Freedom to Whiten: Teeth-Whitener’s Antitrust Suit Against Georgia Board of Dentistry Allowed to Proceed
Earlier this week, in Colindres v. Battle, et al., No. 15-CV-2843 (N.D. Ga.), the District Court for the Northern District of Georgia refused to dismiss antitrust claims brought by the owner of a teeth-whitening company against the members of Georgia’s Board of Dentistry. The plaintiffs, the owner and her company, allege that the Board has been sending agents to threaten her and her company with felony charges for unlicensed practice of dentistry, carrying a possible sentence of as much as five years in prison, though the Board has refused to take formal enforcement action or even put its complaints in writing. The Board is composed of nine licensed dentists, one dental hygienist, and one non-dentist (though the non-dentist seat is currently empty). The plaintiff alleges that all of the dentist Board members offer teeth-whitening services and, therefore, they all have an economic interest in eliminating competition in teeth whitening.
As we recently discussed, the Supreme Court in North Carolina State Board of Dental Examiners v. FTC held that a state agency composed of “active market participants” is subject to antitrust scrutiny under the Sherman Act, unless “actively supervised” by the state. The defendants in this case did not argue that the state of Georgia engaged in sufficient “active supervision” to grant the Board antitrust immunity. The defendants instead argued that the plaintiffs lacked antitrust standing to bring the claim, largely because they had not been the subject of any formal action by the Board. The district court nonetheless addressed the holding in North Carolina State Board, noting that the Supreme Court considered only immunity under the doctrine of Parker v. Brown, 317 U.S. 341 (1943), not whether the underlying decision being appealed was correct as a matter of substantive antitrust law.
Turning to the merits, the absence of evidence of “formal action” was part of the defendant’s scheme. The Board allegedly was careful not to put any of its threats in writing or issue formal cease-and-desist letters, though it has issued cease-and-desist letters to other teeth-whitening practitioners. The Board also never held any formal rulemaking that would definitively characterize the plaintiffs’ services as the “practice of dentistry.” The court, however, held that “the Board may not avoid scrutiny by declining to enter the rulemaking process or by failing to take any direct enforcement action” and ruled that the antitrust case could continue.
As this case demonstrates, after the Supreme Court’s decision in North Carolina State Board, plaintiffs are likely to be emboldened to challenge state occupational licensing boards composed of members of the regulated industry. These boards are also under scrutiny from the FTC. In recent testimony before the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, Commissioner Ohlhausen testified that the FTC has “seen many examples of restrictions that likely impede competition and hamper entry into professional and other services markets, and yet offer few, if any, significant consumer benefits.” The White House weighed in as well, with a study of the economic and competitive impacts of occupational licensing. With an estimated thirty percent of all jobs requiring some sort of license, this will be an area of antitrust law to watch.