Supreme Court Finds That Regulatory Boards Composed Of 'Active Market Participants' Are Subject To Antitrust Laws If Not Actively Supervised By The State

Yesterday, the Supreme Court issued its ruling in North Carolina State Board of Dental Examiners v. FTC, finding that North Carolina's state board of dental examiners was subject to antitrust scrutiny under the Sherman Act and Federal Trade Commission Act. In reaching that decision, the court found that a state agency composed of "active market participants"—here, a board responsible for supervising the practice of dentistry composed primarily of practicing dentists—was not immune to federal antitrust laws as a sovereign actor unless the state "actively supervised" that agency. The Court left open, however, just what sort of active supervision might be required.

The North Carolina board of dental examiners is composed of eight members: six dentists (elected by other licensed dentists), one dental hygienist (elected by other licensed hygienists), and one "consumer," appointed by the governor. The dispute in North Carolina State Board related to teeth whitening, a practice that had once been the exclusive province of dentists. The Court found that over time, however, non-dental practitioners had increasingly offered that service to consumers...