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Today Among Our Benevolent Local Overlords

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From the statement of facts in Kennedy’s opinion for the Court today in North Carolina Board of Dental Examiners v. Federal Trade Commission:

In the 1990’s, dentists in North Carolina started whiten­ing teeth. Many of those who did so, including 8 of the Board’s 10 members during the period at issue in this case, earned substantial fees for that service. By 2003, nondentists arrived on the scene. They charged lower prices for their services than the dentists did. Dentists soon began to complain to the Board about their new competitors. Few complaints warned of possible harm to consumers. Most expressed a principal concern with the low prices charged by nondentists.

Responding to these filings, the Board opened an inves­tigation into nondentist teeth whitening. A dentist mem­ber was placed in charge of the inquiry. Neither the Board’s hygienist member nor its consumermember par­ticipated in this undertaking. The Board’s chief opera­tions officer remarked that the Board was “going forth to do battle” with nondentists. The Board’s concern did not result in a formal rule or regulation reviewable by the independent Rules Review Commission, even though the Act does not, by its terms, specify that teeth whitening is “the practice of dentistry.” Starting in 2006, the Board issued at least 47 cease-and­-desist letters on its official letterhead to nondentist teeth whitening service providers and product manufacturers.

[…]

These actions had the intended result. Nondentists ceased offering teeth whitening services in North Carolina.

Some local regulations of business are, of course, valuable protections of the public interest. Some are straightforward protection rackets. The one at issue here is pretty clearly one of the latter, and one appropriate remedy for this kind of regulation is the application federal antitrust law.

Today’s case held that the Board of Dental Examiners was not exempt from the Sherman Act. While state actors are exempt from federal antitrust law, nominal state entities in which the state delegates to business interests with minimal supervision don’t qualify for the state action exemption. The four Democratic nominees and Chief Justice Roberts sided with the majority. Alito (for Scalia and Thomas) sided with the sovereign dignitude of the states over the interests of consumers.

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