North Carolina Dental Board Urges Reversal of FTC’s “Radical” Stance on State Action Immunity

By on September 5, 2014

North Carolina’s State Board of Dental Examiners has urged the U.S. Supreme Court to reject the Federal Trade Commission’s (FTC’s) “radical departure” from decades of established precedent that offers state actors immunity from antitrust scrutiny, arguing that the FTC’s approach contradicts the federalist principles that originally gave rise to the state action immunity doctrine.

Earlier this year, the Court agreed to consider whether the Fourth Circuit erred in upholding the FTC’s ruling against the Board.  The Board presented its arguments in a brief submitted in advance of oral arguments, which are scheduled for October 2014.

The Board’s brief is but the latest salvo in a long-running battle with the FTC that dates back to 2010.  The North Carolina state agency—which includes practicing dentists among its members—licenses dentists in the state and can take disciplinary measures against licensees. Approximately a decade ago, following complaints from dentists practicing in the state, the Board launched investigations into teeth-whitening services provided by non-dentists and ultimately issued dozens of cease-and-desist letters to such service providers. The FTC issued an administrative complaint in 2010 charging that the Board violated the FTC Act by acting to exclude non-dentist teeth whiteners from the market in North Carolina. Relying on its status as a state entity, the Board has maintained that it is immune from scrutiny under the antitrust laws. The FTC has argued that the presence of market participants on the board means the board is more akin to a private actor, which must be subject to active state supervision in order to benefit from immunity.  The FTC maintains that such supervision is lacking here. The Fourth Circuit sided with the FTC in 2013, and the Supreme Court agreed to review that decision.

In its brief, the Board contends that the FTC’s position runs contrary to long-established precedent.  The Board especially challenges the FTC’s arguments that state action immunity is available only where decisions are made by “disinterested public officials.” According to the Board, the FTC seeks to apply to public officials the test that is applicable to private actors seeking the benefit of state action immunity.  The Board contends this is erroneous and that the federalist principles that justified prior state action immunity decisions render the self-interest of individual public officials irrelevant.

The Supreme Court’s resolution of this conflict could have significant repercussions for state regulatory bodies, many of which rely upon participation of professionals and other market participants. 23 states have filed an amici brief that similarly urges the Supreme Court to reverse the Fourth Circuit’s decision.

Daniel Powers
Daniel (Dan) Powers focuses his practice on antitrust litigation, counseling and regulatory matters. He assists clients in a variety of industries, including health care, pharmaceuticals, mobile communications, aerospace and defense. Read Daniel Powers' full bio.





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