Self-Regulation in the Legal Profession

What does the United States Supreme Court decision holding that the North Carolina Dental Board violated anti-trust law when it prohibited non-dentists from offering teeth-whitening services mean for the legal profession? Not sure. It depends.

North Carolina State Board of Dental Examiners v. Federal Trade Commission

The case arose because the North Carolina Board of Dental Examiners, an agency created by the State to regulate “the practice of dentistry,” sent dozens of cease and desist letters to businesses offering teeth whitening services. The Federal Trade Commission filed suit, alleging the Dental Board’s actions to exclude non-dentists from the market for teeth whitening services violated federal antitrust law. The Dental Board defended itself on the grounds that state governments and private parties acting under state directives are immune from federal anti-trust law. The administrative proceedings went in favor of the FTC, and the Court of Appeals for the Fourth Judicial Circuit affirmed. The United States Supreme Court granted cerSelf-regulation in the legal professiontiorari, or agreed to review.

As I noted in a past post, several state bar associations filed amicus, or friend of the court, briefs supporting the position of the Dental Board and several alternative legal providers and law professors filed amicus briefs supporting the Fourth Circuit.

The Supreme Court decided, by a 6-3 majority, that the immunity on anticompetitive conduct extended to States when they act in their sovereign capacity to regulate did not extend to the Dental Board because the Board was made up of “active market participants.” Practicing dentists and dental hygienists constituted the Dental Board. The majority opinion held that non-sovereign state actors controlled by active market participants enjoy immunity only when 1) the challenged restraint is clearly articulated and affirmatively expressed as state policy; and 2) when the policy is actively supervised by the state. The parties and the Court assumed the first requirement was met. However, because the Board did not receive active supervision by the State when it interpreted the Act as addressing teeth whitening and enforced that policy through sending cease-and-desist letters, the Board could not claim immunity from federal anti-trust actions.

A Compelling Dissent

A strong dissent, authored by Justice Alito and joined by Justices Scalia and Thomas, argued that the case should be controlled by Parker v. Brown, and thus the Court should limit its inquiry to whether or not the Board constituted a state agency. Justice Alito answers this question in the affirmative. He goes on to note that because the Board is a state-created agency, empowered by the state to regulate dentistry within the state, the Court should have found the Board was immune from federal anti-trust actions and ended its inquiry there.

The majority erred, in Justice Alito’s opinion. He accused them of straying from the simple inquiry of whether the Board is a state-created agency and instead crafting a test under which state agencies that are ‘controlled by active market participants’ must demonstrate active state supervision in order to be immune from federal antitrust law. In addition to claiming the Parker precedent does not support the majority, the dissent points out practical ramifications that will lead to confusion as state agencies ponder implementation:

  • Will states have to change the composition of boards to satisfy the Court’s test that active market participants not constitute a controlling number of decision-makers?
  • What is a controlling number?
  • Who, exactly, is an active market participant? If a Board member withdraws from practice during her time of service, does that mean she is not an active participant during her time of service?
  • What is the scope of the market in which a member may not participate while serving on the board?

Application to Lawyer Regulation

So what does this mean for lawyer regulation? Just as the North Carolina definition of the practice of dentistry didn’t include teeth whitening, many tasks performed by lawyers over the decades are not necessarily contained in the definition of the practice of law. Various states define the practice of law differently, and broadly. And some of the definitions seem out of step with advances in the last several decades.

I recall that as a very new lawyer pre-Internet, my “practice of law” consisted largely of researching information that was only accessible to those who knew the arcane legal research system–and very little analysis and application to the client’s world. Now that information is readily available to anyone who has access to the Internet, we must decide: what are the legal services that only a lawyer may provide? Self-regulation is important to lawyers. So we should be engaged in the dialogue about what exactly constitutes the practice of law.

The other aspect of North Carolina Board of Dental Examiners that may be challenging for self-regulation affects the constitution and work of the entities doing the regulating. Unlike the North Carolina Dental Board, Illinois does not have controlling “active market participants” in the lawyer discipline business.

The Illinois Supreme Court has created by Supreme Court Rules the Attorney Registration and Disciplinary Commission to handle these issues. As a commission created by the Court, the ARDC investigates and prosecutes attorney misconduct cases and makes recommendations to the Court. The actual order of discipline issues from the Court as an exercise of sovereign authority. According to the majority opinion, decisions of a state supreme court, acting legislatively rather than judicially “ipso facto” [by the very nature of the deed] are exempt from the operation of the antitrust laws.”

In other states, however, the regulation of lawyers falls to bar associations and to committees of bar associations. Here folks might have to take a look at composition of their boards and at supervision of their actions. This is a slippery slope, as they say, that may deal a death blow to some regulatory boards.

What is the danger of losing self-regulation of the profession? It is important to recall that the rationale for vesting the authority over the legal profession in the courts is to help maintain the legal profession’s independence from government domination.

An independent legal profession is an important force in preserving government under law, for abuse of legal authority is more readily challenged by a profession whose members are not dependent on government for the right to practice.

                                                                                                                                                                                                            –Preamble to the Rules of Professional Conduct, Para 11.

We are talking about the pillars of our constitution and the bedrock of democracy. We must tread carefully and deliberately as we consider these issues.


Jessica Saltiel, our intern from Loyola University Chicago School of Law, contributed to this post.

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Jayne Reardon
As a prior trial lawyer, Jayne leads lawyers to embrace the transformative possibilities of future law practice. As a prior disciplinary counsel, Jayne is passionate about promoting the core values of the legal profession. She is a graduate of the University of Michigan Law School and the University of Notre Dame. Jayne lives in Park Ridge, Illinois with her husband and those of her four children who are not otherwise living in college towns and beyond.
Jayne Reardon

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