## Facts

- North Carolina created the State Board of Dental Examiners to regulate dentistry under the Dental Practice Act.
- The Board had eight members; six were licensed, practicing dentists elected by other dentists, plus a dental hygienist and a consumer member.
- In the early 2000s, non-dentists began offering teeth-whitening services, often at lower prices than dentists.
- The Dental Practice Act did not expressly define teeth whitening as the practice of dentistry.
- After dentists complained about competition, the Board sought to exclude non-dentist teeth whiteners.
- The Board issued at least 47 cease-and-desist letters to non-dentist providers and product manufacturers, warning that unlicensed practice of dentistry was a crime.
- The Board’s actions caused many non-dentists to stop offering teeth-whitening services in North Carolina.
- The FTC brought an administrative action alleging the Board’s conduct was an unfair method of competition; the FTC ruled against the Board and rejected state-action immunity.
- The Fourth Circuit affirmed, holding that active supervision was required because the Board was controlled by active market participants.

## Issues

1. Whether a state-created licensing board controlled by active market participants can claim state-action antitrust immunity without active state supervision.
2. Whether such a board should be treated as a sovereign state actor exempt under state-action immunity, or as a non-sovereign actor that must satisfy the active-supervision requirement.

## Decision

- The Supreme Court affirmed the Fourth Circuit, upholding the FTC’s order.
- Because a controlling number of the Board’s decisionmakers were active market participants in the regulated occupation, the Board could claim state-action antitrust immunity only if it was actively supervised by the State.
- The Court held the Board was not actively supervised when it interpreted the Dental Practice Act to reach teeth whitening and when it used cease-and-desist actions to exclude non-dentists.
- As a result, the Board was not immune from federal antitrust law.

## Legal Principles

- State-action antitrust immunity protects a State’s sovereign anticompetitive policy choices, but it is limited for non-sovereign actors.
- When a state board is controlled by active market participants, it is treated as a non-sovereign actor for immunity purposes due to the risk of self-interested trade restraints.
- For such entities, immunity requires satisfaction of the active-supervision component of the test for non-sovereign actors.
- “Active supervision” requires substantive review of the challenged restraint, power to veto or modify particular decisions, and oversight that is not a rubber stamp.
- The supervisor must be a state official who is not an active participant in the regulated market.
- Formal statutory labeling of an entity as a “state agency” does not, by itself, establish entitlement to antitrust immunity; courts examine the structure of decisionmaking and the presence of real state control.

## Conclusion

A professional licensing board controlled by active participants in the market it regulates is not entitled to state-action antitrust immunity unless the State actively supervises the board’s anticompetitive decisions; because North Carolina did not actively supervise the dental board’s exclusion of non-dentist teeth whiteners, the board remained subject to federal antitrust law.


N.C. State Bd. of Dental Exam’rs v. FTC, 574 U.S. 494 (2015)