The US Supreme Court issued its eagerly awaited decision today in North Carolina State Board of Dental Examiners v. Federal Trade Commission. As you might recall, this case involved an antitrust challenge by the FTC against a state dental board made up of practicing dentists that took actions to exclude non-dentists, i.e. their competitors, from the teeth-whitening business in North Carolina.
The issue before the Supreme Court was whether the North Carolina dental board could invoke the state-action-immunity doctrine to exempt itself from antitrust scrutiny. To obtain state-action immunity, defendants typically have to show (1) that the challenged restraint is clearly articulated and affirmatively expressed as state policy; and (2) that the policy is actively supervised by the state.
Previous Supreme Court decisions had established that the second requirement, active supervision, did not apply to municipalities. Until today, it was an open question whether state licensing boards, and state agencies in general, had to establish active state supervision over their activities as part of state-action immunity. According to the Supreme Court, they do.
This is an important decision that could lead to more antitrust challenges of state-agency conduct. State licensing boards better get their act together; it will be more difficult for them to abuse their power in anticompetitive ways.
In the meantime, you can access the Court’s opinion in North Carolina State Board of Dental Examiners v. Federal Trade Commission. You can read our amicus brief here. My blog posts on anticompetitive state conduct and state-action immunity are here.