The primary issue before the Court is whether state-established boards can regulate their occupations without fear of being accused of violating federal antitrust laws. Stated another way: Whether a regulatory board created by state law can be exempt from federal antitrust law, even if most of the Board’s members earn their livings from the profession they’re overseeing.
This case stems from an action taken in 2007, whereby, after receiving numerous complaints, the NC Dental Board issued cease and desist letters to bleaching kiosks, salons, and malls offering teeth whitening services, etc., stating that this was the unlicensed practice of dentistry. The NC definition of dentistry includes the removal of stains and accretions from the human teeth.
The FTC brought action against the Board stating that the Board had engaged in unfair competition in the teeth whitening market by preventing lower cost competitors who are not licensed dentists from offering teeth whitening services.
Hashim’s opening comment was: “A state regulatory agency does not lose its state action antitrust immunity simply because the agency is run by part-time public officials who are also market participants in their personal capacities.”
He argued that respect for federalism requires deference to a State’s sovereign choices concerning how to structure and manage its own regulatory agencies. He said that states obtain valuable benefit from using market participants as part-time public officials based on their expertise. He explained that the states should be given deference to how they choose to regulate, and the simple fact that the Board is comprised of some market participants doesn’t change the fact that they are a state agency. To make this point he explained that Board members take an oath to enforce state law, they are required to comply with state administrative laws, ethics, and procedures, and to protect the public; they are fiduciaries of the state. He said the issue of how to deal with any board who may not be doing what they’ve sworn to do should be managed by the state, not the federal government.
Judges had questions about the inherent conflict for a dentist Board member, whether elected by peers, appointed by the Governor, recommended by the association, etc., to protect their own self-interests, however, many acknowledged the need for professionals to make decisions about their given professions as opposed to a group of disinterested bureaucrats doing the same. The FTC conceded that the issue was not how the dentists got put on the Board, but rather it was their inability as dentists to put the needs of the public before their own self-interests (a statement that somewhat offended me). He stated that a majority of dentists on the Board constituted a “decisive coalition.” Justice Scalai said, “Do you really think that the financial interest of the individual members of the board is going to be significantly affected? Of each individual member of the board? My goodness. I find that hard to believe.”
In this case the NC Board members were addressing the issue of what constitutes the practice of dentistry, which is a clearly articulated policy given to the Board. Hashim noted that the Dental Practice Act says that only licensed dentists can practice dentistry, and that is on its face inherently anti-competitive, which is acceptable as long as it is a clearly articulated policy. The FTC didn’t argue that the law is a clearly articulated policy, but they claim that the dentists on the Board interpreting what is the practice of dentistry is suspect. The FTC stated that when these determinations are made by market place participants, there cannot be impartiality due to the dentists’ own self-interests, therefore active supervision is required. The judges, whether they agreed with that premise or not, seemed to have difficulty in determining what that would look like, and acknowledging that professionals would not be willing to serve on these regulatory boards if they would subject themselves to antitrust litigation, penalties, damages, attorney’s fees, etc.
Justices Breyer and Scalia noted that a decision in this case will affect not only dentists, but also used the example of neurosurgeons, noting that they would want neurosurgeons making decisions about who should practice and the scope of practice, not disinterested parties. Justice Breyer said, “[If you are not going to give deference to the expert board’s determination], then you’re going to have the neurology qualification determination made by some people in the State who are not neurologists. Now, that to me spells danger.”
In response to the concern the wide spread effect this decision could have, the FTC stated: “… the Court also does proceed incrementally and it doesn’t feel disabled from announcing the right rule in the case before it simply because it can foresee both that difficult cases will arise in the future and that the rule it’s announcing won’t clearly resolve [every case]”.
I can go on and on about what I believed to be significant in this case and in the arguments. It is interesting because the media coverage I’m reading seems to side with the FTC’s position. Headlines include:
- “Can dentists bar competition over teeth whitening?”
- “Justices Skeptical of Dental Board’s Antitrust Immunity”
- “US Supreme Court to hear case over filling state boards with those who regulate own occupation”
- “A State Licensed Board Used Government Power for Self-Serving Private Gain? Justice Scalia Can’t Believe It”
- “Dental Regulators Seek to Quash 14th Amendment”
- “Supreme Court justices chew on teeth whitening dispute”
- “High Court considers if state boards serve public or limit competition”
- “Supreme Court Scrutinizes Power of Licensing Boards”
- My headline would have been a little different I think, but then again, I’m not impartial!
I would be interested in any comments/perspectives you may have. I know every person in the Court room walked away with their own view of what transpired, and how the Court may rule. I have to say I feel optimistic.
- Via telephone at (614) 466-2580
- Via email at Lili.Reitz@den.state.oh.us
About Ms. Lili C. Reitz, Esq.
Ms. Reitz has served as Executive Director of the Ohio State Dental Board since 1996. She oversees the daily operations of the Board, while managing a staff of twelve. She also oversees the licensure, regulation, and enforcement activities of the Ohio State Dental Board.