Notice & Comment

North Carolina Board: Much Ado About Nothing, by Joseph M. Sanderson

For all the sound and fury from federalism scholars over the Supreme Court’s recent decision in FTC v. North Carolina Board of Dental Examiners, one might have thought that the Supreme Court had sounded the death knell for states’ ability to protect favored industries from market competition. But while North Carolina must now actively supervise the market participants it places on its dental boards, protectionism yet lives.

As I wrote last year in my JREG Note, the Fourth Circuit’s ruling, now affirmed by the Supreme Court, “is . . . only a marginal limit on the ability of states to restrict competition on flimsy pretexts.” The vast majority of protectionist occupational regulation occurs not just because a licensing board is dominated by unsupervised market participants given free rein to use their powers to exclude potential competitors. Rather, it occurs because a state statute says so.

One need look no further than the high-profile example of casket sales to see that protectionism often comes in statutory form, and thus will survive North Carolina Board unscathed. No fewer than thirteen states–thirteen!–have explicit, statutory provisions that prohibit people from selling caskets unless they have gone through the lengthy and expensive process of becoming a fully licensed funeral director. Maine goes even further, requiring a funeral service license for the ill-defined and astoundingly broad category of “helping to meet the emotions and disposition of the bereaved.” Me. Rev. Stat. tit. 32, ยง 1400(5) (2013). These blatant instances of protectionism were enacted not by self-interested boards of incumbents, but by elected state legislators.

It thus follows that North Carolina Board represents only a slight limit on anti-competitive occupational regulation. Parker and its progeny are still going strong: as long as a state statute (or state high court decision) clearly articulates a restriction, it will survive antitrust scrutiny. And as the casket sales statutes show, professions have been extraordinarily successful in persuading legislators to enact even the most bizarre anti-competitive rules. North Carolina Board does nothing about these restrictions; it deals only with delegated authority to restrict competition. So, while North Carolina Board may have some effects on the margins, the broad landscape is largely unchanged.

If pushing back against state-level protectionism is a worthy goal–and as I argued in my Note, it is–then something more is needed. Only a federal statute, like the reform I suggested last year, can offer some respite from the onslaught of protectionism from the states. North Carolina Board does nothing to change that; indeed, by creating the illusion of progress, it may make real legislative change even less likely.

Joseph M. Sanderson is a 3L at Yale Law School and a JREG Executive Editor. He published a Note inJREG last year discussing the problem of protectionist occupational regulations and proposing reforms designed to reduce protectionism without displacing states’ primary regulatory role.