The National Council of Examiners for Engineering and Surveying recently filed a “friend of the court” brief with the Supreme Court in a case that could have significant implications for state licensing boards.
The case began with a complaint filed against the North Carolina Board of Dental Examiners by the Federal Trade Commission for sending cease-and-desist letters to nonlicensed teeth whitening providers. The board claims to be acting as a state regulatory body, ensuring patient safety; the FTC claims the board, comprised mostly of dental professionals competing against nonlicensed teeth whitening providers, is exceeding its authority and violating antitrust law.
Following the FTC complaint, the board claimed as a defense the “state action doctrine,” which provides exemption from federal antitrust law for certain state-mandated activities. As a result, the implications of the case have expanded beyond the question of whether it is legal for the board to shut down nonlicensed teeth whitening providers when six of its eight members are dentists, especially after the Fourth US Circuit Court of Appeals agreed with the FTC.
The North Carolina Board of Dental Examiners appealed the court’s decision to the US Supreme Court.
“NCEES is concerned that the position adopted by the FTC and the Fourth Circuit in this case, if affirmed, will subject its member licensing boards to second-guessing by federal antitrust regulators, impeding the boards’ ability to effectively carry out their state-appointed task of regulating the engineering and surveying professions and protecting the general public,” the NCEES brief to the Supreme Court reads. “To lose immunity to federal antitrust law is to lose a basic protection that enables state licensing boards to fully function as delegated state agencies.”
If affirmed, the position adopted by the FTC and the Fourth Circuit Court would leave states with only three options, the brief explains. All of which harm states’ and licensing boards’ ability to regulate the practice of professions that impact public health, safety, and welfare.
“By retaining the status quo—i.e., keeping market participants on their boards—states will expose the boards to the risk of antitrust liability for just doing their jobs. This would harm the ability of states to recruit and maintain well qualified members of the professions to serve part-time on licensing boards and would chill the boards’ ability to make tough calls. Thus, states would lose many of the benefits they sought when they delegated legislative authority to licensing boards, and included on those boards the very people who were most qualified to understand the needs and concerns of the professions they are charged with regulating.”
“To the extent States can only preserve their boards’ immunity by instituting ‘active supervision’ that the FTC or federal courts may deem sufficient (but which the states had not deemed necessary), states would be forced to engage in expensive, wasteful institutional experiments, with little assurance that the supervision would reflect adequate subject-matter knowledge or satisfy any particular tribunal. Adding a layer of bureaucracy would complicate and alter the state-designed decision-making process while still subjecting boards and their members to a continued risk of liability.”
“States may feel it necessary to legislatively eliminate market participants from their licensing boards altogether in order to avoid antitrust liability. But when a decision has such coercive effect, it creates serious federalism concerns. The [Fourth Circuit Court’s] decision…substitutes the FTC or the courts’ determination that action of a state agency is ‘private’ over the State’s own demonstrated intent to delegate regulation of professions as a sovereign state activity. This contravenes this Court’s pronouncements that antitrust law should not nullify the States’ democratic processes for regulating their economies and protecting the public welfare.”
“A state agency, even when directed by the legislature to fill positions with individuals who are market participants, is still a state agency,” the brief contends.
Oral arguments before the Supreme Court are expected to begin on October 14.
For details, visit www.supremecourt.gov. The audio recordings of all oral arguments heard by the Supreme Court are available to the public at the end of each argument week.
Published September 10, 2014 by NSPE