On February 25, 2015, the US Supreme Court issued its opinion in North Carolina State Board of Dental Examiners v. Federal Trade Commission. The court’s opinion impacts how state professional licensing boards must operate.

North Carolina dentists began teeth-whitening services in the 1990s. By 2003, non-dentist providers began offering the same services in spas and salons. They charged less, prompting dentists to complain to the North Carolina State Board of Dental Examiners. Under North Carolina law, this board is “the agency of the state for the regulation of the practice of dentistry.” North Carolina law further requires that six of the eight board members must be licensed, practicing dentists.  
In response to the dentists’ complaints, the board issued cease-and-desist letters to non-dentist teeth whiteners, claiming that teeth whitening was within the scope of practice of dentistry and that spas and salons offering  this service were practicing dentistry without a license. While North Carolina state law defines the practice of dentistry to include the “removal of stains, accretions, or deposits from the human teeth,” the state’s law is silent about the use of peroxide to whiten teeth.
The Federal Trade Commission (FTC) filed a complaint against the board, claiming that the cease-and-desist letters violated federal antitrust law, which prohibits practices that suppress market competition. The FTC contended that the dentists were using
their licensing arm to chase competitors out of a lucrative business that required no special medical
or scientific training.
The board tried to dismiss the FTC’s lawsuit, arguing that states are immune from antitrust suits and that actions by boards constitute actions by the state. The FTC opposed that argument, and the issue ultimately made its way to the US Supreme Court, which ruled that a state board, such as the North Carolina board, “on which a controlling number of decision makers are active market participants in the occupation the board regulates, must satisfy active supervision requirement in order to invoke state-action antitrust immunity.” Almost all regulatory boards will likely be affected since most boards are comprised of board members practicing the profession they regulate.
The decision means that any action taken by a regulatory board that can be viewed as anticompetitive under federal antitrust law must be adequately supervised by the state. The state must review the substance of the anticompetitive decision, not only the procedures followed to produce it. The regulatory board’s action must promote state policy, rather than board members’ individual interests.  
Only board actions that are anticompetitive under federal antitrust law are affected by the Supreme Court’s decision. Regulatory boards will need to understand what types of actions could constitute anticompetitive conduct. Board attorneys and state administrative staff will have to provide some direction.
Since the Supreme Court did not provide a bright line test as to what does or does not constitute adequate state supervision over anticompetitive conduct, we expect board attorneys to be more involved in helping boards distinguish the difference. We would not be surprised if board attorneys were more cautious in their recommendations to boards until states have a chance to review the mechanisms in place to provide assurance that board decisions are indeed promoting state policy.  
For more information on the Supreme Court’s decision, go to “News & Resources” at www.abmp.com.

Jean Robinson is ABMP’s director of government relations. Contact her at jean@abmp.com.