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Advocacy groups to state AGs: Warn board members they now potentially face personal liability

In the wake of February’s Supreme Court decision in North Carolina State Board of Dental Examiners v. FTC, attorneys from three consumer advocacy groups have sent a joint letter to all 50 state attorneys general, maintaining that the states must change the way they conduct professional licensing.

The May 4 letter entitled “Open Letter of Inquiry and Request for Documents” refers to the “critical significance” of the Supreme Court’s decision, which said boards with “market participants” lose their antitrust immunity if not actively supervised by their state. That decision renders unlawful what has become common regulatory practice across all 50 states, said the Center for Public Interest Law, Consumers Union, and the Citizen Advocacy Center.

Since virtually all state boards are directly controlled by members of the trade or profession they purport to regulate, the advocacy groups say, state attorneys general should notify members of boards and commissions that their decisions might expose them individually to criminal and civil liability under federal antitrust law.

The groups also argue that states must now recognize the implications of this ruling and change how they regulate and license professions and trades. Either the composition of these boards must be changed to a super-majority of non-conflicted “public members,” or all actions of a board dominated by active market participants must be subject to a state supervision mechanism that “provide[s] ‘realistic assurance’ that a non-sovereign actor’s anticompetitive conduct ‘promotes state policy, rather than merely the party’s individual interests.’”

A copy of one of the letters is available here.