Blog: State veterinary boards need to heed Supreme Court ruling

The U.S. Supreme Court recently delivered an important decision in North Carolina Board of Dental Examiners v. Federal Trade Commission, affirming a lower court's ruling that the North Carolina dental board was limiting competition in the state. While this particular decision involved dentists, the Supreme Court's ruling directly affects boards of veterinary medicine, along with other professions such as medicine and law.

The North Carolina facts involve the state board's efforts to outlaw teeth whitening by nondentists, a growing practice. The Supreme Court rejected the board's defense-that as a state-regulated agency it was immune from federal antitrust laws-stating that it did not meet the requirements for that kind of immunity and that the board's conduct was inherently anticompetitive.

In its opinion, the court emphasized that the North Carolina dental board consists primarily of practicing dentists. Of course, state veterinary boards across the United States are made up primarily of practicing veterinarians, so the court would likely treat the veterinary profession no differently.

The action against the North Carolina board was brought by the Federal Trade Commission (FTC). Of note to veterinarians, it was also the FTC that held against the Oklahoma State Board of Veterinary Medical Examiners (see page 138) in 1990. That case involved the state board's attempt to restrict licensed Oklahoma veterinarians from business or employment relationships (in their practices) with non-Oklahoma veterinarians or nonveterinarians. This FTC ruling has held sway since then, and in this recent Supreme Court decision, one can assume how the court might rule if veterinarians or nonveterinarians challenged a state board's attempt to enforce that the sole owner of a veterinary practice can only be a licensed veterinarian in that state.

It's also important for veterinarians to understand the Supreme Court's test for whether a state regulatory agency is immune from federal antitrust laws. It stems from the Midcal decision, which focused on California's decision to grant a private body of wine merchants price-setting powers over the entire state. To avoid antitrust liability, the state must actively supervise the decisions and policies of the regulatory agency (for example, the state veterinary board) to prevent a board from limiting competition against members of its profession-and states rarely do this.

According to Justice Kennedy, who wrote the majority opinion in the North Carolina case, Midcal's supervision rule stems from the recognition that “where a private party is engaging in anticompeti­tive activity, there is a real danger that he is acting to further his own interests, rather than the governmental interests of the State.” As a result, the rule demands “realistic assurance that a private party's anticompetitive conduct promotes state policy, rather than merely the party's individual interests.”

So what does this mean for veterinarians? Be assured that every veterinary medical board in the country has been provided by its lawyers with a copy of the North Carolina Board of Dental Examiners decision, just as most if not all have seen the 1990 FTC decision against the Oklahoma State Board of Veterinary Medical Examiners. State veterinary boards act at their peril when they restrict competition within the profession without clear direction from their state legislatures that the restriction is official policy, necessary for the state's broader well-being, and actively watched over by the state itself.

Mark Cushing, JD, is founding partner of the Animal Policy Group, providing government relations and strategic services for various animal health, veterinary and educational interests. He maintains offices in Portland, Ore., and Washington, D.C., and is a frequent speaker at veterinary conferences.

The Veterinary Policy Notes blog on dvm360.com helps veterinarians and other animal health professionals keep abreast of the growing number of issues, political challenges and regulatory initiatives affecting the veterinary profession, animal health industry and animal welfare movement. The views and opinions presented are those of the author.