Eight out of ten members of the North Carolina Board of Dental Examiners are active dental practitioners. The Board issued cease and desist orders to commercial teeth whitening enterprises, asserting that they were unlawfully engaged in the practice of dentistry. The FTC brought an enforcement action against the Board for anticompetitive conduct in using the state regulatory power to manipulate and control the commercial market for teeth whitening services in North Carolina.
The Supreme Court, this week, affirmed the findings of an administrative law judge and the FTC that the Board’s conduct was not immune from antitrust liability under the “state action immunity” doctrine. Federal antitrust law, as a matter of comity, exempts state sovereign acts which have anticompetitive effects from antitrust liability where the actions are a matter of clearly articulated state policy.
Justice Kennedy, in a six to three opinion, stated that even if the Board, made of competitors, could be reasonably perceived as an arm of the State of North Carolina, when it undertakes to manipulate or control a commercial market under color and protection of state law, it must operate under a well articulated state policy and must be actively supervised by the state in its regulatory actions.
The teeth whitening industry is not one that inherently required the active supervision of the Board. No active supervision was present. No immunity for its actions exists. Sic Semper Tyrranis.