_______________________ 

_____________________ 

_____________________ 

_____________________ 

Case: 19-12227 Date Filed: 09/25/2019 Page: 1 of 46 

No. 19-12227 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE ELEVENTH CIRCUIT 

SMILEDIRECTCLUB, LLC, 

Plaintiff-Appellee, 

 v. 

TANJA D. BATTLE; THOMAS P. GODFREY; GREGORY G. 

GOGGANS; RICHARD BENNETT; REBECCA B. BYNUM; TRACY 

GAY; STEVE HOLCOMB; LOGAN NALLEY JR.; ANTWAN L. 

TREADWAY; H. BERT YEARGAN; and WENDY JOHNSON, 

Defendants-Appellants. 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF GEORGIA 

(JUDGE WILLIAM M. RAY, II) 

BRIEF FOR THE UNITED STATES AND THE FEDERAL TRADE 

COMMISSION AS AMICI CURIAE SUPPORTING PLAINTIFFAPPELLEE 

ALDEN F. ABBOTT

 General Counsel 

JOEL MARCUS 

 Deputy General Counsel 

MARK S. HEGEDUS 

 Attorney

 Federal Trade Commission 

600 Pennsylvania Ave., NW 

Washington, D.C. 20580 

MAKAN DELRAHIM 

Assistant Attorney General 

MICHAEL F. MURRAY 

Deputy Assistant Attorney General 

TAYLOR M. OWINGS 

Counsel to the Assistant Attorney General 

ROBERT B. NICHOLSON 

STEVEN J. MINTZ 

Attorneys 

U.S. Department of Justice 

Antitrust Division 

950 Pennsylvania Avenue, N.W. 

Washington, D.C. 20530-0001 

(202) 353-0256 
Case: 19-12227 Date Filed: 09/25/2019 Page: 2 of 46 

SmileDirectClub, LLC v. Battle, et al., No. 19-12227 

CERTIFICATE OF INTERESTED PERSONS AND 

CORPORATE DISCLOSURE STATEMENT 

C-1 of 5 

Pursuant to Eleventh Circuit Rules 26.1-1 and 28.1, the 

undersigned certifies that the following persons and entities are known 

to him to have an interest in the outcome of this case or have 

participated as attorneys or judges in the adjudication of this case: 

Abbott, Alden F., General Counsel, Federal Trade 

Commission 

American Association of Orthodontists, amicus curiae in the 

district court 

Battle, Tanja D., Appellant 

 Bennett, Richard, Appellant 

Bilsborrow, Jameson B., Assistant Attorney General of 

Georgia 

Bryan Cave Leighton Paisner LLP, Attorneys for American 

Association of Orthodontists 

Bynum, Rebecca B., Appellant 

ii 
Case: 19-12227 Date Filed: 09/25/2019 Page: 3 of 46 

SmileDirectClub, LLC v. Battle, et al., No. 19-12227 

C-2 of 5 

Caplan, Michael A., Attorney for Appellants 

Caplan Cobb LLP, Attorneys for Appellants 

Carr, Christopher M., Attorney General of Georgia 

Cashdan, Jeffrey S., Attorney for Appellee 

Cecka, Dale, Attorney for Appellants 

Chalmers, Roger A., Senior Assistant Attorney General of 

Georgia 

Changus, Maximillian, Attorney for Appellants 

Chopra, Rohit, Commissioner, Federal Trade Commission 

Cobb, James W., Attorney for Appellants 

Daughdril, Kirsten, Attorney for Appellants 

Deal, Nathan, former Governor of Georgia 

Delrahim, Makan, Assistant Attorney General, Antitrust 

Division, U.S. Department of Justice 

Devereaux, Stephen B., Attorney for Appellee 

iii 
Case: 19-12227 Date Filed: 09/25/2019 Page: 4 of 46 

SmileDirectClub, LLC v. Battle, et al., No. 19-12227 

C-3 of 5 

Galanek, Christopher Paul, Attorney for American 

Association of Orthodontists 

Gay, Tracy, Appellant 

Georgia Board of Dentistry, former Defendant 

Godfrey, Thomas P., Appellant 

Goggans, Gregory G., Appellant 

Hegedus, Mark S., Attorney, Federal Trade Commission 

Holcomb, Steve, Appellant 

Johnson, Wendy, Appellant 

Jones, Sakinah Noelle, Attorney for the American 

Association of Orthodontists 

Kemp, Brian P., Governor of Georgia 

King & Spalding, LLP, Attorneys for Appellee 

Kitchens, Madison H., Attorney for Appellee 

Knight, Sr., Michael A., member, Georgia Board of Dentistry 

Marcus, Joel, Deputy General Counsel, Federal Trade 

Commission 

iv 
Case: 19-12227 Date Filed: 09/25/2019 Page: 5 of 46 

SmileDirectClub, LLC v. Battle, et al., No. 19-12227 

C-4 of 5 

McPherson, Aiten Musaeva, Attorney for American 

Association of Orthodontists 

Mintz, Steven J., Attorney, Appellate Section, Antitrust 

Division, U.S. Department of Justice 

Murray, Michael F., Deputy Assistant Attorney General, 

Antitrust Division, U.S. Department of Justice 

Nalley Jr., Logan, Appellant 

Nicholson, Robert B., Attorney, Appellate Section, Antitrust 

Division, U.S. Department of Justice 

Owings, Taylor M., Counsel, Antitrust Division, U.S. 

Department of Justice 

Patel, Ami, member, Georgia Board of Dentistry 

Phillips, Noah Joshua, Commissioner, Federal Trade 

Commission 

Pinson, Andrew A., Solicitor General of Georgia 

Ray II, William M., U.S. District Judge, Northern District of 

Georgia 

Reinke, Adam, Attorney for Appellee 

v 
 

 

Case: 19-12227 Date Filed: 09/25/2019 Page: 6 of 46 

SmileDirectClub, LLC v. Battle, et al., No. 19-12227 

C-5 of 5 

SDC Financial, LLC, parent company of Appellee 

Simons, Joseph J., Chairman, Federal Trade Commission 

Slaughter, Rebecca Kelly, Commissioner, Federal Trade 

 Commission 

SmileDirectClub, LLC, Appellee 

Soni, Parag H., member, Georgia Board of Dentistry 

Stiehl, Brent, member, Georgia Board of Dentistry 

Thernes, Byron A., Senior Assistant Attorney General of 

Georgia 

Treadway, Antwan L., Appellant 

Walsh, Daniel, Attorney for Appellants 

Wilson, Christine S., Commissioner, Federal Trade 

Commission 

Yeargan, H. Bert, Appellant 

 /s/ Steven J. Mintz 

 Steven J. Mintz 

Attorney 

vi 
Case: 19-12227 Date Filed: 09/25/2019 Page: 7 of 46 

TABLE OF CONTENTS 

CERTIFICATE OF INTERESTED PERSONS AND CORPORATE 

DISCLOSURE STATEMENT ................................................................... ii 

TABLE OF CONTENTS .......................................................................... vii 

TABLE OF AUTHORITIES .................................................................... viii 

STATEMENT OF INTEREST ................................................................... 1 

STATEMENT OF ISSUES PRESENTED ................................................ 2 

STATEMENT .............................................................................................. 3 

SUMMARY OF ARGUMENT .................................................................. 12 

ARGUMENT ............................................................................................. 15 

I. The State-Action Defense to Antitrust Liability is Limited and 

Disfavored ......................................................................................... 15 

II. The Midcal Requirement of Active Supervision Applies to This 

Case ................................................................................................... 19 

A. Whether the Governor is a “Sovereign Actor” for Purposes of 

the State-Action Defense is Not At Issue Here ........................ 20 

B. The Board’s Challenged Rule Cannot Be Attributed to the 

Governor By Reason of His Supervision. .................................. 24 

III. The Board Members Have Not Demonstrated, At the Motion to 

Dismiss Stage, That the State Actively Supervised the Board’s 

Challenged Conduct. ....................................................................... 28 

CONCLUSION ......................................................................................... 34 

CERTIFICATE OF COMPLIANCE 

CERTIFICATE OF SERVICE 

vii 
Case: 19-12227 Date Filed: 09/25/2019 Page: 8 of 46 

TABLE OF AUTHORITIES 

Cases 

Bates v. State Bar of Arizona, 

433 U.S. 350 (1977) ............................................................................... 22 

California Retail Liquor Dealers Association v. Midcal Aluminum, Inc., 

445 U.S. 97 (1980) ............................................................................. 8, 17 

City of Lafayette v. Lousiana Power & Light Co., 

435 U.S. 389 (1978) ............................................................................... 15 

Community Communications Co. v. City of Boulder, 

455 U.S. 40 (1982) ................................................................................. 10 

Commuter Transporation Systems, Inc. v. Hillsborough County Aviation 

Authority, 

801 F.2d 1286 (11th Cir. 1986) ............................................................. 11 

Cost Management Services, Inc. v. Washington Natural Gas Co., 

99 F.3d 937 (9th Cir. 1996) ............................................................. 29, 30 

Diverse Power, Inc. v. City of LaGrange, 

No. 18-11014 (11th Cir. Aug. 20, 2019) ................................................ 11 

Edinboro College Park Apartments v. Edinboro University Foundation, 

850 F.3d 567 (3d Cir. 2017) ....................................................... 17, 23, 27 

FTC v. Indiana Federation of Dentists, 

476 U.S. 447 (1986) ............................................................................... 11 

*FTC v. Phoebe Putney Health System, 

568 U.S. 216 (2013) ....................................................................... passim 

*FTC v. Ticor Title Insurance Co., 

504 U.S. 621 (1992) ............................................................... 2, 17, 31, 33 

Goldfarb v. Virginia State Bar, 

421 U.S. 773 (1975) ......................................................................... 20, 23 

viii 
Case: 19-12227 Date Filed: 09/25/2019 Page: 9 of 46 

Hoover v. Ronwin, 

466 U.S. 558 (1984) ............................................................. 22, 23, 25, 26 

Huron Valley Hospital, Inc. v. City of Pontiac, 

792 F.2d 563 (6th Cir. 1986) ................................................................. 12 

In re Realcomp II Ltd., 

2007 WL 693619 (FTC Oct. 30, 2009)..................................................... 3 

*North Carolina Board of Dental Examiners v. FTC, 

135 S. Ct. 1101 (2015) ................................................................... passim 

Parker v. Brown, 

317 U.S. 341 (1943) ..................................................................... 1, 15, 16 

Patrick v. Burget, 

486 U.S. 94 (1988) ......................................................................... passim 

Realcomp II, Ltd. v. FTC, 

635 F.3d 815 (6th Cir. 2011) ................................................................... 3 

South Carolina State Board of Dentistry v. FTC, 

455 F.3d 436 (4th Cir. 2006) ........................................................... 11, 12 

Shames v. California Travel & Tourism Commission, 

626 F.3d 1079 (9th Cir. 2010) ............................................................... 17 

SolarCity Corp. v. Salt River Project Agricultural Improvement & Power 

District, 

859 F.3d 720 (9th Cir. 2017) ........................................................... 11, 12 

Teladoc, Inc. v. Texas Medical Board, 

2015 WL 8773509 (W.D. Tex. Dec. 14, 2015) ......................................... 4 

Town of Hallie v. City of Eau Claire, 

471 U.S. 34 (1985) ................................................................................. 29 

Trigen Oklahoma City Energy Corp. v. Oklahoma Gas & Electric Co., 

244 F.3d 1220 (10th Cir. 2001) ............................................................. 29 

ix 
Case: 19-12227 Date Filed: 09/25/2019 Page: 10 of 46 

United States v. Aluminum Co. of America, 

377 U.S. 271 (1964) ................................................................................. 3 

Will v. Hallock, 

546 U.S. 345 (2006) ............................................................................... 11 

Yeager’s Fuel v. Pennsylvania Power & Light Co., 

22 F.3d 1260 (3d Cir. 1994) ............................................................. 17, 18 

Statutes 

15 U.S.C. § 1 ............................................................................................... 7 

2015 Ga. HB 952, 2016 Ga. Laws 485 ..................................................... 21 

O.C.G.A. § 43-1C-1 ................................................................................ 6, 21 

O.C.G.A. § 43-11-9 .................................................................................... 24 

O.C.G.A. § 43-1C-3(a) ................................................................................. 7 

State Agency Rules 

Ga. Comp. R. & Regs. r. 150-9-.01(2) ......................................................... 6 

Ga. Comp. R. & Regs. r. 150-9.02(aa) ................................................ 6, 7, 9 

Rules 

Fed. R. App. P. 29(a) ................................................................................... 2 

Other Authorities 

U.S. Dept. of Justice & Federal Trade Commission, Antitrust 

Guidelines for the Licensing of Intellectual Property (2017) ................... 3 

x 
Case: 19-12227 Date Filed: 09/25/2019 Page: 11 of 46 

STATEMENT OF INTEREST 

The United States and the Federal Trade Commission have 

primary responsibility for enforcing the federal antitrust laws and have 

a strong interest in the proper application of the state-action defense 

articulated in Parker v. Brown, 317 U.S. 341 (1943). That defense 

protects the deliberate policy choices of sovereign states to displace 

competition with regulation or monopoly public service. Overly broad 

application of the state-action defense, however, sacrifices the 

important benefits that antitrust laws provide consumers and 

undermines the fundamental national policy favoring robust 

competition. The federal antitrust agencies have filed amicus curiae 

briefs in appropriate cases to prevent such overly broad applications. 

E.g., Leeds v. Jackson, No. 19-11502 (11th Cir., filed Sept. 11, 2019); 

Teladoc, Inc. v. Tex. Med. Bd., No. 16-50017 (5th Cir., filed Sept. 9, 

2016). In addition, the Supreme Court has clarified the scope and 

application of the state-action defense in cases brought by the FTC. See 

N.C. Bd. of Dental Examiners v. FTC, 135 S. Ct. 1101 (2015); FTC v. 

1 
 

Case: 19-12227 Date Filed: 09/25/2019 Page: 12 of 46 

Phoebe Putney Health Sys., 568 U.S. 216 (2013); FTC v. Ticor Title Ins. 

Co., 504 U.S. 621 (1992).1 

We file this brief under Federal Rule of Appellate Procedure 29(a) 

and urge the Court, if it addresses the “active supervision” component of 

the state-action defense, to affirm the district court’s holding that the 

Defendants-Appellants (hereafter the “Board members”) did not meet 

their burden at this stage of the proceeding to show that the State of 

Georgia actively supervised the challenged regulation of the Georgia 

Board of Dentistry. 

STATEMENT OF ISSUES PRESENTED 

Whether the district court correctly determined that the active 

supervision requirement of the state-action defense applies in this case 

and that the Board members failed to meet their burden to satisfy that 

requirement at the motion to dismiss stage. 

1 FTC staff also has issued guidance regarding the application of 

the defense to state regulatory boards controlled by market 

participants. See FTC Staff Guidance on Active Supervision of State 

Regulatory Boards Controlled by Market Participants (Oct. 13, 2015), 

available at https://www.ftc.gov/system/files/attachments/competitionpolicy-guidance/active_supervision_of_state_boards.pdf. 

2 
Case: 19-12227 Date Filed: 09/25/2019 Page: 13 of 46 

STATEMENT 

1. Vigorous competition is a crucial factor in fueling innovation. 

See, e.g., United States v. Aluminum Co. of Am., 377 U.S. 271, 281 

(1964). Likewise, technological innovations and new business models 

often have enormous pro-competitive benefits. This reinforcing cycle of 

competition and innovation allows consumers to reap the rewards of 

new and exciting products and services, lower prices, and easier access. 

See, e.g., U.S. Dept. of Justice & Federal Trade Comm’n, Antitrust 

Guidelines for the Licensing of Intellectual Property § 1.0 (2017); see 

also In re Realcomp II Ltd., 2007 WL 693619, at *6 (FTC Oct. 30, 2009) 

(“Because technological and organizational dynamism are powerful 

stimulants for economic progress, an especially important application of 

antitrust law is to see that incumbent service providers do not use 

improper means to suppress innovation-driven competition that 

benefits consumers.”), aff’d, Realcomp II, Ltd. v. FTC, 635 F.3d 815 (6th 

Cir. 2011). 

Competition, technological innovation, and new models of health 

care delivery, such as telemedicine, may be disruptive to the traditional 

business models of doctors and dentists. Almost invariably, however, 

3 
Case: 19-12227 Date Filed: 09/25/2019 Page: 14 of 46 

that disruption brings the benefits of competition and innovation to 

consumers. See Dental Examiners, 135 S. Ct. at 1108 (non-dentists who 

offered teeth-whitening services “charged lower prices for their services 

than the dentists did”); Teladoc, Inc. v. Tex. Med. Bd., 2015 WL 8773509 

(W.D. Tex. Dec. 14, 2015) (new competitor offered telehealth services by 

out-of-state doctors for a fraction of the cost of visiting a traditional 

medical office). 

2. Plaintiff-Appellee SmileDirectClub (“SmileDirect”) claims to 

have created an innovative teledentistry system for providing clear 

aligner treatment for cases of mild to moderate malocclusion of the 

teeth. One of SmileDirect’s services is SmileShops, which are physical 

locations in several states at which an employee, using a wand-like, 

non-radiation-emitting device called an iTero, can take rapid 

photographs of a consumer’s mouth. Complaint ¶¶ 24-26. The 

photographs are stored digitally and sent to the SmileDirect lab, which 

uses them to create a 3-dimensional model of the consumer’s mouth. Id. 

¶¶ 26-27. Then, a dentist or orthodontist, who is licensed to practice in 

Georgia but is located off-site (and may be located out-of-state), 

evaluates the model and photographs and collects additional medical 

4 
Case: 19-12227 Date Filed: 09/25/2019 Page: 15 of 46 

information from the consumer. If the dentist deems the consumer 

appropriate for SmileDirect’s clear aligners, and if the consumer elects 

to move forward, the dentist creates a treatment plan that is shared 

with the new patient through SmileDirect’s website portal. Id. ¶¶ 26-

29. The dentist then prescribes the aligners, which are sent directly to 

the patient. Id. ¶ 21. The patient therefore need never visit a 

traditional dental office for teeth alignment treatment. Id. ¶¶ 20-21. 

SmileDirect claims to reduce the cost of expensive aligner 

treatment and to increase access to treatment for unreached segments of 

the population. Complaint ¶¶ 21-23, 32. SmileDirect opened its first 

SmileShop in Georgia in July 2017. Id. ¶ 33. SmileDirect further 

alleges that incumbent dentists and orthodontists who practice in 

traditional dental offices have used their influence with industrycontrolled state licensing boards to enact regulatory restraints on 

competition from SmileDirect, for the purpose of “restricting the number 

of competitors and causing prices in the Relevant Market to rise, 

maintain, or stabilize above competitive levels.” Id. ¶ 97. 

3. The Georgia Board of Dentistry (hereafter “Board”) is a state 

agency that regulates the practice of dentistry in Georgia. Complaint 

5 
Case: 19-12227 Date Filed: 09/25/2019 Page: 16 of 46 

¶¶ 4, 17. SmileDirect alleges that the eleven-member Board consists of 

nine dentists, one dental hygienist, and one non-dentist/non-hygienist, 

with the dentists and the hygienist being active market participants in 

the profession that the Board regulates. Id. ¶¶ 4-15. SmileDirect 

further alleges that, beginning in late 2017, the Board amended its 

rules so as to restrict competition from teledentistry services and make 

it “virtually impossible” for SmileDirect to serve Georgia consumers 

across state lines. Id. ¶¶ 34-39, 43. Specifically, an amended rule 

requires that certain non-dentist personnel may take “digital scans for 

fabrication [of] orthodontic appliances and models” only when acting 

under the “direct supervision” of a licensed dentist. Ga. Comp. R. & 

Regs. r. 150-9.02(aa). Other rules define “direct supervision” as 

requiring that a dentist be physically present “in the dental office or 

treatment facility while the procedures are being performed by the 

dental assistant.” Ga. Comp. R. & Regs. r. 150-9-.01(2). 

4. Georgia’s scheme for review of state agency actions 

(including rulemakings) is, in pertinent part, O.C.G.A. § 43-1C-1 et seq., 

the “Georgia Professional Regulation Reform Act” (2016). The statute 

gives the Governor “the authority and duty to actively supervise the 

6 
Case: 19-12227 Date Filed: 09/25/2019 Page: 17 of 46 

professional licensing boards of this state to ensure that their actions 

are consistent with clearly articulated state policy[.]” Id. § 43-1C-3(a). 

As to rulemakings, the Governor shall “[r]eview and, in writing, 

approve or veto” two kinds of licensing board rules: (1) any rule that is 

“required to be filed in the office of the Secretary of State,” and (2) any 

rule that is “challenged via an appeal to the Governor” or submitted by 

a licensing board for review by the Governor. Id. subsections (a)(1) and 

(2). As to other actions, the Governor shall “[r]eview and, in writing, 

approve, remand, modify, or reverse any action” by a licensing board 

that is challenged via an appeal to the Governor or submitted by a 

board for review by the Governor. Id. subsection (a)(3). 

5. SmileDirect alleges that the amended subparagraph (aa) of 

Board Rule 150-9.02 will subject it to the threat of both Board action 

seeking to enjoin SmileDirect from conducting business in Georgia and 

enforcement action by the state seeking criminal penalties. Complaint 

¶¶ 34-39. SmileDirect filed suit, alleging that the amended rule 

violates (among other things) Section 1 of the Sherman Act, 15 U.S.C. § 

1. Complaint ¶¶ 89-99. SmileDirect alleges that the State of Georgia 

7 
Case: 19-12227 Date Filed: 09/25/2019 Page: 18 of 46 

“did not actively or adequately supervise the Board with regard to its 

action in passing Subparagraph (aa).” Id. ¶ 45. 

6. The Board moved to dismiss SmileDirect’s claims on several 

grounds. With respect to the antitrust claim, the Board contended that 

the state-action defense bars that claim. That defense provides that 

federal antitrust law does not reach the anticompetitive conduct of 

active market participants that is (1) in furtherance of a clearly 

articulated state policy to displace competition, and (2) actively 

supervised by the state. Cal. Retail Liquor Dealers Ass’n v. Midcal 

Aluminum, Inc., 445 U.S. 97, 106 (1980). In an Order filed May 8, 2019, 

the court denied the motion with respect to the antitrust claim against 

the Board members individually in their official capacities. With 

respect to the state-action defense, the court ruled that the Board 

members must satisfy the clear articulation and active supervision 

requirements, as set forth in Dental Examiners. Order at 12. The court 

then ruled that dismissal on the basis of the state-action defense would 

be “premature at this stage.” Id. at 13. 

The court noted that the Board members submitted a 

“Certification of Active Supervision,” signed by the Governor, stating 

8 
Case: 19-12227 Date Filed: 09/25/2019 Page: 19 of 46 

that he approves the amendment to Board rule 150-9-.02. The 

Certification states: 

Pursuant to the Georgia Professional Regulation Reform Act, 

O.C.G.A. § 43-1C-1, et seq., the Governor is vested with the 

duty to “actively supervise the professional licensing boards 

of this state.” In accordance with the Georgia Professional 

Regulation Reform Act, the Georgia Board of Dentistry 

(hereinafter “Board”) seeks to amend Ga. Comp. R. & Regs. 

r. 150-9-.02. As stated by the Board, the purpose of the 

amendment is to expand the list of services dental assistants 

may perform. 

Georgia law grants the Board authority to promulgate rules 

and regulations related to dental assistant services. See 

O.C.G.A. § 43-11-9. As such, the amendment adopted by the 

Board is within its authority as granted by clearly 

articulated state policy. Therefore, I hereby approve the 

amendment to Ga. Comp. R. & Regs. r. 150-9-.02 for the 

purposes of active supervision review required by O.C.G.A. § 

43-1C-3. 

Doc. 29-2. 

SmileDirect, however, alleged that the Board impeded active 

supervision by the Governor. Complaint ¶ 45. The Board did not fully 

advise the Governor of the reasons for its actions and the objections 

thereto; the Board’s official minutes do not fully summarize the 

objections to the Board’s action expressed during Board meetings; the 

Board did not inform the Governor of the consumer impact of the 

amendment; and the Board did not “reveal the conflicts of interest” of 

9 
Case: 19-12227 Date Filed: 09/25/2019 Page: 20 of 46 

the Board members “who will benefit monetarily, now or in the future, 

by restraining trade[.]” Order at 12-13; Complaint ¶ 45. Given these 

allegations, the court found that “the Complaint reveals a well-pleaded 

factual dispute that is not resolved by the Certification of Active 

Supervision,” and discovery is necessary to determine “whether the 

Certification of Active Supervision was merely ‘rubberstamped’ as a 

matter of course.” Order at 13. The court noted, however, that the 

Board members could re-assert the state-action defense on summary 

judgment. Id. 

7. The court did not reach the “clear articulation” requirement 

of the state-action defense. We note, however, that the Board’s general 

regulatory authority to implement a broad public interest standard, 

such as health and safety, does not mean that the legislature has 

clearly articulated a policy to displace a particular form of competition 

such as teledentistry. See Phoebe Putney, 568 U.S. at 228 (“the substate 

governmental entity must also show that it has been delegated 

authority to act or regulate anticompetitively”); Community 

Communications Co. v. City of Boulder, 455 U.S. 40, 54-55 (1982) 

(general grant of home rule authority to municipality did not articulate 

10 
Case: 19-12227 Date Filed: 09/25/2019 Page: 21 of 46 

any policy to displace competition in cable television). Merely because 

anticompetitive conduct purports to protect health and safety does not 

immunize it from antitrust challenge, see FTC v. Indiana Federation of 

Dentists, 476 U.S. 447, 462-63 (1986). 

8. On June 10, 2019, the Board members took this 

interlocutory appeal of the district court’s ruling on the state-action 

defense, based on the collateral-order doctrine. The Board members 

must satisfy all three requirements of the collateral-order doctrine. See 

Will v. Hallock, 546 U.S. 345, 349 (2006). Although our brief addresses 

the state-action merits, we note our view that this Court’s decisions on 

the reviewability requirement of the collateral-order doctrine, see 

Commuter Transp. Sys., Inc. v. Hillsborough Cty. Aviation Auth., 801 

F.2d 1286 (11th Cir. 1986); Diverse Power, Inc. v. City of LaGrange, No. 

18-11014, slip op. at 5 n.1 (11th Cir. Aug. 20, 2019), rely on the faulty 

premise that the state-action defense is an immunity from suit. See 

Brief of the United States as Amicus Curiae in SolarCity Corp. v. Salt 

River Project Agric. Improvement & Power Dist., 859 F.3d 720 (9th Cir. 

2017) (2016 WL 3208041); Brief of the FTC in S.C. State Bd. of 

11 
 

Case: 19-12227 Date Filed: 09/25/2019 Page: 22 of 46 

Dentistry v. FTC, 455 F.3d 436 (4th Cir. 2006) (2005 WL 3775767). 2 A 

majority of the circuits to have addressed this issue hold that orders 

denying state-action protection may not be appealed under the 

collateral-order doctrine. SolarCity Corp.; S.C. State Bd. of Dentistry; 

Huron Valley Hosp., Inc. v. City of Pontiac, 792 F.2d 563 (6th Cir. 1986). 

We agree with this majority but recognize that for this Court to join it 

would require an en banc decision. 

SUMMARY OF ARGUMENT 

The state-action defense is disfavored, narrowly construed, and 

the party asserting the defense (here, the Board members) bears the 

burden of showing that the requirements of the defense are satisfied. 

Applying these principles, the district court ruled correctly that the 

Board members have not shown at this stage of the proceeding that the 

2 SmileDirect’s arguments (Br. 41-42) highlighting the district 

court’s unanswered factual questions demonstrate one of the reasons 

why the state-action defense should not be considered an immunity 

from suit that is appealable under the collateral-order doctrine. Factual 

development may be necessary to determine if the state supervisor is an 

“active market participant,” see Dental Examiners, 135 S. Ct. at 1117, or 

whether the supervisor actually engaged in substantive review and 

made a decision to approve the agency rule, because the “mere potential 

for state supervision is not an adequate substitute for a decision by the 

State.” Id. at 1115-16. 

12 
Case: 19-12227 Date Filed: 09/25/2019 Page: 23 of 46 

state actively supervised the Board regulation challenged by 

SmileDirect. 

The court first ruled correctly that the active supervision 

requirement applies to this case. Dental Examiners “holds ... that a 

state board on which a controlling number of decisionmakers are active 

market participants in the occupation the board regulates must satisfy 

Midcal’s active supervision requirement in order to invoke state-action 

antitrust immunity.” 135 S. Ct. at 1114. SmileDirect alleges that the 

Board is controlled by active market participants—dentists and a 

dental hygienist—in the occupation that the Board regulates. 

Contrary to the Board members’ contentions, the ipso facto 

standard for anticompetitive action by a state sovereign entity does not 

apply here. First, SmileDirect does not allege that the Governor alone 

took the action challenged as anticompetitive. The Governor does not 

direct the Board’s activities or set the bounds of the Board’s authority. 

Instead, as the Certification of Active Supervision states, the Governor’s 

sole role was to serve as the “supervisor” of certain Board conduct. This 

case therefore does not present the question whether or when a 

governor plays a role equivalent (for state-action purposes) to a state 

13 
Case: 19-12227 Date Filed: 09/25/2019 Page: 24 of 46 

legislature or a state supreme court acting legislatively. Second, Dental 

Examiners cannot be avoided on the ground that gubernatorial review 

of the Board’s allegedly anticompetitive conduct transforms that 

conduct into an act of the Governor, or an act attributable to the 

Governor. Far from obviating the active supervision requirement, the 

text of the Certification, the statutory language, and the legislative 

history all reflect a system created precisely to comply with Dental 

Examiners’ requirement of active supervision. The question is whether 

the Board members can show that this requirement has been satisfied. 

The district court also rightly determined that the Board members 

did not show, at the motion to dismiss stage, that the involvement of 

the Governor amounted to active supervision. First, SmileDirect 

alleges that the Governor “did not actively or adequately supervise the 

Board,” Complaint ¶ 45, because the Board impeded active supervision 

in specific ways—factual allegations that are accepted as true on a 

motion to dismiss. The district court properly recognized that a factual 

inquiry is needed to resolve the question whether the Board provided 

the information required to permit the Governor to actively supervise 

the Board’s actions. Second, the Certification of Active Supervision, 

14 
Case: 19-12227 Date Filed: 09/25/2019 Page: 25 of 46 

even assuming it could be considered on a motion to dismiss, does not 

establish, on its face, whether the Governor engaged in the “constant 

requirements of active supervision” that the Supreme Court has 

identified. Dental Examiners, 135 S. Ct. at 1116. Under those 

requirements, the supervisor should review the actual substance and 

effect of the Board rule to ensure that it is “in accord with state policy” 

to displace competition. Id. at 1111 (quoting Patrick v. Burget, 486 U.S. 

94, 101 (1988)). The Certification, however, establishes only that the 

Governor, relying on the rule’s stated purpose, determined that the 

Board acted within its authority, which does not satisfy the 

requirements of active supervision. See id. at 1116. 

ARGUMENT 

I. The State-Action Defense to Antitrust Liability is Limited 

and Disfavored. 

Competition is “the fundamental principle governing commerce in 

this country,” City of Lafayette v. La. Power & Light Co., 435 U.S. 389, 

398 (1978). The Supreme Court, however, has recognized a limited 

defense to antitrust liability to accommodate principles of federalism 

and state sovereignty. In Parker v. Brown, 317 U.S. 341 (1943), the 

15 
Case: 19-12227 Date Filed: 09/25/2019 Page: 26 of 46 

Court held that “because ‘nothing in the language of the Sherman Act . . 

. or in its history’ suggested that Congress intended to restrict the 

sovereign capacity of the States to regulate their economies, the Act 

should not be read to bar States from imposing market restraints ‘as an 

act of government.’” Phoebe Putney, 568 U.S. at 224 (quoting Parker, 

317 U.S. at 350, 352). The state-action defense therefore does not apply 

“unless the actions in question are an exercise of the State’s sovereign 

power.” Dental Examiners, 135 S. Ct. at 1110. The Court has 

recognized that a state exercises sovereign power when the 

anticompetitive act in question is itself “[s]tate legislation” or when it is 

the “decision[] of a state supreme court, acting legislatively rather than 

judicially.” Id. (internal quotation marks and citation omitted). Under 

these limited circumstances, the clear articulation and active 

supervision requirements do not apply, and state legislatures and 

supreme courts are entitled to what is sometimes called ipso facto stateaction protection. Id. 

The Court repeatedly has emphasized, however, that the stateaction defense “is disfavored, much as are repeals by implication.” 

Dental Examiners, 135 S. Ct. at 1110 (quoting Phoebe Putney, 133 S. Ct. 

16 
Case: 19-12227 Date Filed: 09/25/2019 Page: 27 of 46 

at 1010, and Ticor Title Ins. Co., 504 U.S. at 636). This is because it 

detracts from “the fundamental national values of free enterprise and 

economic competition that are embodied in the federal antitrust laws.” 

Id. Courts therefore interpret the state-action defense “narrowly.” 

Shames v. Cal. Travel & Tourism Comm’n, 626 F.3d 1079, 1084 (9th 

Cir. 2010); see also Yeager’s Fuel v. Pa. Power & Light Co., 22 F.3d 

1260, 1265 (3d Cir. 1994). 

To ensure that the defense is appropriately limited, the Supreme 

Court has imposed requirements on sub-state entities and private 

parties that seek to invoke it. In Midcal, the Court held that nonsovereign actors can invoke the state-action defense only when they can 

show (1) that the alleged anticompetitive conduct was taken pursuant 

to a “clearly articulated and affirmatively expressed . . . state policy” to 

displace competition, and (2) that the conduct was “actively supervised 

by the State itself.” 445 U.S. at 105. This is “[t]he most searching level 

of scrutiny,” and the test is “rigorous.” Edinboro College Park 

Apartments v. Edinboro University Foundation, 850 F.3d 567, 573 (3d 

Cir. 2017). 

17 
Case: 19-12227 Date Filed: 09/25/2019 Page: 28 of 46 

In Dental Examiners the Supreme Court held that both of the 

Midcal requirements also apply to any non-sovereign state entity 

“controlled by active market participants” in the occupation that the 

entity regulates. 135 S. Ct. at 1114. State agencies controlled by active 

market participants are treated like “private trade associations vested 

by States with regulatory authority.” Id. This holding reflects the 

recognition that, when “a State empowers a group of active market 

participants to decide who can participate in its market,” there is a 

“structural risk” that they will pursue “their own interests” instead of 

“the State’s policy goals.” Id. 

Accordingly, state boards that are controlled by active market 

participants bear the burden of satisfying both of the Midcal 

requirements. See Dental Examiners, 135 S. Ct. at 1114 (board 

controlled by active market participants “must satisfy [the] active 

supervision requirement”); see also Patrick v. Burget, 486 U.S. 94, 101 

(1988) (concluding that respondents had not succeeded in showing 

active supervision); Yeager’s Fuel, 22 F.3d at 1266 (“Cases since Parker, 

however, clarify that state action immunity is an affirmative defense as 

to which [defendant] bears the burden of proof.”). 

18 
 

Case: 19-12227 Date Filed: 09/25/2019 Page: 29 of 46 

II. The Midcal Requirement of Active Supervision Applies to 

This Case. 

The district court correctly held that this case is governed by 

Dental Examiners, and the Board members therefore must satisfy the 

active supervision requirement. Order at 12. Dental Examiners 

squarely “holds ... that a state board on which a controlling number of 

decisionmakers are active market participants in the occupation the 

board regulates must satisfy Midcal’s active supervision requirement in 

order to invoke state-action antitrust immunity,” 135 S. Ct. at 1114, a 

holding that the Board members do not dispute (Br. 34-35). 

SmileDirect alleges that the Board is controlled by active market 

participants in the occupation of dentistry. Complaint ¶¶ 4-15. 

In an attempt to evade this directly analogous precedent and the 

Midcal requirements that come with it, the Board members wrongly 

assert (1) that the Governor’s supervisory role here is that of the state 

acting as a “sovereign actor” in a state-action sense (Br. 23-30), and 

(2) that the challenged rule can be “attributed” to the Governor (Br. 30-

34), making it ipso facto an act of the sovereign. Both assertions are 

incorrect. This Court need not decide whether or when a governor acts 

as the sovereign for state-action purposes. Under Georgia’s statutory 

19 
Case: 19-12227 Date Filed: 09/25/2019 Page: 30 of 46 

framework, the Governor’s role here was only to supervise. The alleged 

injury from promulgation and ultimate enforcement of the Board rule 

thus cannot be attributed to him, regardless of whether a governor 

might be deemed the state acting as sovereign in other circumstances. 

A. Whether the Governor is a “Sovereign Actor” for 

Purposes of the State-Action Defense is Not At Issue 

Here. 

The state-action defense protects the right of states to choose to 

displace competition with a program of state regulation, but only when 

that choice is made by “the State acting as sovereign.” Goldfarb v. 

Virginia State Bar, 421 U.S. 773, 790 (1975). Under current law, the 

Supreme Court has recognized the legislature when enacting legislation 

and the state supreme court when acting legislatively rather than 

judicially, as “sovereign” for purposes of the state-action defense. 

Dental Examiners, 135 S. Ct. at 1110. The Board members do not 

disagree (Br. 24-25), but ask the Court to rule that the Governor also is 

sovereign for purposes of state-action (Br. 24-30). The Court, however, 

need not and should not rule that a governor can act as a sovereign to 

displace competition because the question simply is not presented by 

this case: Here, state law makes clear that the Governor’s role 

20 
 

Case: 19-12227 Date Filed: 09/25/2019 Page: 31 of 46 

regarding the challenged restraint is solely supervisory. The challenged 

Board rule is not an act of the Governor as sovereign decisionmaker 

ordering a market restraint.3 

The Georgia Professional Regulation Reform Act, O.C.G.A. § 43-

1C-1, et seq., gives the Governor authority to “actively supervise” 

professional licensing boards and to “review” board rules to “ensure that 

their actions are consistent with clearly articulated state policy,” id. 

subpart (a). It was enacted in an attempt to comply with Dental 

Examiners, not to assign regulatory authority to the Governor. See 

2015 Ga. HB 952, 2016 Ga. Laws 485, Section 1 (citing Dental 

Examiners as the impetus for the bill).4 The Certification of Active 

Supervision submitted by the Board emphasizes that the Governor 

acted only as the supervisor of the Board, using language that mirrors 

the Court’s holding in Dental Examiners. In addition, the Certification 

is not framed as a restraint of competition by the Governor. It says only 

3 Because the question of a governor’s sovereignty is not 

presented, we take no position on it at this time. 

4 The same title of the Georgia Code that assigns supervisory 

authority to the Governor does so for more than 40 separate 

occupational boards, including the Board of Dentistry. 

21 
Case: 19-12227 Date Filed: 09/25/2019 Page: 32 of 46 

that the Board sought to “expand the list of services dental assistants 

may perform.” 

When the Supreme Court has found that a legislature or state 

supreme court was acting in a sovereign capacity, the challenged 

market restraints were adopted by or mandated by the sovereign. 

Thus, in Parker the Court “considered the antitrust implications of the 

California Agriculture Prorate Act” and held that “when a state 

legislature adopts legislation, its actions constitute those of the State.” 

Hoover v. Ronwin, 466 U.S. 558, 568 (1984). In Bates v. State Bar of 

Arizona, 433 U.S. 350 (1977), where the Court held that “a decision of a 

state supreme court, acting legislatively rather than judicially, is 

exempt from Sherman Act liability as state action,” Hoover, 466 U.S. at 

568, the state bar carried out the “affirmative command of the Arizona 

Supreme Court” and “act[ed] as the agent of the court under its 

continuous supervision.” Bates, 433 U.S. at 360, 361. In Hoover, where 

the plaintiff challenged the activities of a bar admissions committee, the 

Court held that “conduct that [plaintiff] challenges was in reality that of 

the Arizona Supreme Court” because that court had delegated only 

limited responsibilities to the committee, the committee followed the 

22 
Case: 19-12227 Date Filed: 09/25/2019 Page: 33 of 46 

court’s rules, and the court made the final decision to grant or deny 

admission to practice. 466 U.S. at 561, 572-73. 

Here, by contrast, SmileDirect does not challenge any statute, as 

in Parker, and the Governor has not delegated authority to the Board or 

directed it, unlike the Arizona Supreme Court’s delegation to the state 

bar in Bates or the bar admissions committee in Hoover. SmileDirect’s 

alleged antitrust injury stems from the Board’s and its members’ own 

conduct in adopting the amended rule—and not from any act of the 

Governor. Cf. Goldfarb, 421 U.S. at 790 (“it cannot fairly be said that 

the State of Virginia through its Supreme Court Rules required the 

anticompetitive activities of” defendants); Edinboro College Park 

Apartments, 850 F.3d at 573 (“plaintiffs’ alleged antitrust injury stems 

entirely from the conduct of the University”). The Governor did not 

take any action that even purported to restrain competition: he merely 

approved the Board’s rule, in his role as supervisor, as “within its [the 

Board’s] authority.” Doc. 29-2. 

As shown above, not all acts of a legislature or state supreme 

court are treated as those of the state acting as sovereign. In the same 

way, not all acts of a governor should be treated as sovereign decisions. 

23 
Case: 19-12227 Date Filed: 09/25/2019 Page: 34 of 46 

It may be that in some circumstances the governor may act as a 

sovereign in an antitrust sense, for example, in the command of the 

National Guard in the wake of a natural disaster. In this case, 

however, the Georgia legislature delegated to the Governor limited 

supervisory powers over active market participants; it did not create a 

new “sovereign” power for the Governor to regulate the occupation of 

dentistry. The Certification of Active Supervision itself recites that 

“Georgia law grants the Board authority” to regulate dental assistant 

services, not the Governor. Doc. 29-2 (citing O.C.G.A. § 43-11-9) 

(emphasis added). When a governor is authorized to act only as a 

supervisor, in compliance with Dental Examiners, there is no basis to 

find the type of ipso facto protection that applies when a legislature 

passes legislation or a state supreme court acts in a legislative role. 

The question is thus whether the active supervision test is satisfied. 

B. The Board’s Challenged Rule Cannot Be Attributed to 

the Governor By Reason of His Supervision. 

In the absence of a restraint on competition by the Governor 

himself, the Board members seek to analogize the Board to the bar 

admissions committee in Hoover by pointing to the supervision and 

“ultimate authority” of the Arizona Supreme Court (Br. 32). The Board 

24 
Case: 19-12227 Date Filed: 09/25/2019 Page: 35 of 46 

members ignore, however, that the Arizona Supreme Court also 

directed and mandated the activities of the bar admissions committee. 

“The Supreme Court Rules specified the subjects to be tested, and the 

general qualifications required of applicants for the Bar. ... After giving 

and grading the examination, the Committee’s authority was limited to 

making recommendations to the Supreme Court. The court itself made 

the final decision to grant or deny admission to practice.” 466 U.S. at 

572-73. 

By contrast, the Board here did not administer any policy or 

directive of the Governor and did not merely follow rules promulgated 

by the Governor. Nor does the Governor here retain final decisionmaking authority over how the Board rule is applied to individual 

cases—i.e., the conduct of non-dentist personnel in photographing a 

patient’s mouth or the conduct of dentists who serve Georgia consumers 

via teledentistry—as the Arizona Supreme Court had final authority 

over examination standards and individual bar admissions. Thus, 

Hoover simply is not controlling. 

Hoover itself explained that “[c]loser analysis [i.e., more exacting 

scrutiny than ipso facto protection] is required when the activity at 

25 
 

Case: 19-12227 Date Filed: 09/25/2019 Page: 36 of 46 

issue is not directly that of the legislature or supreme court, but is 

carried out by others pursuant to state authorization.” 466 U.S. at 568 

(citing cases involving state boards, private parties, and municipalities). 

In those situations, “[i]f the replacing of entirely free competition with 

some form of regulation or restraint was not authorized or approved by 

the State then the rationale of Parker is inapposite.” Id. As a result, 

cases involving anticompetitive conduct by entities other than the 

legislature or the state supreme court acting legislatively require the 

clear articulation test, and active supervision is also “relevant to the 

inquiry.” Id. at 569. 

Hoover’s caution that ipso facto protection is not appropriate 

“when the activity at issue is not directly that of the legislature or 

supreme court, but is carried out by others pursuant to state 

authorization” precisely describes this case. The activity at issue (the 

challenged Board rule) is not directly that of the Governor but is carried 

out by others (the Board and its members) pursuant to state 

authorization. 

There is no meaningful distinction between the Board here and 

the dental board in Dental Examiners: the sole fact that compelled the 

26 
Case: 19-12227 Date Filed: 09/25/2019 Page: 37 of 46 

Supreme Court’s decision was control of the board by active market 

participants (dentists), which SmileDirect alleges here. The Board 

members’ attempt to distinguish the Board factually from the North 

Carolina Board (Br. 35 n.8) is unavailing. “[T]he need for supervision” 

does not turn on how board members are appointed or removed, but on 

“the risk that active market participants will pursue private interests in 

restraining trade.” Dental Examiners, 135 S. Ct. at 1114. See also id. 

at 1117 (“If a State wants to rely on active market participants as 

regulators, it must provide active supervision”); Edinboro College Park 

Apartments, 850 F.3d at 579 (Dental Examiners imposed full Midcal 

scrutiny “[b]ecause” the North Carolina board was “controlled by active 

market participants”). 

If the Board members’ position that gubernatorial supervision 

alone is enough to make the Board’s conduct ipso facto sovereign were 

the law, Dental Examiners would be largely meaningless. Yet, the 

Court there never suggested that if the North Carolina Board had been 

supervised by a sovereign actor, the acts of that board would have been 

attributed to the supervisor. Instead, the Court explained that if the 

North Carolina board had been properly supervised, the board would 

27 
Case: 19-12227 Date Filed: 09/25/2019 Page: 38 of 46 

have been entitled to state-action protection because it would have 

satisfied Midcal’s active supervision requirement. 135 S. Ct. at 1116. 

The Court thus identified “constant requirements of active supervision” 

that could have met the active supervision test. Id. There would have 

been no need to spell out proper methods of supervision if board rules 

simply could be attributed to the supervisor and declared ipso facto 

protected. 

III. The Board Members Have Not Demonstrated, At the 

Motion to Dismiss Stage, That the State Actively 

Supervised the Board’s Challenged Conduct. 

Dental Examiners identifies as a “constant requirement[] of active 

supervision” that the state supervisor must “review the substance of the 

anticompetitive decision, not merely the procedures followed to produce 

it.” 135 S. Ct. at 1116. Review of the “substance” means review to 

determine whether the action at issue actually implements a clearly 

articulated state policy to displace competition, instead of serving 

private competitive interests. See Patrick, 486 U.S. at 101 (referring to 

“review ... to determine whether such decisions comport with state 

regulatory policy and to correct abuses”); id. at 105 (review of the 

28 
 

Case: 19-12227 Date Filed: 09/25/2019 Page: 39 of 46 

“merits” of a decision determines “whether it accorded with state 

regulatory policy”). 

The question of whether the state supervisor actually reviewed 

the substance of the challenged conduct is a factual one. See Town of 

Hallie v. City of Eau Claire, 471 U.S. 34, 46 (1985) (the “requirement of 

active state supervision serves essentially an evidentiary function: it is 

one way of ensuring that the actor is engaging in the challenged 

conduct pursuant to state policy”); Cost Mgmt. Servs., Inc. v. Wash. 

Nat’l Gas Co., 99 F.3d 937, 943 (9th Cir. 1996) (“[T]he question of 

whether a state has ‘actively supervised’ a state regulatory policy is a 

factual one which is inappropriately resolved in the context of a motion 

to dismiss.”).5 SmileDirect’s Complaint, whose factual allegations must 

be accepted as true on a motion to dismiss, alleges that the required 

substantive review did not occur because the Board failed to provide the 

Governor with information regarding the substance of the rule and its 

5 The Board members assert (Br. 51-52) that active supervision is 

a legal question, but the case they cite, Trigen Okla. City Energy Corp. 

v. Okla. Gas & Elec. Co., 244 F.3d 1220, 1225 (10th Cir. 2001), refers 

only to “state action immunity” generally, not the active supervision 

test specifically, and does not cite any authority for this specific 

proposition. 

29 
 

Case: 19-12227 Date Filed: 09/25/2019 Page: 40 of 46 

impact on consumers. Complaint ¶ 45. SmileDirect alleges that the 

Board “impeded” the Governor’s review of the Board’s rule by 

withholding important information from the Governor, including a 

complete account of the reasons for and the objections to the Board’s 

conduct. Id.; Order at 12-13. SmileDirect further alleges that the 

Board failed to explain the consumer impact of the Board’s conduct, 

information that may be critical to a supervisor’s assessment of 

competitive impact. Order at 12-13. Supervision in the absence of 

complete information can render the review substantively insufficient. 

See Cost Mgmt. Servs., 99 F.3d at 943 (plaintiff’s allegation that key 

information was deliberately withheld from the supervisor made active 

supervision a disputed issue of fact). 

The Certification of Active Supervision submitted by the Board, 

assuming that the district court could consider it on a motion to 

dismiss, does not resolve the factual question of whether active 

supervision occurred. 6 A purpose of the active supervision inquiry is to 

determine “whether the State has exercised sufficient independent 

6 We do not question the Governor’s motives in issuing the 

Certification, which are not at issue here. 

30 
Case: 19-12227 Date Filed: 09/25/2019 Page: 41 of 46 

judgment and control” such that the Board’s conduct “has been 

established as a product of deliberate state intervention.” Ticor Title 

Ins. Co., 504 U.S. at 634. The text of the Certification, however, 

appears to disclaim independent judgment by the Governor; it recounts 

the “purpose” of the amendment “[a]s stated by the Board.” Doc. 29-2 

(emphasis added). 

 Moreover, the Certification’s stated rationale for approval is that 

the Board’s amended rule is “within its authority” because it is “related 

to” dental assistant services. Merely determining that the Board 

regulated an occupation within its authority, however, is not active 

supervision. See Patrick, 486 U.S. at 105 (“constricted review does not 

convert the action of a private party ... into the action of the State for 

purposes of the state-action doctrine”). The Supreme Court has 

explained that “state-law authority to act is insufficient ... the substate 

governmental entity must also show that it has been delegated 

authority to act or regulate anticompetitively.” Phoebe Putney, 568 U.S. 

at 228. 

In any event, Dental Examiners makes clear that whether the 

Board exceeded its authority is not the relevant supervisory question. 

31 
Case: 19-12227 Date Filed: 09/25/2019 Page: 42 of 46 

See 135 S. Ct. at 1116 (“Whether or not the Board exceeded its powers 

under North Carolina law,” there was no evidence of state control of the 

board’s action). The relevant question is whether a proper state 

supervisor reviewed the challenged Board rule to determine whether 

the rule actually implements an articulated state policy to displace 

competition instead of serving private competitive interests. Although 

the Governor has a statutory “duty” to review Board rules, as the Board 

members note (Br. 48), actually carrying out that duty is a different 

matter. The Certification of Active Supervision, by finding only that the 

Board’s rule was “related to” dental assistant services, does not 

establish that the Governor conducted a substantive review to ensure 

that the rule and the Board’s enforcement of it are in “accord with state 

policy” to displace competition. Id. at 1111 (quoting Patrick, 486 U.S. at 

101). The Board members therefore have not at this stage of the 

litigation met their burden to prove the state-action defense applies to 

their conduct. 

Finally, the Board members are wrong to argue that the active 

supervision test “looks to the State’s review mechanisms set out in state 

law ... not to the details of a state supervisor’s review of the particular 

32 
Case: 19-12227 Date Filed: 09/25/2019 Page: 43 of 46 

conduct under challenge.” Br. 52 (citation and internal quotations 

omitted). That contention is flatly inconsistent with Dental Examiners 

and other Supreme Court precedent. The Court has made clear that 

substantive review actually must take place in the case at hand, finding 

that “there is no evidence here of any decision by the State to initiate or 

concur with the Board’s actions” and explaining that the “mere 

potential for state supervision is not an adequate substitute for a 

decision by the State.” 135 S. Ct. at 1115-16. Similarly, in Ticor the 

Court held that a “negative option,” by which regulatory rates became 

effective if not rejected within a set time, was not active supervision; 

there must be an actual “decision by the State.” 504 U.S. at 638. See 

also Patrick, 486 U.S. at 101 (active supervision demands “that state 

officials have and exercise power to review particular anticompetitive 

acts”) (emphasis added). The Board members’ recitation of Georgia’s 

statutory review procedures (Br. 47-51) therefore is insufficient to show 

what review actually took place. 

33 
 

 

 

 

Case: 19-12227 Date Filed: 09/25/2019 Page: 44 of 46 

CONCLUSION 

If the Court addresses the active supervision component of the 

Board members’ state-action defense, the Court should affirm the 

district court’s holding that the Board members did not meet their 

burden to show active state supervision of the Board’s challenged 

regulation. 

Respectfully submitted. 

/s/ Steven J. Mintz 

 MAKAN DELRAHIM 

Assistant Attorney General 

MICHAEL F. MURRAY 

 Deputy Assistant Attorney 

General 

TAYLOR M. OWINGS 

Counsel to the Assistant Attorney 

General 

 

ROBERT B. NICHOLSON 

STEVEN J. MINTZ 

Attorneys

 U.S. Department of Justice 

Antitrust Division 

950 Pennsylvania Avenue, N.W. 

Room 3224 

Washington, D.C. 20530-0001 

 Phone: (202) 353-0256 

 Fax: (202) 514-0536 

Email: Steven.Mintz@usdoj.gov 

 

Dated: September 25, 2019 

 

 

 

34 

ALDEN F. ABBOTT 

 General Counsel 

JOEL MARCUS

 Deputy General Counsel 

MARK S. HEGEDUS 

Attorney

 

Federal Trade Commission 

 600 Pennsylvania Ave., NW 

Washington, D.C. 20580 

 
 

 

Case: 19-12227 Date Filed: 09/25/2019 Page: 45 of 46 

CERTIFICATE OF COMPLIANCE 

1. This brief complies with the type-volume limitations of Rules 

32(a)(7)(B) and 29(a)(5) of the Federal Rules of Appellate Procedure 

because it contains 6,476 words, excluding the parts of the brief 

exempted by Rule 32(a)(7)(B)(iii). 

2. This brief complies with the typeface requirements of Rule 

32(a)(5) of the Federal Rules of Appellate Procedure and the type style 

requirements of Rule 32(a)(6) because this brief has been prepared in a 

proportionally spaced typeface using Microsoft Office Word 2007 with 

14-point New Century Schoolbook font. 

September 25, 2019 /s/ Steven J. Mintz 

Attorney 
 

 

Case: 19-12227 Date Filed: 09/25/2019 Page: 46 of 46 

CERTIFICATE OF SERVICE 

I hereby certify that on September 25, 2019, I electronically filed 

the foregoing Brief of the United States of America and Federal Trade 

Commission as Amici Curiae Supporting Plaintiff-Appellee with the 

Clerk of the Court of the United States Court of Appeals for the 

Eleventh Circuit using the CM/ECF system. I also sent 7 copies to the 

Clerk of the Court by FedEx next day delivery. 

I certify that all participants in the case are registered CM/ECF 

users and that service will be accomplished by the CM/ECF system. 

 /s/ Steven J. Mintz 

Attorney