       Certiorari granted by Supreme Court, March 3, 2014
           Affirmed by Supreme Court February 25, 2015



                              PUBLISHED

                 UNITED STATES COURT OF APPEALS
                     FOR THE FOURTH CIRCUIT


                             No. 12-1172


THE NORTH CAROLINA STATE BOARD OF DENTAL EXAMINERS,

               Petitioner,

          v.

FEDERAL TRADE COMMISSION,

               Respondent.

---------------------------------

AMERICAN    DENTAL     ASSOCIATION;    AMERICAN    OSTEOPATHIC
ASSOCIATION;   AMERICAN    VETERINARY   MEDICAL   ASSOCIATION;
AMERICAN ACADEMY OF PEDIATRIC DENTISTRY; AMERICAN ACADEMY OF
PERIODONTOLOGY;   AMERICAN    ASSOCIATION   OF  ORTHODONTISTS;
AMERICAN ASSOCIATION OF DENTAL BOARDS; FEDERATION OF STATE
MEDICAL BOARDS; AMERICAN MEDICAL ASSOCIATION; NORTH CAROLINA
MEDICAL SOCIETY; SOUTH CAROLINA MEDICAL ASSOCIATION; MEDICAL
SOCIETY   OF    VIRGINIA;    WEST   VIRGINIA   STATE   MEDICAL
ASSOCIATION; NATIONAL ASSOCIATION OF BOARDS OF PHARMACY;
NORTH CAROLINA BOARD OF PHARMACY; THE FEDERATION OF STATE
BOARDS OF PHYSICAL THERAPY; THE FEDERATION OF ASSOCIATIONS
OF REGULATORY BOARDS; THE ASSOCATION OF SOCIAL WORK BOARDS;
THE AMERICAN ASSOCIATION OF VETERINARY STATE BOARDS; THE
FEDERATION OF CHIROPRACTIC LICENSING BOARDS; THE FEDERATION
OF STATE MASSAGE THERAPY BOARDS; INTERNATIONAL CONFERENCE OF
FUNERAL SERVICE EXAMINING BOARDS, INCORPORATED; THE NATIONAL
ASSOCIATION OF LONG TERM CARE ADMINISTRATOR BOARDS; THE
NATIONAL BOARD FOR CERTIFICATION IN OCCUPATIONAL THERAPY,

               Amici Supporting Petitioner,

AMERICAN ANTITRUST INSTITUTE,

               Amicus Supporting Respondent.
On Petition for Review       of   an   Order   of   the   Federal   Trade
Commission. (No. 9343)


Argued:   December 5, 2012                     Decided:   May 31, 2013


Before SHEDD, KEENAN, and WYNN, Circuit Judges.


Petition denied by published opinion.          Judge Shedd wrote the
opinion, in which Judge Wynn joined.            Judge Keenan wrote a
separate concurring opinion.


ARGUED: Noel Lee Allen, ALLEN, PINNIX & NICHOLS, P.A., Raleigh,
North Carolina, for Petitioner. Imad Dean Abyad, FEDERAL TRADE
COMMISSION, Washington, D.C., for Respondent.        ON BRIEF: M.
Jackson Nichols, Catherine E. Lee, Nathan E. Standley, Brenner
A. Allen, ALLEN, PINNIX & NICHOLS, P.A., Raleigh, North
Carolina, for Petitioner.       Richard A. Feinstein, Director,
Richard B. Dagen, William L. Lanning, Willard K. Tom, General
Counsel, John F. Daly, Deputy General Counsel for Litigation,
FEDERAL TRADE COMMISSION, Washington, D.C., for Respondent.
Jack R. Bierig, Dale E. Thomas, SIDLEY AUSTIN LLP, Chicago,
Illinois, for American Dental Association, American Osteopathic
Association, American Veterinary Medical Association, American
Academy    of    Pediatric   Dentistry,   American     Academy   of
Periodontology, American Association of Orthodontists, American
Association of Dental Boards, and Federation of State Medical
Boards, Amici Supporting Petitioner.          Leonard A. Nelson,
AMERICAN MEDICAL ASSOCIATION, Chicago, Illinois; Stephen W.
Keene, NORTH CAROLINA MEDICAL SOCIETY, Raleigh, North Carolina;
J. Mitchell Armbruster, SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL & JERNIGAN, L.L.P., Raleigh, North Carolina, for The
American Medical Association and the Medical Associations for
the States of North Carolina, South Carolina, Virginia, and West
Virginia, Amici Supporting Petitioner.       Matthew W. Sawchak,
Stephen D. Feldman, ELLIS & WINTERS LLP, Raleigh, North
Carolina, for The National Association of Boards of Pharmacy and
The   North   Carolina   Board  of   Pharmacy,   Amici   Supporting
Petitioner.    Lee K. Van Voorhis, Jennifer A. Semko, Jeremy W.
Cline, BAKER & MCKENZIE, LLP, Washington, D.C., for The
Federation of State Boards of Physical Therapy, The Federation
of Associations of Regulatory Boards, The Association of Social
Work Boards, The American Association of Veterinary State
Boards, The Federation of Chiropractic Licensing Boards, The

                                   2
Federation of State Massage Therapy Boards, International
Conference of Funeral Service Examining Boards, Incorporated,
The National Association of Long Term Care Administrator Boards,
and The National Board for Certification in Occupational
Therapy, Amici Supporting Petitioner.      Richard M. Brunell,
Director of Legal Advocacy, AMERICAN ANTITRUST INSTITUTE,
Washington, D.C.; Peter C. Carstensen, UNIVERSITY OF WISCONSIN
LAW SCHOOL, Madison, Wisconsin; K. Craig Wildfang, Ryan W.
Marth, Scott M. Kranz, ROBINS, KAPLAN, MILLER & CIRESI L.L.P.,
Minneapolis, Minnesota, for American Antitrust Institute, Amicus
Supporting Respondent.




                               3
SHEDD, Circuit Judge:

      The North Carolina State Board of Dental Examiners (the

Board)   petitions     for     review    of      the    Federal        Trade   Commission

(FTC) order finding that the Board violated the FTC Act, 15

U.S.C. § 45, by engaging in unfair competition in the market for

teeth-whitening services in North Carolina.                           For the following

reasons, we deny the petition.

                                         I.

      The   Board    is    a   state    agency,         N.C.     Gen.    Stat.    § 90-48,

created because the “practice of dentistry” in North Carolina

affects “the public health, safety and welfare,” N.C. Gen. Stat.

§ 90-22(1)(a).         The     eight-member        Board        is    comprised    of   six

licensed    dentists,        one   licensed        dental        hygienist,       and   one

consumer member.          N.C. Gen. Stat. § 90-22(b).                     Dentists elect

the   six   dental        members,     and       dental     hygienists         elect    the

hygienist member.          Id. § 90-22(c).              If an election ends in a

tie, the candidates are allowed to describe their positions on

issues that will come before the Board before a revote is held.

The Governor appoints the consumer member.                           The Board is funded

by fees paid by licensed dentists and dental hygienists in North

Carolina.      Board      members—other          than     the    consumer      member—are

required to maintain an active dentistry practice while serving,

and   during   the     relevant      time        frame,    several        Board    members

provided teeth-whitening services.

                                             4
     North Carolina’s Dental Practice Act provides that it is

unlawful    for    an    individual    to   practice    dentistry     in    North

Carolina without a license from the Board.              See N.C. Gen. Stat.

§ 90-29(a).       Under the Dental Practice Act, a person “shall be

deemed to be practicing dentistry” if that person, inter alia,

“[r]emoves stains, accretions or deposits from the human teeth.”

N.C. Gen. Stat. § 90-29(b)(2).          The Board has the “power” to (1)

refuse to issue a license to practice dentistry; (2) refuse to

renew a license; (3) revoke or suspend a license; or (4) take

other disciplinary measures “against a licensee as it deems fit

and proper.”      N.C. Gen. Stat. § 90-41.          If the Board suspects an

individual of engaging in the unlicensed practice of dentistry,

it may bring an action to enjoin the practice in North Carolina

Superior Court or may refer the matter to the District Attorney

for criminal prosecution.        See N.C. Gen. Stat. § 90-40.1.              This

power is hardly unique, however, because such actions may also

be maintained by the “Attorney General for the State of North

Carolina, the district attorney of any of the superior courts,”

or “any resident citizen.”            Id.   Moreover, the Board does not

have the authority to discipline unlicensed individuals or to

order non-dentists to stop violating the Dental Practice Act.

     This case involves the market for teeth-whitening services

in North Carolina.        Teeth-whitening is a popular cosmetic dental

procedure   that    is    available    in   North    Carolina,   as    in    most

                                        5
states,    in    several       forms,       including      as    an     in-office      dental

treatment,       as    dentist-provided            take-home         kits,    as    over-the-

counter products, and as services provided by non-dentists at

salons, mall kiosks, and other locations.                         Each of these teeth-

whitening services involves applying peroxide to the teeth by

means of a gel or strip, which triggers a chemical reaction that

results in whiter teeth.                The services differ, however, in the

immediacy of the results, the ease of use, the necessity of

repeat applications, the need for technical support, and price.

Not   surprisingly,           in-office      dentist      whitening          procedures    are

fast,     effective,           and     usually       do     not        require       repeated

applications,         but    they     are    also   the    “most       costly”      offering.

(J.A. 146).           In contrast, over-the-counter whitening products

typically       contain       lower     concentrations          of    peroxide       and   may

require multiple applications to achieve results, but they cost

far less.

      Beginning         in     the     1990s,       dentists          started       providing

whitening services throughout North Carolina.                            In about 2003,

non-dentists       also       started       offering      teeth-whitening           services,

often at a significantly lower price than dentists.                                  Shortly

thereafter, dentists began complaining to the Board about the

non-dentists’ provision of these services.

      Relevant        here,    after    receiving         complaints         from   dentists,

the Board opened an investigation into teeth-whitening services

                                               6
performed by        non-dentists.             A       case    officer         (a    dentist        board

member) spearheaded the investigation, leading an investigatory

panel consisting of the Board’s Deputy Operations Officer, an

Investigator,        and     on        occasion        the        Board’s          legal       counsel.

Although permitted to do so, neither the consumer member nor the

hygienist        member    participated           in       any    of     the       teeth-whitening

investigations.             During       meetings,           the       Board        discussed          the

increasing        number    of    complaints           regarding          non-dentist            teeth-

whitening services and indicated to practicing dentists that the

Board was attempting to shut down these non-dentist providers.

      As    a    result     of    the    investigations,                the    Board          issued   at

least      47    cease-and-desist            letters         to    29    non-dentist             teeth-

whitening        providers.            The    letters         were       issued          on     official

letterhead and requested that the target cease and desist “all

activity constituting the practice of dentistry.”                                        (J.A. 159).

Several      letters       indicated         that      the       sale    or        use     of    teeth-

whitening products by a non-dentist is a misdemeanor.                                              These

letters effectively caused non-dentists to stop providing teeth-

whitening         services        in     North          Carolina          and        also         caused

manufacturers and distributors of teeth-whitening products used

by   these      non-dentist       providers           to   exit     or    hold       off        entering

North Carolina.            The Board also sent letters to mall operators

in an effort to stop malls from leasing kiosk space to non-

dentist         teeth-whitening         providers;            additionally,               the      Board

                                                  7
contacted the North Carolina Board of Cosmetic Art Examiners to

request that the Cosmetic Board inform its members and licensees

to refrain from providing teeth-whitening services.

       In     sum,   the      Board    successfully         expelled     non-dentist

providers from the North Carolina teeth-whitening market.                          On

June       17,   2010,     the    Federal       Trade     Commission     issued    an

administrative       complaint     against      the     Board,   charging    it   with

violating 15 U.S.C. § 45, the FTC Act, by excluding non-dentist

teeth whiteners from the market.                The Board moved to dismiss the

complaint, arguing that the FTC lacked jurisdiction over it and,

alternatively, that it was exempt from the federal antitrust

laws under the “state action” doctrine.                     An Administrative Law

Judge       (ALJ)    denied      the   motion,        and    the   FTC      affirmed.

Interlocutory Order In re North Carolina State Bd. of Dental

Exam’rs, 151 F.T.C. 607, 2011 WL 3568990 (FTC February 3, 2011)

(Interlocutory Order).            In response, the Board filed a federal

declaratory action, raising the same grounds and requesting that

a federal court stop the administrative proceeding against it.

The district court dismissed that action as an improper attempt

to   enjoin      ongoing   administrative        procedure. 1      North     Carolina


       1
       The Board has appealed that decision. See North Carolina
State Bd. of Dental Exam’rs v. FTC, No. 11-1679.    In light of
our opinion in this petition for review, we have dismissed that
appeal as moot.



                                            8
State    Bd.   of    Dental    Examiners     v.    FTC,    768     F.   Supp.2d   818

(E.D.N.C. 2011).

     The ALJ then held a merits trial and issued an opinion

finding that the Board violated the FTC Act.                       On appeal, the

FTC—applying a de novo standard of review—affirmed and entered a

final order against the Board that included a cease-and-desist

order    enjoining     the    Board   from,       inter    alia,    continuing     to

unilaterally        issue    extra-judicial       orders    to     teeth-whitening

providers in North Carolina.          In re North Carolina State Bd. of

Dental Exam’rs, 2011-2 Trade Cases P 77705, 2011 WL 6229615, at

*2-5 (FTC December 7, 2011) (Final Order).

     The Board petitions for review of the FTC’s final order,

raising three arguments: that it is exempt from the antitrust

laws under the state action doctrine; that it did not engage in

concerted action under § 1 of the Sherman Act; and that its

activities did not unreasonably restrain trade under § 1.                          We

address each in turn.

                                       II.

                                       A.

        We begin with the Board’s contention that it is exempt from

the antitrust laws under the “state action” doctrine. 2                       Under


     2
       The Board also argues that the FTC lacked jurisdiction
over it because it is not a “person” under the FTC Act, 15
U.S.C. § 45(a)(2).  We find this argument to be without merit.
(Continued)
                                        9
this    doctrine,        the     antitrust          laws      do      “not     apply    to

anticompetitive restraints imposed by the States ‘as an act of

government.’”       City of Columbia v. Omni Outdoor Adver., Inc.,

499 U.S. 365, 370 (1991) (quoting Parker v. Brown, 317 U.S. 341,

352    (1943)).     In       Parker,    the       Supreme     Court    announced       this

doctrine after recognizing that “nothing in the language of the

Sherman Act or in its history . . . suggests that its purpose

was    to    restrain    a     state    or        its     officers    or     agents    from

activities directed by its legislature.”                       317 U.S. at 350-51.

The Parker Court cautioned, however, that a state cannot “give

immunity to those who violate the Sherman Act by authorizing

them    to   violate     it,    or     by   declaring        that    their     action   is

lawful.”     317 U.S. at 351.

       There are “three situations in which a party may invoke the

Parker doctrine.”        South Carolina State Bd. of Dentistry v. FTC,

455 F.3d 436, 442 (4th Cir. 2006).                      First, a state’s own actions




The Supreme Court has held that a state is a “person” under the
Sherman Act and the Clayton Act.    Jefferson Cnty. Pharm. Ass’n
v. Abbott Labs., 460 U.S. 150, 155 (1983) (Clayton Act); City of
Lafayette v. La. Power & Light Co., 435 U.S. 389, 395 (1978)
(Sherman Act). In Jefferson County, the Court noted it did not
“perceive any reason to construe the word ‘person’ in [the
Sherman] Act any differently than we have in the Clayton Act.”
Jefferson Cnty., 460 U.S. at 156.        Given the similarities
between the FTC Act and the Clayton and Sherman Acts, we
likewise find that the Board is a “person” under the FTC Act.



                                             10
“ipso facto are exempt” from the antitrust laws. 3                             Hoover v.

Ronwin, 466 U.S. 558, 568 (1984).                 Second, private parties can

claim     the   Parker      exemption   if    acting    pursuant    to     a    “clearly

articulated       and    affirmatively       expressed   as    state     policy”     and

their behavior is “actively supervised by the State itself.”

California Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc.,

445   U.S.      97,   105    (1980)   (internal    quotation       marks       omitted).

Third, as the Supreme Court recently reaffirmed, municipalities

and   “substate       governmental      entities   do    receive     immunity       from

antitrust scrutiny when they act pursuant to state policy to

displace        competition      with    regulation       or    monopoly          public

service.”        FTC v. Phoebe Putney Health Sys., Inc., 133 S.Ct.

1003,      1010       (2013)     (internal      quotation       marks          omitted).

Municipalities are not required to show the active-supervision

prong     of    the   Midcal   test,    because,    “[w]here     the     actor     is   a

municipality, there is little or no danger that it is involved


      3
       The Board repeatedly asserted at oral argument that it is
“sovereign” within the meaning of Parker. The Supreme Court has
recognized two entities as “sovereign” under Parker—the state
legislature   and   the   state   supreme  court   when  “acting
legislatively.”    Hoover v. Ronwin, 466 U.S. 558, 567-68
(1984)(citing Parker, 317 U.S. at 351 (legislature); and Bates
v. State Bar of Arizona, 433 U.S. 350, 360 (1977) (state supreme
court)). The actions of these entities are “ipso facto” exempt
from the antitrust laws.     Id. at 568.   It is obvious that a
state agency comprised of privately employed dentists is not the
“sovereign” equivalent of the state legislature or state supreme
court.



                                          11
in a private price-fixing arrangement.”                 Town of Hallie v. City

of Eau Claire, 471 U.S. 34, 47 (1985) (emphasis in original). 4

The       Court’s   rationale        stemmed     from        the   fact        that   a

municipality’s      conduct     is    “likely     to    be    exposed     to    public

scrutiny”     and   “checked    to    some     degree   through    the     electoral

process.”       Id. at 45 n.9.          Thus, “at the end of the day a

municipality shares the state’s ‘immunity’ when but only when it
      4
       The Hallie Court also             included       the   following        footnote
addressing state agencies:

      In cases in which the actor is a state agency, it is
      likely that active state supervision would also not be
      required, although we do not here decide that issue.
      Where state or municipal regulation by a private party
      is involved, however, active state supervision must be
      shown, even where a clearly articulated state policy
      exists.

     Town of Hallie v. City of Eau Claire, 471 U.S. 34, 46 n.10
(1985).   Relying on this footnote, the Board maintains that,
because it is categorized as a state agency by North Carolina,
it, too, is not required to show active supervision.       This
footnote, however, does not bear quite the weight the Board
suggests.   First, in Southern Motor Carriers Rate Conference,
Inc. v. United States, 471 U.S. 48, 57 (1985), issued the same
day as Hallie, the Court stated that Midcal continued to define
“most specifically” the situations in which “state agencies”
were entitled to the Parker exemption.      Second, as the FTC
explained in rejecting the Board’s argument, “the dicta in
footnote 10 of Hallie must be reconciled with the Court’s other
language and reasoning in that same decision,” including its
discussion of Goldfarb v. Virginia State Bar, 421 U.S. 773
(1975), which we discuss infra at 15-16.   Interlocutory Order,
151 F.T.C. at 625.       Although we find the dicta in Hallie
inapplicable in the instant case, where the “state agency” is
composed entirely of private market participants, our opinion
should not be read as precluding more quintessential state
agencies from arguing that they need not satisfy the active
supervision requirement.



                                        12
is    implementing           anticompetitive             policies     authorized         by   the

state.”     Kay Elec. Coop. v. City of Newkirk, 647 F.3d 1039, 1042

(10th Cir. 2011).

      While Parker is available in these three circumstances, in

Phoebe Putney the Court cautioned that “given the fundamental

national values of free enterprise and economic competition that

are     embodied        in    the     federal        antitrust       laws,     ‘state-action

immunity is disfavored, much as are repeals by implication.’”

Phoebe Putney, 133 S.Ct. at 1010 (quoting FTC v. Ticor Title

Ins. Co., 504 U.S. 621, 636 (1992)).                        Thus, “we recognize state-

action    immunity           only    when     it    is     clear    that     the     challenged

anticompetitive conduct is undertaken pursuant to a regulatory

scheme that ‘is the State’s own.’”                        Id. (quoting Ticor, 504 U.S.

at 635).

                                                B.

      In this case, the FTC first held that the Board was a

private party required to meet both prongs of Midcal and then

concluded        that    the        Board     could       not   show    it     was       actively

supervised       by     North       Carolina.        The    FTC     rejected       the   Board’s

argument that, as a state agency, it was a substate governmental

entity that only had to show its actions were authorized by a

clearly articulated state policy.                         While recognizing that state

agencies may, in some instances, fall within Hallie, the FTC

found     that     the       “Court     has        been    explicit     in     applying       the

                                                13
antitrust      laws    to     public/private            hybrid     entities,         such    as

regulatory bodies consisting of market participants” like the

Board.      Interlocutory           Order,       151    F.T.C.     at    619.        The    FTC

explained that the “operative factor is a tribunal’s degree of

confidence      that        the     entity’s           decision-making          process     is

sufficiently      independent            from    the     interests       of   those     being

regulated,” and that, because a decisive majority of the Board

was elected by dentists, it was required to meet the active-

supervision requirement.             Id.        The FTC found this conclusion was

supported by the policies underlying the state action doctrine:

      Decisions that are made by private parties who
      participate in the market that they regulate are not
      subject to these political constraints unless these
      decisions are reviewed by disinterested state actors
      to assure fealty to state policy.        Without such
      review, “there is no realistic assurance that a
      private party’s anticompetitive conduct promotes state
      policy, rather than merely the party’s individual
      interests.”    Patrick v. Burget, 486 U.S. 94, 101
      (1988). Therefore, allowing the antitrust laws to
      apply to the unsupervised decisions of self-interested
      regulators acts as a check to prevent conduct that is
      not in the public interest.

Id. at 622.

      Having     reached          this    conclusion,        the        FTC   then     easily

determined that the Board was not actively supervised because it

pointed only to “generic oversight” that did “not substitute for

the    required        review        and        approval      of        the     ‘particular

anticompetitive acts’ that the complaint challenges.”                                 Id. at

630 (quoting Patrick, 486 U.S. at 101).

                                                14
                                     C.

     In its petition for review, the Board renews its contention

that, as a state agency, it is only required to show clear

articulation.       Alternatively,      the   Board   contests    the    FTC’s

conclusion that its conduct was not actively supervised.                     We

disagree with the Board on both counts.

     First, we agree with the FTC that state agencies “in which

a   decisive    coalition    (usually     a   majority)   is   made     up   of

participants in the regulated market,” who are chosen by and

accountable    to   their   fellow   market    participants,     are    private

actors and must meet both Midcal prongs.              Phillip E. Areeda &

Herbert Hovenkamp, 1A Antitrust Law: An Analysis of Antitrust

Principles and Their Application ¶ 227b, at 501 (3d ed. 2009).

See also Einer Richard Elhauge, The Scope of Antitrust Process,

104 Harv. L. Rev. 667, 689 (1991) (concluding that “financially

interested action is . . . ‘private action’ subject to antitrust

review”).      This result accords with Supreme Court precedent as

well as our own.

     For example, in Goldfarb v. Virginia State Bar, 421 U.S.

773 (1975), the Court addressed an ethical opinion enforced by

the Virginia State Bar Association that required attorneys to

abide by a minimum fee schedule.          The Bar was a “state agency by

law,” id. at 790, with the “power to issue ethical opinions,”



                                     15
id. at 791.       The Court still denied the Parker exemption to the

Bar, concluding that:

     The fact that the State Bar is a state agency for some
     limited purposes does not create an antitrust shield
     that allows it to foster anticompetitive practices for
     the benefit of its members. Cf. Gibson v. Berryhill,
     411 U.S. 564, 578-579 (1973).       The State Bar, by
     providing that deviation from County Bar minimum fees
     may lead to disciplinary action, has voluntarily
     joined    in   what    is    essentially   a     private
     anticompetitive activity, and in that posture cannot
     claim it is beyond the reach of the Sherman Act.

Id. at 791-92.

     The   key,    according      to    the    Goldfarb      Court,   was      that   the

Parker exemption      did   not    permit       the   state    agency     to    “foster

anticompetitive practices for the benefit of its members.”                            When

a state agency and its members have the attributes of a public

body—such as a municipality—and are subject to public scrutiny

such that “there is little or no danger that [they are] involved

in a private price-fixing arrangement,” active supervision is

not required.       Hallie, 471 U.S. at 47.               However, when a state

agency appears to have the attributes of a private actor and is

taking actions to benefit its own membership—as in Goldfarb—both

parts of Midcal must be satisfied.               Requiring active supervision

over such entities ensures “the State has exercised sufficient

independent   judgment      and    control      so    that    the   details     of    the

[challenged   action]       have       been    established     as     a   product      of

deliberate state intervention.”               Ticor, 504 U.S. at 634.


                                          16
       We have indicated—prior to Midcal and Hallie—that a state

agency operated by market participants must show active state

involvement.          See Asheville Tobacco Bd. of Trade, Inc. v. FTC,

263 F.2d 502, 509 (4th Cir. 1959).                              In Asheville Tobacco, we

addressed conduct by a local board of trade comprised of market

participants.           The board was “an administrative agency of the

State      of   North      Carolina,”      id.      at    508,     that   was    granted    the

authority          under     state   law     to      “make        reasonable      rules     and

regulations” for selling “leaf tobacco at auction,” id. at 505.

We   found      that       the   board   was     required         to   show     that   it   was

adequately supervised by the state because, in function, the

board was a private actor “organized primarily for the benefit

of those engaged in the business.”                        Id. at 509. 5         Of particular

relevance was the fact that the officers were appointed from the

board’s membership and not by the State—a factor also present in

this       case.      Id.    at   510.      See          also    Washington      State    Elec.

Contractors Ass’n, Inc. v. Forrest, 930 F.2d 736, 737 (9th Cir.

1991)      (noting      state     regulatory        council       “may    not”    qualify    as

“state agency” because it “has both public and private members,

and the private members have their own agenda”); FTC v. Monahan,

832 F.2d 688, 689-90 (1st Cir. 1987) (Breyer, J.) (noting state

       5
       In reaching this conclusion, we specifically found that we
were “not bound by the State court’s characterization of the
boards.” Asheville Tobacco, 263 F.2d at 509.



                                               17
pharmacy board’s status as public or private “depends upon how

the   Board   functions   in   practice,   and   perhaps   upon   the   role

played by its members who are private pharmacists”). 6

      In sum, we agree with the FTC that, as here, when a state

agency is operated by market participants who are elected by

other     market   participants,     it     is    a   “private”     actor.

Accordingly, it is required to satisfy both Midcal prongs to

obtain the Parker exemption.

                                    D.

      Second, having concluded that the Board must satisfy both

Midcal prongs, we likewise agree with the FTC that the Board

cannot satisfy Midcal’s active-supervision prong.             In Midcal,

the Court found that California did not actively supervise the

wine-selling scheme at issue because California law: (1) “simply


      6
       Although the Board points to several cases concluding that
a state agency did not have to demonstrate active supervision,
these cases do not create the bright-line rule that the Board
requests.     See Earles v. State Bd. of Certified Public
Accountants of Louisiana, 139 F.3d 1033, 1041 (5th Cir. 1998);
Bankers Ins. Co. v. Florida Residential Prop. & Cas. Joint
Underwriting Ass’n, 137 F.3d 1293, 1296-97 (11th Cir. 1998);
Hass v. Oregon State Bar, 883 F.2d 1453, 1460 (9th Cir. 1989);
Gambrel v. Kentucky Bd. of Dentistry, 689 F.2d 612, 620-21 (6th
Cir. 1982).      Instead, in each case, those courts merely
determined that the particular state agency at issue was more
akin to a municipality than a private actor. See, e.g., Earles,
139 F.3d at 1041 (noting the “Board is functionally similar to a
municipality”); Hass, 883 F.2d at 1460 (review of state
provisions left “no doubt that the Bar is a public body, akin to
a municipality for purposes of the state action exemption”).



                                    18
authorizes price setting and enforces the prices established by

private parties”; (2) “neither establishes prices nor reviews

the     reasonableness       of    the    price      schedules”;           (3)     does    not

“regulate the terms of fair trade contracts”; (4) and does not

“monitor      market        conditions      or       engage         in     any      ‘pointed

reexamination’ of the program.” Midcal, 445 U.S. at 105–06.                                The

Court reinforced that our national policy in favor of robust

competition “cannot be thwarted by casting such a gauzy cloak of

state    involvement        over   what   is     essentially         a     private    price-

fixing arrangement.”              Id. at 106.        As the Court later noted,

“[t]he mere presence of some state involvement or monitoring

does not suffice.”          Patrick, 486 U.S. at 101.

      North Carolina has done far less “supervision” in this case

than the Court found wanting in Midcal.                           Here, the cease-and-

desist letters were sent without state oversight and without the

required     judicial       authorization.           The     Board       has     pointed    to

certain reporting provisions and “good government” provisions in

North Carolina law, but those fall far short of the type of

supervision in Midcal that was nonetheless considered deficient.

As    the    FTC    explained,      “[t]his       sort       of     generic       oversight,

however,     does     not    substitute        for     the        required       review    and

approval of the ‘particular anticompetitive acts’” challenged by

the   FTC.         Interlocutory     Order,      151     F.T.C.       at     630    (quoting

Patrick, 486 U.S. at 101).

                                           19
                                      III.

     We next turn to the question of whether the FTC properly

found that the Board’s behavior violated the FTC Act.                 The FTC’s

factual    findings    are   conclusive      if   supported    by    substantial

evidence, Telebrands Corp. v. FTC, 457 F.3d 354, 358 (4th Cir.

2006), and, while we review legal issues de novo, we “give some

deference     to     the    Commission’s     informed    judgment       that    a

particular commercial practice is to be condemned as ‘unfair,’”

FTC v. Indiana Fed’n of Dentists, 476 U.S. 447, 454 (1986).

“The [FTC Act] forbids a court to ‘make its own appraisal of the

testimony, picking and choosing for itself among uncertain and

conflicting inferences.’”            Id. (quoting FTC v. Algoma Lumber

Co., 291 U.S. 67, 73 (1934)).

     The     FTC     Act     makes    unlawful      “[u]nfair       methods     of

competition.”        15 U.S.C. § 45(a)(1).          In this case, the FTC

determined that the Board’s conduct violated § 45(a)(1) because

it was a violation of § 1 of the Sherman Act, which we have

previously recognized is a “species” of “unfair competition.”

South     Carolina    Bd.    of   Dentistry,      455   F.3d    at    443     n.7.

Accordingly, because the FTC limited its review to whether the

Board’s conduct violated § 1, we do the same.                 Section 1 of the

Sherman Antitrust Act prohibits “[e]very contract, combination .

. ., or conspiracy, in restraint of trade.”              15 U.S.C. § 1.         To

establish a § 1 antitrust violation, a plaintiff must prove “(1)

                                       20
a   contract,    combination,         or        conspiracy;       (2)    that    imposed       an

unreasonable restraint of trade.”                     Dickson v. Microsoft Corp.,

309 F.3d 193, 202 (4th Cir. 2002).                         Here, the Board challenges

both     of     these     requirements,               arguing       that,        under        the

intracorporate        immunity        doctrine,            see    Copperweld         Corp.     v.

Independence      Tube       Corp.,       467    U.S.      752,    771    (1984),       it    is

incapable of conspiring with itself, and that, to the extent

that   doctrine       does     not    apply,         the    FTC    failed       to    prove     a

combination or conspiracy that imposed an unreasonable restraint

of trade.

                                                A.

       Section 1 of the Sherman Act applies “only to concerted

action,” American Needle, Inc. v. National Football League, 130

S.Ct. 2201, 2208 (2010), and “unilateral conduct is excluded

from its purview,” Oksanen v. Page Memorial Hosp., 945 F.2d 696,

702 (4th Cir. 1991).             In American Needle, the Court recognized

that “[a]greements made within a firm can constitute concerted

action    . . . when the parties to the agreement act on interests

separate from those of the firm itself” such that “the intrafirm

agreements      may     simply       be    a     formalistic        shell       for    ongoing

concerted action.”            American Needle, 130 S.Ct. at 2215.                             See

also Am. Chiropractic Ass’n v. Trigon Healthcare, Inc., 367 F.3d

212,   224    (4th    Cir.     2004)       (recognizing           “independent        personal

stake exception” to Copperweld).                     As the American Needle Court

                                                21
explained, “substance,” not “form” determines whether an “entity

is capable of conspiring under § 1,” and the key inquiry is

“whether there is a conspiracy between ‘separate economic actors

pursuing separate economic interests, such that the agreement

deprives      the    marketplace      of    independent       centers          of    decision

making.’”      Robertson v. Sea Pines Real Estate Co., 679 F.3d 278,

285    (4th   Cir.    2012)     (quoting      American       Needle,      130       S.Ct.    at

2212).

       Applying      American      Needle,    the     FTC    concluded         that      “Board

members were capable of conspiring because they are actual or

potential competitors.”             Final Order, 2011 WL 6229615, at *20.

Specifically, the FTC found that “Board members continued to

operate separate dental practices while serving on the Board,”

and that the “Board members had a personal financial interest in

excluding non-dentist teeth whitening services” because many of

them     offered      teeth-whitening             services    as        part        of   their

practices.      Id.     The FTC continued by noting its conclusion was

“buttressed by the significant degree of control exercised by

dentist    members     of   the     Board    with     respect      to    the    challenged

restraints.”        Id. at *21.

       We uphold the FTC’s finding that the Board has the capacity

to conspire under § 1.             As American Needle made clear, concerted

action is satisfied when an agreement exists between “separate

economic      actors”       such     that     any      agreement         “deprives          the

                                             22
marketplace       of   independent       centers      of    decision     making.”

American Needle, 130 S.Ct. at 2212 (internal quotation marks

omitted).     The Board members—apart from the consumer member—are

active dentists who are required, by the Dental Practice Act,

N.C. Gen. Stat § 90-22(b), to be actively engaged in dentistry

during   their    Board    tenure.      As   even     the   Board’s   own   expert

recognized, 7 the Board members’ active-service requirement can

create a conflict of interest since they serve on the Board

while they remain “separate economic actors” with a separate

financial   interest      in    the   practice   of    teeth   whitening.         Cf.

Oksanen,    945    F.2d    at   706   (noting    “a    medical   staff      can    be

comprised of physicians with independent and at times competing

economic interests” and thus “have the capacity to conspire as a

matter of law”). 8        Any agreement between the Board members thus

deprives the market of an independent center of decision making.


     7
       The Board’s expert testified that the Board is concerned
about the financial interests of dentists, and that there “is a
financial aspect” to the decision to exclude the non-dentist
teeth whiteners. (J.A. 580).
     8
       The fact that the Board members may have a unity of
purpose in the particular restraint at issue—expelling non-
dentist teeth whiteners from the market—does not render them
incapable of conspiring under § 1, because some “commonality of
interest exists in every cartel.” Los Angeles Memorial Coliseum
Comm’n v. NFL, 726 F.2d 1381, 1389 (9th Cir. 1984). The salient
fact is that the Board members, in their private business,
remain “separately controlled, potential competitors.” American
Needle, 130 S.Ct. at 2215.



                                        23
     Moreover,         the    Board’s     status        as    a   single     entity         is    not

dispositive      because       “[c]ompetitors           ‘cannot     simply        get       around’

antitrust       liability            by      acting          ‘through        a        third-party

intermediary or joint venture.’”                     American Needle, 130 S.Ct. at

2215-16    (quoting          Major     League       Baseball       Properties,             Inc.    v.

Salvino, Inc., 542 F.3d 290, 336 (2d Cir. 2008) (Sotomayor, J.,

concurring      in     judgment)).            In      Robertson,        we       rejected         the

argument    that     the      MLS    listing      service’s        status        as    a    “single

corporation” rendered it incapable of § 1 conspiracy because it

was “comprised of individual real estate brokerages that are

separately incorporated and that compete with each other in the

sale and purchase of real estate.”                      Robertson, 679 F.3d at 285.

Importantly, we found implausible the MLS’s contention that the

realtors       could     not        violate       § 1        because    the           “individual

brokerages acted only in their capacities as MLS board members.”

Id. at 284.          Likewise, in this case the Board’s members are

separate economic actors who cannot escape liability under § 1

simply    by    organizing           under    a     “single       umbrella.”               American

Needle, 130 S.Ct. at 2212.

                                               B.

     Having determined that the Board is capable of conspiring

under § 1, we next examine whether the FTC’s conclusion that the

Board engaged in concerted action is supported by substantial

evidence.      Of course, concluding that the Board has the capacity

                                               24
to conspire “does not mean, however, that every action taken” by

the Board “satisfies the contract, combination, or conspiracy

requirement of section one.”            Oksanen, 945 F.2d at 706.              Thus,

to   be    concerted    action,   the   parties      must    have   “a    conscious

commitment to a common scheme designed to achieve an unlawful

objective.”        Monsanto Co. v. Spray-Rite Service Corp., 465 U.S.

752, 768 (1984).          We have indicated there must be “something

more” than independent action, such as “a unity of purpose or a

common design and understanding, or a meeting of the minds.”

Parkway Gallery Furniture, Inc. v. Kittinger/Pennsylvania House

Group, Inc., 878 F.2d 801, 805-06 (4th Cir. 1989).                        Concerted

action may be proven by “direct or circumstantial evidence.”

Monsanto, 465 U.S. at 768.

       The FTC found both direct and circumstantial evidence to

support a finding of concerted action.               First, the FTC concluded

that      “[o]n    several   occasions,       the    Board     discussed       teeth

whitening services provided by non-dentists and then voted to

take action to restrict these services.”                Final Order, 2011 WL

6229615,     at    *23.      Second,    the    FTC    found     a     “wealth”    of

circumstantial evidence to the same effect—members “engaged in a

consistent practice of discouraging non-dentist teeth whitening

services”     through     their   cease-and-desist          letters      and   other

efforts.     Id.    The FTC found these communications were “similar”

and had the “common objective” of closing the market.                      Id.    It

                                        25
was this “consistency” and “frequency” that pointed to concerted

action.       Id.    Substantial evidence supports this conclusion.              As

the FTC found, several of these letters were sent after votes by

the    Board,       and   the   lengthy    consistent     campaign     of   sending

letters and cease-and-desist orders is suggestive of coordinated

action. 9         Accordingly, we agree with the FTC that the Board

engaged in a combination or conspiracy under § 1.

                                          IV.

       Finally, the Board challenges the FTC’s conclusion that its

actions amounted to an unreasonable restraint of trade under

§ 1.        As noted above, we review the FTC’s legal conclusion de

novo—while giving some deference to its expertise—and we uphold

its    factual       findings    if    supported    by   substantial    evidence.

Indiana Fed’n of Dentists, 476 U.S. at 454.                 We have recognized

three forms of analysis for determining if conduct violates § 1:

(1) per se; (2) quick-look; and (3) rule of reason.                   Continental

Airlines, Inc. v. United Airlines, Inc., 277 F.3d 499, 508-09

(4th       Cir.   2002). 10     “The   boundaries   between   these     levels   of


       9
       The Board renews its argument—made with regard to the
state action doctrine—that enforcement of state law can never be
an antitrust conspiracy. As previously discussed, the Board was
acting to regulate third parties in a manner not authorized by
state law.
       10
        The per se analysis, which “permits courts to make
‘categorical judgments’ that certain practices, including price
fixing, horizontal output restraints, and market-allocation
(Continued)
                                          26
analysis are fluid,” and they are “best viewed as a continuum.”

Id. at 509.         “In all cases, however, ‘the criterion to be used

in judging the validity of a restraint on trade is its impact on

competition.’”        Id. (quoting National Collegiate Athletic Ass’n

v. Bd. of Regents of Univ. of Okla., 468 U.S. 85, 104 (1984)).

       The   rule    of    reason        applies           “if   the    reasonableness       of    a

restraint cannot be determined without a thorough analysis of

its net effects on competition in the relevant market.”                                    Id.    In

some instances, an examination short of the rule of reason can

be   substituted,         that     is,    when         a    “quick      look”    indicates       the

anticompetitive           effect     of       the          conduct      “but     procompetitive

justifications . . . also exist.”                            Id.       “Rather than focusing

upon   the   category       to     which      a    particular           restraint     should      be

assigned,” Polygram Holding, Inc. v. FTC, 416 F.3d 29, 35 (D.C.

Cir. 2005), the “‘essential inquiry remains the same—whether or

not the challenged restraint enhances competition,’”                                  California

Dental Ass’n. v. FTC, 526 U.S. 756, 780 (1999) (quoting Bd. of

Regents      of     University           of       Oklahoma,            468     U.S.   at     104).

Application of a quick look is appropriate when “the experience




agreements,” are per se violative of § 1, is not at issue in
this case because the FTC utilized the “quick look” and full
rule of reason analysis. Continental Airlines, 277 F.3d at 509
(quoting Nw. Wholesale Stationers, Inc. v. Pac. Stationery &
Printing Co., 472 U.S. 284, 289 (1985)).



                                                  27
of the market has been so clear, or necessarily will be, that a

confident      conclusion         about     the      principal    tendency      of     a

restriction will follow from a quick (or at least a quicker)

look,    in   place    of   a    more     sedulous    one.”      Id.   at   781.      In

applying      this    abbreviated        analysis,     however,    a    court      “must

carefully       consider         a      challenged      restriction’s        possible

procompetitive justifications.”                  Continental Airlines, 277 F.3d

at 510.

    In this case, the FTC determined that the Board’s conduct

violated § 1 under both a quick-look analysis 11 and a full rule

of reason.      Final Order, 2011 WL 6229615, at *18 (noting the FTC

analyzed the Board’s behavior under “the . . . modes of analysis

endorsed in Indiana Federation of Dentists,” including the quick

look approach and the rule of reason).                   Applying the quick look

approach,      the    FTC       first     concluded     that     the   conduct       was

“inherently suspect” because “[t]he challenged conduct is, at

its core, concerted action excluding a lower-cost and popular

group of competitors,” id. at *25, and “[n]o advanced degree in

economics is needed to recognize” that the behavior “is likely




    11
        The FTC referred to the quick look analysis as the
“inherently suspect” approach, consistent with its earlier
ruling in In re Polygram Holding, Inc., 136 F.T.C. 310 (2003),
aff’d Polygram Holding, Inc. v. FTC, 416 F.3d 29 (D.C. Cir.
2005).



                                            28
to    harm     competition          and     consumers,     absent     a    compelling

justification,” id. at *26.

      We affirm the FTC’s mode of analysis and find that its

conclusion      that     the    Board’s       behavior     was    likely     to    cause

significant     anticompetitive           harms    is   supported    by    substantial

evidence.      See Fashion Originators’ Guild of Am., Inc. v. FTC,

312 U.S. 457, 465 (1941) (holding that manufacturer’s boycott of

certain retailers “has both as its necessary tendency and as its

purpose and effect the direct suppression of competition”); Nw.

Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co.,

472   U.S.    284,     294   (1985)       (internal     quotation    marks    omitted)

(noting      “likelihood       of   anticompetitive        effects    is    clear”    in

group boycotts involving “joint efforts . . . to disadvantage

competitors by either directly denying or persuading or coercing

suppliers or customers to deny relations the competitors need in

the   competitive       struggle”).          The   Court    has     made   clear    that

practices like group boycotts are amenable to the quick look

approach—cases in which “an observer with even a rudimentary

understanding of economics could conclude that the arrangements

in question would have an anticompetitive effect on customers

and markets.”        California Dental, 526 U.S. at 770.                     It is not

difficult     to   understand        that    forcing     low-cost    teeth-whitening




                                             29
providers        from    the     market     has       a     tendency          to    increase      a

consumer’s price for that service. 12

       Of   note       here,   the     Supreme     Court         has    cautioned         that   we

should      be     hesitant       to     quickly           condemn       the        actions      of

professional organizations because “certain practices by members

of a learned profession might survive scrutiny . . . even though

they    would     be    viewed    as    a   violation        of        the    Sherman      Act   in

another     context.”          Nat’l     Soc’y        of    Prof’l       Eng’rs      v.    United

States, 435 U.S. 679, 686 (1978).                      See also Goldfarb, 421 U.S.

at   788    n.17       (“The   fact     that      a    restraint             operates     upon    a

profession       as     distinguished       from       a    business          is,   of    course,

relevant     in        determining      whether           that    particular          restraint

violates the Sherman Act.”).                   That is, “[t]he public service




       12
         The Board argues that FTC failed to consider its
justification, that it “acted pursuant to state law,” and was
“motivated by public protection concerns.”    (Appellant’s Br. at
57).   The FTC found that, even assuming these were appropriate
justifications for anticompetitive behavior, the Board failed to
adduce factual support.      The FTC recounted that the Board
members pointed to “theoretical” risks of teeth-whitening
services without “any clinical or empirical evidence validating”
the risks and that the Board could only point to four anecdotal
cases of consumer injury “over a multi-year period based on
products considered safe by the FDA and used over a million
times over the last twenty years.”        Final Order, 2011 WL
6229615, at *33.       The FTC likewise noted the “lack of
contemporaneous   evidence  that   the  challenged   conduct  was
motivated by health or safety concerns.”      Id.   We find this
conclusion supported by substantial evidence.



                                             30
aspect” of a profession “may require that a particular practice

. . . be treated differently.”                   Goldfarb, 421 U.S. at 788 n.17.

      The Supreme Court has likewise made pellucid, however, that

anticompetitive acts are not immune from § 1 because they are

performed by a professional organization.                         See, e.g., Arizona v.

Maricopa       Cnty.      Med.        Soc’y,      457    U.S.     332,     347-51       (1982)

(condemning       as    a   per       se   § 1    violation       maximum    fee     setting

agreement by physicians); Indiana Fed’n of Dentists, 476 U.S. at

459-60 (finding horizontal agreement among dentists to be a § 1

violation under quick look analysis).                          We have also noted, “we

are   not     inclined      to    condone        anticompetitive         conduct    upon    an

incantation       of    ‘good     medical        practice.’”        Virginia       Acad.    of

Clinical Psychologists v. Blue Shield of Virginia, 624 F.2d 476,

485 (4th Cir. 1980).                  In this case, the Board’s status as a

group    of    professionals           does    not      condone    its    anticompetitive

practices.        Accordingly, we conclude that substantial evidence

supports       the     FTC’s     factual       findings        regarding    the     economic

effects of the Board’s actions and that those findings support

the conclusion that the Board’s behavior violates § 1.                              Indiana

Fed’n of Dentists, 476 U.S. at 465-66.

                                                 V.

      In      conclusion,        we    note      that    our    decision    today       hardly

sounds      the   death     knell       for    federal/state        balance       the    Board

posits.        For one, given our conclusion that the Board is a

                                                 31
private actor under the antitrust laws, there is no federalism

issue.     To     that    end,   we    note    that   Board   is   represented     by

private    counsel       and   the    State    has    never   intervened     in   the

proceedings on the Board’s behalf.                   Cf. Maryland Stadium Auth.

v. Ellerbe Beckett, Inc., 407 F.3d 255, 264-65 (4th Cir. 2005)

(noting representation by state Attorney General was factor in

determining state control).             At the end of the day, this case is

about a state board run by private actors in the marketplace

taking action outside of the procedures mandated by state law to

expel a competitor from the market.                   Despite these actions, if

the Board was actively supervised by the State, it would be

entitled     to   the     Parker      exemption.       Today’s     opinion   simply

reinforces the Court’s admonition that federalism                      “serves to

assign political responsibility, not to obscure it.”                   Ticor, 504

U.S. at 636.      As the FTC summarized:

     allowing   the  antitrust   laws  to  apply   to  the
     unsupervised decisions of self-interested regulators
     acts as a check to prevent conduct that is not in the
     public interest; absent antitrust to police their
     actions, unsupervised self-interested boards would be
     subject to neither political nor market discipline to
     serve consumers’ best interests.

Interlocutory Order, 151 F.T.C. at 622-23.

     For the foregoing reasons, the Board’s petition for review

is denied.

                                                                   PETITION DENIED




                                          32
BARBARA MILANO KEENAN, Circuit Judge, concurring:

       I am pleased to concur in the majority’s opinion.                    I write

separately to emphasize the narrow scope of our holding that the

North Carolina State Board of Dental Examiners (the Board) is a

private actor for purposes of the state action doctrine, and to

discuss the practical implications of our decision.

       Under the Supreme Court’s precedent, private parties are

immune from the antitrust laws under the state action doctrine

when two criteria are met.           See Cal. Retail Liquor Dealers Ass’n

v.    Midcal   Aluminum,   Inc.,     445    U.S.   97,   105   (1980)     (Midcal).

First, the challenged restraint must be “clearly articulated and

affirmatively       expressed   as    state    policy,”    and,    second,        that

policy must be “actively supervised” by the state itself.                       Id.

       In this context, it is useful to state what our opinion

does not hold.        We do not hold that a state agency must always

satisfy the active supervision prong of the standard set forth

in    Midcal   to   qualify   for    antitrust     immunity    under      the    state

action doctrine.        Nor do we hold that a state agency comprised,

in whole or in part, of members participating in the market

regulated by that state agency is a private actor subject to

Midcal’s active supervision prong.                 Instead, our holding that

the Board is a private actor for purposes of the state action

doctrine turns on the fact that the members of the Board, who

are     market      participants,     are     elected     by      other     private
participants in the market.     See slip op. at 18 (“[W]hen a state

agency is operated by market participants who are elected by

other market participants, it is a ‘private’ actor.”).

     If the Board members here had been appointed or elected by

state government officials pursuant to state statute, a much

stronger case would have existed to remove the Board from the

reach of Midcal’s active supervision prong. *         See FTC v. Phoebe

Putney   Health   System,   Inc.,   133   S.   Ct.   1003,   1010   (2013)

(holding   that   municipal   and   certain    “substate”    entities   of

government receive immunity from antitrust scrutiny when they

act pursuant to clearly articulated and affirmatively expressed

state policy to displace competition, without regard to whether

their activities are actively supervised by the state).


     *
       The separate features supporting the Board’s position
included: (1) the North Carolina legislature’s designation of
the Board “as the agency of the State for the regulation of the
practice of dentistry in this State,” N.C.G.S. § 90-22(b); (2)
the designation of Board members as “State employees,” N.C.G.S.
§ 93B-16(b); (3) the Board members’ entitlement to sovereign
immunity and legal defense by the state attorney general,
N.C.G.S. §§ 93B-16(c), 143-300.3; (4) the oath Board members are
required to take promising to uphold North Carolina’s laws and
protect the health, safety, and welfare of the public, N.C.
CONST. art. VI, § 7; (5) the potential that Board members may be
punished by the North Carolina Ethics Commission if the members
act in a manner that presents a conflict of interest, N.C.G.S.
§§ 138A-10, 12(o); and (6) the review powers over the Board
enjoyed by the North Carolina Joint Legislative Commission on
Governmental Operations, which has the power to study state
agency   activities   regarding   “conformity with   legislative
intent,” N.C.G.S. § 120-76(1)(d).


                                    34
     I further observe that subjecting the Board to Midcal’s

active supervision prong does not impose an onerous burden on

either the Board or the state.                 The Supreme Court explained that

“the requirement of active state supervision serves essentially

an evidentiary function: it is one way of ensuring that the

actor is engaging in the challenged conduct pursuant to state

policy.”    Town of Hallie v. City of Eau Claire, 471 U.S. 34, 46

(1985) (emphasis added).                Accordingly, if a state creates an

agency and directs that the members of that agency be selected

in a manner similar to the process employed here, the agency may

still   enjoy    antitrust        immunity       if,   for    example,     the     state

“monitor[s]     market       conditions        or   engage[s]       in   [a]    ‘pointed

reexamination’” of the agency’s actions, Midcal, 445 U.S. at

106, or if the agency’s actions have been authorized by the

state’s    judiciary         or   are    subject       to    judicial     enforcement

proceedings, Bates v. State Bar of Arizona, 433 U.S. 350, 361-62

(1977).

     In this case, I do not doubt that the Board was motivated

substantially     by     a    desire      to    eliminate      an    unsafe      medical

practice, namely, the performance of teeth whitening services by

unqualified individuals under unsanitary conditions.                           The Board

was aware that several consumers had suffered from adverse side

effects, including bleeding or “chemically burned” gums, after

receiving teeth-whitening services from persons not licensed to

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practice dentistry.        Additionally, the Board was aware that many

of the “mall kiosks” where such teeth-whitening services are

performed lack access to running water.               The Board also received

reports   that     non-licensed    persons       performed    teeth-whitening

services without using gloves or masks, thereby increasing the

risk of adverse side effects.                Accordingly, in my view, the

record supports the Board’s argument that there is a safety risk

inherent in allowing certain individuals who are not licensed

dentists, particularly mall-kiosk employees, to perform teeth-

whitening services.

     North Carolina is entitled to make the legislative judgment

that the benefits of prohibiting non-dentists from performing

dental services related to stain removal outweigh the harm to

competition that results from excluding non-dentists from that

market.   That kind of legislative judgment exemplifies the very

basis of the state action immunity doctrine.                 However, because

“state-action immunity is disfavored,” Phoebe Putney, 133 S. Ct.

at 1010, when the state makes such a judgment, the state must

act as the state itself rather than through private actors only

loosely affiliated with the state.

     Here,   the    fact   that   the    Board   is    comprised   of   private

dentists elected by other private dentists, along with North

Carolina’s lack of active supervision of the Board’s activities,

leaves us with little confidence that the state itself, rather

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than a private consortium of dentists, chose to regulate dental

health in this manner at the expense of robust competition for

teeth whitening services.   Accordingly, the Board’s actions are

those of a private actor and are not immune from the antitrust

laws under the state action doctrine.   With these observations,

I am pleased to join the majority opinion.




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