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Page Number: 4.0

4 

NORTH CAROLINA STATE BD. OF DENTAL
EXAMINERS v. FTC 

Syllabus
 

the Court holds today that a state board on which a controlling num-
ber  of  decisionmakers  are  active  market  participants  in  the  occupa-
tion the board regulates must satisfy  Midcal’s active supervision re-
quirement  in  order  to  invoke  state-action  antitrust  immunity. 
Pp. 12–14. 

(4) The  State  argues  that  allowing  this  FTC  order  to  stand  will 
discourage  dedicated  citizens  from  serving  on  state  agencies  that 
regulate  their  own  occupation.  But  this  holding  is  not  inconsistent
with  the  idea  that  those  who  pursue  a  calling  must  embrace  ethical 
standards  that  derive  from  a  duty  separate  from  the  dictates  of  the
State.  Further, this case does not offer occasion to address the ques-
tion  whether  agency  officials,  including  board  members,  may,  under
some  circumstances,  enjoy  immunity  from  damages  liability.    Of 
course,  States  may  provide  for  the  defense  and  indemnification  of
agency  members  in  the  event  of  litigation,  and  they  can  also  ensure 
Parker  immunity  is  available  by  adopting  clear  policies  to  displace
competition and providing active supervision.  Arguments against the 
wisdom  of  applying  the  antitrust  laws  to  professional  regulation  ab-
sent compliance with the prerequisites for invoking Parker immunity
must be rejected, see Patrick v. Burget, 486 U. S. 94, 105–106, partic-
ularly in light of the risks licensing boards dominated by market par-
ticipants may pose to the free market.  Pp. 14–16.   

(5) The Board does not contend in this Court that its anticompet-
itive  conduct  was  actively  supervised  by  the  State  or  that  it  should
receive  Parker  immunity  on  that  basis.    The  Act  delegates  control 
over  the  practice  of  dentistry  to  the  Board,  but  says  nothing  about
teeth whitening.  In acting to expel the dentists’ competitors from the 
market,  the  Board  relied  on  cease-and-desist  letters  threatening 
criminal  liability,  instead  of  other  powers  at  its  disposal  that  would
have invoked oversight by a politically accountable official.  Whether 
or not the Board exceeded its powers under North Carolina law, there 
is no evidence of any decision by the State to initiate or concur with 
the Board’s actions against the nondentists.  P. 17. 

(c) Here, where there are no specific supervisory systems to  be re-
viewed,  it  suffices  to  note  that  the  inquiry  regarding  active  supervi-
sion  is  flexible  and  context-dependent.    The  question  is  whether  the
State’s  review  mechanisms  provide  “realistic  assurance”  that  a  non-
sovereign  actor’s  anticompetitive  conduct  “promotes  state  policy,  ra-
ther than merely the party’s individual interests.”  Patrick, 486 U. S., 
100–101.  The Court has identified only a few constant requirements
of  active  supervision:  The  supervisor  must  review  the  substance  of
the anticompetitive decision, see id., at 102–103; the supervisor must
have the power to veto or modify particular decisions to ensure they 
accord  with  state  policy,  see  ibid.;  and  the  “mere  potential  for  state