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N.C. State Bd. of Dental Exam'rs v. FTC - 574 U.S. 494, 135 S. Ct. 1101 (2015)

Rule:

A non-sovereign actor controlled by active market participants enjoys Parker immunity only if it satisfies two requirements: first that the challenged restraint be one clearly articulated and affirmatively expressed as state policy, and second that the policy be actively supervised by the State.

Facts:

Petitioner North Carolina State Board of Dental Examiners ("Board") was responsible for creating, administering, and enforcing a licensing system for dentists. After dentists complained to the Board that non-dentists were charging lower prices for such services than dentists did, the Board issued at least 47 official cease-and-desist letters to non-dentist teeth whitening service providers, even though state statute did not specify that teeth whitening was "the practice of dentistry." Thereafter, respondent Federal Trade Commission ("FTC") filed an administrative complaint, alleging that the Board's concerted action to exclude non-dentists from the market for teeth whitening services in North Carolina constituted an anti-competitive and unfair method of competition under federal law. An Administrative Law Judge ("ALJ") denied the Board's motion to dismiss on the ground of state-action immunity. The FTC sustained that ruling, reasoning that even if the Board had acted pursuant to a clearly articulated state policy to displace competition, the Board had to be actively supervised by the State to claim immunity, which it was not. After a hearing on the merits, the ALJ determined that the Board had unreasonably restrained trade in violation of antitrust law. The FTC again sustained the ALJ. On judicial review, a federal court of appeals affirmed the FTC in all respects. The Board was granted a writ of certiorari.

Issue:

Were the Board's actions protected from federal antitrust regulation under the doctrine of state-action antitrust immunity?

Answer:

No.

Conclusion:

The Supreme Court of the United States affirmed the judgment of the court of appeals. The Court noted that beginning with Parker v. Brown, 317 U.S. 341, the Court interpreted the antitrust laws to confer immunity on the anti-competitive conduct of States acting in their sovereign capacity. In the case at bar, the Court held that the Board's actions were not cloaked with Parker immunity. A non-sovereign actor controlled by active market participants—such as the Board—would enjoy Parker immunity only if the challenged restraint was clearly articulated and affirmatively expressed as state policy, and the policy was actively supervised by the State. In this case, the Board did not receive active supervision by the State when it interpreted the state's Dental Practice Act as addressing teeth whitening, and when it enforced that policy by issuing cease-and-desist letters to non-dentist teeth whiteners.

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