State licensing boards subject to FTC antitrust jurisdiction

In a case that likely will impact state veterinary licensing boards, the U.S. Supreme Court ruled in North Carolina State Board of Dental Examiners v. Federal Trade Commission (FTC) that the FTC has jurisdiction over that board’s action to exclude non-dentists from the market for teeth whitening services. The board issued “cease and desist” letters to teeth whitening service providers and product manufacturers who were unlicensed non-dentists. The FTC had found that the board’s actions unreasonably restrained trade in violation of federal antitrust law. The Supreme Court held that because a controlling number of the board’s decision-makers are “active market participants” (licensed practicing dentists), the board would enjoy immunity from antitrust liability only if it was subject to “active supervision” by the state.

To avoid similar antitrust liability concerns in the future, state licensing boards across all professions will need to make sure that any anti-competitive decisions or actions follow clearly articulated state policy and that the state is actively supervising their decisions and actions. What constitutes sufficient supervision of a state agency is “flexible and context dependent,” but according to the opinion, it must include a review of the anti-competitive decision and the reviewer must have power to veto or modify the decision to comport with state policy. The review system must provide “realistic assurance” that the agency’s anti-competitive conduct promotes state policy rather than merely the agency members’ individual interests. Last fall, the AVMA joined with 18 other medical-related associations, including the American Medical Association and the American Dental Association, in submitting an amici curiae brief to the Supreme Court supporting the Dental Board’s position and opposing the FTC.

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