Opinion analysis: No antitrust shield for veteran chartering boards

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Eric M. Fraser practices appellate, antitrust, and egghead skill law during Osborn Maledon, P.A.

State chartering play stoical of marketplace participants do not suffer involuntary shield from antitrust laws, a Supreme Court ruled on Wednesday. The decision in North Carolina Board of Dental Examiners v. Federal Trade Commission affirms a Fourth Circuit and deals a reversal to an increasingly common form of regulation.

State movement antitrust immunity

Since 1943, certain forms of state movement have been defence from a antitrust laws. Accordingly, state legislatures might pass laws with anticompetitive effects. Several critical Supreme Court cases given afterwards have addressed a doctrine of state movement shield and helped to conclude a contours, quite as it relates to actions outward state legislatures.

Antitrust shield generally covers non-state actors usually if a state both (1) clearly articulates a anticompetitive policy, and (2) actively supervises a policy. This box deals with a second requirement. If a veteran chartering house is a state agency, contingency another state actor manipulate a organisation in sequence for a organisation to be defence from a antitrust laws?

The dental board

In North Carolina, a legislature substituted law of dentists to a dental board. By state law, practicing dentists contingency fill a infancy of a seats on a dental board.

This form of “self-regulation” is common among state chartering boards. But it has a healthy bent to turn anticompetitive. Members of a guild frequently wish to keep insiders in, keep outsiders out, and column adult a profession. A extended operation of complicated professions tumble underneath veteran chartering boards, including not usually doctors, lawyers, and dentists, yet also interior designers, genuine estate agents, floral designers, and hair braiders.

In this case, a dental house attempted to bar non-dentists from a marketplace for teeth-whitening services after dentists complained about a low prices non-dentists charged for teeth whitening. It sent melancholy letters to non-dentists who offering teeth-whitening services and even speedy mall operators to flog out kiosks used for teeth whitening.

The dental board’s actions were not supervised by any state officials from North Carolina other than a members of a dental house itself. On these facts, a FTC took movement opposite a dental board. The FTC and a Fourth Circuit both deserted a dental board’s try to plead a invulnerability of state movement immunity.

No shield for a dental house tranquil by dentists

In a six-to-three opinion created by Justice Anthony Kennedy, currently a Supreme Court endorsed a Fourth Circuit, holding that a dental house is not defence from a antitrust laws.

The Court’s opinion explains that even yet a dental house is an organisation of a state, a actions contingency still be supervised by a state in sequence to suffer antitrust immunity. The “formal nomination given by a States” does not itself emanate immunity. Here, a house is tranquil by marketplace participants in a same function that a house regulates. “When a State empowers a organisation of active marketplace participants to confirm who can attend in a market, and on what terms, a need for organisation is manifest.”

Which agencies get antitrust immunity?

Putting a several Supreme Court cases together, we now know that state legislatures and high courts generally suffer antitrust immunity. We also know that municipalities contingency act pursuant to a clearly articulated state policy, yet need not be actively supervised by a state to get immunity. This opinion sheds light on state agencies.

The requirement of state organisation announced in today’s opinion relates to agencies “controlled by active marketplace participants.” Actions taken by play with no impasse from marketplace participants might not have to prove that requirement. The opinion also identifies some factors concerning adequate state supervision. For example, a state administrator contingency indeed examination a piece of a agency’s actions and have a energy to overrule or cgange a actions.

Bar associations in sold have been a source of lawsuit over a doctrine of state movement immunity. Today’s opinion cites 3 critical cases concerning law of lawyers by state bar associations. The Court’s descriptions of a cases advise that those cases should be interpreted to meant that usually a specific actions of a bar that are actively supervised by a state (e.g., a state autarchic court) get antitrust immunity. The rest of a bar association’s activities expected have no such immunity.

The dissent: An organisation is a state actor

Justice Samuel Alito, assimilated by Justices Antonin Scalia and Clarence Thomas, dissented. The gainsay records that a use of self-regulation by dentists in sold predates a Sherman Act in a 1800s. There is zero new about it. Justice Alito afterwards explains that a organisation gets shield as a state actor since North Carolina designated a dental house as a state agency. He reasons that a organisation is not a private celebration and a courts should not wade into last either a state organisation is amply eccentric to get shield but being actively supervised by another state central or entity.

Posted in North Carolina Board of Dental Examiners v. Federal Trade Commission, Featured, Merits Cases

Recommended Citation:
Eric M. Fraser,
Opinion analysis: No antitrust shield for veteran chartering boards,
SCOTUSblog (Feb. 25, 2015, 3:56 PM),

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