On March 3, the U.S. Supreme Court agreed to hear North Carolina Board of Dental Examiners v. FTC during its October 2014 term. In this case, the North Carolina Board of Dental Examiners is challenging a lower court ruling and an order by the Federal Trade Commission (FTC), which said that the board engaged in unfair competition in the market for teeth-whitening services by excluding individuals not licensed to practice dentistry from the market for teeth-whitening services.
According to court documents, beginning in the 1990s, dentists began providing teeth-whitening services in North Carolina. In about 2003, non-dentists also began offering the services, often at a reduced price. The board became aware of the performance of teeth whitening services by persons not licensed to practice dentistry, and also began receiving complaints from dentists. Several consumers suffered from adverse side effects, including bleeding or “chemically burned” gums, after receiving teeth whitening from non-dentists. In addition, consumers complained that the non-licensed individuals performing services were doing so without gloves or masks, thereby increasing the risk of side effects. As a result of the board receiving a number of complaints, an investigation was conducted and more than 40 cease-and-desist letters to non-dentist teeth-whitening providers were issued.
The FTC’s original complaint against the board was issued on June 17, 2010, alleging that the board was harming competition by preventing non-dentists from providing teeth-whitening services in North Carolina.
The board appealed, arguing that the FTC overstepped its authority. Specifically, the board argued that it is exempt from the federal antitrust laws under the “state action” doctrine. Under this doctrine, the antitrust laws “do not apply to anticompetitive restraints imposed by the states ‘as an act of government.’”
The board lost its appeals of the FTC’s decision, including a 2013 ruling by the U.S. Court of Appeals for the Fourth Circuit, which upheld the right of non-dentists to offer teeth-whitening products and services in the state. Click here to view additional documents related to this case.
Justice Barbara Keenan, of the U.S. Court of Appeals for the Fourth Circuit, stated in her concurring opinion, that “the fact that the board is comprised of private dentists elected by other private dentists, along with North Carolina’s lack of active supervision of the board’s activities, leaves us [the court] with little confidence that the state itself, rather than a private consortium of dentists, chose to regulate dental health in this manner at the expense of robust competition for teeth whitening services. Accordingly, the board’s actions are those of a private actor and are not immune from the antitrust laws under the state action doctrine.”
The question before the U.S. Supreme Court is whether, for purposes of the state-action exemption from federal antitrust law, an official state regulatory board created by state law may properly be treated as a “private” actor simply because, pursuant to state law, a majority of the board’s members are also market participants who are elected to their official positions by other market participants.
According to an April 2013 report by the Institute for Justice, since 2005, at least 14 states have changed their laws or regulations to exclude all but licensed dentists, dental hygienists or dental assistants from offering teeth-whitening services. As a result, the U.S. Supreme Court’s decision could have far-reaching implications.