Bars May Lose Antitrust Immunity

The Supreme Court is out today with a really important decision in North Carolina Board of Dental Examiners v. Federal Trade Commission. I wrote about the case back in October when it was argued – it involves the question of whether the North Carolina Board of Dental Examiners enjoys antitrust immunity for its actions excluding non-dentist competition.

Understandably, the case was followed closely by the state attorney regulators – the parallels between dentists excluding commercial tooth whitening outfits and lawyers excluding, say, commercial document preparation outfits being uncomfortably close.

The court made no bones about it, siding with the FTC: the regulatory bodies of self-regulated professions (like dentistry and the law) only get immunity from antitrust liability if they are “actively supervised” by the State.  As the court pointed out:

States, furthermore, can ensure Parker immunity is available to agencies by adopting clear policies to displace competition; and, if agencies controlled by active market participants interpret or enforce those policies, the States may provide active supervision.

Boom.

As I’ve harped on before, states have very unclear policies to displace competition in the legal marketplace. The definition of “the practice of law” is incredibly vague, and is often used to exclude non-lawyers from doing activities that remotely smell of being “legal.” This is a wake-up call that this definition needs to be clarified and refined – right now – if the state bars want to preserve antitrust immunity.

As for state bar advertising review committees – such as those employed in Florida and Nevada – I’d say this decision marks the end of them. The Court noted that “active supervision” requires, among other things, that:

The supervisor must review the substance of the anticompetitive decision, not merely the procedures followed to produce it.

Maybe the states want to interject more active supervision over the decisions these committees make, but I doubt it.  Good riddance.