U.S. Supreme Court Will Review State-Action Ruling In FTC Case

U.S. Supreme Court Will Review State-Action Ruling In FTC Case

 WASHINGTON, D.C. — (Mealey’s) The U.S. Supreme Court on March 3 agreed to review a Fourth Circuit U.S. Court of Appeals ruling sustaining the FTC’s determination that dentists in North Carolina, through the North Carolina Board of Dental Examiners, are conspiring to exclude non-dentists from providing teeth-whitening services in violation of Section 5 of the Federal Trade Commission Act (The North Carolina State Board of Dental Examiners v. Federal Trade Commission, No. 13-534, U.S. Sup.; See January 2014).

The dental board is the sole licensing authority for dentists in North Carolina and has the power to exclude dentists and non-dentists from competing in the market of teeth-whitening services in North Carolina.  The board members are elected by other licensed dentists in North Carolina.

In its Oct. 25 petition for a writ of certiorari, the dental board argued that the Fourth Circuit erred by holding that the board, an official state regulatory board created by state law, is a “private” actor because, pursuant to state law, a majority of the board’s members are also market participants and, therefore, the board is not exempt from federal antitrust law under the state-action doctrine because it was not actively supervised by other state entities.

North Carolina State Bar, North Carolina Board of Law Examiners, West Virginia State Bar and Florida Bar filed an amicus brief in support of the dental board, as did American Dental Association, American Medical Association, American Osteopathic Association, American Veterinary Medical Association, American Association of Dental Boards, Federation of State Medical Boards, American Academy of Pediatric Dentistry, American Association of Orthodontists, American Society of Anesthesiologists, The Litigation Center of the American Medical Association and the State Medical Societies, Medical Society of Virginia, North Carolina Medical Society, South Carolina Medical Association and West Virginia State Medical Society.

States of West Virginia, Alabama, Colorado, Delaware, Florida, Kansas, Maryland, North Carolina, Ohio and South Carolina also filed an amicus brief in support of the dental board’s petition for review.

FTC Position

In opposing review, the FTC argued that “the state board is formally denominated an ‘agency of the state,’ and it consists chiefly of active market participants who are economically affected by competitive threats from new entrants into the markets they serve (such as non-dentists who offer teeth-whitening services).  Under Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975) [an enhanced version of this opinion is available to lexis.com subscribers] and its progeny, petitioner’s constituent members are thus ‘persons with economic incentives to restrain trade,’ Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 501 (1988) [enhanced version], and are the natural and proper subjects of” the active-supervision requirement of California Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97 (1980) [enhanced version]

“[W]ith respect to the substantive characteristics that are crucial to the state action doctrine, petitioner is more closely analogous to a typical private trade association than to a municipality or traditional state regulatory agency,” the FTC said.

Counsel

The dental board is represented by Glen D. Nager, Hashim M. Mooppan and Amanda R. Parker of Jones Day in Washington.

Amici curiae North Carolina State Bar, North Carolina Board of Law Examiners, West Virginia State Bar and Florida Bar in support of the dental board are represented by Everett J. Bowman, Mark W. Merritt and Lawrence C. Moore III of Robinson Bradshaw & Hinson in Charlotte, N.C.

Amici American Dental Association, American Medical Association, American Osteopathic Association, American Veterinary Medical Association, American Association of Dental Boards, Federation of State Medical Boards, American Academy of Pediatric Dentistry, American Association of Orthodontists, American Society of Anesthesiologists, The Litigation Center of the American Medical Association and the State Medical Societies, Medical Society of Virginia, North Carolina Medical Society, South Carolina Medical Association and West Virginia State Medical Society in support of petitioner are represented by Jack R. Bierig and Steven J. Horowitz of Sidley Austin in Chicago.

Amici states of West Virginia, Alabama, Colorado, Delaware, Florida, Kansas, Maryland, North Carolina, Ohio and South Carolina in support of petitioner are represented by Solicitor General Elbert Lin, Attorney General Patrick Morrisey and Assistant Attorneys General Jennifer S. Greenlief and Derek A. Knopp of the West Virginia Office of the Attorney General in Charleston, W.Va.

The FTC is represented by Solicitor General Donald B. Verrilli Jr. of the U.S. Department of Justice and General Counsel Jonathan E. Nuechterlein, Deputy General Counsel for Litigation John F. Daly and Attorneys Mark S. Hegedus and Imad D. Abyad of the FTC.  All are in Washington.

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