This article, The Decay in Regulating California’s Corporate Practice of Medicine, first appeared in the Business Law News (Issue 2, 2015) of the State Bar of California on June 24, 2015.
“There is nothing worse than a sharp image of a fuzzy concept.”
In the 1990s, dentists in North Carolina began to whiten teeth. A decade later, nondentists across the state began to provide the same services, but at a lower price. In 2006, the North Carolina State Board of Dental Examiners (the “N.C. Dental Board”) responded by issuing more than 47 cease-and-desist letters to parties whitening teeth without degrees in dentistry, and in 2007 the N.C. Dental Board enlisted the aid of the North Carolina Board of Cosmetic Art Examiners to issue similar warnings, specifically to cosmetologists Their combined efforts were successful, and North Carolina nondentists soon stopped offering teeth whitening services.
The United States Federal Trade Commission (the “FTC”) took exception to the actions by the N.C. Dental Board, and in 2010 the FTC filed an administrative complaint, alleging the N.C. Dental Board acted deliberately for the benefit of North Carolina dentists and to the detriment of North Carolina nondentists. According to the FTC, these anticompetitive and unfair tactics violated the Federal Trade Commission Act, and in particular Section 5.
After multiple hearings before an administrative law judge, followed by the FTC’s internal oversight and a review by the Court of Appeals for the Fourth Circuit in February 2015, the United States Supreme Court agreed with the FTC’s 2010 allegations, namely that the anticompetitive conduct of the N.C. Dental Board violated antitrust law, and in particular the Sherman Act. The Supreme Court also held that sovereign immunity did not protect the actions of the N.C. Dental Board.
In its 6-3 decision referring to the roles of dentists and nondentists in North Carolina, the Supreme Court reached a far greater audience than those concerned with tooth color in the Tar Heel state. In point of fact, the Court’s ruling did much to undermine most if not all authority held by professional organizations in California, including in particular the Medical Board of California (“MBC”). This article explores how and why such change came about. … Read more →