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Posted on 03/06/2015 2:14:16 PM PST by reaganaut1
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On Feb. 25, the Supreme Court released its decision in that case, North Carolina State Board of Dental Examiners v. Federal Trade Commission.
To briefly reiterate the facts, the FTC filed suit against the NC Board over its practice of telling non-dentists that offering teeth whitening services would land them in trouble because they were not licensed to do such work. In the FTC’s view, that was a clear violation of the Sherman Antitrust Act.
In response, the Board said that its actions were permissible, claiming that they came under a “state action” exemption to antitrust the Court established in a 1943 case.
Justice Kennedy wrote the majority opinion, joined by Chief Justice Roberts and Justices Ginsburg, Breyer, Kagan and Sotomayor. Rejecting the argument that the Board’s conduct was shielded against antitrust attack, Kennedy wrote, “Where a State delegates control over a market to a nonsovereign actor, the Sherman Act confers immunity only if the State accepts political accountability for the anticompetitive conduct it permits and controls. Limits on state-action immunity are most essential when a State seeks to delegate its regulatory power to active market participants….”
If the North Carolina General Assembly had ever directed the Board to reserve the business of teeth whitening for licensed dentists only, the case would have been different. But it had never done anything to approve the Board’s aggressive campaign to scare away others from competing against dentists, so there really was no state action involved, and therefore no immunity.
Justice Kennedy also brushed off the desperate, laughable claim made by the state that if the FTC prevailed, that would “discourage dedicated citizens from serving on state agencies that regulate their own occupation.
(Excerpt) Read more at forbes.com ...
SCOTUS.
Great! Now if they will just strike down the NC Regs that prevent stores like Aldi and Harbor Freight from selling affordable canes and walkers because “they are not licensed pharmacies, so they are not allowed to sell medical equipment.”
Of potential interest to you. See the comments.
FReepmail me to subscribe to or unsubscribe from the SCOTUS ping list.
On Feb. 25, the Supreme Court released its decision in that case, North Carolina State Board of Dental Examiners v. Federal Trade Commission.
To briefly reiterate the facts, the FTC filed suit against the NC Board over its practice of telling non-dentists that offering teeth whitening services would land them in trouble because they were not licensed to do such work. In the FTC’s view, that was a clear violation of the Sherman Antitrust Act.
In response, the Board said that its actions were permissible, claiming that they came under a “state action” exemption to antitrust the Court established in a 1943 case.
Justice Kennedy wrote the majority opinion, joined by Chief Justice Roberts and Justices Ginsburg, Breyer, Kagan and Sotomayor. Rejecting the argument that the Board’s conduct was shielded against antitrust attack, Kennedy wrote, “Where a State delegates control over a market to a non-sovereign actor, the Sherman Act confers immunity only if the State accepts political accountability for the competitive conduct it permits and controls. Limits on state-action immunity are most essential when a State seeks to delegate its regulatory power to active market participants….”
If the North Carolina General Assembly had ever directed the Board to reserve the business of teeth whitening for licensed dentists only, the case would have been different. But it had never done anything to approve the Board’s aggressive campaign to scare away others from competing against dentists, so there really was no state action involved, and therefore no immunity.
What a double-whammy for the administrative state: stop stifling competition and instead, do your job.
The interesting question is what further implications the Court’s decision could have. The North Carolina Dental Board is by no means the only professional regulatory body that uses its power not just to oversee the competence and ethics of its practitioners, but also to decide who may compete with them. Often, the answer is “nobody.”
State bar associations are notorious for acting like junkyard dogs, protecting licensed attorneys against any and all “trespassers” who might take away some billable hours. The way they do so is through “unauthorized practice of law” suits against people who do anything that could be called “practicing law” – even if no money changes hands and the work is done perfectly.
Rarely does the law carefully define what “the practice of law” is, so the lawyers have a free hand to try stopping websites, books, legal secretaries and anything else that could divert business away from members of the legal guild — a problem I wrote about in this column.
The meaning of North Carolina Board of Dental Examiners case is that professional regulatory bodies cannot violate the antitrust laws unless they have been explicitly authorized to do so by political processes. It was a good win for the FTC. Let us hope that the FTC follows up with suits against bar associations and other state agencies that have taken it upon themselves to stifle competition.
The 1943 case was bad law to start with. We need to return to the days before the overbroad and unnecessary Sherman Anti-Trust Act. It’s caused much more harm than good.
Although I like the result this case is ridiculous. The state can grant monopolies? That’s at least better than letting the feds do so.
The 1943 case limited the Sherman Antitrust Act; this decision strengthens it.
I totally agree with you....
Yes.
One of the problems we are dealing with today is all the banking and oil company mergers that took place during the Clinton administration. Granted, some were finalized under Bush but the process started under Clinton.
The same is true with Walmart’s expansion policy of unfair competition against small businesses to drive them out. Remember, Hillary was on their BOD prior to 1992 and Walmart financed much of Bill’s primary campaign.
The Sherman Antitrust Act (1898) banned monopolies. In 1943, the Supreme Court carved out a "state action" exception-- if a state, by law, did something like banning anyone not licensed in the state from practicing law or medicine, that would not be seen as a violation of the Sherman Act, on the theory that Congress didn't intend to stop states from exercising their traditional regulatory powers.
In this case, the state of Alabama went a step further-- they first limited the practice of dentistry to licensed dentists (OK so far), and they then delegated to the state's dentists the power to decide what "the practice of dentistry" means. The dentists, predictably, started banning non-dentists from doing routine things like teeth-whitening. The Supreme Court held that the 1943 exemption applies only to monopolies created directly by the state's elected officials, and the state cannot delegate to people who compete in the marketplace the power to exclude their own competition.
That is interesting thanks.
Seems to me that if the board could have made the case that teeth whitening can be damaging to the teeth or gums if done improperly they might have made the case that it was dentistry.
They still get to make that argument when the case goes back down to the lower courts. The point is that if the elected state legislature had said that only dentists could do teeth whitening, that decision couldn't be challenged at all in federal court. Because the decision was made by dentists trying to exclude competitors, they don't get the immunity that the state would have had, and have to justify their decision to a court and jury.
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