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Antitrust – State action immunity

By: WISCONSIN LAW JOURNAL STAFF//February 25, 2015//

Antitrust – State action immunity

By: WISCONSIN LAW JOURNAL STAFF//February 25, 2015//

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U.S. Supreme Court

Civil

Antitrust – State action immunity

A state dental board is not entitled to state action immunity from an antitrust action.

The Board’s argument that entities designated by the States as agencies are exempt from Midcal’s second requirement cannot be reconciled with the Court’s repeated conclusion that the need for supervision turns not on the formal designation given by States to regulators but on the risk that active market participants will pursue private interests in restraining trade. State agencies controlled by active market participants pose the very risk of self-dealing Midcal’s supervision requirement was created to address. See Goldfarb v. Virginia State Bar, 421 U. S. 773, 791. This conclusion does not question the good faith of state officers but rather is an assessment of the structural risk of market participants’ confusing their own interests with the State’s policy goals. While Hallie stated “it is likely that active state supervision would also not be required” for agencies, 471 U. S., at 46, n. 10, the entity there was more like prototypical state agencies, not specialized boards dominated by active market participants. The latter are similar to private trade associations vested by States with regulatory authority, which must satisfy Midcal’s active supervision standard. 445 U. S., at 105–106. The similarities between agencies controlled by active market participants and such associations are not eliminated simply because the former are given a formal designation by the State, vested with a measure of government power, and required to follow some procedural rules. See Hallie, supra, at 39. When a State empowers a group of active market participants to decide who can participate in its market, and on what terms, the need for supervision is manifest. Thus, the Court holds today that a state board on which a controlling number of decisionmakers are active market participants in the occupation the board regulates must satisfy Midcal’s active supervision requirement in order to invoke state-action antitrust immunity.

717 F. 3d 359, affirmed.

13-534 North Carolina State Board of Dental Examiners v. FTC

Kennedy, J.; Alito, J., dissenting.

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