Opinion ID: 272298
Heading Depth: 1
Heading Rank: 2

Heading: Failure to Register

Text: 18 Another question that this Court must consider before approaching the main contentions is whether the failure of Diapulse Corporation to register under the New York Education Law prevented it from maintaining this libel action. We agree with Judge Dooling that Diapulse was not barred from bringing this suit. 4 19 Section 6805 of the Education Law, McKinney's Consol.Laws, c. 16, provides that No manufacturer    of drugs or devices shall operate as a manufacturer    until the proprietor has applied for and received a registration certificate from the board. 5 At the time the present litigation was commenced, Diapulse Corporation was not registered under that section. In response to an inquiry by counsel for the Birtcher Corporation, a clerk of the Pharmacy Board stated that it was his understanding that Diapulse was not required to register. A year later, however, when defense counsel was preparing for trial, a similar inquiry was made. This time the response by the Secretary of the Pharmacy Board stated that if the Diapulse machine was as described, the manufacturer would have to register. The full circle of well-meaning but confusing and inconsistent interpretations was completed in May 1964, when the Counsel of the State Education Department advised plaintiff's counsel by letter that The Department has never registered diathermy or similar machines and is not of the view that such registration is required. 20 In light of our determination we need not decide whether the Diapulse Corporation violated section 6805 of the Education Law. 6 The conflicting positions taken by the various state authorities indicate that any attempt by the Diapulse Corporation to have registered in 1956 most likely would have been unsuccessful. Moreover, and not of small significance, is the reality that even if New York did have a public policy requiring registration of such devices, such policy was quite feeble; thus, the state courts, as a matter of fair play, would not refuse to entertain a suit by an unregistered manufacturer. And, even if the failure by the Diapulse Corporation to register would have prevented it from bringing certain suits, the New York cases establish that Diapulse would not be barred from bringing this suit. The cases posit the maxim that failure to register will be fatal only when the cause of action involves the very essence of the regulatory scheme embodied in the particular statute which was violated. Thus Williams v. New York Herald Co., 165 App.Div. 529, 150 N.Y.S. 838 (1914) is of little solace to the appellant. There, a dairy company which violated the Penal Law by conducting its business under a fictitious name and without registering as required, could not recover damages in an action for libel. The objective of the Penal Law, the court pointed out, was to protect creditors who were dealing with individuals doing business under a name other than their own. The heart of the statute, therefore, was the registration of the fictitious name, and the failure of plaintiffs in the Williams case to register prevented their trade name from having any legally protected significance which would form the basis of an action for libel. The purpose of section 6805 of the Education Law, however, is quite different. The legislative history recorded on the jacket of the bill which brought the section into existence indicates, The purpose is to have a list of all places in the state at which drugs and devices are manufactured, which will greatly facilitate the enforcement of the law. The law is thus aimed only at ascertaining the location of manufacturers of certain drugs and devices, and not the name under which the particular manufacturer conducts its business. The allegation in the present case, that the name Diapulse was defamed does not involve the essence of the regulatory scheme embodied in section 6805, and therefore appellees' failure to register does not bar them from bringing this cause of action. 21 Moreover, since the Birtcher Corporation is not a member of that class which section 6805 was designed to protect, we do not believe it has standing to raise the failure to register as a defense. We see this principle formulated in Rosasco Creameries, Inc. v. Cohen, 276 N.Y. 274, 11 N.E.2d 908, 118 A.L.R. 641 (1937). The New York Court of Appeals decided there, that the failure of a milk dealer to procure a license as required by law did not deprive him of the right to recover the reasonable value of milk sold to another dealer. The court found that the statute was enacted to protect producers and consumers, and therefore another dealer, not being a member of that class, could not raise the failure to register as a defense. In the present case, section 6805 is a police measure protecting the public health. It is not designed to protect the interests of competitors or critics of particular devices, and, accordingly, we are of the opinion that the Birtcher Corporation cannot properly defend by alleging that Diapulse failed to register. Judge Dooling properly held this defense to be insufficient in law.