                            OFFICE OF THE ATTORNEY GENERAL

                                      State of California


                                     JOHN K. VAN DE KAMP

                                        Attorney General


                          ______________________________________

                  OPINION            :
                                     :          No. 89-402
                  of                 :
                                     :          JULY 6, 1989
       JOHN K. VAN DE KAMP           :
           Attorney General          :
                                     :
       RODNEY O. LILYQUIST           :
        Deputy Attorney General      :
                                     :
______________________________________________________________________________

               THE CALIFORNIA STATE BOARD OF PHARMACY has requested an opinion
on the following question:

               Is a pharmacy operated by the University of California subject to the licensure,
inspection, and disciplinary provisions of the Pharmacy Law?

                                           CONCLUSION

               A pharmacy operated by the University of California is subject to the licensure,
inspection, and disciplinary provisions of the Pharmacy Law.

                                             ANALYSIS

                 The University of California ("University") was founded in 1868 and is established
under the Constitution as "a public trust, to be administered by . . . 'The Regents of the University
of California.'" (Cal. Const., art. IX, § 9, subd. (a).) "Broadly stated, the function of the University
is to impart learning and to advance the boundaries of knowledge." (Goldberg v. Regents of the
University of California (1967) 245 Cal.App.2d 867, 869.) In managing the affairs of the
University, the Regents1/ provide students with various health care services, including the operation
of such facilities as hospitals and pharmacies. (See Davie v. Board of Regents (1924) 66 Cal.App.
693, 700-701 [infirmary maintained for "purpose of safeguarding and protecting the health of the
student body. . . . maintenance of the health of the students is an educational activity."].)



      1. The Regents, as specified in the Constitution, are responsible for administering the
University's affairs and constitute a separate but constituent part of the University. (Estate of Royer
(1899) 123 Cal. 614, 619-624.) "The Board of Regents has been variously characterized as an
institution of the state, a public corporation, a governmental agency, and a public entity." (Regents
of University of California v. Superior Court (1970) 3 Cal.3d 529, 534.) For our purposes the
Regents and the University may be treated interchangeably.

                                                  1.                                            89-402
               The question presented for resolution is whether the pharmacies operated on the
University's campuses are subject to the provisions of the Pharmacy Law (Bus. & Prof. Code, §§
4000-4480),2/ particularly with respect to licensure, inspection, and disciplinary proceedings. We
conclude that the requirements of the Pharmacy Law are applicable to the University's pharmacies.

               The Pharmacy Law is administered by the California State Board of Pharmacy
("Board") and covers a variety of subjects, including access to areas where dangerous drugs are
stored (§ 4035.2), filling prescriptions with generic substitutes (§ 4076.6), labeling drugs furnished
(§ 4048), refilling prescriptions (§ 4229), maintaining drug inventory records (§ 4232), and
maintaining prescription records (§ 4331).

               With respect to the licensing of pharmacies, section 4080 provides:

               "No person shall conduct a pharmacy . . . in the State of California unless he
       or she has obtained a certificate, license, permit or registration from the board. A
       certificate, license, permit or registration shall be required for each of the premises
       of any person operating a pharmacy in more than one location. Such certificate,
       license, permit or registration shall be renewed annually on or before November 1
       of each year and shall not be transferable."

Additionally section 4391 states:

                 "No building shall have upon it or displayed within it or affixed to or used in
       connection with it a sign bearing the word or words . . . 'Pharmacy,' . . . 'Drugstore,'
       . . . or any word or words of similar or like import . . . unless there is upon or within
       the building a pharmacy holding a permit issued by the board pursuant to Section
       4080 of this code."

               Concerning the inspection of pharmacies, section 4010 provides in part:

               " . . . The members of the board and inspectors of pharmacy . . . may
       inspect, during business hours, all pharmacies . . . or places in which drugs are
       compounded, dispensed or sold."

                Under the disciplinary provisions of the Pharmacy Law, the Board may suspend
or revoke any certificate, license, permit, registration, or exemption issued by it. (§§ 490, 4350-
4359; Arenstein v. State Board of Pharmacy (1968) 265 Cal.App.2d 179, 192-194.) In Vermont
& 110th Medical Arts Pharmacy v. Board of Pharmacy (1981) 125 Cal.App.3d 19, for example,
the court upheld the Board's revocation of a pharmacy permit and of the licenses of pharmacists
for violating the Pharmacy Law, the California Uniform Controlled Substances Act (Health and
Saf. Code, §§ 11000-11650), and the Controlled Substances Act (21 U.S.C. § 801; 21 C.F.R. §
1306).3/


   2. All references hereafter to the Business and Professions Code are by section number only.

  3. We note that an investigation by the Board may also uncover violations of the Sherman Food,
Drug and Cosmetic Law (Health & Saf. Code, §§ 26000-26851) and of the Board's own
administrative regulations (Cal Code of Regs., tit. 16, §§ 1700-1792) implementing the Pharmacy
Law. With respect to operating a pharmacy, the Board's regulations cover such subjects as building
construction standards, sanitary standards, security standards, reporting drug losses, and handling
radioactive drugs.

                                                  2.                                               89-402

               For purposes of the Pharmacy Law, "person" is defined in section 4039 as follows:

             "'Person' includes firm, association, partnership, corporation, state
       governmental agency, or political subdivision."

We believe the University comes within this broad statutory definition of "person." (See Regents
of University of California v. Superior Court (1976) 17 Cal.3d 533, 536 ["The University is a
public corporation"]; Estate of Royer, supra, 123 Cal. 614, 619-620 [the University "is a
governmental agency . . . an instrumentality of the state"]; California State Employees Assn. v.
State of California (1973) 32 Cal.App.3d 103, 109 ["The University is a constitutional
department or function of the state government"]; Ishimatsu v. Regents of University of
California (1968) 266 Cal.App.2d 854, 864 ["the University is a statewide administrative
agency"]; Pennington v. Bonelli (1936) 15 Cal.App.2d 316, 321 ["the University of California
[is] a branch of the state"].)4/

                Looking only at the provisions of the Pharmacy Law, we would conclude that the
University is required to obtain a license to operate each of its pharmacies (§§ 4039, 4080, 4081),
each pharmacy must be managed by a registered pharmacist (§§ 4386-4387; In re Gray (1929)
206 Cal. 497, 499-502; see also §§ 4035.2, 4050, 4385), the Board could inspect the University's
pharmacies (§ 4010), and the disciplinary provisions (§§ 490, 4350-4359) would be applicable
with respect to the operation of each pharmacy.

                The critical issue, however, is not whether the University's pharmacies come
within language and terms of the Pharmacy Law, but whether the Legislature has the power to
regulate the University's pharmacies at all. The issue arises because of the Regents' unique
constitutional authority over the affairs of the University.

                As the courts have repeatedly declared: "'The power of the Regents to operate,
control, and administer the University is virtually exclusive'" (Regents of the University of
California v. Superior Court, supra, 3 Cal.3d 529, 540), "the Regents' powers of organization and
government are broad, while the Legislature's power to regulate the university and the Regents
is quite limited" (Simpson v. Unemployment Ins. Comp. Appeals Bd. (1986) 187 Cal.App.3d 342,
349), which "contrasts with the comprehensive power of regulation the Legislature possesses
over other state agencies" (San Francisco Labor Council v. Regents of University of California,
supra, 26 Cal.3d 785, 788).

               The Legislature may of course "exercise any and all legislative powers which are
not expressly or by necessary implication denied to it by the Constitution," with any doubt as to
the Legislature's power "'resolved in favor of the Legislature's action.'" (Methodist Hosp. of
Sacramento v. Saylor (1971) 5 Cal.3 685, 691.) In determining whether the Legislature may
subject the University's pharmacies to the requirements of the Pharmacy Law, we look solely to


   4. Although section 4039 was amended in 1980 (Stats. 1980, ch. 948, § 1) to specifically include
"state governmental agency, or political subdivision," we do not suggest that the amendment was
necessary to place the University within the scope of the definition. (See San Francisco Labor
Council v. Regents of the University of California (1980) 26 Cal.3d 785, 789 ["the university is so
autonomous that, unlike other state agencies, it is subject to . . . laws . . . applicable to private
persons and private universities"]; City Street Imp. Co. v. Regents, etc. (1908) 153 Cal. 776, 779
["the university . . . is not clothed with the sovereignty of the state"]; Estate of Royer, supra, 123
Cal. 614, 624 ["The university is not the sovereign. . . . the statute applies to the university as a
public corporation"].)

                                                  3.                                          89-402

the provisions of the Constitution. Do they deny the Legislature's power in this area, either
expressly or by necessary implication?

                Section 9 of article IX of the Constitution states:

                "(a) The University of California shall constitute a public trust, to be
        administered by the existing corporation known as 'The Regents of the University
        of California,' with full powers of organization and government, subject only to
        such legislative control as may be necessary to insure the security of its funds and
        compliance with the terms of the endowments of the university and such
        competitive bidding procedures as may be made applicable to the university by
        statute for the letting of construction contracts, sales of real property, and
        purchasing of materials, goods, and services. . . .

                "......................

                 "(f) The Regents of the University of California shall be vested with the
        legal title and the management and disposition of the property of the university
        and of property held for its benefit and shall have the power to take and hold,
        either by purchase or by donation, or gift, testamentary or otherwise, or in any
        other manner, without restriction, all real and personal property for the benefit of
        the university or incidentally to its conduct; provided, however, that sales of
        university real property shall be subject to such competitive bidding procedures
        as may be provided by statute. Said corporation shall also have all the powers
        necessary or convenient for the effective administration of its trust, including the
        power to sue and to be sued, to use a seal, and to delegate to its committees or to
        the faculty of the university, or to others, such authority or functions as it may
        deem wise. The Regents shall receive all funds derived from the sale of lands
        pursuant to the act of Congress of July 2, 1862, and any subsequent acts
        amendatory thereof. The university shall be entirely independent of all political
        or sectarian influence and kept free therefrom in the appointment of its regents
        and in the administration of its affairs, and no person shall be debarred admission
        to any department of the university on account of race, religion, ethnic heritage,
        or sex.

                "(g) Meetings of the Regents of the University of California shall be
        public, with exceptions and notice requirements as may be provided by statute."
        (Emphases added.)

                The Constitution thus grants authority to the Legislature to (1) insure the security
of the University's funds, (2) insure the University's compliance with the terms of its
endowments, (3) regulate competitive bidding procedures for the University's contracts, and (4)
provide notice and closed session requirements for the meetings of the Regents. More
significantly, the Constitution places authority in the Regents over (1) the organization and
government of the University, (2) the management and disposition of the University's property,
and (3) the administration of the University as a public trust. Not only do these provisions place
a restriction upon the Legislature's powers by necessary implication, especially by use of the
phrase "subject only to such legislative control . . ." (see San Francisco Labor Council v. Regents
of University of California, supra, 26 Cal.3d 785, 788), the Constitution expressly mandates that
the University "be entirely independent of all political . . . influence . . . in the administration of
its affairs."


                                                    4.                                            89-402

               In construing the governing constitutional language, the courts have found three
areas where the Legislature may regulate the affairs of the University although not expressly so
authorized in article IX. In San Francisco Labor Council v. Regents of University of California,
supra, 26 Cal.3d 785, 789, the Supreme Court stated:

                "It is true the university is not completely free from legislative regulation.
        In addition to the specific provisions set forth in article IX, section 9, there are
        three areas of legislative regulation. First, the Legislature is vested with the
        power of appropriation, preventing the regents from compelling appropriations
        for salaries. [Citations.]

                "Second, it is well settled that general police power regulations governing
        private persons and corporations may be applied to the university. [Citations.]
        For example, workers' compensation laws applicable to the private sector may be
        made applicable to the university.

                "Third, legislation regulating public agency activity not generally
        applicable to the public may be made applicable to the university when the
        legislation regulates matters of statewide concern not involving internal university
        affairs. [Citation.]"

                The first category mentioned, that of appropriations, is plainly inapplicable to our
discussion of the Pharmacy Law. With respect to the second category of general police power
regulations, it has been observed that "[t]he police power of the state finds its genesis in the
state's inherent power to govern . . . which subjects the citizens of the state to reasonable
regulation for the general welfare of society." (Findley v. Justice Court (1976) 62 Cal.App.3d
566, 571; see In re Ramirez (1924) 193 Cal. 633, 649-650; Churchill v. Parnell (1985) 170
Cal.App.3d 1094, 1098.) "It has long been settled that the police power extends to objectives in
furtherance of the public peace, safety, morals, health and welfare, and is elastic and capable of
expansion to meet existing conditions." (People v. H & H Properties (1984) 154 Cal.App.3d
894, 900; accord, Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, 160.) Accordingly, the
scope of the Legislature's general police power authority is exceedingly broad.

                We believe that the Pharmacy Law fits squarely within this second category of
"general police power regulations governing private persons and corporations." (See Whalen v.
Roe (1977) 429 U.S. 589, 597-598 [51 L.Ed.2d 64, 97 S.Ct. 869] [requiring a patient's
identification for prescriptions of certain dangerous drugs constitutes a reasonable exercise of
police power]; Kelley v. Johnson (1976) 425 U.S. 238, 247 [47 L.Ed 708, 96 S.Ct. 1440] ["the
promotion of safety of persons and property is unquestionably at the core of the State's police
power"]; People v. Privitera (1979) 23 Cal.3d 697, 704-705 [the state has a "'vital interest in
controlling the distribution of dangerous drugs'"]; In re Gray, supra, 206 Cal. 497, 499 ["for the
preservation of public health and safety, the state may regulate and place proper restrictions upon
the practice of pharmacy, and . . . in the exercise of its police power it may also regulate the
manufacture, compounding and sale of drugs, medicines and poisons, where such regulation in
any way reasonably tends to protect the public health, safety or morals"]; Wilson v. California
Health Facilities Com. (1980) 110 Cal.App.3d 317, 323 [when "the state's legitimate interests
in health and safety are involved, it may properly exercise its police powers"].)

                Williams v. Wheeler (1913) 23 Cal.App. 619, was one of the first cases to affirm
the authority of the Legislature to apply general police power statutes to the operations and affairs
of the University. The court observed with respect to a statute requiring students to be vaccinated
against smallpox:

                                                   5.                                            89-402

                "It is undoubtedly true . . . that there are certain subjects affecting the
        general welfare over which the legislature has been wisely invested with ultimate
        control. These subjects are those embraced within the general police powers of
        the state; and among them is the subject of the general health. . . . over this subject
        the state legislature has the ultimate control; and that in the exercise of that
        control it has power to pass general laws, in the nature of health regulations, upon
        the subject of vaccination prescribing the extent to which persons seeking
        entrance as students in educational institutions within the state must submit to its
        requirements as a condition of their admission; and . . . in so far as such an act
        of the legislature comes within the definition of a general law, and as such also
        comes within the general police powers of the state as a health regulation, the
        rules and regulations of the board of regents of the university must give way
        before it." (Id., at p. 625.)

                In Wallace v. Regents, etc. (1925) 75 Cal.App. 274, 278, the court stated:

                "There is no question but that the legislature may under its police power
        limit or abrogate this right [of the Regents to adopt and enforce health measures
        covering University students], and, in fact, respondents do not claim otherwise,
        for they concede that the power vested under the constitution in the Regents is not
        so broad as to destroy or limit the general power of the legislature to enact laws
        for the general welfare of the public, including laws regulating the subject of
        vaccination, even though it might incidentally affect the University of California,
        as such a law would be paramount as against a rule of the Regents in conflict
        therewith."

                Recently, in Laurel Heights Improvement Assn. v. Regents of University of
California (1988) 47 Cal.3d 376, the Supreme Court noted the authority of the California
Department of Health Services to regulate the University's operation of a School of Pharmacy
with respect to "standards for radioactive particle concentrations in outside air." (Id., at p. 411.)
The Regents conceded the application of these police power regulations when it submitted an
environmental impact report ("EIR") proposing the relocation of a biomedical research facility.
As found by the Supreme Court:

               "According to the EIR, the California Department of Health Services
        regulates and monitors the use of radioactive substances, and various other
        governmental agencies have established guidelines for handling hazardous
        wastes. In response to public questions on the draft EIR, the final EIR stated, "A
        California State Department of Health permit is required for disposal of these
        [carcinogenic] hazardous wastes." (Id., at p. 419, fn. 21.)

The court also referred to "prior difficulties UCSF has had in complying with regulations
governing the handling of [radioactive] materials" (id., at p. 419), a "compliance inspection" by
the State Department of Health Services that resulted in an "enforcement conference" (id., at p.
420), and specifically found that "[t]he handling of radioactive substances is closely regulated
and monitored, as evidenced by the oversight of UCSF's activities" (ibid.). Although the court
modified an earlier order to allow the introduction of radioactive materials at the new location,
it stated that "[t]his modification does not exempt UCSF from obtaining all required licenses and
permits for the use of radioactive materials before introducing them to the Laurel Heights
facility." (Id., at p. 425, fn. 25.) Laurel Heights is thus replete with references to the
Legislature's police power authority over the University's activities in the area of health
regulations.

                                                    6.                                            89-402

               We are informed by the State Department of Health Services that it licenses and
regulates the University's acute care hospitals, clinical laboratories, production of biologics,
domestic water supply systems, hazardous waste facilities, radioactive materials, sources of
ionizing radiation, and drug manufacturing. (See Health & Saf. Code, §§ 1254, 1265, 1612,
4011, 25810, 25815, and 26685.) These would be additional examples of health regulations
applied to the University under the category of "general police power regulations governing
private persons and corporations."

                As for the third category mentioned in San Francisco Labor Council of
"legislation regulating public agency activity . . . [concerning] matters of statewide concern not
involving internal university affairs," we know of no case that has explored the relationship
between "police power" regulations and "statewide concern" regulations. In Tolman v. Underhill
(1952) 39 Cal.2d 708, however, the court stated "that laws passed by the Legislature under its
general police power will prevail over regulations made by the regents with regard to matters
which are not exclusively university affairs." (Id., at p. 712.) Tolman was a governmental
agency regulatory case, and its use of the word "exclusively" might explain more appropriately
the test for a "statewide concern" type of regulation. Even assuming that a police power
regulation may not encroach upon what is exclusively a University affair,5/ health regulations
such as the Pharmacy Law would obviously have no difficulty meeting this requirement.6/

               Finally, we note that the Pharmacy Law does not impose a fee upon governmental
agencies for obtaining a pharmacy permit; the fee is imposed solely upon the operation of "a
nongovernmental pharmacy." (§ 4416, subd. (a).) Similar to many other statutes (see, e.g., Gov.
Code, § 6103), this codifies the general practice of governmental agencies not charging other
governmental agencies for services rendered. (See Atty.Gen.Opn. NS 3290 (1941) [the
University need not pay the State Department of Public Health for its license to operate a
hospital]; Atty.Gen.Opn. 10428 (1935) [the University need not pay the State Director of




   5. It has been suggested that "educational decisions" (Regents of the University of California v.
Superior Court, supra, 17 Cal.3d 533, 537), "the details of its internal government" (Williams v.
Wheeler, supra, 23 Cal.App. 619, 623), "central functions" including "determination of the content
of courses and curricula; requirements for degrees; conduct of research; establishment of policies
and procedures concerning selection, retention, and conditions of employment of academic
personnel; internal allocation of resources; initiation, administration, revision and termination of
academic programs; establishment of patterns of internal governance; and determination of at least
the academic aspects of admissions criteria" (Horowitz, The Autonomy of the University of
California Under the State Constitution (1977) 25 UCLA L.Rev. 23, 37), and "decisions concerning
faculty employment or student admissions" (Note, Autonomy and Accountability: The University
of California and the State Constitution (1987) 38 Hastings L.J. 927, 928) might be considered
within the category of "exclusively a University affair."

      6. Laurel Heights, for example, focused primarily upon a "statewide concern" legislative
regulation. The Regents conceded the application of the statutory scheme (Laurel Heights
Improvement Assn. v. Regents of University of California, supra, 47 Cal.3d 376, 390-391) even
though its application directly affected the siting of a research facility and could potentially disrupt
ongoing scientific research, cause the loss of faculty members and research funds, and require
substantial sums of money for relocation if the Regents did not comply with the statutory scheme
(id., at p. 424). These possible intrusions into the University's internal affairs did not merit even
brief questioning concerning the Legislature's powers over the University's activities.

                                                  7.                                            89-402

Agriculture for its license to operate a creamery].)7/ While an argument may be made that a
University pharmacy should be considered "a nongovernmental pharmacy" (see San Francisco
Labor Council v. Regents of the University of California, supra, 26 Cal.3d 785, 789 ["the
university is so autonomous that, unlike other state agencies, it is subject to . . . laws . . .
applicable to private persons and private universities"]; Estate of Royer, supra, 123 Cal. 614, 624
["The university . . . is not clothed with the sovereignty of the state and is not the sovereign"], we
believe that the University would not be required to pay the fee of section 4416 under the
ordinary definitions of its terms (see City Street Imp. Co. v. Regents, etc., supra, 153 Cal. 776,
779 ["the University [is] a governmental institution and an instrumentality of the state"];
California State Employees Assn. v. State of California, supra, 32 Cal.App.3d 103, 109 ["The
University is a constitutional department or function of the state government"]; Pennington v.
Bonelli, supra, 15 Cal.App.2d 316, 321 ["the University of California [is] a branch of the state
itself"].)

                In summary, the Pharmacy Law was enacted by the Legislature in the exercise of
its police power authority to protect the general health and welfare of the public. While the
University is free from much of the Legislature's control, general police power regulations are
applicable to the University unless the Legislature indicates otherwise. Finding no exclusion
from regulation for the University's pharmacies, we conclude that a pharmacy operated by the
University is subject to the licensure, inspection, and disciplinary provisions of the Pharmacy
Law.

                                             *****




  7. In a 1948 memorandum to the Board, a Deputy Attorney General indicated that the University
need not obtain a permit from the Board to operate a pharmacy. The conclusion was based upon a
misreading of our prior opinions, NS 3290 and 10428, as well as Williams v. Wheeler, supra, 23
Cal.App. 619, and Davie v. Board of Regents, etc., supra, 66 Cal.App. 693. Davie held that the
University was not liable for the negligence of a physician performing surgery at its hospital under
the law then applicable. (Id., at p. 700.) Neither our prior opinions nor the two cases cited remotely
suggested that the University was exempt from obtaining licenses required under general police
power regulatory schemes protecting the public health and welfare. The 1948 memorandum to the
Board is disapproved.

                                                   8.                                            89-402
