One of the cases up for grabs dealt with this question.
- Click here for North Carolina Board of Dental Examiners v. Federal Trade Commission.
The direct answer was no. They - and any other similar licensing board - can be sued for trying arbitrarily to stifle competition.
The reason - as best I can tell - is that doing so allows for monopolistic practices and therefore violates federal anti-trust laws. Normally a state can make its agencies immune from such lawsuits, but the court ruled that that is not necessarily the case if the agency is controlled by a group of professionals that can regulate themselves. In this case, dentists in the state could issue regulations protecting their control of a service. While there can be good reasons for doing so - we don't want just anyone to be able to perform surgery - that same power should not be used to unduly control the market place.
Students interested in writing up this decision might want to look at how the court
struck that balance.
Some useful related terminology.
- License: a document that allows for an activity to be performed - by the holder of the license - the would otherwise be specific. The licensee can be private of public entity.
- State Licensing: Permission granted by the state for a person or organization to perform a service or engage in an activity or profession. This falls under the reserved powers of the state. Aside from issues raised in cases like this one, the national government giver states leeway in these matters. For information regard the licensing process in Texas click here for the Texas Department of Licensing and Regulation.
- State Licensing Board: The relatively small group of individuals affiliated with a profession that are allowed to determine who can practice that profession. These are established by the state legislature and can be found in the Texas Occupations Code - click here for it. Most of these boards are composed of members who are appointed by the governor - which explains why professional associations get involved in politics. The ability to be able to regulate one's profession is a principle source of power. Click here for a list of the positions that the Texas Governor can appoint.
- Professional Association: Similar to a state licensing board except that they have no governing power. They are nonprofit organizations that seek to further the interests of a particular profession. This includes using the political process to have state boards established and having influence over who is on those boards.
- State Action Antitrust Immunity: A doctrine stating that "state and municipal authorities are immune from federal antitrust lawsuits for actions taken pursuant to a clearly expressed state policy that, when legislated, had foreseeable anti competitive effects. When a state approves and regulates certain conduct, even if it is anti competitive under FTC or DOJ standards, the federal government must respect the decision of the state.' - Source.
- Antitrust Law: "Legislation enacted by the federal and various state governments to regulate trade and commerce by preventing unlawful restraints, price-fixing, and monopolies; to promote competition; and to encourage the production of quality goods and services at the lowest prices, with the primary goal of safeguarding public welfare by ensuring that consumer demands will be met by the manufacture and sale of goods at reasonable prices." - Source.
- Sherman Antitrust Act: " . . . a landmark federal statute in the history of United States antitrust law (or "competition law") passed by Congress in 1890. It prohibits certain business activities that federal government regulators deem to be anti-competitive, and requires the federal government to investigate and pursue trusts." - Source.
- Federal Trade Commission: "an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act. Its principal mission is the promotion of consumer protection and the elimination and prevention of anticompetitive business practices, such as coercive monopoly." - Source.
- Regulatory Capture: ". . . a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating." - Source.
