Plaintiff, National Pharmacies ("National") was a mail-order pharmacy based in New Jersey, duly licensed under Federal law and engaged in its business in Puerto Rico. Defendants included a retail pharmacy association of Puerto Rico (Asociacion), a quasi-public corporation defending the rights of domestic pharmacists in Puerto Rico (Colegio), the Secretary of Justice of Puerto Rico, and Secretary of Health of Puerto Rico. Plaintiff was challenging the constitutionality of several Puerto Rican statutes that were designed to protect Puerto Rican pharmacists from extraterritorial competitors. In addition, several of the defendants in the action had already attacked the mail-order pharmacy business on another front by bringing the matter before the Secretary of Health in an administrative proceeding. Plaintiffs then brought this suit in response to those allegations, and challenged the protectionist statutes on interstate commerce grounds.

The statutes in question provided that a pharmacy must be a member of the Colegio; the pharmacy must register with the Board of Pharmacy; a pharmacy may be inspected by the Secretary of Health; the pharmacist must live in the town where his or her business is located; and a minimum amount of hours that the pharmacist would be present in his place of business. The court went through a list of different states and their various regulations upon pharmacies, and noted that if these statutes were construed against out of state pharmacies, they would place an undue burden on interstate commerce. Regulation of a learned profession by either government or trade associations is allowed, so long as it does not unreasonably impinge on interstate commerce.

The court began its analysis by determining whether National had standing to pursue the case in Federal court. The local courts had deferred ruling on the issue, and the administrative hearing had been stayed. In turn, the court determined that National did satisfy the standing requirements. After a determination that Federal law did not preempt the Puerto Rican statutes, the court discussed the regulation of a profession when viewed in the context of interstate commerce and antitrust concerns. The Court held that the Puerto Rican regulation was subject to both laws.

National contended that the Puerto Rican statutes which required membership in the Colegio and registration with the Board of Pharmacy were unlawful and unconstitutional. The court declined to rule on the validity of those two statutes stating that plaintiff had failed to adequately demonstrate the type of impact the statutes had had on them. The court held that plaintiff’s allegations that the statutes were "guild-like" were in and of themselves insufficient to determine the constitutionality of a statute.

The court also denied National’s contention that the remaining Puerto Rican statutes at issue were unconstitutional. The Court did, however, note that the statutes applied only to Puerto Rican pharmacies. The reasoning behind the Court’s decision is simple: the context of the statutes would have made them impossibly invalid if the Puerto Rican Secretary of Health had tried to enforce them the way the defendants had argued in court. For example, the Secretary could not have the power to inspect an out-of-state pharmacy, nor would the Puerto Rican statutes have any effect on the pharmacies of another state.

The court noted that the statutes at issue had been enacted long before there was even a phenomenon such as mail-order pharmacies. The court also determined that National needed to register with the Colegio and the Board, but that the remaining three statutes had no effect on National’s operations, and that Puerto Rico could not enforce them against National.

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