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NC Dental Board v. FTC: Supreme Court justices stress competition, federalism, safety

In the interests of free competition, the U.S. Federal Trade Commission wants the North Carolina dental board to stop shutting down teeth-whitening operations in the state, and the board has resisted, filing suit against the federal agency.

After a loss in the Fourth Circuit U.S. Court of Appeals, the board’s suit is now pending before the U.S. Supreme Court. During oral argument on October 14, the justices asked counsel for both sides numerous questions, giving a rare glimpse of how Supreme Court members think about professional regulation.

The high court justices showed the most concern about three areas: the proper allocation of authority between state government and federal agencies, whether members of state boards had a conflict of interest in setting policy about competitors, and the public-protection reasons for highly skilled professionals to be regulating their own fields.

Justice Ruth Ginsberg suggested that the board might have been acting beyond its authority. “One puzzle in this case: Why should there be an antitrust exemption for conduct that is not authorized by state law? The objection here was that this board was issuing a whole bunch of cease and desist orders. They had no authority to do that. No authority at all.”

Along the same lines, Justice Stephen Breyer wondered if the state exercised enough authority over a licensing board composed of practicing dentists: “…What we have here is … a group of dentists like the group of wine merchants, like the group of truckers, and of course they’re not fixing prices, what they’re doing is deciding who will be in the business and there we are, end of case. Is there supervision [over the dental board], yes or no? The FTC says, no, there isn’t… The object of the antitrust laws is to prevent private individuals who compete with each other in business from getting together and making agreements. That kind of interest seems present here.”

Justice Anthony Kennedy echoed Justice Breyer’s concern about oversight: “…The concern is that there is no statepolicy if the state simply says…you take an oath and then you do what you want. And if the board says we think what’s good for dentistry is good for North Carolina, our cases say that’s not enough because you’re pursuing your self-interest.”

Setting entry standards and setting scope of practice can both be anti-competitive, Justice Joseph Scalia pointed out. “What is a more obvious restriction of competition than preventing someone from competing?… I don’t see how you draw that line… It’s one thing to say that so-and-so can’t practice, but it’s another thing …to say that tooth whitening is part of the practice. It seems to me they both involve anticompetitive decisions.”

On the other hand, Justice Breyer questioned the role of antitrust regulation in professional regulation. Regarding brain surgeons’ deciding who could practice brain surgery in a state, he said, “I don’t want a group of bureaucrats deciding that. I would like brain surgeons to decide that… I don’t want … medical boards throughout the country to decide everything in favor of letting in the unqualified person, lest he sue them under the antitrust law for treble damages and attorneys’ fees.”

Justice Samuel Alito expressed support for federalism: “I really am not attracted to the idea of federal courts looking at state agencies, state regulatory agencies, to determine whether they are really serve the public interest or they are serving some private interest.”

A ruling in the case, North Carolina State Board of Dental Examiners v. Federal Trade Commission, is expected sometime in 2015.