Walgreen Co. prevailed against the City and County of San Francisco in California court and can proceed with its challenge to San Francisco’s ordinance banning the sale of tobacco products at certain retail establishments that contain a pharmacy. San Francisco defined "pharmacy" as "a retail establishment in which the profession of pharmacy by a [licensed] pharmacist is practiced and where prescription drugs are offered for sale." The prohibition applied to a store as a whole, even if the licensed pharmacy was situated within a larger store selling other merchandise. Thus, the ordinance would have included drugstores, grocery stores, chain stores, supermarkets, and big box stores that contain a pharmacy. However, San Francisco elected to exclude general grocery stores and big box stores.

Walgreens challenged this distinction on state and federal constitutional grounds, claiming violation of the equal protection clauses of the California and United States constitutions. The parties agreed that Walgreens and all other retail establishments containing licensed pharmacies are similarly situated for purposes of the challenged ordinance. The parties agreed also that rational basis review governed the equal protection claims. On this basis, the court considered whether a rational basis existed for exempting general grocery stores and big box stores that contain licensed pharmacies from the ban.