Wednesday, February 09, 2011

Federal Trade Commission Denies North Carolina Dental Board's Motion to Dismiss Complaint

Remember last year that the Federal Trade Commission filed a complaint against the North Carolina Dental Board regarding teeth whitening services.
The Federal Trade Commission issued an administrative complaint June 17 charging that the North Carolina dental board "has acted in various ways to eliminate the provision of teeth whitening services by non-dentists."

"Dentists in North Carolina, acting through the instrument of the North Carolina Board of Dental Examiners ('Dental Board'), are colluding to exclude non-dentists from competing with dentists in the provision of teeth whitening services," the FTC complaint said. "The actions of the Dental Board prevent and deter non-dentists from providing or expanding teeth whitening services, increase prices and reduce consumer choice without any legitimate justification or defense, including the 'state action' defense."

The complaint says teeth-whitening services are offered by dentists and non-dentists in North Carolina and that dentist members of the board "can and do control the operation of the dental board" and have financial interest in board decisions. The dental board consists of six licensed dentists, one licensed hygienist and one consumer member who is neither a dentist or a hygienist.

"The conduct of the dental board constitutes concerted action by its members and the dentists of North Carolina," the complaint asserts.

The FTC gave the board 14 days to respond to the allegations and scheduled a hearing on the complaint for Feb. 17, 2011, before an administrative law judge. The administrative complaint begins a proceeding "In the Matter of The North Carolina Board of Dental Examiners," FTC Docket No. 9343, but is neither a finding nor a ruling that the dental board violated the law.
The North Carolina Dental Board's response to the FTC complaint is here (Pdf).

Apparently, the North Carolina Dental Board filed a motion for dismissal of the complaint on constitutional grounds in November 2010. This motion was denied today by the Federal Trade Commission.
The Federal Trade Commission denied a motion by the North Carolina State Board of Dental Examiners to dismiss a complaint filed by the FTC’s staff which charges that the Dental Board stifled competition by blocking non-dentists from providing teeth-whitening services.

The Commission issued an Opinion and Order unanimously rejecting the Dental Board’s argument that the “state action doctrine” exempts it from antitrust scrutiny under the FTC Act. The state action doctrine exempts from antitrust liability conduct by private actors if their conduct is pursuant to a clearly articulated state policy to displace competition and if that conduct is supervised by the state. Because of the ruling, the case against the Dental Board will move forward as scheduled, with a hearing before an Administrative Law Judge on February 17, 2011.

The Commission wrote that “because the Board is controlled by practicing dentists, the Board’s challenged conduct must be actively supervised by the state for it to claim state action exemption from the antitrust laws. Because we find no such supervision, we hold that the antitrust laws reach the Board’s conduct.” The Dental Board consists of eight members, including six licensed dentists, that regulate the practice of dentistry in North Carolina.

FTC’s staff sued the Dental Board in June 2010, alleging that the state regulatory agency violated federal law by blocking non-dentists from providing teeth-whitening services.

The Board filed a motion in November 2010 seeking to dismiss the FTC’s charges based on the state action doctrine. At the same time, complaint counsel filed a motion for partial summary decision, asking the Commission to rule that the state action defense was unavailable to the Dental Board. The Commission considered these motions together under the FTC’s revised Rules of Practice. In its Opinion, the Commission concluded that the state action doctrine did not exempt the Dental Board from antitrust scrutiny, and granted complaint counsel’s motion for partial summary decision.

The Commission vote approving the Opinion and Order was 4-0, with Commissioner Julie Brill recused. More information on the FTC’s complaint against the Dental Board can be found here.
Today's FTC opinion is here (Pdf) and the FTC order is here (Pdf).

I suppose this means the February 17, 2011 hearing or trial on the original complaint will proceed, unless the North Carolina Dental Board is able to win an injunction from a federal court. Remember they filed suit against the Federal Trade commission last week alledging violations of the U.S. Constitution.

This is yet another legal step in what will be a case that will be decided most probably years from now in a federal appeals court or at the Supreme Court of the United States.

Stay tuned.....


Here is a link to all of the legal documents/pleadings in the case:

Docket No. 9343
In the Matter of The North Carolina Board of Dental Examiners
FTC File No. 081-0133

Updated: North Carolina Dental Board Files Suit Against the Federal Trade Commission

North Carolina Dental Board files Suit Against the Federal Trade Commission

No comments:

Post a Comment