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June 11, 2013

Fourth Circuit Rules North Carolina Dental Board's Cease and Desist Letters are not Immunized by the State Action Doctrine

Arnold & Porter Advisory

In a unanimous ruling handed down on May 31, 2013, the Fourth Circuit found that state action immunity did not apply to bar the FTC's claims that the North Carolina Dental Board's (the Board's) cease and desist letters to non-dentist teeth-whitening providers unreasonably restrained trade in violation of Section 1 of the Sherman Act and Section 5 of the FTC Act. The court affirmed the FTC's decision that the state action doctrine did not apply because the Board was a private actor, not the state itself, and because its conduct was not actively supervised by the state. Even though the Board was a state agency under North Carolina law, the court held that it must be treated as a private entity for state action immunity purposes because most of its members were elected by North Carolina dentists, not appointed by the state, and because board members were practicing dentists.