Le Drugstore Etats Unis, Inc. v. New York State Bd. of Pharmacy, 33 N.Y.2d 266 (1973)
An unlicensed business cannot use the term “drug store” in its name, even with a disclaimer, if state law prohibits such use by unlicensed entities.
Summary
Le Drugstore Etats Unis, Inc., an unlicensed retailer, sought a declaratory judgment to allow it to use the name “Le Drugstore,” despite not being a licensed pharmacy, arguing that a disclaimer stating “Not a Pharmacy” mitigated any potential public confusion. The New York Court of Appeals reversed the lower court’s decision, holding that Education Law § 6811(6) unambiguously prohibits unlicensed businesses from using the term “drug store,” regardless of disclaimers. The Court reasoned that allowing such use would debase the term’s significance and potentially confuse the public, thus warranting legislative action for any exceptions.
Facts
Le Drugstore Etats Unis, Inc. operated a retail business under the name “Le Drugstore” from October 1970 to February 1973. The business, modeled after a European merchandising concept, included boutiques, a restaurant, and other shops, but did not sell drugs. A sign outside the store stated “Not a Pharmacy.” The business never obtained a pharmacy license. Due to financial difficulties, the store closed in February 1973, and the corporation changed its name to Drop Kick, Inc. The State Board of Pharmacy challenged the use of the name “Le Drugstore”.
Procedural History
The plaintiff sought a declaratory judgment in Special Term, which granted summary judgment in their favor. The Appellate Division affirmed the Special Term’s decision, with two justices dissenting. The defendants appealed to the New York Court of Appeals based on the dissenting opinion. While the appeal was pending, the plaintiff closed its business and moved to dismiss the appeal as moot.
Issue(s)
1. Whether the appeal should be dismissed as moot due to the plaintiff closing its business.
2. Whether an unlicensed retailer can use the name “drug store” if it does not sell drugs and posts a disclaimer stating “Not a Pharmacy.”
Holding
1. No, because a novel and important question of statutory construction is presented, which is likely to recur.
2. No, because Education Law § 6811(6) expressly prohibits the use of the term “drug store” by other than a licensed pharmacy.
Court’s Reasoning
The Court of Appeals held that the appeal was not moot, emphasizing the novel and recurring nature of the statutory construction question regarding the use of the term “drug store” by unlicensed retailers. The Court then addressed the merits, focusing on the unambiguous language of Education Law § 6811(6), which prohibits any person from conducting business under a name containing the words “drug store” unless the place of business is a licensed pharmacy. The court rejected the argument that a disclaimer would prevent public deception, stating that the words “drug store” signify a place where drugs are dispensed by trained, licensed individuals, and allowing exceptions would debase the term’s significance and create unwarranted public confusion. The court distinguished People v. Bernstein, noting that the term “patent medicine” had a vastly different meaning to the public than “medicine,” and that patent medicines had been expressly excluded from regulation. The court stated, “To debase the significance of the term ‘drug store’, by implying exceptions in the statute, might create unwarranted confusion in the public…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.” The Court concluded that any exceptions to the statutory prohibition were properly a matter for the Legislature to decide.