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Supreme Court Ruling Affects How State Licensing Board Operate

Late last month the Supreme Court of the United States issued its decision in the North Carolina State Board of Dental Examiners v. Federal Trade Commission case which could change how state licensing boards operate across the country.

In the 6-3 finding, the Supreme Court decided for the plaintiff by stating in the ruling that if a state-created entity is composed of a controlling number of those who practice in the profession, or what the Court calls "active market participants," then that entity must also be supervised by the state government in order to be exempt from federal antitrust lawsuits.

The suit was brought against the North Carolina Board, which is mandated by state law to have six out of its eight members be licensed and practicing dentists, after the board issued cease-and-desist letters to non-dentists that were performing teeth-whitening services.

The decision will affect state medical boards and other state-created entities across the country that are controlled by market participants. These entities will now have to reconsider their composition requirements or become actively supervised to obtain antitrust immunity.

According to the ruling, active supervision could come from a legislative committee or a state court. The supervision does not require day-to-day involvement in the entity's operations, however, it must have the power to veto or modify particular decisions that come from the entity.

In the majority opinion, Justice Kennedy noted, "This conclusion does not question the good faith of state officers but rather is an assessment of the structural risk of market participants' confusing their own interests with the State's policy goals."

ASPS will continue to monitor the developments that arise from the findings of this case.