facto immune state actors the problem with that decision is that it's the wrong standard n c dental makes it clear that when you have a specialized board like the board  here and when it's controlled by market participants it's then subject to the big doll test not parker there is no ipso facto immunity instead of the defendants in order to obtain that munity need to show first that they acted pursuant to a clearly articulated policy of the state and to you that they were actively supervised this district court did not engage in that analysis and again just assumed this kind of i it's a specialized board that's majority controlled by court reporters all of who have an interest in raising prices the number is six to nine the first many complain also ledges and this is important for incidental purposes this is not just a board that was at risk of regulatory capture but actually there was shown in the facts alleged that their action was captured here at the market to participa because of this board to gauge in a whole host of conduct the district court recognized would in fact state a claim for relief that conduct in fact included and we document a meeting agenda that we attach to the complaint additionally in addition to sort of meeting to discuss prices and coronating our prices you also have these board members taking the statute issue article fourteen thirty four what they said was court orders cannot have contracts with court reporting groups who are doing business or obtain volume discounts for insurance companies when those insurance companies are paying for the defense of an insured in litigation even if the insurance company is not a party to the litigation article forty thirty four as originally there would be interested in the outcome of the case absent that there's no question that they would have potentially an interest in the outcome of the case but for purposes of analysis here you have market participants making that interpretation without any supervision of the board of the state which is about their complaining about corp order rates and how to get them higher not about corruption or ethics not about corruption or ethics now you can go back in the first make complaint the appearance of impartiality and that before adopting any rule though this national says ca she went and sought that opinion from the business review letter from the department justice department justice said look you can adopt some ethical rules to address your impartiality concerns with respect to contracting but what you can't do what the antitrust laws prohibit is prohibited in volume based discounts and what happened is you now have a board that if it were the state itself in fact regulating but you have a board here of private actors making these decisions the fact that they're private actors that makes all the difference in the world for purposes of n c dental we can look at the cases that in fact the defendants here rely on an incidental to say that incidental doesn't apply there are many cases edgar which is a fifth circuit decision and before n c dental there is no doubt egger would've applied egger dealt with the louisiana board th was controlled by market participants and it said look even though this board is controlled by market participants we think not that parker applies but that highly applies so that we are going to give immunity to this particular board even those controlling market participants because we do think it's an arm of the state well that decision egger in fact created part of the circuit split that then led to n c dental and  judge southwick you may recall that you were part of a case it's not precedent because it's unpublished but iraq your rogers versus state board of nursing six sixty five federal pundit's three two six two thousand and sixteen a panel of this corporate curium decided or noted and recognized that n c dental clarified the circumstances under which a warrant when he was captured by private market participants when immunity doesn't does not apply or how you in fact decide immunity so you have that case that recognizes that as the dental clarified picture but you also have more recent decisions and again this decision is not presidential because it is a decision by the f t c commission but the f t c just on april tenth of this year decided in a case that it brought after our case but against a louisiana board this the state argued against the f t c it argued that this is a fact based issue you can't decide these issues of active supervision and control at a summary judgment face but here we're in a motion discovery we were dismissed at the twelve p six stage and so we just don't think that these fact based issues should have been decided at this time even if the correct immunity standard had been appl ultimately it also is worth noting that this is an affirmative defense and so does the defendant supported turning now to the equal protection prices for court reporters he could say look we are going we think that if there needs to be a living wage for court reporters and so we're going to set that wage at x dollars per page or per per day state has the right to do that but what it doesn't have the right to do is give control over that process to private market participants once it does down to a economic and appropriate economic right of the state turns from being a plausible way for the state of obtaining its objective to a situation where you have the state authorizing price fixing by private market participants  accept that then you have to reach the conclusion that in fact there is no rational relationship when there's price fixing because price fixing this record has been very clear serves no source or utility agreed it did then you should also find that in this case at least as applied this particular statute has to fall because it's been a statute that was given to be administered by a board then it was operated or controlled by private market participants who had every incentive to in fact abuse their abuse the power of the state and that is ultimately the question right equal protection and due process you know was this a purposeless law was an arbitrary well it becomes purposeless or becomes arbitrary when the state gives price fixing authority to private parties that's the key and so no matter which way you turn here once the state has given private parties the right to actually engage in right price fixing then there cannot be immunity and there are also cannot be a rational basis because it's implausible that price fixing can actually achieve any legitimate purpose that the state may put out  there we don't agree you know again i disagree the state has the right to engage in economic regulation all it wants absolutely what it doesn't have the right to do where it starts to violate equal protection  taking it further i believe are your your friends on the outside so you have them was done in previously on a lower court what what has happened here is a prohibition on long term of vol regulation that at least is focused on trying to prevent it prevent conflicts of interest from big law firms hiring long term contracts with court reporters and that has some fair we say plausible basis and it's not directly price fixing so i got a stand why you emphasizing this other good deal with it on its own terms why is it because it has that potential and it's that market itself six out of mind is doing it and so we read at least at this stage look we think contracting shows impartial shows partiality and so we're going to ban it but and it would be able to do that plausibly in achieve a result that this court could not over except when like in this case it is giving control over the ministration of that statute to board there is controlled by market participants at that point the statute the may pass rational basis on its own can no longer pass rational basis as applied because it's being administered by private parties the state has given it how it's regulatory authority its discretion to private parties who are have every interest in abusing that power that's the whole point no one counts that says it's rational basis of done by a traditional state official but it's not rational basis  by private control so that so nothing dealing with this specific concept but if you go back to the fisher case for the supreme court that says that rent control for regulatory system that controls for rents is perfectly appropriate mistaken do that and then you compare that in contrast that with say joseph a fish circuit decision here which says  that that regulation is there purely protectionist and have no other purpose or do not pass rational basis here the reason this economic regulation does not pass rational basis is because once it's controlled by private parties it then has no other purpose other than protectionism because the court record our competitors i have no other incentive other than to cheat they g you have a different take on all this season you're out of your different understanding of all this it's a slightly your honor yes i think that that could be fairly stated it may please the court your honors joshua force on behalf of louisiana board of examiners of certified shorthand reporters i'm joined a counsel table by david marcello and brandon key and we're also joined in court today by special assistant attorney general eliot baker the issue before this court is whether a state the state of louisiana has the right to enact and enforce a state statute that prohibits court reporters from accepting employment from a firm or person regardless of their state of residence that has a contractual relationship with a party litigant to provide core porting services that's what article fourteen thirty four does in one thousand nine hundred five louisiana legislature enacted fourteen thirty four and it did so to insure the reliability and the integrity of corp orders and the deposition transcripts that they produce were their concerns that there were incidents of corruption were this legislation come from europe it came from a very brief hearings as far as i'm aware the record doesn't actually contain legislative history but it's reflective of the code of ethics that the the board has adopted that has very specific requirements as to into what kind of relationships core porters can enter and more importantly what they have to do in interacting with their customers and also with protecting the deposition records they create so it's entirely consistent with the ethical regulations that the board has as promulgated as administered during this period of time and as a result of that it's very different than the same issues of abbey case that counsel mentioned a moment ago because in that case as this court found the only justification that was rational related to that particular regulation was the economic protectionism that the board itself in changes that be argued was one of the bases one of the legitimate interests that supported that legislation in fact and that regulation in fact this court found that the regulation did not rationally relate to the regulation of the funeral profession because the state didn't regulate the use of caskets in any other way in fact at the time at least louisiana remains even be buried in a casket what about the sherman act claim or do you make of this agenda item how to increase rates you want i think that that particular agenda items taken completely out of context all that says is it relates to the advisory committee and says that they're going to discuss the future of the profession trending towards more voice writers open discussion on why reporters are moving to cart slash captioning mainly due to low wages  enacted the safe harbor provision in revised statutes section thirty seven cole and twenty five fifty sixty which expressly codified the boards in force of an interpretation of article four hundred thirty four but this agenda item has nothing to do with article hundred thirty four it has nothing to do with who are putting firms it what addresses is that the board recognized that fewer people were entering court reporting schools and even existing court reporters were moving from traditional court reporting to other that's all that the committee was talking about and quite frankly your honor it doesn't even reflect in the record that this meeting ever took place that it occurred in august was supposed to occur in august two thousand and sixteen at a time when there were massive floods in baton rouge and that the meeting actually never even took place as i understand it we're not here talking about the merits of an actress liability where you're talking about the immunity whether or not you're you're i think we're talking about about two things first on the face of the competitive effect in the marketplace that that's that's not a conspiracy of the defendants and it doesn't prove or doesn't alleges should say that it's the defendant's conduct that caused the anti competitive fact it says the statute cause the anti competitive effect if there's a question about that your honor all the core needs to do is look at the medical played itself because this this did come to court by way of a motion to dismiss and the court that lower court's orders granting that motion dismissed and therefore the allegations in the complaint are  two which purports to prohibit court reporters in louisiana from entering into long term or volume based contracts with frequent consumers of corporate and services close quote in the second paragraph of the complaint and vertex focuses on the legal basis for its sherman act declaration that article fourteen thirty four is unconstitutional the second thing the very text asked for is an injunction injunction to prohibit the board from forcing in taking any actions to enforce article fourteen thirty four eighty two against core porters or varitek so this lawsuit is not about actions that the board took other than to enforce fourteen thirty four eighty two and it's important in looking at the sherman act claim to recognize that it's the statute that underlies varitek playing in this lawsuit because even counsel conceded very text cannot sue the members of the louisiana legislature under the sherman act for enacting article fourteen thirty four maybe they could do it but it may be immune under parker and it makes no sense to say that varitek can circumvent that immunity by suing the questions that was asked earlier of regarding what has been pleaded in this case and that is that even if in theory dental exams requires mid cal to be applied to this particular state  board it would only do so to the extent that the board is dominated by active market participants and the amended complaint does not sufficiently plead that this board is dominated by active market participants it is true th alleges a number of times that six of the nine members of the board a court reporters and it's true that protects alleged that number of times that they are active market participants and they dominate the board but that's not sufficient under louisiana law we pointed out are breached in the revised statutes section thirty seven coal and twenty five fifty five and twenty five fifty six distinguishes between two different types of court reporters freelance corp orders and official corp orders freely as court reporters may take depositions in louisiana official court reporters may not take depositions in louisiana official reporters are employed by courts exclusively and there they are paid by salary so they are not active market participants in the market that has been defined for this court which is court reporters who take depositions which i will make sure i understand are you saying that not all six of the nine are active i'm saying two things  honor first fault that the pleading does not distinguish between official and freelance corp orders and therefore merely saying that their court reporters doesn't establish a prime if they should claim that the board is dominated by active market participants it is if you know or if it's in the record of this of the nine how many are from the three miles category of of the nine at most four would be members of the freelance reconsideration i take your point is it's up to them to plead right yes but it you get me that this court on it in considering an appeal from motions miss as the district court has to take the well pleaded facts as true  our point is that merely saying that six of the nine are court reporters doesn't prove even if true that the board is dominated by active market participants because to the extent that members of the board are only official corp orders actions they only are are official court reporters they are not active market pissants they don't participate in this market of competing for and taking depositions and therefore they don't have the kind of self interest that counsel talked about for four freelance reporters is that selection discretionary do not require that to be court reporters for be freelance and that's when you're looking at who gets appointed there's not credentials required for the individual positions where you have to have to court reporters know you're out of the the board is comprised of of nine members some appointed by the governor others appointed by by the legislature there is a judge there are two lawyers in there me there's not a specific categories the two court reporters have to be no members and this is something though where the facts of our case as pleated differ from the dental examiners case the statute in gen examiners under north carolina law required that six of the eight members of the dental board not only be dentist but be engaged in the act of practice of dentistry and so there on the face of the statute you had the  fact that the the the board was dominated by active market participants that's not the case here that the statute doesn't require that as six of the nine members of the corporate board be free lance reporters the other difference too i think that's important between this case in des moines and his case is that in devon samaras the board acted ultra virus the statute issue was a very general one that they gave that board the authority to regulate the practice of dentistry because of complaints that the members of the board received from other dentists who were not happy that non dentist for performing teeth whitening services the board sent out forty seven i think cease and desist letters and also prevailed upon other organizations to stop the non dentists from practicing teeth whitening now the statute that created the board gave the board some for authority it allowed the board to file lawsuits to enjoin non dentists over whom the board did not have regulatory authority from practicing dentistry and the board also had notice and comment rule making authority but the board didn't follow any of those procedures it decided unilaterally that teeth whitening constituted the practice of dentistry and then it sought out to shut down non dentists practice of that particular procedure that's not the situation here in this case the legislature has been very specific in prohibiting employment relationships between court reporters and party litigants either direct or indirect and that's that's what the board two thousand and twelve it was going to enforce so this case does not involve either a situation where the board has acted off or virus it also doesn't involve a situation where you're looking at interstitial policy making done by the board characterized what fourteen thirty four did previously but in looking at what the statute actually says there are two parts that are important subsection a one is the legislature decision that only officers who are authorized to administer of its may take depositions but officers who are either lawyers or employees of party litigants or otherwise interested in the outcome the lawsuit may not take depositions that raises the question is who is an employee subsection eight who defines prescriptively who an employee is and it's anyone who has a contract relationship with a party litigant to provide core porting services or anyone who accepts employment from a person who has a contractual relationship to provide services to a party litigant if there's hundred thirty four and the legislature actively and actually supervised the board by enacting the safe harbor statute that appears in the revised statutes and that statute very very clearly i think forcing fourteen thirty four and instructs the board to create a certification process so that corp orders can enter into employment relationships with persons or firms and and have security that they're not in breach of four hundred thirty four there's a direct relationship between those two statutes because they say harbor statute says that a quarter is not to be considered an employee the language of fourteen thirty four turning to very text constitutional arguments that they should bear no better and quite frankly the argument i think that was just made confuses very text sherman act claim with its constitutional claims that both parties recognize the rational basis test applies to the equal protection and due process claims and as a result of that act i'm sorry arthel fourteen thirty four is presumptively constitutional and very texas has to disprove any conceivable interest that is promoted by article fourteen thirty four in the goldberg case the supreme court recognized that states have a legitimate interest in regulating professions and in particular lawyers who are officers of the court under article fourteen thirty four a one quarter porters are also officers of the court and as a result of that the state of louisiana has a legitimate interest in regulating court reporters throughout this litigation we've identified a number of different legitimate interests that this statute serves in protecting the integrity and reliability of court reporters as well as the deposition transcript and very text doesn't dispute that in its brief in this case vertex admits that it quote that the district court judge reached because in that case this court found that there was no rational basis for the regulation of the funeral proposed profession and that the only purpose that the state could rely upon was economic protectionism but that alone did not establish the constitutionality of that particular regulation the facts of this case are much more closely aligned with this court's previous holding in the greater houston small taxicab company owners case because in that case the court recognized that even if the legislature there the municipality had some motive in part to promote economic protectionism and there's no record evidence in this case that that was the legislature's motive  that this the statute is still constitutional so long as it serves a nother legitimate state interest and here that stayed interest is in ensuring their liability and integrity of the court twitters and the deposition transcript the district court applied rational basis to both equal protection and due process and recognize that there were legitimate interests which very text does not dispute the fact that there may be other interests that vertex can argue are served by that statute as well does not establish that statute as unconstitutional but we ask that the court affirmed just record and just mix dismiss virtex claims in its many complain requires actual investigation and requires resolution after full record here we have alleged majority control by court reporters we've also alleged this court reports each have a financial interest in increasing rates we've also you know it was their point that there were two different categories of court reporters and we did not address the issue of two different categories of court reporters all we've done is a legit depositions it's not in the record it's not part of our it's not part of our could not tell you that produce saying you plan sufficiently to beat immunity based on the six that's right and what you've just heard this question that you've just raised this is the question of fact but it's only one of many questions of fact related to control and see don't dental was very very clear it's not just who has majority control the clearly there is majority control here by private market participants it's also what is the risk of a regulatory capture what is the risk that private market participants will use this board for their own anti competitive purposes and we've alleged that alleged not only is there a risk but it's actually happens and that means there's been regulatory control what do you make of what they've said today about the how to increase rates to decide nothing to do with is part of what the c of what this board is doing for their own private purposes but we also allege that the board goes well beyond anything related to fourteen thirty four one of the things we a e is that in fact they are getting together and exchanging price information without any supervision agreeing on prices and how to raise those rates and what again t complaint seek besides stopping forty thirty or so if you go back to say paragraph that they they quoted from in the second remedy one for injunction it does  ask for a remedy to stop enforcing fourteen thirty four but then it goes on and the vast majority and that of that paragraph in the prayer for leave paragraph number two deals with requesting that the the board members from gaging in any other conduct that is anti competitive in has a whole list of the types of anti competitive conduct that it is asking for an injunction on in you know which would include the price fixing which would include the boycott another action that has happened here that we've not focused on too much yet is that in fact this board has targeted my client they've issued a notice of investigation to an out of state company over which they have no jurisdiction over and they've done that for purposes of publicizing it as a deterrent of court reporters for working with us and that's problemat now with respect a rational basis the judge did not conduct a rational basis test it identified a potential legitimate purpose and then assumes that the statute achieve that purpose rational basis also requires a fact intensive investigation it is just deferential but fact intensive it's not toothless and that is what true what that is the step that was skipped