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SOUTH OGDEN CVS STORE v. AMBACH

June 12, 1980

SOUTH OGDEN CVS STORE, INC., Plaintiff, against GORDON M. AMBACH, et al., Defendants.


The opinion of the court was delivered by: CONNER

OPINION AND ORDER

This is an action for injunctive and declaratory relief pursuant to 28 U.S.C. §§ 2201 and 2202 and 42 U.S.C. § 1983. Plaintiff is a retail drug, health and beauty aid store in Buffalo, New York, registered as a licensed pharmacy under New York Education Law § 6806. Defendants are members of the Board of Regents of the State University of New York, charged with supervision of pharmacies under New York Education Law § 6506; the Commissioner of Education of the State of New York, who administers the practice of the profession of pharmacy under the direction of the Board of Regents; and the Executive Secretary of the New York State Board of Pharmacy, who enforces the regulations of the Board of Regents and of the Commissioner relating to the practice of pharmacy in New York State.

Plaintiff challenges defendants' finding of a violation of New York State Education Law Article 137 with respect to two advertisements for discounts at plaintiff's store, asserting that the advertisements in question are protected commercial speech under the First Amendment.

 The case is before the Court on plaintiff's motion for summary judgment and defendants' cross-motion for summary judgment and motions to dismiss the action for lack of proper venue under 28 U.S.C. § 1391 or, in the alternative, for change of venue under 28 U.S.C. § 1404(a).

 Factual Background

 The facts are not in dispute. In 1976 and 1977, plaintiff conducted two advertising campaigns to help it compete more effectively with other retail drugstores in the Buffalo area. In the first campaign, plaintiff posted signs in its store and distributed circulars which stated "Senior Citizens Prescription Plan, 10% extra savings on all prescriptions for anyone over 60" without indicating on either the signs or the handout the normal prices from which the discount would be taken. In the second, plaintiff published newspaper advertisements with a coupon stating: "$ 1.00 off with this coupon on any one prescription that is not currently being filled at CVS."

 As to both campaigns, plaintiff states, and defendants do not deny, that information as to normal prices could have been obtained by a telephone call to the store; that plaintiff prominently posted, pursuant to New York Education Law § 6826, prices of the 150 most widely prescribed drugs in the pharmacy at its store, and informed customers on the posted sign that the price for any other prescription could be obtained on request; and that it would not have been practical to print the normal prices for the thousands of different prescription drugs sold by plaintiff in a newspaper advertisement or on a handout or sign.

 Plaintiff's store was inspected by the state on December 3, 1976 and December 29, 1977. On the first occasion, the inspector found that window signs in the pharmacy advertising the 10% senior citizens' discount and a newspaper advertisement containing the "$ 1.00 off for new prescriptions" coupon were in violation of the state pharmacy regulations quoted below. On the second occasion, the inspector found that application forms for the 10% senior citizens' discount in the pharmacy were a violation of the regulations. Plaintiff subsequently received notice that a committee of the New York State Board of Pharmacy would conduct a hearing on February 13, 1979 to determine whether violations had in fact occurred. The hearing was held as scheduled, and the Board of Pharmacy decided that the advertising in question did violate rules for pharmacies promulgated by the Board of Regents under Section 6506(9) of the New York Education Law, which provide, in relevant part:

 
"s 29.1 General provisions for all professions.
 
(a) Unprofessional conduct shall be the conduct prohibited by this section. The provisions of these rules applicable to a particular profession may define additional acts or omissions as unprofessional conduct and may establish exceptions to these general prohibitions.
 
(b) Unprofessional conduct in the practice of any profession licensed or certified pursuant to title 8 of the Education Law shall include:
 
(12) advertising or soliciting for patronage that is not in the public interest;
 
(i) Advertising or soliciting not in the public interest shall include but not be limited to advertising that:
 
(a) is false, fraudulent, deceptive, misleading, sensational or flamboyant;
 
(e) offers gratuitous services or discounts in connection with professional services; but this clause shall not be construed to relate to the negotiation of fees between professionals and patients or clients, or to prohibit the rendering of professional services for which no fee is charged ;
 
(g) states or includes prices for professional services, except as provided for in clause (b) of ...

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