The Federal Trade Commission plans to offer guidance to states amid confusion over the implications of a recent U.S. Supreme Court decision involving the powers of state boards that regulate medical and other professionals.
FTC Commissioner Julie Brill said Wednesday that she expects the FTC to release some type of guidance in coming months. The decision “has caused a lot of head scratching on the part of state officials,” she said. “They are now in the position of saying, 'What do we do? ... What is the structure that we need to put in place?' ” Brill said.
In February, the Supreme Court ruled that state licensing boards made up of active members of the profession, such as practicing doctors, are not immune from antitrust laws unless they are actively supervised by the state. That decision raised questions about what constitutes active supervision.
In the North Carolina Board of Dental Examiners v. Federal Trade Commission decision, the court, in a 6-3 decision, held that it was illegal for the board, composed mostly of practicing dentists, to tell nondentists working in mall kiosks to stop offering teeth-whitening services.
Brill said the FTC will be working on a guidance “to try to help state regulators understand … what kind of guidance needs to take place in order to meet that prong of the state action immunity.”
Barak Richman, a professor of law and business administration at Duke University, said FTC guidance couldn't hurt, but he's not sure it's necessary. “Further clarification from the FTC will of course be useful because it's the FTC that's most likely to bring actions,” Richman said. “But I read the Supreme Court actually to be telling the states something that I don't think should be all that confusing to them.”
In the majority opinion, Justice Anthony Kennedy wrote that active supervision requires the state supervisor to review the substance of board decisions and have the power to veto or change the decisions to make sure they're in line with state policy. In addition, the supervisor may not be an active market participant.
Robert Fellmeth, a professor of public interest law at the University of San Diego, also said he believes the justices were pretty clear in their ruling, though he doesn't oppose guidance because there are different ways to accomplish state supervision.
He doesn't think any state has made a real attempt to ensure state supervision since the North Carolina decision. Fellmeth's Center for Public Interest Law, along with two consumer organizations, recently sent letters to every state attorney general saying states should change how they regulate and license the professions and trades in light of the decision. Fellmeth said 34 states have responded to that letter but few seem to be taking the issue seriously.
The North Carolina case, however, is already starting to influence court cases. Fellmeth said at least four cases have been filed in various parts of the country over the issue.
One of the most prominent is telemedicine company Teladoc's lawsuit against the Texas Medical Board's new rule requiring physicians to either meet with patients in person before treating them remotely, or treat them face-to-face via technology while other providers are physically present with them when treating them remotely for the first time. Twelve of the Texas board's 19 members are practicing doctors. Teladoc alleges that the state of Texas does not actively supervise the medical board.
In that case, a federal judge has issued a temporary restraining order and preliminary injunction to keep the rule from taking effect while the case is ongoing.
Dr. William Sage, a law professor at the University of Texas, said states may still be feeling out how to respond to the ruling. “This is all very new to them and unexpected,” Sage said. “This is a pretty dramatic Supreme Court ruling.
