In its February 25 North Carolina Dental v. Federal Trade Commission decision, the U.S. Supreme Court held that a state regulatory board that is controlled by market participants in the industry being regulated cannot invoke “state action” antitrust immunity unless it is “actively supervised” by the state. Will this decision discourage harmful protectionist regulation, such as the prohibition on tooth whitening by non-dentists at issue in this case? Will it also interfere with the ability of states to shape their regulatory programs as they see fit? U.S. Federal Trade Commissioner Maureen Ohlhausen will address this important set of questions in a March 31 luncheon presentation at the Heritage Foundation, with Clark Neily of the Institute for Justice and Misha Tseytlin of the West Virginia State Attorney General’s Office providing expert commentary. (You may view this event online or register to attend it in person here).
Just in time for this event, the Heritage Foundation has released a legal memorandum on “North Carolina Dental Board and the Reform of State-Sponsored Protectionism.” The memorandum explains that North Carolina Dental “has far-reaching ramifications for the reform of ill-conceived protectionist state regulations that limit entry into myriad professions and thereby harm consumers. In holding that a state regulatory board controlled by market participants in the industry being regulated cannot cloak its anticompetitive rules in ‘state action’ antitrust immunity unless it is ‘actively supervised’ by the state, the Court struck a significant blow against protectionist rent-seeking legislation and for economic liberty. The states may re-examine their licensing statutes in light of the Court’s decision, but if they decline to revise their regulatory schemes to eliminate their unjustifiable exclusionary effect, there may well be yet another round of challenges to those programs—this time based on the federal Constitution.”
