Senate bill would attach strings to state licensing boards’ antitrust immunity
As we noted last month, the FTC has recently been voicing concerns about potentially anticompetitive actions of state professional licensing boards. Our post also discussed the scope of such boards’ immunity from antitrust liability under the Supreme Court’s caselaw.
Now, a U.S. Senate bill sponsored by Republicans Mike Lee, Ted Cruz, and Ben Sasse seeks to clarify the circumstances under which antitrust immunity will attach, but also to discourage the use of occupational licensing requirements except when necessary “to combat real, substantial threats to public health, safety, or welfare.”
The law, if passed, would offer two routes to state-board immunity: First, a state could establish an “Office of Supervision of Occupational Boards” to review and either approve or reject any occupational regulation proposed by a board and to hear complaints from licensees and state residents regarding board actions. Alternatively, the state may provide a path for judicial review by establishing a cause of action for injunctive relief against enforcement of any occupational licensing law that does not meet standards set by the bill.
Regarding such standards, both paths to immunity require the state to adopt “a policy of using less restrictive alternatives to occupational licensing to address real, substantial threats to public health, safety, or welfare.” “Less restrictive alternatives” are defined by the bill to include, among other things, “market competition,” “industry or consumer-related ratings and reviews,” “private certification,” “a specific private civil cause of action to remedy consumer harm,” and “bonding or insurance.” Additionally, any action by the state licensing board must be “authorized by a non-frivolous interpretation of the occupational licensing laws of the State.”
It is, of course, uncertain whether the bill will pass. The effect on state behavior—i.e. whether legislatures will view the supervision required by the bill to qualify for immunity as too burdensome to warrant the use of licensing boards in the first place—is also yet to be determined.