Supreme Court Limits Protectionism By State Healthcare Licensing Boards

Charles Johnson III and Robert Highsmith are Partners and Cody Wigington is an Associate in our Atlanta office.

Boards Comprised of Active Medical Providers Are Not Entitled to Immunity from Federal Antitrust Law Unless They Are Actively Supervised by the State

HIGHLIGHTS:

A new Supreme Court decision reaffirms the two-part Midcal/Ticor test of state action immunity. This Supreme Court decision makes it clear that, if a state delegates its regulatory authority to a specialized board that is dominated by active market participants, antitrust immunity is available only if the state exercises a continuing role in the work of the board and actively supervises the board's work. The Supreme Court held that a state board on which a controlling number of decision-makers are active market participants in the occupation that the board regulates must have active state supervision to invoke Parker immunity. The United States Supreme Court's recent decision in N.C. State Bd. of Dental Examiners v. Federal Trade Commission, No. 13-534, 2015 WL 773331 (S.Ct. February 25, 2015) makes clear that the anticompetitive actions of state regulatory boards controlled by active market participants not actively supervised by the state are not entitled to state action immunity from federal antitrust law.

In N.C. State Bd. of Dental Examiners, the Federal Trade Commission filed an administrative complaint against the North Carolina State Board of Dental Examiners alleging the board's concerted action to exclude non-dentists from the teeth whitening services market in North Carolina constituted an anticompetitive and unfair method of competition in violation of federal antitrust laws. After a series of administrative hearings and appeals, the case made it to the U.S. Supreme Court.

Objections to Services by Unlicensed Providers Required Filing a Lawsuit

By way of background, the state has delegated the regulation of dentistry to the board, whose principal duty is to create, administer and enforce a licensing system for dentists. The board's authority with respect to unlicensed persons, however, is limited to filing a lawsuit to enjoin a person from unlawfully practicing dentistry. Under North Carolina law, the board's eight members must be licensed dentists engaged in the active practice of dentistry. They are elected by other licensed dentists in North Carolina, who cast their ballots in elections conducted by the board.

In the early years of providing teeth whitening...