NC Board of Dental Examiners v. FTC
Citation
574 U.S. 494 (2015). Supreme Court of the United States.
Facts
The North Carolina State Board of Dental Examiners, whose members were overwhelmingly practicing dentists elected by other dentists, sent cease-and-desist letters to non-dentist teeth-whitening providers, driving them out of the market. The FTC challenged this as an anticompetitive restraint of trade. The Board claimed state action immunity under Parker v. Brown, which shields anticompetitive conduct that is the product of state policy and actively supervised by the state.
Issue
Does a state professional licensing board — controlled by active market participants — qualify for state action antitrust immunity without active state supervision?
Holding
The Court held that when a state regulatory board is controlled by active market participants (rather than disinterested state officials), it is not automatically entitled to state action immunity. To receive immunity, such a board must be actively supervised by the state itself.
Rule / Doctrine
Parker v. Brown state action immunity requires: (1) the challenged conduct must be pursuant to clearly articulated state policy authorizing anticompetitive conduct; and (2) when private parties or self-interested market participants control the regulatory body, active supervision by a disinterested sovereign is also required. Active supervision means the state must actually review the substance of the anticompetitive decision, not merely provide a procedural framework. Boards dominated by market participants do not receive the deference given to the legislature or disinterested state agencies.
Significance
NC Board is a significant check on professional licensing boards as vehicles for incumbent exclusion. It has prompted states to restructure licensing boards and increase supervision mechanisms to maintain antitrust immunity.