Continued Debates regarding Antitrust Concerns and Professional Licensing Boards

Filed in Antitrust by on November 5, 2014 1 Comment

Tara Ragone

Cross-Posted at HealthLawProf Blog

Earlier this year, I blogged about developments concerning antitrust liability and professional licensing boards. In particular, I noted that the North Carolina Board of Dental Examiners had asked the United States Supreme Court to review the Fourth Circuit’s decision upholding theFederal Trade Commission’s ruling that the Board was not entitled to state action immunity because it was not actively supervised by the state. I also highlighted a then-forthcoming article in the University of Pennsylvania Law Review by Professors Aaron Edlin and Rebecca Haw that explored whether the actions of state professional licensing boards should be subject to antitrust scrutiny.

Since that post, the U.S. Supreme Court granted cert and held oral argument in the North Carolina case, North Carolina State Board of Dental Examiners v. The Federal Trade Commission, and Professors David Hyman and Shirley Svorny have published a Response to Edlin and Haw’s article in the University of Pennsylvania Law Review Online.

Hyman and Svorny’s Response offers three suggestions to “limit occupational licensing’s anticompetitive tendencies and licensing board’s anticompetitive behavior:”

First, in reviewing the decisions of licensing boards, courts should presume that states were not actively supervising the boards, absent compelling evidence to the contrary. Second, defendant-licensing boards should be required to present persuasive evidence of actual harm that their proposed licensing restrictions or restraints will prevent and should be required to show that private market and non-regulatory forces (including brand names, private certification, credentialing, and liability) are insufficient to ensure that occupations maintain a requisite level of quality. Finally, . . . legislators should take steps to roll back existing licensing regimes.

Although couched as mere modifications to Edlin and Haw’s framework, Hyman and Svorny’s Response seems to go far beyond Edlin and Haw’s approach by seeking, fundamentally, deregulation — to eliminate licensing boards and rely wherever possible on market and private mechanisms, such as malpractice actions and specialty boards. In their words, they are waging “war on occupational licensing.”

From its questions on October 14, 2014, the Supreme Court does not seem ready to take up Hyman and Svorny’s battle cry. Rather than wanting to eradicate professional licensing boards, some Justices seemed to appreciate the expertise professional board members can bring to important questions of public health. Justice Breyer, for example, feared that it “spells danger” to have neurology qualifications decided by non-expert bureaucrats rather than practicing neurologists. Justice Scalia seemed to agree.

That is not to say that the North Carolina Board of Dental Examiners is likely to prevail. Several Justices expressed their concern that there was no state supervision to ensure that the self-interested Board members were appropriately pursuing the state’s clearly articulated anti-competitive policy. Justice Kagan, for example, expressed her belief that the two Midcal elements – clear articulation by the state of an anticompetitive policy and active supervision by the state of the policy’s implementation — work in tandem to ensure “that an actor is in accord with the State policy and is not acting solely to further his own interest.” Thus, there “needs to be some supervision . . . .”

Justice Ginsburg similarly suggested that courts could provide “a check of supervision,” noting that the Board had no authority to issue cease and desist letters to non-dentists who were competing with dentists to provide teeth whitening services.

Justice Alito, however, stated that he is “not attracted to the idea of Federal courts looking at State agencies, State regulatory entities, to determine whether they are really serving the public interest or they are serving some private interest.”

The Court thus continues to wrestle with how to balance federalism with federal antitrust concerns. The Justices repeatedly asked Deputy Solicitor General Stewart to articulate a test for what active supervision would require, but Stewart seemed to struggle. He acknowledged that “different things could qualify as adequate supervision,” depending on the particular “question to be answered.”

It is not clear how the Court will resolve this tension. But I do not believe it is likely to go as far as Hyman and Svorny urge. Rather there are a variety of alternatives available that offer a more nuanced and appropriate response to antitrust concerns without giving short shrift to federalism and expertise.


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  1. Licensing boards do not determine neurology qualifications…the Justices are mistaken. Most newly minted neurologists are medical specialty board certified (private). And hospitsls credential and privilege. They decide neurology qualifications. How can we move forward if even the Justices don’t understand how the system works?

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