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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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  • Joe_JP

    9 out 10 dentists admit this is a correct decision.

    Kagan’s dissent in the Yates case is the right tone if the troofers win the statutory argument.

    • Srsly Dad Y

      Yes! But that’s exactly what worried me about it. It struck me as an odd tone to take against a Ginsburg opinion joined by Breyer.

      • Joe_JP

        Kagan can be pretty snarky & the interpretation given by the majority is arguably rather problematic.

        • rea

          What could be more problematic than a conclusion that fish are tangible?

          • Joe_JP

            I’m not sure what you are saying here, especially since separately you said that Ginsburg has the better of the argument. Fish are “tangible.”

            The concern is — in context — that doesn’t make sense regarding what sort of tangible object the statute is applicable to. And, the fifth vote (Alito) even says the question is “close.” The narrow reading here would possibly cause various problems as noted by Kagan.

            I’m open to the majority/plurality approach, but lean toward Kagan.

            • rea

              I’m not sure what you are saying here

              Evidently, I’m not either.

              • Ahuitzotl

                you’re polishing your SCOTUS credentials in case of a vacancy?

  • Mr. Rogers

    What argument did Alito make, I wonder? That any enforcement of federal oversight is unconstitutional? That monopolist rents are critical to the free market? I’m at a loss….

    • Hogan

      The Court’s decision in this case is based on a serious misunderstanding of the doctrine of state-action antitrust immunity that this Court recognized more than 60 years ago in Parker v. Brown, 317 U. S. 341 (1943). In Parker, the Court held that the Sherman Act does not prevent the States from continuing their age-old practice of enacting measures, such as licensing requirements, that are designed to protect the public health and welfare.

      The rest of his argument assumes that the last ten words of that passage don’t exist.

      • Mr. Rogers

        I figured it was something like that. It must be nice to have the special conservative glasses which remove the parts of any document that don’t _really_ apply.

      • mpowell

        It’s still not clear why this is the decision he would want to reach. I guess local feudal lordships is really his preferred governance structure.

        • NonyNony

          I’d assume that anything that weakens the ability to apply Federal anti-trust laws would be considered a good thing by the radical conservatives, even if it means allowing for more state regulation in the short term.

      • Denverite

        The rest of his argument assumes that the last ten words of that passage don’t exist.

        This isn’t fair. Dental (and medical and nursing and so on) boards may ALSO be a barrier for entry for potential competitors, but it’s really hard to dispute that a primary purpose is to protect the public health. Unless you want some shmuck off the street performing a root canal on you?

        • Hogan

          But there’s no public health rationale for the regulation being contested here.

          • Denverite

            There’s that. But I thought under that Parker analysis courts don’t engage in a close look to see if the anticompetitive conduct in question has any other purpose? It’s just blanket immunity? IANAAL

        • Mr. Rogers

          No argument there, but the 10 words in questions

          that are designed to protect the public health and welfare.

          don’t apply to teeth whitening, which is the service at issue. If the service at issue isn’t covered by a need to protect public health and welfare than the licenscing requirements don’t apply.

          Heck, you can’t even use Flexible Spending Account money on teeth whitening….

          • Denverite

            See above. I didn’t think that courts look at intent under the Parker analysis.

  • so-in-so

    They don’t need special glasses, just the primal WILL to see their perceived “correct” interpretation.

    A triumph of the will, if you please.

  • Denverite

    Alito has the better of it, I think. The idea that a state Med Board or Nursing Board or Dental Board isn’t a state agency is silly. That’s why, for example, some states group them in a Department of Regulatory Agencies. (NC doesn’t for most of its professional licensing boards, which seems odd.) They’ve always been seen as state agencies. It’s going to be really difficult for states now to figure out what exactly they have to do to be able to structure their regulatory and licensing apparatuses to fall under the Parker doctrine.

    Honestly, it would have been better if Kennedy had just created an exception to Parker for state agencies comprised of a majority of practicing members in the profession, rather than muddy the waters as to what is or isn’t a state agency, and how much supervision a state has to exert over a non-state agency to fall under Parker.

    • Hogan

      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.”

      The fact that the Board sent out C&D letters when it hadn’t even issued a formal regulation seems like a gross enough effort to evade supervision (i.e., accountability) that I’ll give Kennedy a pass on this. That should be a pretty easy bar for states and state agencies to clear.

      • Denverite

        Today, in Episode 147 of “SCOTUS isn’t always on the 100% up-and-up about the facts,” refer to N.C. Gen. Stat. § 90-29(b)(2), which specifically defines the following to be the practice of dentistry:

        “Remov[ing] stains, accretions or deposits from the human teeth.”

        I’m not saying that this necessarily MUST encompass teeth whitening, but it definitely wasn’t frivolous for the Dental Board to interpret it as doing so.

        In any event, though, my problem isn’t so much that the board wasn’t sufficiently supervised, it’s that under the Parker analysis (as I understand it), you don’t even get to that issue if you’re dealing with a state agency, and any argument that the Dental Board wasn’t one of those is nonsense.

        • Scott Lemieux

          I think it’s plausible that the Supreme Court was effectively modifying Pakrer to give more authority to federal antitrust regulators and less to nominal state agencies.

          Uh…good?

          • Brett

            I think it’s good. Especially if it leads to more oversight on boards made up almost entirely of practicing incumbents in the field, like the North Carolina case.

  • ThrottleJockey

    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.

    At least in my state a lot of regulation is racketeering. The optometrists got a bill passed that “prohibited” them from giving you your contact lens prescription. This meant that once they measured you for contact lens they could not give you the prescription to shop around for cheaper lenses because “public health laws”…Of course theater owners also got a bill passed that prohibited outside food/drink from being brought into the theater because “public health laws”. There’s a lot of racketeering at the state level.

    • NonyNony

      Of course theater owners also got a bill passed that prohibited outside food/drink from being brought into the theater because “public health laws”.

      Why would you need a public health law to cover this? Wouldn’t they be able to do this just by dint of being property owners and business proprietors who get to set the rules for their establishment?

      • NewishLawyer

        Maybe they can justify searching now?

        I used to put a drink and a snack into my messenger bag when I went to movies. No one ever asked to check the contents of my bag.

  • NewishLawyer

    Well this case will make the neo-liberals and libertarians happy because one of their prime arguments is that you help people economically by allowing them to get out of licensing requirements.

    I wonder if this is going to go to further licensing challenges.

    • Brett

      I hope so. There’s a lot of shitty compulsory licensing rules out there in the states – I still remember the one in my home state where the wholly captured cosmetologist licensing board went after a poor black woman who started a small business braiding people’s hair (thankfully, the state lost the case). I’m not opposed to having an optional “licensed and bonded” status for that type of stuff, but not mandatory licensing.

      Which is not to say that there aren’t good licensing rules out there, or that they’re all onerous. I’m not opposed to requiring a Food Handler’s Permit for food sales above a certain level and time – it’s good for people to at least get something on proper sanitation and cooking times, and it’s not onerous (I remember it lasted about an hour and cost me about $20 IIRC).

    • Brien Jackson

      El. Oh. El.

  • Gwen

    You know who seems to be most obviously affected by this decision, aside from the actual parties?

    State Bar Associations. Not actually state agencies, but generally empowered with a lot of regulatory authority.

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