In a 6-3 decision released today, the U.S. Supreme Court ruled that the state Board of Dental Examiners lacked immunity from antitrust laws and could not enforce regulations that effectively limit competition.
The case, NC Board of Dental Examiners v. FTC, arose from the Board’s repeated efforts to stop non-dentists from rendering teeth-whitening services, saying that such services constituted the “practice of dentistry” subject to its regulation.
After years of cease-and-desist orders issued by the Board to unlicensed providers of that service, the Federal Trade Commission stepped in and accused that body of stifling competition. In response the Board argued that as a state agency it was immune from antitrust laws.
The FTC and the Fourth Circuit disagreed, finding that the Board wasn’t really acting at state direction and was more akin to a private group using state regulation to restrain competitors.
The Supreme Court agreed.
Writing for the majority, Justice Anthony Kennedy found that because the Board was comprised mostly of dentists practicing and competing in the teeth-whitening market with non-dentists, it could only invoke state-action antitrust immunity if the state actively supervised the its actions concerning that service.
“The Board does not claim that the State exercised active, or indeed any, supervision over its conduct regarding nondentist teeth whiteners; and, as a result, no specific supervisory systems can be reviewed here,” Kennedy wrote.
Beyond the specific North Carolina situation, Kennedy — who was joined in the decision by Chief Justice John Roberts and Associate Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan — offered this guidance:
The [antitrust laws] protect competition while also respecting federalism. [They] do not authorize the States to abandon markets to the unsupervised control of active market participants, whether trade associations or hybrid agencies. If a State wants to rely on active market participants as regulators, it must provide active supervision if state-action immunity is to be invoked.
Justice Samuel Alito dissented, joined by Justices Antonin Scalia and Clarence Thomas.
The full opinion is here.