal with the business of
debt adjusting. Unquestionably, there are arguments showing that
the business of debt adjusting has social utility, but such
arguments are properly addressed to the legislature, not to us. We
refuse to sit as a 'superlegislature to weigh the wisdom of
legislation,' and we emphatically refuse to go back to the time
when courts used the Due Process Clause"
"to strike down state laws, regulatory of business and
industrial conditions because they may be unwise, improvident, or
out of harmony with a particular school of thought."
"Nor are we able or willing to draw lines by calling a law
'prohibitory' or 'regulatory.' Whether the legislature
Page 414 U. S. 166
takes for its textbook Adam Smith, Herbert Spencer, Lord Keynes,
or some other is no concern of ours. The Kansas debt adjusting
statute may be wise or unwise. But relief, if any be needed, lies
not with us, but with the body constituted to pass laws for the
State of Kansas."
at 372 U. S.
-732 (footnotes omitted).
The majority of the Court in Liggett
for which Mr.
Justice Sutherland spoke held that business or property rights
could be regulated under the Fourteenth Amendment only if the
"legislation bears a real and substantial relation to the public
health, safety, morals, or some other phase of the general
welfare," 278 U.S. at 278 U. S.
-112. The majority held the Act governing pharmacies
"creates an unreasonable and unnecessary restriction upon private
278 U. S. 113
. The opposed view stated by Mr. Justice
Holmes, and concurred in by Mr. Justice Brandeis, was:
"A standing criticism of the use of corporations in business is
that it causes such business to be owned by people who do not know
anything about it. Argument has not been supposed to be necessary
in order to show that the divorce between the power of control and
knowledge is an evil. The selling of drugs and poisons calls for
knowledge in a high degree, and Pennsylvania, after enacting a
series of other safeguards, has provided that, in that matter, the
divorce shall not be allowed. Of course, notwithstanding the
requirement that, in corporations hereafter formed, all the
stockholders shall be licensed pharmacists, it still would be
possible for a stockholder to content himself with drawing
dividends and to take no hand in the company's affairs. But
obviously he would be more likely to observe the business with an
intelligent eye than a casual
Page 414 U. S. 167
investor who looked only to the standing of the stock in the
market. The Constitution does not make it a condition of preventive
legislation that it should work a perfect cure. It is enough if the
questioned act has a manifest tendency to cure or at least to make
the evil less."
at 278 U. S.
Those two opposed views of public policy are considerations for
the legislative choice. The Liggett
case was a creation at
war with the earlier constitutional view of legislative power,
Munn v. Illinois, 94 U. S. 113
94 U. S. 132
94 U. S. 134
and opposed to our more recent decisions. Olsen v.
Nebraska, 313 U. S. 236
313 U. S. 241
Williamson v. Lee Optical Co., 348 U.
, 348 U. S.
-488; Day-Brite Lighting, Inc. v. Missouri,
342 U. S. 421
well as the Daniel, Lincoln Union,
cases already discussed. The Liggett
case, being a
derelict in the stream of the law, is hereby overruled. We reverse
and remand the judgment below and free the courts and agencies of
North Dakota from what the State Supreme Court deemed to be the
mandate of Liggett.
N.D.Cent.Code § 43-15-35(5) (Supp. 1973) provides:
"Requirements for permit to operate pharmacy.
board shall issue a permit to operate a pharmacy, or a renewal
permit, upon satisfactory proof that:"
"* * * *"
"5. The applicant for such permit is qualified to conduct the
pharmacy, and is a registered pharmacist in good standing or is a
partnership, each active member of which is a registered pharmacist
in good standing, or a corporation or association, the majority
stock in which is owned by registered pharmacists in good standing,
actively and regularly employed in and responsible for the
management, supervision, and operation of such pharmacy. . . ."
"* * * *"
"The provision of subsection 5 of this section shall not apply
to the holder of a permit on July 1, 1963, if otherwise qualified
to conduct the pharmacy, provided that any such permit holder who
shall discontinue operations under such permit or fail to renew
such permit upon expiration shall not thereafter be exempt from the
provisions of such subsection as to such discontinued or lapsed
permit. The provisions of subsection 5 of this section shall not
apply to hospital pharmacies furnishing service only to patients in
"Final judgments or decrees rendered by the highest court of a
State in which a decision could be had, may be reviewed by the
Supreme Court. . . ."
28 U.S.C. § 1257.
We held in Local No. 438 v. Curry, 371 U.
, that a state court judgment which authorized a
temporary injunction against picketing because, in the court's
view, the National Labor Relations Board did not have exclusive
jurisdiction was "final" for purposes of 28 U.S.C. § 1257. We did
not wait until the litigation had been resolved in the state court,
as the state court had finally determined its jurisdiction, and
erroneously so. 371 U.S. at 371 U. S.
In Mercantile National Bank v. Langdeau, 371 U.
, a receiver for a Texas insurance company sued
two national banks, and the only question tendered on appeal from
the state court concerned the question of venue, viz.,
what state court a national bank could be sued. It was argued that
the state court judgment was not "final" for purposes of 28 U.S.C.
§ 1257. We rejected that view, holding the judgment "final" and
"[W]e believe that it serves the policy underlying the
requirement of finality in 28 U.S.C. § 1257 to determine now in
which state court appellants may be tried, rather than to subject
them, and appellee, to long and complex litigation which may all be
for naught if consideration of the preliminary question of venue is
postponed until the conclusion of the proceedings."
371 U.S. at 371 U. S.
In California v. Stewart, 384 U.
, 384 U. S.
-499, in a capital case, the State Supreme Court set
aside the verdict on a federal constitutional ground and directed
that the defendant (respondent) be retried. He moved that we
dismiss the State's petition, which we had granted, for lack of a
"final" judgment. We noted, however, that if, on a retrial, he were
acquitted, there was no appeal available to the State. We therefore
held that the judgment under review was "final" for our purposes.
at 384 U. S. 498
In Brady v. Maryland, 373 U. S. 83
state court had given a defendant post-conviction relief and
remanded the case for retrial on the question of punishment. We
took the case to determine whether the suppression of evidence by
the prosecution entitled the defendant to a retrial on the issue of
guilt as well as punishment. We held that the issue of guilt was
quite independent of the issue of punishment and that it was time
to decide the due process and/or equal protection questions
presented by the state decision.