Wednesday, June 09, 2010

Walgreen v. City and County of San Francisco (Cal. Ct. App. - June 8, 2010)

When was the last time you saw a statute regulating economic transactions struck down on rational basis review?

Yeah. I thought so. Freakishly uncommon.

Admittedly, the Court of Appeal doesn't strike down the statute here. But it comes darn close, and not only reverses the trial court's dismissal, but its holding and analysis makes it very likely that the statute gets found unconstitutional on remand.

It's a somewhat strange -- and yet understandable -- statute. From San Francisco, which is not surprising given the context. Basically the statute says that retail "pharmacies" can't sell tobacco products. On the laudable ground that we don't want people in the business of health also in the business of unhealth, and want to avoid any perception that places that sell vital drugs endorse the consumption of unhealthy drugs as well.

One can debate the premise, of course. But that's largely for the Legislature to decide. With very, very limited constitutional review on rational basis grounds.

So you'd think the statute would be pretty invulnerable. Except that it does have features that make it difficult to defend. For example, while the entire store that has a pharmacy in it (even if it sells other things) is precluded from selling cigarettes -- e.g., an entire Rite-Aid is covered -- the statute also says that "grocery stores" and "big box" stores are expressly not covered. So your Safeway, which has a pharmacy in it, can sell cigarettes, as can your Costo, but Walgreens can't. Those exceptions are what really trouble the Court of Appeal, and make the statute much more vulnerable to an equal protection challenge. Especially when, as applied, the law basically applies almost exclusively to Walgreens and Rite-Aid, which are owned by the same entity.

But, again, rational basis is a darn lax test. And Walgreens and Rite-Aid are "health" stores in a way that other retail stores aren't. So on rational basis review, I think the statute may have a bit -- albeit perhaps a tiny bit -- more going for it than the Court of Appeal gives it credit.

Though I readily concede that, on the other side, my thoughts on this subject are undoubtedly colored by my personal knowledge of the relevant stores. For example, I often go to my local Rite-Aid (in Ocean Beach) for prescriptions or with my kids with ice cream. That place must do 90% of its business -- no exaggeration -- in alcohol sales. Every single person in line invariably is buying beer or hard liquor, and for the majority, that's it. The place is infamous for having by far the cheapest alcohol in my neighborhood, and its customers are fully aware of that fact. So to the extent the San Francisco ordinance is trying to say "Oh, we're deeply concerned that pharmacies be perceived to have an undiluted connection to heath," well, try telling that to the guy at Rite-Aid buying tequila, two cases of beer, and a box of condoms. I'm not really sure that making the guy walk across the street for cigarettes keeps the pharmacy "pristine".