EH Fixed LRO EMTS TWIN 162 U Pa L Rev 1093

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ARTICLE

CARTELS BY ANOTHER NAME:
SHOULD LICENSED OCCUPATIONS FACE
ANTITRUST SCRUTINY?

AARON EDLIN† & REBECCA HAW††
It has been over a hundred years since George Bernard Shaw wrote that
“[a]ll professions are a conspiracy against the laity.” Since then, the number of
occupations and the percentage of workers subject to occupational licensing have
exploded; nearly one-third of the U.S. workforce is now licensed, up from five
percent in the 1950s. Through occupational licensing boards, states endow
cosmetologists, veterinary doctors, medical doctors, and florists with the authority to
decide who may practice their art. It cannot surprise when licensing boards
comprised of competitors regulate in ways designed to raise their profits. The result
for consumers is higher prices and less choice, as licensing raises wages by eighteen
percent and bars competition from unlicensed workers. For African-style hair
braiders, the result is either an illicit business or thousands of hours of irrelevant
training imposed by a cosmetology board. For lawyers, the result is less competition
from tax accountants, paralegals, and out-of-state lawyers.
The Sherman Act’s great accomplishment has been to make cartels per se
illegal and relatively scarce—unless the cartel is managed by a professional licensing
board. Most jurisdictions consider such boards, as state creations, exempt from
antitrust scrutiny by the state action doctrine, leaving would-be competitors and
consumers no recourse against their cartel-like activity.
† Richard Jennings Professor of Law and Professor of Economics, University of California,
Berkeley; Research Associate, National Bureau of Economic Research; J.D., Stanford University;
Ph.D., Economics, Stanford University.
†† Professor of Law, Vanderbilt University Law School; J.D., Harvard University. We thank
Einer Elhauge, Prasad Krishnamurthy, and Carl Shapiro for helpful comments. We also thank James
Blumstein for comments on a previous draft and Sean Ryan for excellent research assistance.

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We contend that the state action doctrine should not prevent antitrust suits
against state licensing boards that are comprised of private competitors deputized to
regulate and to outright exclude their own competition, often with the threat of
criminal sanction. At most, state action should immunize licensing boards from the
per se rule and require plaintiffs to prove their cases under the rule of reason. We
argue that the Fourth Circuit’s recent decision, soon to be reviewed by the Supreme
Court, to uphold a Federal Trade Commission (FTC) antitrust suit against a
licensing board—denying state action immunity to a licensing board and thereby
creating a circuit split—was a step in the right direction but did not go far enough.
The Supreme Court should take the split as an opportunity to clarify that when
competitors hold the reins to their own competition, they must answer to Senator
Sherman.
INTRODUCTION ............................................................................ 1095
I. OCCUPATIONAL LICENSING BOARDS: THE NEW CARTELS ....... 1102
A. The Scope of Professional Licensing: Big and Getting Bigger ............ 1102
B. The Anticompetitive Potential of Occupational Licensing ................. 1104
1. The New “Professions” ..................................................... 1104
2. Old Professions, New Restrictions...................................... 1107
II. THE ROAD TO PROFESSIONAL CARTELIZATION ....................... 1111
A. The Economics of Licensing ..........................................................1111
1. The Costs of Licensing: Higher Prices, Lower Quantity ..... 1112
2. The Benefits of Licensing: Improved Quality? .................... 1116
B. The Legal Landscape of Professional Licensing ................................ 1118
1. Twin Immunities Shield State Licensing Boards from
Antitrust Liability ............................................................. 1118
a. Parker and State Action Immunity................................... 1119
b. Noerr and Petitioning Immunity.......................................1121
c. Immunity for Professional Licensing Boards Under
Parker and Noerr ...........................................................1121
2. The Common Route to Challenging State Licensing
Restraints: Due Process and Equal Protection .................... 1127
III. THE NORMATIVE CASE: WHY SHERMAN ACT LIABILITY FOR
STATE LICENSING BOARDS IS A GOOD IDEA ............................ 1131
A. Antitrust Liability for Professional Licensing:
An Economic Standard for Economic Harm................................... 1131
1. Sherman Act Policy and the Competitive Harm of
Licensing: A Close Fit ....................................................... 1132
2. Constitutional Suits and Their Limited Ability to
Protect Consumers ............................................................1134

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B. Antitrust Federalism: Its Modern Justifications and Applicability to
Sherman Act Liability for Licensing Boards....................................1136
1. The Parker Debate: Accountability Is Key ...........................1136
2. State Licensing Boards: Self-Interested and
Unaccountable Consortiums of Competitors .......................1139
IV. THE MECHANICS OF ANTITRUST LIABILITY FOR STATE
LICENSING BOARDS ................................................................ 1144
A. Imagining a New Regime ........................................................... 1145
1. The Standard: Rule of Reason as Applied to Licensing ...... 1145
2. The Parties: Standing to Sue and Available Damages ......... 1150
3. The Defense: Boards as Single Entities? ............................. 1153
B. Possible State Responses and Their Likely Effects ............................ 1154
1. Actively Supervising Board Activity .................................. 1154
2. Changing Board Composition ............................................ 1155
3. Moving Licensing to the Interior of State Government ...... 1155
CONCLUSION ................................................................................. 1156
APPENDIX: FLORIDA ...................................................................... 1157
APPENDIX: TENNESSEE ................................................................. 1161

“All professions are conspiracies against the laity.”
George Bernard Shaw
The Doctor’s Dilemma (1906)
INTRODUCTION
The Sherman Act has had one principal success: cartels and their smokefilled rooms, where competitors agree to waste economic resources for their
own industry’s benefit, are unambiguously and uncontroversially illegal in
the United States1—unless that industry is a profession and that cartel is a
state licensing board. Although often overlooked, licensing boards have
become a massive exception to the Act’s ban on cartels.
Licensing boards are largely dominated by active members of their
respective industries who meet to agree on ways to limit the entry of new

1 15 U.S.C. §§ 1–7 (2012) (“Every contract, combination in the form of trust or otherwise, or
conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is
declared to be illegal.”). The loud and lively debate about the Sherman Act’s reach beyond this
uncontroversial core tends to obscure this simple yet powerful success of § 1.

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competitors.2 Some boards use their power to limit price competition or
restrict the quantity of services available.3 But professional boards, unlike
cartels in commodities or consumer products, are sanctioned by the state—
even considered part of the state4—and so are often assumed to operate
outside the reach of the Sherman Act under a line of Supreme Court cases
starting with Parker v. Brown.5
When only about five percent of American workers were subject to licensing
requirements during the 1950s,6 the anticompetitive effect of these statesanctioned cartels was relatively small. Now, however, nearly a third of
American workers need a state license to perform their job legally, and this
trend toward licensing is continuing.7 The service sector—the most likely to
be covered by licensing—has grown enormously, with its share of nonfarm
employment growing from roughly 40% in 1950 to over 60% in 2007.8 Some
recent additions to the list of professions requiring licenses include locksmiths, 9 beekeepers, 10 auctioneers, 11 interior designers, 12 fortune tellers, 13
tour guides,14 and shampooers.15
Many boards have abused their power to insulate incumbents from competition. Cosmetologists, for example, are required, on average, to have ten
2 See Morris M. Kleiner, Occupational Licensing, 14 J. ECON. PERSP. 189, 191 (2000) (defining
occupational licensing and explaining the composition of state licensing boards); see also infra text
accompanying notes 49-50 and Appendix.
3 See MORRIS M. KLEINER, LICENSING OCCUPATIONS: ENSURING QUALITY OR RESTRICTING COMPETITION? 65-96 (2006) (discussing occupational regulations’ ability to restrict
supply and the implications of practitioner earnings).
4 See Benson v. Ariz. St. Bd. of Dental Exam’rs, 673 F.2d 272, 275 (9th Cir. 1982) (explaining
that the Board of Dental Examiners is “a state agency” due to state statutes that, among other
things, “establish the Board”).
5 317 U.S. 341, 351 (1943) (“The Sherman Act makes no mention of the state as such, and
gives no hint that it was intended to restrain state action or official action directed by a state.”).
6 KLEINER, supra note 3, at 1.
7 See Morris M. Kleiner & Alan B. Krueger, Analyzing the Extent and Influence of Occupational
Licensing on the Labor Market, 31 J. LAB. ECON. S173, S198 (2013) (estimating that, as of 2008, 29%
of U.S. workers were licensed and noting that licensing is a growing phenomenon in the U.S.
economy).
8 See Marlene A. Lee & Mark Mather, U.S. Labor Force Trends, POPULATION BULL., June
2008, at 3, 7, available at http://www.prb.org/pdf08/63.2uslabor.pdf.
9 Stephanie Simon, A License to Shampoo: Jobs Needing State Approval Rise, WALL ST. J., Feb.
7, 2011, at A1.
10 Walter Gellhorn, The Abuse of Occupational Licensing, 44 U. CHI. L. R EV. 6, 6 (1976).
11 Dick Carpenter & Lisa Knepper, Op-Ed., Do Barbers Really Need a License?, WALL ST. J.,
May 11, 2012, at A13
12 Clark Neily, Op-Ed., Watch Out for that Pillow, WALL ST. J., Apr. 1, 2008, at A17.
13 Emily Sweeney, Town Rebuffs Fortune-Teller, Citing Residency Law, BOS. GLOBE, May 9,
2004, at W1.
14 J. Freedom du Lac, Regulating the Right to Talk to Customers?, WASH. POST, Sept. 27, 2010, at B1.
15 Simon, supra note 9.

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times as many days of training as Emergency Medical Technicians (EMT)
must have. 16 In Alabama, unlicensed practice of interior design was a
criminal offense until 2007.17 In Oklahoma, one must take a year of coursework on funeral service (including embalming and grief counseling) just to
sell a casket, while burial without a casket at all is perfectly legal.18 Even
traditionally licensed occupations, the so-called learned professions, use
licensing restrictions to repress competition. For example, all states impose
some restrictions on lawyer advertising, and some even prevent truthful
claims about low prices.19 In many states, dentists cannot legally employ
more than two hygienists each, a restriction that raises demand for dentists.20 And in some states, nurse practitioners must be supervised by a
physician,21 even though studies show that nurse practitioners and physicians
provide equivalent quality of care where their practices overlap.22

16 See DICK M. CARPENTER II ET AL., INST. FOR JUSTICE, LICENSE TO WORK: A NATIONAL
STUDY OF BURDENS FROM OCCUPATIONAL LICENSING 29 (2012) [hereinafter LICENSE TO
WORK], available at http://www.ij.org/images/pdf_folder/economic_liberty/occupational_licensing/
licensetowork.pdf (reporting that states require an average of 33 days of training for EMTs, but 372
days for cosmetologists). Arkansas, for instance, requires 28 days of training for EMTs and 350 days
for cosmetologists. Id. at 42-43.
17 Neily, supra note 12.
18 See Powers v. Harris, 379 F.3d 1208, 1211-13 (10th Cir. 2004) (outlining the regulatory
scheme for the funeral industry in Oklahoma).
19 See LEXISNEXIS, 50 STATE SURVEYS OF STATUTES & REGULATIONS : ATTORNEY
ADVERTISING (Mar. 2013) (“Every state regulates the advertising of its attorneys.”); see also
OHIO RULES OF PROF’L CONDUCT R. 7.1 cmt. 4 (2012) (“Characterization of rates or fees
chargeable by the lawyer or law firm such as ‘cut rate,’ ‘lowest,’ ‘giveaway,’ ‘below cost,’ ‘discount,’
or ‘special’ is misleading.”).
20 See J. NELLIE LIANG & JONATHAN D. OGUR, BUREAU OF ECON. STAFF REP. TO
THE F.T.C., RESTRICTIONS ON DENTAL AUXILIARIES: AN ECONOMIC POLICY ANALYSIS 6
& n.6 (1987), available at http://www.ftc.gov/sites/default/files/documents/reports/restrictionsdental-auxiliaries/232032.pdf (noting that restrictions generally allow dentists to employ between
one and three hygienists).
21 See SHARON CHRISTIAN & CATHERINE DOWER, CAL. HEALTHCARE FOUND.,
SCOPE OF PRACTICE LAWS IN HEALTH CARE: RETHINKING THE ROLE OF NURSE
PRACTITIONERS 3 (2008), available at http://www.chcf.org/~/media/MEDIA%20LIBRARY%
20Files/PDF/S/PDF%20ScopeOf PracticeLawsNursePractitionersIB.pdf (noting that thirty states
require at least some degree of physician supervision or collaboration); Tracy A. Klein, Scope of
Practice and the Nurse Practitioner: Independent, Collaboration, Supervision: How Is Your Scope
Regulated?, MEDSCAPE, http://www.medscape.org/viewarticle/506277_5 (last updated Oct. 19,
2007) (“[Twenty-three] states require no physician involvement for the licensed [Nurse Practitioner]
to diagnose and treat, while the remainder of states require some degree of written or formal
physician involvement in [Nurse Practitioner] practice.”).
22 CHRISTIAN & DOWER, supra note 21, at 6 (listing multiple studies finding no material
difference in quality of care); Morris M. Kleiner et al., Relaxing Occupational Licensing Requirements: Analyzing Wages and Prices for a Medical Service (Nat’l Bureau of Econ. Research, Working
Paper No. 19906, 2014), available at http://www.nber.org/papers/w19906.

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Labor economists have shown that the net effect of licensing on quality
is equivocal.23 What is not equivocal, according to their empirical studies, is
the effect of licensing on consumer prices. Morris Kleiner, the leading
economist studying the effects of licensing on price and quality of service,
estimates that licensing costs consumers $116 to $139 billon every year.24
And consumers are not the only potential losers, since more licensing means
fewer jobs.25 All this said, we do not claim that all licensing rules are
harmful. Some no doubt improve service quality and public safety enough
to justify the costs. Our point is that many do not.
Thanks in part to a spate of stories in mainstream news outlets like The
New York Times, 26 The Wall Street Journal, 27 NPR, 28 and even The Daily
Show,29 politicians are taking notice of the growing problem with licensing.
In early 2013, Massachusetts Governor Deval Patrick announced a set of
“common-sense changes in the Division of Professional Licensure” designed
to improve the business climate in the state. 30 Governor Patrick only
proposed modest changes,31 perhaps because an attempt at more dramatic
licensing reform by Florida Governor Rick Scott failed in 2011.32 The White
23

See CAROLYN COX & SUSAN FOSTER, BUREAU OF ECON., FTC, THE COSTS AND BENEOCCUPATIONAL REGULATION 21-27, 40 (1990), available at http://www.ramblemuse.com/
articles/cox_foster.pdf (“The empirical findings indicate that mandatory entry requirements of
licensing cannot necessarily be relied upon to raise the quality of service or decrease the overprescription of treatment.”).
24 KLEINER, supra note 3, at 115.
25 See Kleiner & Krueger, supra note 7, at S178 (noting studies that have found that licensing
restricts the supply of workers).
26 See Jacob Goldstein, So You Think You Can Be a Hair Braider..., N.Y. TIMES MAG., June 17,
2012, at 20 (discussing the burdens of licensing requirements on certain low- to moderate-income
occupations).
27 See Simon, supra note 9 (citing the efforts of cat groomers, tattoo artists, tree trimmers,
and other specialists to increase regulations in their fields).
28 Why It’s Illegal to Braid Hair Without a License, NPR ( June 12, 2012), http://www.npr.org/
blogs/money/2012/06/21/154826233/why-its-illegal-to-braid-without-a-license (telling the story of
one Utah woman who was forced to abandon her business).
29 The Braidy Bill, DAILY SHOW WITH JON S TEWART ( June 3, 2004), http://
www.thedailyshow.com/watch/thu-june-3-2004/the-braidy-bill (parodying the potential harm from
“illegal braiders”).
30 Press Release, Massachusetts Office of the Governor, Governor Patrick Builds on Regulatory Reform Successes; Files Legislation to Improve Business Climate for Licensed Professionals
( Jan. 7, 2013), http://www.mass.gov/governor/pressoffice/pressreleases/2013/0107-regulatory-reform.html.
31 Governor Patrick proposed merging the electrology and barbering boards and eliminating
the Board of Radio and Television Technicians. Id.
32 See Chip Mellor & Dick Carpenter, Op-Ed., Want Jobs? Cut Local Regulations, WALL
ST. J., July 28, 2011, at A15 (criticizing the Florida legislature for rejecting Governor Scott’s
proposal to deregulate twenty occupations). Michigan Governor Rick Snyder has made similar
proposals. See Carpenter & Knepper, supra note 11 (referencing Governor Snyder’s April 2012
proposal to abolish eighteen occupational licenses and eliminate nine licensing boards).
FITS OF

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House has also taken a stand against excessive licensing. In 2011, President
Obama named Alan Krueger, a labor economist whose empirical work
highlights some of the anticompetitive effects of licensing, as Chair of the
President’s Council of Economic Advisers. 33 Krueger has written that
licensing has gone too far and become a way to restrict labor supply.34 First
Lady Michelle Obama has successfully lobbied twenty-two states to approve
legislation that recognizes out-of-state licenses held by military spouses as a
part of her “Joining Forces” initiative.35 Even Congress has started to pay
attention. In 2010, Congress commissioned a report on the effect of
healthcare worker licensing on the affordability of care; the report advised
streamlining license requirements and allowing for interstate reciprocity.36
Despite wide recognition of the potential for economic harm associated
with allowing professions to control their licensing rules and define the
scope of their art, real reform is elusive. Part of the reason is that, in the
professional licensing context, the most powerful legal tool against anticompetitive activity appears unavailable. Most jurisdictions interpret antitrust
federalism to shield licensing boards from the Sherman Act despite the fact
that the boards often look and act like § 1’s principal target. Other avenues
for reform, including constitutional suits asserting the rights of would-be
professionals, have done little to slow or reverse the trend toward cartelized
labor markets.
Last year, in North Carolina State Board of Dental Examiners v. FTC,37 the
Fourth Circuit upheld an FTC decision finding a state licensing board
liable for Sherman Act abuses, becoming the only appellate court to expose
a licensing board to antitrust scrutiny and thereby creating a circuit split.
The case is a step in the right direction, but it does not go far enough
because the court could be seen as relying on the method of appointment to

33 See Press Release, White House, Remarks by the President in Announcing his Nomination
of Alan Krueger for Chair of CEA (Aug. 29, 2011), http://www.whitehouse.gov/the-pressoffice/2011/08/29/remarks-president-announcing-his-nomination-alan-krueger-chair-cea.
34 See, e.g., Alan B. Krueger, Do You Need a License to Earn a Living? You Might Be Surprised at
the Answer, N.Y. TIMES (Mar. 2, 2006), http://www.nytimes.com/2006/03/02/business/yourmoney/
02scene.html.
35 See EXEC. OFFICE OF THE PRESIDENT, MILITARY SKILLS FOR AMERICA’S FUTURE: LEVERAGING MILITARY SERVICE AND EXPERIENCE TO PUT VETERANS AND
MILITARY SPOUSES BACK TO WORK 20-21 (2012), available at http://www.whitehouse.gov/
sites/default/files/docs/veterans_report_ 5 -31-2012.pdf (detailing the scope of the problem and the
White House’s response).
36 U.S. DEP’T OF HEALTH & HUMAN SERVS., HEALTH LICENSING BOARD REPORT TO
CONGRESS 31 (2010), available at http://www.hrsa.gov/ruralhealth/about/telehealth/licenserpt10.pdf.
37 717 F.3d 359 (4th Cir. 2013).

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the board—not just on the identity of its members as competitors.38 The
Supreme Court has now granted certiorari; we urge the Court to take this
opportunity to hold boards composed of competitors to the strictest version
of its test for state action immunity, regardless of how the board’s members
are appointed. In particular, the Court should make clear that, just like the
wine producers in Midcal, competitor-dominated boards that regulate their
own competition and the entry of competitors will be treated as private
actors and subject to antitrust review unless their acts are both (1) pursuant
to the state’s clearly articulated purpose to displace competition and (2)
subject to active state supervision.39 Where a board fails either prong of this
test, courts should subject the board’s actions to antitrust scrutiny under a
modified rule of reason.
Our proposal recognizes the potential benefits of licensing—preventing
charlatanism and injury to the public—but rejects the idea that the potential
benefits justify total antitrust immunity for licensing. We advocate for an
approach that uses the potential benefits to influence how restrictions will
be reviewed, not whether they will be reviewed at all. Although our proposal
involves a shift in the dominant interpretation of state action doctrine, it
does not require any change in Supreme Court precedent, and the Supreme
38 The majority in North Carolina State Board of Dental Examiners agreed 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.” Id. at 368. The majority did not explicitly
decide whether a board should be treated as private actors if a “decisive coalition . . . is made up of
participants in the regulated market” but chosen by the governor, for example, as is true of the vast
majority of boards we survey in our Appendix. And, in fact, elsewhere in the opinion, the majority
leaves out the method of appointment. Id. at 375. (“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 . . . .”). Judge Barbara Keenan, in contrast, makes clear in her concurrence that, as
she understands the court’s decision, the selfish financial interest of the board members as market
participants would not alone make them private actors subject to antitrust review; instead,
according to the concurrence, the court’s holding “turn[ed] on the fact that the members of the
Board, who are market participants, are elected by other private participants.” Id. at 376 (Keenan,
J., concurring).
Our reading, however, is that the majority was careful not to decide a case that was not before
them, such as a case in which a financially interested board is appointed by a governor, rather than
elected by other financially interested market participants. If the majority had decided that the
dental board’s method of appointment were critical, the majority could have been explicit about
that and thus eliminated the need for a concurrence. The best reading is that the majority simply
did not decide this important question because it did not need to in the case before the court. That
said, under the Fourth Circuit’s opinion in North Carolina State Board of Dental Examiners, there is
ample room for boards to argue that they are not private actors so long as they are appointed by
the state without any election.
39 Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 105 (1980) (explaining the two standards—namely, state articulation and supervision—for antitrust immunity).

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Court’s unanimous opinion last term in FTC v. Phoebe Putney Health System,
Inc. demonstrated its appetite for stopping cartel-like abuses of antitrust
immunity.40 The time is right to take action.
This Article proceeds in five parts. Part I details the expansion of licensing
in the United States and gives examples of its excesses. Part II explains how
the current crisis arose, first summarizing the economics of licensing and
then surveying the legal landscape that allowed its relatively unfettered
expansion. Part III makes our normative case for imposing Sherman Act
liability on state licensing boards, arguing that there is a logical fit between
antitrust policy and the economic harm of heavy-handed licensing requirements. We also address antitrust federalism, claiming that deference to state
decisionmaking is especially difficult to justify in the context of occupational
licensing. Part IV details the mechanics of the alternative system we propose. We suggest that in the licensing context, the rule of reason should be
modified to allow defendants to justify their restraint with the argument
that less competition (of certain kinds) benefits consumers in the regulated
labor market because it will improve public safety and the quality of service
provided, an argument that is traditionally out of bounds in § 1 cases. Part
40 133 S. Ct. 1003 (2013). In Phoebe Putney, a local government entity (the Hospital Authority
of Albany-Dougherty County) purchased a hospital, changing the local market from one with two
competing hospitals to one with a single monopolistic provider of acute-care hospital services. The
purchase was possible because the state of Georgia had granted the Hospital Authority a variety of
powers, including the power to buy hospitals. Because Town of Hallie v. City of Eau Claire
previously held that sub-state governmental entities do not require supervision to trigger antitrust
immunity, 471 U.S. 34, 43 (1985), the question in Phoebe Putney was whether the state had clearly
articulated a policy of displacing competition through an anticompetitive merger when it granted
the Hospital Authority the power to buy hospitals. 133 S. Ct. at 1009. The Court held that the
state had not done so, reasoning that although the Authority was entrusted with providing medical
care and acquiring the means to provide medical care (which may involve purchasing hospitals),
those powers can be exercised without raising competitive issues. Id. at 1012. Therefore, the grant
of those powers did not implicitly and necessarily contemplate anticompetitive use. Id. at 1014.
The Court also emphasized that state action exemptions should be disfavored, quoting its prior
language from FTC v. Ticor Title Insurance Co., to this effect. Id. at 1010 (“[S]tate-action immunity
is disfavored, much as are repeals by implication.” (quoting FTC v. Ticor Title Ins. Co., 504 U.S.
621, 636 (1992))).
To the extent that licensing board cases are about supervision, which is our focus here, Phoebe
Putney’s relevance to state action immunity for licensing boards is indirect. The case mainly
demonstrates an appetite for narrow readings of the state action doctrine and a reiteration of
Ticor’s language that state action immunities are disfavored. We argue, however, that the FTC’s
success in arguing that the “clear articulation” prong was not met would be much more difficult in
the context of professional licensing. Unlike the authority to purchase hospitals, the state-granted
ability to restrict professional entry and practice will almost always have an anticompetitive effect.
Thus, we do not see Phoebe Putney as widening the path for challenges to licensing board
immunity. Rather, the battleground in the case of occupational boards remains the supervision
prong under Midcal. Still, Phoebe Putney is in the spirit of narrowing state action immunity and
reiterates that state action immunity is disfavored. In that sense, it accords with our thesis.

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IV then discusses the parties, damages, and defenses that would be involved
in a licensing board suit and speculates about likely state responses to the
new system.
I. OCCUPATIONAL LICENSING BOARDS: THE NEW CARTELS
Once limited to a few learned professions, licensing is now required for
over 800 occupations.41 And once limited to minimum educational requirements and entry exams, licensing board restrictions are now a vast, complex
web of anticompetitive rules and regulations. The explosion of licensing and
the tangle of restrictions it has created should worry anyone who believes
that fair competition is essential to national economic health.
A. The Scope of Professional Licensing: Big and Getting Bigger
State-level occupational licensing is on the rise. In fact, it has eclipsed
unionization as the dominant organizing force of the U.S. labor market.
While unions once claimed 30% of the country’s working population, that
figure has since shrunk to below 15%.42 Over the same period of time, the
number of workers subject to state-level licensing requirements has doubled;
today, 29% of the U.S. workforce is licensed and 6% is certified by the
government.43 The trend has important ramifications. Conservative estimates suggest that licensing raises consumer prices by 15%.44 There is also
evidence that professional licensing increases the wealth gap; it tends to
raise the wages of those already in high-income occupations45 while harming
low-income consumers who cannot afford the inflated prices.
The expansion of occupational licensing has at least two causes. First, as
the U.S. economy shifted away from manufacturing and toward service
industries, the number of workers in licensed professions swelled, accounting
for a greater proportion of the workforce. Second, the number of licensed
41
42
43
44

KLEINER, supra note 3, at 5.
Kleiner, supra note 2, at 190.
Kleiner & Krueger, supra note 7, at S176, S177 fig.1, S182.
Id. at S179 (“[E]stimates of . . . state licensing’s influence on wages with standard labor
market controls show a range from 10% to 15% for higher wages associated with occupational
licensing.”).
45 See Kleiner, supra note 2, at 194-96 (calculating the extent to which licensing affects wages);
see also Timothy R. Muzondo & Bohumir Pazderka, Occupational Licensing and Professional Incomes
in Canada, 13 CAN. J. ECON. 659, 666 (1980) (performing a regression analysis and finding that
licensing restrictions confer benefits to employees in educated professions); Robert J. Thornton &
Andrew R. Weintraub, Licensing in the Barbering Profession, 32 INDUS. & LAB. REL. REV. 242, 248
(1979) (finding that minimum education requirements may “exclud[e] significant numbers from
entering the trade”).

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professions has increased. Where licensing was once reserved for lawyers,
doctors, and other “learned professionals,” now floral designers,46 fortune
tellers, and taxidermists47 are among the jobs that, at least in some states,
require licensing. Licensing requirements are ubiquitous, although the
extent of regulation differs dramatically between states. For example,
Massachusetts licenses almost three times as many occupations as Rhode
Island does.48
Since boards are typically dominated by active members of the very profession that they are tasked with regulating, this dramatic shift toward
licensing has put roughly a third of American workers under a regime of
self-regulation. Our study of the composition and powers of all occupational
licensing boards in Florida and Tennessee revealed that license-holders
active in the profession have a majority on 90% of boards in Florida and
93% of boards in Tennessee.49 Our empirical findings, which we report in
the Appendix, corroborate the anecdotal references to “practitioner dominance” in the legal and economic scholarship on occupational boards.50
Given this composition, it is not surprising that boards often succumb to

46 See Meadows v. Odom, 360 F. Supp. 2d 811, 823 (M.D. La. 2005), vacated as moot, 198 F.
App’x 348 (5th Cir. 2006) (noting Louisiana’s licensing requirement in the floral profession).
47 CARPENTER ET AL., supra note 16, at 10 tbl.1 (noting that twenty-six states require licensing
for taxidermists).
48 See Kleiner, supra note 2, at 199 (suggesting that state-by-state comparisons are one good
way to structure economic analysis of licensing); see also Charles J. Wheelan, An Empirical
Examination of the Political Economy of Occupational Licensure 100 (Mar. 1998) (unpublished
Ph.D. dissertation, University of Chicago) (on file with University of Chicago) (noting that the
total number of professions that a state licenses is an obvious indicator of a state’s proclivity to
license).
49 For a table reporting our findings on the composition and rulemaking authority of boards in
Florida and Tennessee, see Appendix.
50 See, e.g., Jarod M. Bona, The Antitrust Implications of Licensed Occupations Choosing Their
Own Exclusive Jurisdiction, 5 U. ST. THOMAS J.L. & PUB. POL’Y 28, 45 (2011) (noting that
individuals have strong incentives “to expand the reach of their occupation to the detriment of
both consumers and other occupations”); Clark C. Havighurst, Contesting Anticompetitive Actions
Taken in the Name of the State: State Action Immunity and Health Care Markets, 31 J. HEALTH POL.
POL’Y & L. 587, 596 (2006) (observing that board members are typically chosen from lists of
nominees from within the profession itself, with one or two outside members); Kleiner, supra note
2, at 191 (“Generally, members of the occupation dominate the licensing boards.”); see also COX &
FOSTER, supra note 23, at 36-38 (conceding that members of the profession have valuable industry
knowledge but acknowledging the accompanying dangers); Jared Ben Bobrow, Note, Antitrust
Immunity for State Agencies: A Proposed Standard, 85 COLUM. L. REV. 1484, 1496 (1985) (noting
that some state statutes require licensing board members to have experience in the industry);
J.R.R. II, Note, Due Process Limitations on Occupational Licensing, 59 VA. L. REV. 1097, 1118 (1973)
(“[S]eventy-five percent of all occupational licensing boards are made up exclusively of practitioners
licensed in the respective occupations.”).

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the temptation of self-dealing, creating regulations to insulate incumbents
rather than to ensure public welfare.
B. The Anticompetitive Potential of Occupational Licensing
This Section illustrates the anticompetitive potential of licensing regulations as well as the breadth of occupations subject to licensing. A complete
picture of state licensing activity is impossible, as there are thousands of
professional boards operating in the United States. But a few snapshots
suffice to show that the theoretical problems of self-regulation are all too
real in practice.
1. The New “Professions”
Jobs once thought to be low-skill and low-stakes are increasingly coming
under state regulation. In Louisiana, for example, all flower arranging must
be supervised by a licensed florist.51 So when flower shop owner Monique
Chauvin’s only licensed employee passed away, she found her business in
violation of state law.52 Although Chauvin had run her New Orleans shop
successfully for over ten years and her arrangements were frequently
featured in magazines, she could have been subject to fines and even
imprisonment if she continued to operate. 53 One should note that the
Louisiana Horticulture Commission uses money collected from the licensing
scheme to fund enforcement actions against unlicensed practitioners, rather
than using its authority to pursue complaints or alleged violations of its
quality and safety requirements.54 Constitutional challenges against Louisiana’s licensing scheme have proven unsuccessful. A federal court recently
upheld the scheme, persuaded by an expert who claimed that licensing
51 LA. REV. STAT . ANN. § 3:3808(B)(1) (2010) (“A retail florist’s license authorizes the
holder thereof to arrange or supervise the arrangement of floral designs which include living or
freshly cut plant materials and to sell at retail floral designs, cut flowers, and ornamental plants in
pots normally and customarily sold by florists.”).
52 See Freeing Louisiana Florists: Licensing Law is Blooming Nonsense, INST. JUST., http://www.ij.org/
freeing-louisiana-florists-licensing-law-is-blooming-nonsense (last visited Mar. 22, 2014) (telling
Monique Chauvin’s story as an example of licensing gone too far).
53 Id.
54 The Louisiana Horticulture Commission governs licensure for landscape architects, landscape horticulturists, landscape irrigation contractors, arborists, and florists. The Commission held
fourteen meetings between March 2008 and December 2011 and considered sixty-four cases. In
sixty-two of those cases, the alleged infraction was practicing without a license. In only two cases
did the Commission address violations of substantive rules governing the practice of horticulture.
For board meeting minutes, see Horticulture Commission Meeting Minutes, ST. LA. BOARDS &
COMMISSIONS, https://wwwprd.doa.louisiana.gov/boardsandcommissions/viewMeetingMinutes.
cfm?board=475 (last visited Mar. 22, 2014).

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“prevents the public from having any injury” from exposed picks, broken
wires, or infected flowers.55 But the court also noted that the regulation
could stand even without a public health justification—“industry protectionism” was itself a legitimate state interest.56
As another example, Minnesota (along with several other states57) now
defines the filing of horse teeth as the practice of veterinary medicine, a
move that has redefined an old vocation as a regulated profession subject to
restricted entry and practice rules. This put Chris Johnson, a “teeth-floater”
for hire, out of work. Although his family had practiced this routine,
noninvasive, and painless procedure58 for satisfied customers for generations, the Minnesota Veterinary Board sent Johnson a cease-and-desist
letter. Since his business did not employ veterinarians to supervise the teeth
floating, continued operation would be considered an unlicensed practice of
veterinary medicine, which carries severe penalties in Minnesota. Johnson
lost a constitutional challenge against the rule.59
Several states even prohibit the sale of caskets by anyone other than
licensed funeral directors. 60 This restriction outlawed businesses like a
Benedictine monks’ woodshop at Saint Joseph Abbey in Louisiana.61 For
years, the monks had made simple pine coffins to bury their departed. But
when they opened their shop to the public to help cover the costs of their
healthcare, the State Board of Embalmers and Funeral Directors (a body
with only one member from outside the industry62) found the competition
unwelcome. It served the monks with a cease-and-desist letter, threatening
jail time and a fine.63 The monks never handled bodies or planned funeral
55 Meadows v. Odom, 360 F. Supp. 2d 811, 824 (M.D. La. 2005), vacated as moot, 198 F. App’x
348 (5th Cir. 2006).
56 Id. at 824-25.
57 See State Summary Report: Authority of Veterinary Technicians and Other Non-Veterinarians to
Perform Dental Procedures, AM. MED. ASS’N, https://www.avma.org/advocacy/stateandlocal/pages/
sr-dental-procedures.aspx (last updated Oct. 2013) (listing each state’s scope of practice for nonveterinarians).
58 A domesticated horse’s modern diet is not coarse enough to wear down its teeth naturally,
which never stop growing. Horse teeth therefore require periodic filing, or “floating.” For more
information on Johnson’s story and the industry generally, see Challenging Barriers to Economic
Opportunity: Challenging Minnesota’s Occupational Licensing of Horse Teeth Floaters, INST. JUST.,
http://www.ij.org/minnesota-horse-teeth-floating-background (last visited Mar 22, 2014).
59 Johnson v. Minn. Bd. of Veterinary Med., No. 27-CV-06-16914 (Minn. Dist. Ct. 4th Judicial Dist. June 25, 2008).
60 See, e.g., LA. REV. STAT. ANN. § 37:831(35)-(36) (2007) (defining “funeral director” under
Louisiana law as one with a valid license to perform all aspects of “funeral directing,” which
includes the sale of caskets and other funeral merchandise).
61 See St. Joseph Abbey v. Castille, 700 F.3d 154 (5th Cir. 2012).
62 Id. at 159.
63 See LA. REV. STAT. ANN. § 37:850 (2007).

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services. 64 They simply drop-shipped the empty caskets to mortuaries,
offering an inexpensive and simple alternative to the extravagant caskets
typically sold at funeral homes. And although Louisiana restricts the sale of
caskets, it does not regulate the design of caskets or even require that bodies
be buried in a casket at all.65
For a final example, we turn to the beauty industry. State cosmetology
boards have responded to competition from two increasingly popular
practices—African-style hair braiding and eyebrow threading—by demanding
that braiders and threaders obtain cosmetology licenses before they can
lawfully practice their craft.66 Neither practice requires sharp instruments or
chemicals, and neither involves a significant risk of infection. Now many
state cosmetology boards want braiders and threaders to attend two years of
school (with a price tag of $16,000) to learn cosmetology procedures and
techniques irrelevant to their practice, pass an exam, and pay yearly dues to
maintain a license in cosmetology—a profession they have no interest in
practicing.67
For Texas entrepreneur Ashish Patel, this meant shuttering his successful brow threading business and firing his employees after the state upheld
the licensing requirements against his constitutional challenge.68 For hair
braider Amber Starks, it means crossing the border daily from her native
Oregon, where hair braiders are explicitly required to have a cosmetology
license, to Washington, where they are not.69 The majority of her clientele
come from Oregon as well, but they make the trip over the border to get
their preferred hairstyle at a price they can afford.70 The millions of customers that live far away from the eleven states that exempt hair braiders
from the cosmetology license requirements71 must either find a practitioner
willing to flout the board or pay cartel prices.

64
65

St. Joseph Abbey, 700 F.3d at 157.
Id. After several years of litigation, the monks finally won a constitutional challenge
against the restriction. Id.
66 See Goldstein, supra note 26, at 20 (describing the challenges that an African-style hair
braider faced when seeking an exemption from Utah’s licensing requirements).
67 Id.
68 See Monica Luhar, Threading Licensing in Texas Tied Up in Debate, Lawsuit, INDIA WEST,
Mar. 30, 2012, at B1, available at http://indiawest.com/news/3739-Threading-Licensing-in-TexasTied-Up-in-Debate—Lawsuit.html (discussing a lawsuit filed by eight plaintiffs against the Texas
Department of Licensing and Regulation).
69 See Anna Griffin, Braiding African American Hair at Center of Overregulation Battle in Oregon,
THE OREGONIAN (Aug. 11, 2012), http://www.oregonlive.com/politics/index.ssf/2012/08/braiding_
african_american_hair.html (describing Starks’s challenge to an Oregon law).
70 Id.
71 Id.

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2. Old Professions, New Restrictions
For some professions, licensing provides such an obvious public benefit
that barriers to entry and regulation of practice are accepted as necessary
evils. But while some professions may require restrictions to ensure quality
and public safety, a close examination of restrictions in those professions
suggests that those boards, too, have abused their ability to self-regulate.
For example, in many states, dental licensing boards restrict the number
of hygienists a dentist can hire to two.72 The anticompetitive effects of this
restriction are well known; in 1987, the FTC published a policy paper
showing that dentist-to-hygienist ratios tend to raise prices but not quality.73
According to some dentists, the ratio restrictions are necessary to prevent
“hygiene mills”—practices that offer low-cost dental cleanings without
advanced dental services like exams, diagnosis, and surgery.74 The American
Dental Association (ADA) calls such practices unsafe, but since dental
hygienists must themselves possess a license requiring extensive education
on safe cleaning techniques,75 it seems clear that the main threat these
“mills” pose is to dentists themselves, in the form of reduced demand for
their services. At least one state has taken the hygienist restrictions further.
In 2001, the South Carolina Board of Dentistry required that exams performed by a licensed dentist accompany all cleanings.76 The rule frustrated
the state legislature’s attempt to extend in-school dental cleanings to rural
and other underserved children.
Similarly, the advent of nurse practitioners and physician assistants has
ignited a turf war between these “physician extenders” and doctors.77 Nurse
practitioners and physician assistants are trained in some of the same skills
72 LIANG & OGUR, supra note 20, at 6 (describing the increase in the number of states with
such restrictions since 1970).
73 See id. at 44-47 (estimating that, in 1982, the deadweight loss from the restrictions was
$680-710 million in the sixteen states that imposed such restrictions); see also Morris M. Kleiner &
Robert T. Kudrle, Does Regulation Affect Economic Outcomes? The Case of Dentistry, 43 J.L. & ECON.
547, 549 (2000) (showing empirically that, at least for uninsured individuals, stricter licensing
restrictions for dentists has only very little impact on quality).
74 See VA. DEP’T OF PLANNING & BUDGET, REGULATIONS GOVERNING THE PRACTICE OF
DENTISTRY AND DENTAL HYGIENE DEPARTMENT OF HEALTH PROFESSIONS, 18 VAC 60-20, at
10-11 (Jan. 22, 2002), available at http://townhall.virginia.gov/L/GetFile.cfm?File=C:%5CTownHall%
5Cdocroot%5C21%5C1112%5C1954%5Cdhp1954%20dentistry%20(dental%20hygienists)-b.pdf.
75 LIANG & OGUR , supra note 20, at 4-5.
76 S.C. Bd. of Dentistry, 138 F.T.C. 229, 230 (2004) (stating that the legislature amended its
law to require dental hygienists to work “under general supervision”).
77 Carl B. Meyer, Science and Law: The Quest for the Neutral Expert Witness. A View from the
Trenches, 12 J. NAT. RESOURCES & ENVTL. L. 35, 49 (1996–1997) (“[I]ntense turf battles have
been fought between . . . doctors and nurse practitioners over the scope of responsibilities of the
parties.”).

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as family practice physicians but need not learn the more advanced skills
essential to obtaining a medical degree. Thus, nurse practitioners’ education
costs less than that of medical doctors, and nurse practitioners’ fees reflect
those cost savings.78 For many procedures, outcome studies reveal that the
extenders’ services are as safe and effective as that of physicians.79 Extenders
have been essential to low-cost convenience clinics like CVS’s MinuteClinics
and public health initiatives aimed at serving low-income individuals with
restricted access to medical care.80
Undoubtedly influenced by powerful lobbying from the American Medical
Association (AMA), twelve states (including more populous states such as
California, Texas, and Florida) require physician supervision over all nurse
practitioner activity. 81 Several states prohibit nurse practitioners from
prescribing medication.82 For the most part, state medical boards, made up
primarily of physicians, hold the reins of competition—and decide the level
of supervision required.
Lawyers, too, use licensing to limit competition. Restrictions on bar entry and rules defining the ethical conduct of lawyers reveal that attorneylicensing bodies have yielded to the temptation of self-dealing. Advertising
restrictions insulate lawyers from competition from other lawyers who can
claim better average outcomes for clients. For example, Alabama requires all
attorney advertising to include the following disclaimer: “No representation
is made that the quality of the legal services to be performed is greater than

78 See Veritas Prep, Should You Go to Medical School or Nursing School?, U.S. NEWS &
WORLD REP. (Aug. 29, 2011), http://usnews.com/education/blogs/medical-school-admissionsdoctor/2011/08/29/should-you-go-to-medical-school-or-nursing-school (describing the educational
differences for nurse practitioners and doctors in terms of time, requirements, costs, and roles).
79 See, e.g., Daniel Trampf & Jeff Oliphant, Licensed Athletic Trainers: A Traditional, Unique,
and Proactive Approach in Wisconsin Sports Medicine, 103 WIS. MED. J. 33, 34 (2004) (“Outcome
studies at the national level prove that patients utilizing athletic trainers demonstrate a significant
reduction in re-injury rates, restricted workdays, and lost work time, and they have a 98% or
greater patient satisfaction rating.”).
80 See Elcha Shain Buckman, The Healthcare Climate and Communication (“The mission of
[corporate-owned retail health] clinics is to . . . relieve the excessive time and costs of unnecessarily using emergency rooms and provide quality care and savings . . . for our millions of
Medicaid, Medicare, underinsured, and uninsured citizens . . . .”), in PATIENT-PROVIDER
COMMUNICATIONS: CARING TO LISTEN 64 (Valerie A. Hart ed., 2010).
81 See State Practice Environment, AM. ASS’N NURSE PRAC., http://www.aanp.org/legislationregulation/state-practice-environment/66-legislation-regulation/state-practice-environment/1380state-practice-by-type (last visited Mar. 22, 2014) (categorizing states by licensing and regulatory
requirements).
82 Id. (explaining that sixteen states and the District of Columbia allow nurse practitioners to
prescribe medication, while the remainder of states place restrictions or prohibitions on nurse
practitioners’ ability to do so).

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the quality of legal services performed by other lawyers.”83 In addition,
many states define title certification and abstraction as the “practice of law,”
which effectively inflates demand for legal services by requiring attorney
representation at all real estate transactions.84 And the state ethical rules
prohibiting “champerty”—selling an interest in the outcome of a lawsuit—
help contingency fee lawyers prop up the price of representation at thirty
percent of the award.85
Moreover, each state has its own bar exam and licensing procedure,
which reduces lawyer mobility across state lines. Segmentation of the
market means that lawyers in each state are insulated from out-of-state
competition, allowing attorneys to charge higher legal fees than they could
in a nationwide market. The justification for this is colorable—a different
exam is necessary for each jurisdiction because of differing state laws—but
it fails to account for practices such as California’s requirement that lawyers
qualified in other states retake the multistate portion of the exam when
sitting for the California bar.86
Licensing bodies have also devised ways to restrict competition among
law schools and among law professors. In 1995, the Department of Justice
(DOJ) challenged the American Bar Association’s (ABA) law school accreditation standards that required schools to pay faculty “compensation . . . comparable with that of other ABA-approved schools,” limited
teaching obligations to eight hours per week, and required schools to provide
professors with paid leaves of absence.87 Although the ABA entered a consent
83
84

ALA. CODE OF PROF’L CONDUCT R. 7.2(e) (West 2013).
The FTC has written letters to state bar associations that are considering whether to implement restrictions on who may participate in loan closings. The FTC has urged bar associations
to avoid “the anticompetitive consequences of rules that prevent nonlawyers from conducting
closings.” FTC OFFICE OF POLICY PLANNING, REPORT OF THE STATE ACTION TASK
FORCE 68 (2003) [hereinafter STATE ACTION TASK FORCE].
85 Max Schanzenbach & David Dana, How Would Third Party Financing Change the Face of
American Tort Litigation? The Role of Agency Costs in the Attorney-Client Relationship 6 (Sept.
14, 2009) (unpublished manuscript) (on file with authors). Professors Dana and Schanzenbach
explore the efficiencies of allowing third-party assignment and highlight the anticompetitive effect
of a rule allowing assignment only to attorneys. They point out that “the emergence of a full
assignment market would undermine the ability of contingency fee firm lawyers to charge as much
as they do”—champerty would create a competitive market for legal claims and likely reduce fees
to below the traditional (and suspiciously stable) thirty percent that contingency lawyers currently
charge. Dana and Schanzenbach argue that this pay cut partially explains why legislation allowing
champerty lacks attorney support. Id. at 5.
86 Thirteen other states also require retaking the MBE (Multistate Bar Examination). Bar
Exam / MBE Transfer, BARRECIPROCITY.COM, http://barreciprocity.com/bar-exam-mbe-transfer
(last visited Mar. 22, 2014).
87 Competitive Impact Statement at 5, United States v. Am. Bar Ass’n, 934 F. Supp. 435
(D.D.C. 1996) (No. 95-1211), available at http://www.justice.gov/atr/cases/f1000/1034.htm.

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decree that eliminated some of the most anticompetitive rules, 88 they
replaced them with standards that have the same anticompetitive effects.89
In the same vein, the ABA allegedly refused to accredit the Massachusetts
School of Law at Andover (MSLA) for pretextual reasons. MSLA sued,
accusing the ABA of enforcing a group boycott and conspiring to monopolize legal education in violation of the Sherman Act.90 The school lost on
state action grounds.91
Another device that many professions now use to restrict competition is
the apprenticeship. Many state licensing boards require apprenticeships for
would-be professionals, essentially guaranteeing incumbents low-cost labor
and raising barriers to entry. 92 For example, most states’ funeral and
mortuary licensing boards require an applicant to complete a one-year
apprenticeship under a licensed funeral director in addition to education
and testing requirements.93 Similarly, some states require lengthy apprenticeships for aspiring psychotherapists. California requires a total of 3000
hours of therapy under the supervision of a licensed therapist at that
therapist’s place of work.94 Interns cannot receive compensation directly
from patients, but rather they can only be paid, if at all, by their supervising
therapist.95 And the statute actually limits supervision to five hours per
week, restraining competition among therapists for interns.96

88
89

Id. at 9-12 (discussing the conditions outlined in the proposed final judgment).
For example, where the 1995 standards limited teaching loads to eight hours per week, the
modern standards emphasize that professors should have enough time, in addition to teaching, for
research; scholarship; “keep[ing] abreast of developments in their specialties”; and fulfilling obligations
to the law school, university community, profession, and the public. ABA, STANDARDS AND RULES
OF PROCEDURE FOR APPROVAL OF LAW SCHOOLS, Standard 404, 34 (2011-2012), available at
http://www.americanbar.org/content/dam/aba/publications/misc/legal_education/Standards/standardsar
chive/2011_2012_standards_and_rules_complete_book.authcheckdam.pdf. Thus, the ABA can make a
compelling argument that any school requiring more than eight hours per week of teaching violates this
provision. For a list of contemporary restrictions on law schools, see generally id.
90 Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass’n, 107 F.3d 1026, 1031 (3d Cir. 1997).
91 Id. at 1038 (granting the ABA Noerr immunity).
92 Wayne McCormack, Economic Substantive Due Process and the Right of Livelihood, 82 KY.
L.J. 397, 410 (1993–1994) (identifying medicine and architecture as examples).
93 For a state-by-state breakdown of license, education, and apprenticeship requirements, see
Licensing Boards and Requirements, NAT’L FUNERAL DIRECTORS ASS’N (Apr. 5, 2011),
http://www.nfda.org/licensing-boards-and-requirements.html.
94 See CAL. BUS. & PROF. CODE § 4980.43 (2014) (detailing requirements that interns or
trainees must complete before applying for licensing examinations).
95 Id. § 4980.43(h).
96 Id. § 4980.43(c)(2).

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II. THE ROAD TO PROFESSIONAL CARTELIZATION
State professional boards arose from a belief that, for some professions,
inexpert practice would be socially inefficient or even dangerous. Licensing
created a mechanism by which the government could prevent incompetent
practitioners from participating in the market. Regulation was justified by
the idea that the public benefits outweighed the costs of higher prices and
reduced economic liberty.97 But unlike other regulatory bodies, licensing
boards became dominantly comprised of practitioners themselves.98 The
theory was that only members of a profession had the expertise necessary to
define efficient rules for entry and practice, but self-dealing is inevitable
when the regulated act as regulators.99 Thus, the board-as-cartel was born.
This Part tells the economic and legal stories of anticompetitive licensing
in the United States. Section A reviews the economic theory behind
licensing, identifying its potential costs and benefits. It explains that
licensing schemes that raise consumer prices and yield little benefit to
anyone other than incumbent practitioners are socially wasteful. But, as
Section B details, state licensing boards have virtually free rein to enact this
socially wasteful regulation.
A. The Economics of Licensing
Licensing has long been an obsession of economists, including Milton
Friedman, who dedicated an entire chapter to the topic in his 1962 book,
Capitalism and Freedom.100 But the past twenty years have witnessed an
explosion of empirical work on the effects of licensing restrictions on
service quality and price, led most prominently by Morris Kleiner at the
University of Minnesota. The work of Kleiner and his contemporaries
reveals a consensus in the academy: a licensing restriction can only be
97 See KLEINER, supra note 3, at 44-48 (discussing various theories of why occupations are
regulated); see also Lee Benham, The Demand for Occupational Licensure (“Licensed occupations
place great emphasis on convincing the larger society of the benefits associated with their
licensure . . . .”), in OCCUPATIONAL LICENSURE AND REGULATION 13, 17 (Simon Rottenberg
ed., 1980); Wheelan, supra note 48, at 6 (discussing the three traditional public-interest justifications for licensing).
98 See supra text accompanying notes 49-50 and Appendix A; see also Kleiner, supra note 2, at
191 (“Generally, members of the occupation dominate the licensing boards.”).
99 See COX & FOSTER, supra note 23, at 36-38 (discussing the impact of self-regulation on
the public).
100 MILTON FRIEDMAN, CAPITALISM AND FREEDOM, ch. IX (1962); see also 1 ADAM
SMITH, THE WEALTH OF NATIONS, bk. I, ch. 10, pt. II (George Bell & Sons 1908) (1776)
(observing that guilds raise earnings by limiting the availability of apprenticeships and lengthening
their duration), cited in KLEINER, supra note 3, at 3.

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justified where it leads to better quality professional services—and for many
restrictions, proof of that enhanced quality is lacking.101
1. The Costs of Licensing: Higher Prices, Lower Quantity
Licensing restrictions can affect price along four dimensions. First, professional licensing can act as a barrier to entry into the profession. 102
Second, licensing can establish rules of practice, like advertising bans, that
restrict competition.103 Third, state boards can suppress interstate competition by recognizing licenses only from their own state.104 Finally, a profession can prevent competition by broadening the definition of its practice,
bringing more potential competitors under its licensing scheme.105 These
“scope-of-practice” limitations tend to oust low-cost competitors that
operate at the fringes of an established profession.106

101 See KLEINER, supra note 3, at 8 (“The major public policy justification for occupational
licensing lies in its role in improving quality of service rendered . . . . [T]he effect of regulation
on the level of service quality is uncertain.”); REBECCA LEBUHN & DAVID A. SWANKIN,
CITIZEN ADVOCACY C TR., REFORMING SCOPES OF PRACTICE 3 (2010) (“The stated purpose
[of state licensing laws] is to ensure consumers that healthcare workers conduct their practices in
areas for which they are properly trained.”); Sidney L. Carroll & Robert J. Gaston, Occupational
Licensing and the Quality of Service, 7 LAW & HUM. BEHAV. 139, 145 (1983) (“[L]icensing has gone
far enough to ensure adequate quality in most places and has gone too far in others.”); Morris M.
Kleiner, Enhancing Quality or Restricting Competition: The Case of Licensing Public School Teachers, 5
U. ST. THOMAS J.L. & PUB. POL’ Y 1, 3, 8 (2010) [hereinafter Kleiner, Enhancing Quality] (“The
general rationale for licensing is the health and safety of consumers. Beyond that, the quality of
service delivery . . . [is] sometimes invoked.”); Morris M. Kleiner & Charles Wheelan,
Occupational Licensing Matters: Wages, Quality and Social Costs, CESIFO DICE REP., Mar. 2010, at
29, 29 (“Of course, these labor market distortions must be weighed against any potential gains to
consumers from the quality improvements in the licensed profession. Yet even the putative
benefits of licensure have come under academic assault.”); Morris M. Kleiner, Occupational
Licensing: Protecting the Public Interest or Protectionism? 4 (W.E. Upjohn Inst., Policy Paper No. 2011009, 2011) [hereinafter Kleiner, Protecting the Public Interest or Protectionism?], available at
http://research.upjohn.org/up_policypapers/9 (“[S]everal studies have found a number of cases
where licensing reduces employment, increases prices, but does not result in better services.”).
102 See Kleiner, supra note 2, at 192 (describing methods by which licensing curtails labor
supply); see also Simon Rottenberg, Introduction to OCCUPATIONAL LICENSURE AND REGULATION, supra note 97, at 1, 2.
103 See John E. Kwoka, Jr., Advertising and the Price and Quality of Optometric Services, 74 AM.
ECON. REV. 211, 216 (1984) (concluding from data in the optometry profession that advertising
increases competition but nonadvertising increases quality).
104 See Kleiner, supra note 2, at 192-93 (providing examples of limitations such as tougher
examination pass rates and longer residency requirements).
105 See Kleiner & Krueger, supra note 7, at S178 (“For example, the work of ‘hair braiders,’
which is an unlicensed profession, could be brought under the control of the cosmetology board
and limited to only licensed cosmetologists or barbers.”).
106 Id.

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It is worth starting this cost analysis with what makes a professional licensing cartel different from a typical cartel. A typical price-fixing cartel
will only be effective if an industry has a small number of firms; otherwise,
the temptation to cut price and expand output will be too great. Licensing
boards, however, can effectively raise price despite thousands of market
participants. Sometimes they work by muting price competition among
members through direct restrictions on professional practice, but that is not
the only way. Limiting the number of licensed professionals by making entry
difficult—and unauthorized entry illegal—raises prices because it limits
supply, and it does so even if licensed participants compete vigorously.107
Unlike firms, which may be able to expand without bound, a licensed
professional can only provide so much service herself. Boards can further
limit supply by controlling what unlicensed workers can produce and how
they must be supervised; the rule requiring that dentists supervise a maximum of two hygienists is an example. As a result, licensing boards can limit
output and raise price even with thousands of competing professionals,
much as cartelized oligopolies can in other industries.
Economists have studied extensively the effects of these professional
licensing requirements on price and, less extensively, quantity of services.
Studies that have the statistical power to identify an effect tend to show an
increase in price and a reduction in quantity.108 Mandatory entry requirements—such as examinations or educational prerequisites—tend to raise
consumer prices, but estimating the effect with any certainty has proven
difficult. 109 One 2006 study estimated that licensing requirements raise
wages by 10% to 12%.110 Newer data suggest that licensing raises hourly
wages by 18%.111 A 2000 study showed that tougher licensing, in the form of
107 See Kleiner & Wheelan, supra note 101, at 32 (illustrating this point using a hypothetical
restriction on prospective teachers).
108 See KLEINER, supra note 3, at 8-11. Since professional licensing is mostly the prerogative
of individual states, economists have used the United States as a kind of natural experiment to
observe price differences under different licensing regimes. Studies of the effects of licensing on
price typically adopt one or more of three basic methodologies. First, studies can compare prices
in professions before and after states’ imposition of licensing requirements. Second, studies can
compare prices of professional services in a state that requires a license with prices in a state that
does not (interstate study). Finally, economists can compare wages (as a proxy for price) between
licensed professions and unlicensed professions that require similar education levels, similar dayto-day responsibilities, and lifestyle. See generally Kleiner & Kudrle, supra note 73, at 548-49.
109 See Kleiner, supra note 2, at 197 (“[R]elatively little empirical work has looked at issues
involving the quality of output or the demand-side response to these quality effects.”).
110 Morris M. Kleiner, Regulating Occupations: Quality or Monopoly?, EMP’T RES. (W.E.
Upjohn Inst., Kalamazoo, Mich.), Jan. 2006, at 2 tbl.1, available at http://research.upjohn.org/
empl_research/vol13/iss1/1.
111 Kleiner & Krueger, supra note 7, at S185.

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lower pass rates on the qualifying exam, increased prices for dental services
by 11%.112
Similarly, most studies examining practice restrictions show that when a
licensing board is more heavy-handed in dictating hours, advertising, or
levels of supervision within a profession, the consumer prices are higher.
For example, one team of researchers estimated that restricting the number
of hygienists a dentist may employ increased the cost of a dental visit by
7%,113 resulting in an estimated $700 million cost to consumers in 1982.114
Restrictions on advertising by lawyers is associated with an increase in
price,115 and in optometry, restrictions on advertising have been shown to
inflate prices by at least 20%.116 Geographic restrictions—like nonreciprocity
between states—also tend to increase consumer prices.117
Because the nature of licensed practice is not to produce physical goods
that can be counted, measuring output as a function of licensing restrictions
has been a less attractive method for economists to measure licensure’s
effect on competition. Several studies, however, have analyzed its effect on a
related issue: employment growth. Here, the results have been more mixed
than in the price context. One 1981 study examining electricians, dentists,
plumbers, sanitarians, and veterinarians found that licensing reduces the
number of practitioners in a given field.118 Yet other studies have failed to
measure any appreciable effect of licensing on the supply of barbers119 and
nurses.120
If licensing increases consumer prices, then some consumers must go
without professional services—these are the services they could afford in a

112
113
114
115

Kleiner & Kudrle, supra note 73, at 572-73.
LIANG & OGUR, supra note 20, at 40, 43.
Id. at 47.
See WILLIAM W. JACOBS ET AL., FTC, IMPROVING CONSUMER ACCESS TO LEGAL
SERVICES: THE CASE FOR REMOVING RESTRICTIONS ON TRUTHFUL ADVERTISING 106
tbl.D (1984) (finding many instances of a statistically significant higher price for legal work in
areas with restrictions on advertising).
116 Kwoka, supra note 103, at 216.
117 One study estimated that universal reciprocity among states for dentists would result in a
geographical reallocation of dentists generating $52 million (in 1978 prices) in consumer surplus.
Bryan L. Boulier, An Empirical Examination of the Influence of Licensure and Licensure Reform on the
Geographical Distribution of Dentists, in OCCUPATIONAL LICENSURE AND REGULATION, supra
note 97, at 73, 94-95.
118 Carroll & Gaston, supra note 101, at 143, 145.
119 See Thornton & Weintraub, supra note 45, at 249 (finding that licensing requirements had
a minimal impact on the number of barbers entering the profession).
120 See William D. White, Mandatory Licensure of Registered Nurses: Introduction and Impact, in
OCCUPATIONAL LICENSURE AND REGULATION, supra note 97, at 47, 68.

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world without licensing.121 Some would-be practitioners lose out as well;
these are the individuals who do not have licenses but would like to compete
with the licensed professionals by offering low-cost services.122 A state’s
ability to cite and even prosecute unlicensed practitioners deters these lowcost transactions; in economic terms, these deterred low-cost transactions
are the deadweight loss from licensing.123
The story, however, might not be so simple. To get a complete picture of the
world but-for licensing, one needs a theory of how efficiently an unrestricted
market would function.124 Advocates of licensing argue that the free market
does a poor job of efficiently allocating professional services to consumers
because service quality would be too low without licensing.125 The notion
that a free market would result in too-low quality service rests on two
possible sources of failure in the market for professional services. First,
absent licensing, the asymmetry of information between professional
providers and consumers about the quality of service126 would create what
economists call the “lemons problem.” Second, free markets for professional
services would result in sub-optimal quality because the market participants
(providers and consumers) do not internalize all the costs of bad service.127
In other words, a free market for professional services creates negative
externalities.
The lemons problem, first articulated by George Akerlof in 1970, occurs
in a market where products vary in quality but consumers cannot reliably
distinguish good products from bad ones.128 If consumers cannot distinguish
between good and bad professional service, the high-quality, high-price
121 See KLEINER, supra note 3, at 43 (quoting an article about a farm worker who performed
two root canals on himself because he could not afford dental services).
122 See Kleiner, supra note 2, at 192-93 (describing the deterrent effect of licensing, which may
lead to greater entry into unlicensed professions).
123 See Kleiner, Enhancing Quality, supra note 101, at 4 (noting that using licensing requirements as a gatekeeping mechanism can lead to negative consequences); see also Kleiner &
Wheelan, supra note 101, at 31 (“When members of the legal profession told Milton Friedman that
every lawyer should be a Cadillac, he famously replied that many people would be better off with a
Chevy . . . .”).
124 See Kleiner & Wheelan, supra note 101, at 30 (comparing and contrasting certification
regimes with licensure regimes).
125 See Kleiner, supra note 2, at 191; see also Benham, supra note 97 (“Almost all licensed occupations have claimed they will successfully cope with undesirable market failures.”).
126 Alex R. Maurizi, The Impact of Regulation on Quality: The Case of California Contractors, in
OCCUPATIONAL LICENSURE AND REGULATION, supra note 97, at 26.
127 See COX & FOSTER, supra note 23, at 10-11 (discussing how reputation and litigation will
likely be efficient to control the problem of externalities only in some circumstances).
128 See George A. Akerlof, The Market for “Lemons”: Quality Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488, 489 (1970) (explaining that buyers possess imperfect information when
purchasing a car because they do not know whether the car “will be good or a lemon”).

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providers will not be able to attract even those customers who both want
and can pay for better quality service.129 Unable to obtain a premium for
their service, high-quality providers will either exit the market or reduce the
quality of the service to match their low-quality, low-cost competitors.130
This leads to deadweight loss in the form of deterred transactions between
high-quality providers and high-quality demanding consumers.131 Licensure
addresses the information asymmetry at the root of the lemons problem by
assuring consumers that all providers meet a minimum quality standard.
The second market failure possibly addressed by licensure occurs when
low-price, low-quality transactions impose costs on third parties. An
individual may be willing to receive poor service for a low price rather than
no service at all, but only because she does not have to bear the full costs of
bad service (e.g., treatment in a public hospital for infection from a careless
barber or a nuisance settlement of a frivolous suit filed by an unscrupulous
lawyer). Licensure can improve public safety by imposing quality standards
on professionals through education or examination and by setting rules of
professional practice.
It may not be fair to say that professional licensure results in deadweight
loss by harming competition if it also avoids the deadweight loss (associated
with the lemons problem and negative externalities) that would obtain in a
free market. But the cure must not be worse than the disease: a procompetitive licensing scheme should avoid more deadweight loss than it creates.
Quantifying the social harm from licensure on the one hand, and from freebut-inefficient markets for professional services on the other, is difficult.
But if licensing has any effect on the market failures it is designed to
address, then it should improve service quality. Put simply, if licensure
works, quality of service should improve.132
2. The Benefits of Licensing: Improved Quality?
The economic research on quality of service as a function of licensing
paints a murky picture. Some studies show modest increases in quality,133 at
129
130
131
132
133

See COX & FOSTER, supra note 23, at 5-6.
Id. at 6.
Id.
Kleiner, supra note 2, at 191-92.
See KLEINER, supra note 3, at 53 tbl.3.2 (showing varying levels of quality improvements
in a number of licensed professions); Carroll & Gaston, supra note 101, at 145 (concluding that
licensing results in better delivered quality but not better quality received by society as a whole);
Kleiner & Kudrle, supra note 73, at 575 (suggesting that licensing increased the quality of dental
visits but not overall dental health); Carl Shapiro, Investment, Moral Hazard, and Occupational
Licensing, 53 REV. ECON. STUD. 843, 850-51 (1986) (finding an overall increase in service quality

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least for some kinds of consumers, but other studies do not find that same
effect.134 A few studies even claim to show that licensing reduces quality.135
Part of the explanation for the mixed results may be the difficulty of
assessing the quality of professional services;136 this is the very source of the
lemons problem that licensing is designed to address. Researchers have used
a variety of ingenious methods to evaluate the quality of professional
services in the last few decades, but none is without its flaws.
Alex Maurizi, for example, used the number of consumer complaints
lodged with the California Contractors’ State License Board as a proxy for
the quality of service provided by professional contractors.137 He hypothesized that if barriers to entry (a licensing examination in this case) were
effective in eliminating low-quality providers, then lower pass rates should
be associated with higher quality service.138 In fact, he found the opposite.139
Similarly, economists have used malpractice litigation rates to measure the
quality of professional outcomes.140 Using consumer dissatisfaction to gauge
quality has obvious limits because consumers may not take the initiative to
formalize their unhappy experience in a complaint or lawsuit.141

due to licensing, but finding that consumers who put little value on quality are worse off because
of higher prices).
134 See Joshua D. Angrist & Jonathan Guryan, Teacher Testing, Teacher Education, and Teacher
Characteristics, 94 AM. ECON. REV. 241, 246 (2004) (“[T]here is . . . no evidence that testing
hurdles have raised the quality of new and inexperienced teachers . . . .”); Thomas J. Kane et al.,
What Does Certification Tell Us About Teacher Effectiveness? Evidence from New York City, 27 ECON.
EDUC. REV. 615, 629 (2008) (“We find little difference in the average academic achievement
impacts of certified, uncertified and alternatively certified teachers.”); Morris M. Kleiner & Daniel
L. Petree, Unionism and Licensing of Public School Teachers: Impact on Wages and Educational Output
(concluding that teacher licensing has “ambiguous effects” on student performance), in WHEN
PUBLIC SECTOR WORKERS UNIONIZE 305, 317 (Richard B. Freeman & Casey Ichniowski eds.,
1988); Robert Gordon et al., Identifying Effective Teachers Using Performance on the Job 30 (The
Hamilton Project, Discussion Paper No. 2006-01, 2006) (“[R]aising the hurdles for entry into the
teaching profession a little higher is not likely to generate a watershed improvement in teacher
quality.”).
135 See Carroll & Gaston, supra note 101, at 145 (suggesting that “excessive restriction” reduces
the quality of services available to the “lower middle income classes”); Maurizi, supra note 126, at
34 (“[C]onsumers may be receiving a quality of service quite similar to what would prevail in the
absence of licensing, and they may be paying higher prices for that quality.”).
136 Kleiner, supra note 2, at 198.
137 Maurizi, supra note 126, at 27-29.
138 Id. at 31-34.
139 Id.
140 See, e.g., KLEINER, supra note 3, at 57-58.
141 Maurizi, supra note 126, at 27-28 (challenging the assumption that increases in low-quality
work will “produce an equivalent increase in the number of voiced complaints”). But see KLEINER,
supra note 3, at 56 (“[L]icensing makes an occupation more visible and sets up rules and regulations that make lawsuits easier to file.”).

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Sometimes quality can be measured directly by looking at actual outcomes from professional services. For example, Kleiner used test scores to
measure the effect of licensing requirements for public school teachers on
student performance.142 His study ultimately did not show an effect from
licensing.143 Using a similar outcome-based technique, Kleiner and Kudrle
analyzed dental exam results from new enlistees in the U.S. Air Force. They
found that, for uninsured individuals, the strictness of licensing requirements for dentists in their home states did not impact enlistees’ dental
health at the time of enlistment.144
B. The Legal Landscape of Professional Licensing
Where researchers have been able to show that licensing improves quality,
existing regulation might be addressing the market failures caused by
information asymmetry and negative externalities. If so, and if the benefits
of licensing outweigh its harm to competition, then it is socially desirable.
But under the dominant interpretation of antitrust immunity, state licensing
boards never have to balance the procompetitive benefits of a restriction
against its anticompetitive effects. While all other combinations of competitors operate in Sherman’s shadow, licensing boards have mostly escaped
antitrust suits—allowing them to create rules that maximize welfare for
incumbent professionals at the expense of everyone else. That leaves only
constitutional avenues of redress, which have proven to be weak against selfdealing boards.
1. Twin Immunities Shield State Licensing Boards from
Antitrust Liability
Licensing requirements are essentially agreements, usually among competitors, to create barriers to entry into their profession. These incumbent
professionals reap the rewards of weaker competition in the form of higher
prices and higher profits. This conduct sounds, on its face, like a perfect

142 See Kleiner, Enhancing Quality, supra note 101, at 6-8; see also KLEINER, supra note 3, at 54
(calling test scores “a generally recognized measure of ‘quality’ in education”).
143 Kleiner, Enhancing Quality, supra note 101, at 11-13; see also Kane et al., supra note 134, at 629.
144 Kleiner & Kudrle, supra note 73. For those with insurance coverage (which was also associated with higher income), however, tougher state regulations on dentistry improved average
dental health. Id. at 575-76. The results of the Air Force study exemplify an interesting finding of
some quality studies: positive quality effects, where found, tend to be limited to higher-end
consumers. See, e.g., Carroll & Gaston, supra note 101, at 145 (showing that licensing improved
practitioner quality but decreased overall service quality for consumers by creating a practitioner
shortage).

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target for Sherman Act liability. But with Parker v. Brown145 and Eastern
Railroad Presidents Conference v. Noerr Motor Freight, Inc.,146 the Supreme
Court has created twin immunities that make antitrust suits over state
licensure regulation very difficult.
Parker created antitrust immunity for “state action,” which shields state
governments and bodies delegated a state’s authority from federal antitrust
liability. 147 In the line of cases following Parker, the Court defined the
contours of the immunity to include all bodies “clearly authorized” by the
state to restrict competition. 148 In most cases, where these bodies are
deemed private actors, these bodies must also be subject to active supervision by the state itself.149 State action immunity bars suits by aggrieved
competitors and public enforcers alike. In Noerr, the Court held that private
individuals and organizations cannot be sued under the Sherman Act for
attempting to influence government action—by either filing a law suit or
lobbying a legislature—even if their intent and effect is anticompetitive.150
Together, these doctrines “are complementary expressions of the principle
that the antitrust laws regulate business, not politics.”151
a. Parker and State Action Immunity
In Parker, the Supreme Court rejected antitrust claims against what was
essentially a price-fixing scheme among competitors because the scheme had
been blessed by the state of California.152 In holding that the Sherman Act
does not apply to state government action, the Court found the identity of
the actor—the state or private citizens—essential but provided no guidance
on how to draw the line.153 This created serious problems for lower courts
trying to apply Parker because states rarely regulate economic activity
directly through a legislative act. Rather, states delegate rulemaking and

145
146
147

317 U.S. 341 (1943).
365 U.S. 127 (1961).
Parker, 317 U.S. at 350-51 (“We find nothing in the language of the Sherman Act or in its
history which suggests that its purpose was to restrain a state or its officers or agents from
activities directed by its legislature.”).
148 See, e.g., Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminum Inc., 445 U.S. 97, 105
(1980) (“First, the challenged restraint must be one clearly articulated and affirmatively expressed
as state policy . . . .” (internal quotation marks omitted)).
149 See, e.g., id. (“[S]econd, the policy must be actively supervised by the State itself.” (internal quotation marks omitted)).
150 Noerr, 365 U.S. at 136.
151 City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 383 (1991).
152 Parker, 317 U.S. at 351.
153 Id. at 352.

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rate-setting to agencies, councils, or boards dominated by private citizens.154
Are these bodies arms of the state or collections of private actors?
The Court responded in 1982 with California Retail Liquor Dealers Ass’n
v. Midcal Aluminum Inc.,155 which provided a test to distinguish private
action from state action. To enjoy state action immunity, the Court held, the
challenged restraint must be “one clearly articulated and affirmatively
expressed as state policy to restrict competition,” and the policy must be
“actively supervised by the State itself.”156 For many potential defendants,
the Midcal rule thus shifted the battleground from the public–private boundary to the precise meanings of “clear articulation” and “active supervision.” In
no fewer than ten decisions refining Midcal’s two-step test,157 the Court has
made clear that virtually any colorable claim to state authority can be all the
articulation necessary.158 The supervision requirement, in contrast, can have
real bite.
Since Midcal, however, the Court has created a category of entities not
subject to the supervision requirement at all. 159 These entities, which
include municipalities,160 enjoy immunity if they can meet the clear articulation prong alone. The question in the recent Fourth Circuit case, currently
under review by the Supreme Court, is whether licensing boards are like
municipalities in this respect; in particular, whether a licensing board
dominated by competitors—who regulate the way they compete and exclude

154
155
156
157

For evidence of delegation in two states, see Appendix.
445 U.S. 97 (1980).
Id. at 105 (citation and internal quotation marks omitted).
For the evolution of the Midcal two-step test, see FTC v. Phoebe Putney Health Sys., Inc.,
133 S. Ct. 1003, 1010-11 (2013); FTC v. Ticor Title Ins. Co., 504 U.S. 621, 633-37 (1992); City of
Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 370-74 (1991); Patrick v. Burget, 486 U.S. 94,
100-01 (1988); 324 Liquor Corp. v. Duffy, 479 U.S. 335, 341-45 (1987); Fisher v. City of Berkeley, 475
U.S. 260, 267-70 (1986); Town of Hallie v. City of Eau Claire, 471 U.S. 34, 38-40 (1985); S. Motor
Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 55-62 (1985); Hoover v. Ronwin, 466 U.S.
558, 567-69 (1984); Cmty. Comm’ns Co., Inc. v. City of Boulder, 455 U.S. 40, 48-51 (1982).
158 Clear articulation need not be an affirmative statement about abrogating a competitive
policy. See STATE ACTION TASK FORCE, supra note 84, at 8 (“To satisfy the ‘clear articulation’
standard, the case law provides that the state need not compel the anticompetitive conduct at
issue . . . .”). And if a state creates a policy that has foreseeable anticompetitive effects, that
policy is sufficient under Midcal’s first prong. See Hallie, 471 U.S. at 45. Indeed, since Midcal, the
Supreme Court has rejected a clear articulation claim only twice. See Phoebe Putney Health Sys.,
Inc., 133 S. Ct. 1003; Cmty. Comm’ns Co., Inc., 455 U.S. 40.
159 STATE A CTION TASK FORCE, supra note 84, at 18 (noting an exception for boards that
“perform a public function and are directly accountable to the state”).
160 See Hallie, 471 U.S. at 45 (“None of our cases involving the application of the state action
exemption to a municipality has required that compulsion be shown.”).

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would-be competitors—enjoy state action antitrust immunity without being
supervised by the state.
b. Noerr and Petitioning Immunity
Whereas Parker immunity insulates public or quasi-public bodies from
antitrust scrutiny, Noerr immunity shields private actors’ efforts in petitioning
governments for anticompetitive restraints.161 Noerr and Parker immunities
are, as Justice Scalia has observed, “two faces of the same coin”162—by
disallowing suits against the private parties that influence state action, Noerr
essentially closes a loophole left open by Parker. Noerr itself was a suit
against a confederacy of railroad companies accused of persuading a state
legislature to pass laws unfavorable to truckers.163 Even though the railroads
had used deception in their campaign to influence the state legislature,164
the Court found their actions to be immune to antitrust liability on federalism
grounds.165 Later cases extended Noerr immunity to government petitioning
through all avenues, including lawsuits166 and executive branch lobbying.167
c. Immunity for Professional Licensing Boards Under Parker and Noerr
Although many potential plaintiffs and scholars—and probably licensing
board members—assume that state occupational boards operate outside of
the Sherman Act’s reach,168 the question is more complex than it appears.
161 See Omni, 499 U.S. at 379-80 (“The federal antitrust laws also do not regulate the conduct of private individuals in seeking anticompetitive action from the government.”); Allied
Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 499 (1988) (“Concerted efforts to
restrain or monopolize trade by petitioning government officials are protected from antitrust
liability . . . .”).
162 Omni, 499 U.S. at 383.
163 E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 129-30 (1961).
164 The defendants deceived the legislature by attributing their own antitrucking statements
and studies to “bogus independent civic groups.” Marina Lao, Reforming the Noerr-Pennington
Antitrust Immunity Doctrine, 55 RUTGERS L. REV. 965, 972 (2003).
165 Noerr, 365 U.S. at 137 (holding that allowing such liability would “substantially impair the
power of government to take actions through its legislature and executive that operate to restrain
trade”).
166 See Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60
(1993) (“If an objective litigant could conclude that the suit is reasonably calculated to elicit a
favorable outcome, the suit is immunized under Noerr . . . .”).
167 See United Mine Workers of Am. v. Pennington, 381 U.S. 657, 670 (1965) (“Joint efforts to
influence public officials do not violate the antitrust laws even though intended to eliminate
competition.”).
168 See, e.g., Neil Katsuyama, The Economics of Occupational Licensing: Applying Antitrust Economics to Distinguish Between Beneficial and Anticompetitive Professional Licenses, 19 S. CAL.
INTERDISC. L.J. 565, 569 (2010) (“Most licensing boards were created or are managed by the

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Notably, the Fourth Circuit recently held a state licensing board accountable
for its anticompetitive restrictions on dental practice in North Carolina State
Board of Dental Examiners v. FTC.169 The law here is complicated and in
flux; thus, a comprehensive treatment of its details is necessary.
Certainly, licensing restrictions passed directly by a state’s legislature or
supreme court enjoy state action immunity.170 Most licensing regulations,
however, become law when promulgated by an administrative board, and the
Supreme Court has not determined the status of practitioner-dominated
boards since Midcal. Most board decisions likely meet Midcal’s first prong
requiring clear articulation from the state, but these decisions are not
typically subject to the kind of state review that courts have required to find
active supervision. Thus, immunity turns on whether state licensing boards
are among the entities that do not have to show supervision.
Any state mandate calling for the regulation of entry and good standing
in a profession is likely to meet the Court’s low bar for clear articulation,
since all licensing restricts competition by reducing the number of competing
professionals in the field.171 The Ninth Circuit’s opinion in Benson v. Arizona
State Board of Dental Examiners172 is typical. In considering Sherman Act
claims challenging a state dental board’s refusal to recognize out-of-state
licenses, the court easily found the necessary clear articulation in the state’s
statute giving the Board discretion to adopt reciprocity rules.173 Contrary
outcomes involve boards acting in violation of state policy. In Goldfarb v.
state, and therefore are beyond the reach of the Sherman Act.”); cf. Einer Richard Elhauge, The
Scope of Antitrust Process, 104 HARV. L. REV. 667, 693 (1991) (noting the Supreme Court’s
suggestion that “the active supervision requirement is probably inapplicable to state agencies, a
suggestion with which the lower courts have virtually all agreed” (footnote omitted)).
169 717 F.3d 539 (4th Cir. 2013)
170 See Hoover v. Ronwin, 466 U.S. 558, 567-68 (1984) (“[W]hen a state legislature adopts
legislation, its actions constitute those of the State . . . and ipso facto are exempt from the
operation of the antitrust laws.” (citations omitted)); see also Mass. Sch. of Law at Andover, Inc. v.
Am. Bar Ass’n, 107 F.3d 1026, 1036 (3d Cir. 1997) (applying state action immunity because the
states made the ultimate decision whether to adhere to ABA standards); STATE ACTION TASK
FORCE, supra note 84, at 6 (noting that “actions of a state legislature and of a state supreme court
acting in a legislative fashion are those of the state acting as sovereign” (footnote omitted));
Bobrow, supra note 50, at 1487 (noting that discretion over a law restricting attorney advertising
was properly left to the state in Bates v. State Bar of Arizona, 433 U.S. 350 (1977)).
171 See, e.g., Earles v. State Bd. of Certified Pub. Accountants, 139 F.3d 1033, 1044 (5th Cir.
1998) (noting that, in establishing a permissive policy with respect to the State Board of Certified
Public Accountants Board of Louisiana, “the state rejected pure competition . . . in favor of
establishing a regulatory regime that inevitably has anticompetitive effects”); see also Havighurst,
supra note 50, at 599 (“Few things are more foreseeable than that a trade or profession empowered
to regulate itself will produce anticompetitive regulations.”).
172 673 F.2d 272 (9th Cir. 1982).
173 Id. at 275.

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Virginia State Bar, the Supreme Court held that although a state bar association was a state agency for the purpose of “investigating and reporting the
violation” of ethical rules promulgated by the Supreme Court of Virginia,174
it could not enjoy immunity for its price-fixing because it acted contrary to
the state’s clearly articulated competition policy.175
As clear as it is that typical licensing board actions pass Midcal’s first
prong, it is equally clear that many would fail the second prong—the activesupervision requirement—if subjected to it. The Supreme Court has
recognized that the active-supervision requirement is met only when states
actually “exercise ultimate control over the challenged anticompetitive
conduct;”176 the Court has overturned schemes where states possessed, but
never exercised, their authority to review the scheme. 177 Even schemes
where the state provides the final authorization of a restriction can lack
supervision if the state uses a “negative option” that allows a state’s silence
to signify approval.178 For most licensing boards, their restrictions become
operational upon, at most, a rubber stamp from the state. The typical case
falls short of Ticor’s requirement of an affirmative pronouncement by the
state signaling that it has “played a substantial role in determining the
specifics of the economic policy.”179
Thus, a board’s status under Parker turns on whether it is subject to the
requirement of supervision at all. In Town of Hallie v. City of Eau Claire, the
Court found a municipality immune under Parker because it acted pursuant
174
175

421 U.S. 773, 776 n.2 (1975) (quoting VA. CODE ANN. § 54-49 (1972)).
See id. at 790-91 (“[A]nticompetitive activities must be compelled by direction of the State
acting as a sovereign.”); see also FTC v. Mass. Bd. of Registration in Optometry, 110 F.T.C. 549,
614 (1988) (refusing to find clear articulation for an optometry board’s onerous advertising
restrictions in light of contrary statutory language).
176 Patrick v. Burget, 486 U.S. 94, 101 (1988); see also Cal. Retail Liquor Dealers Ass’n v.
Midcal Aluminum Inc., 445 U.S. 97, 106 (1980) (finding inadequate supervision because the “State
does not . . . engage in any ‘pointed reexamination’ of the program”). Although decided decades
before Midcal’s two-step formulation, Parker itself emphasized the fact that the challenged
restriction did not take effect until approved by the state. Parker v. Brown, 317 U.S. 341, 352
(1943).
177 See, e.g., FTC v. Ticor Title Ins. Co., 504 U.S. 621, 638 (1992) (“The mere potential for
state supervision is not an adequate substitute for a decision by the State.”).
178 Id. at 639-40. Likewise, the FTC has held that “silence on the part of the state does not
equate to supervision.” N.C. Bd. of Dental Exam’rs, 151 F.T.C. 607, 632 (2011).
179 Ticor, 504 U.S. at 635. Boards are typically subject to several mechanisms that improve
their accountability to the state, such as member disclosure requirements, adherence to state
administrative procedure acts, and public access to meetings and minutes. See, e.g., N.C. Bd. of
Dental Exam’rs, 151 F.T.C. at 630-32 (noting the board’s required compliance with “North
Carolina’s Public Records Act, Administrative Procedure Act, and open meetings law”). But at
least one lower court has held that these devices are inadequate to establish supervision under
Midcal’s second prong. See N.C. State Bd. of Dental Exam’rs v. FTC, 717 F.3d 359 (4th Cir. 2013).

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to the state’s clearly articulated policy to displace competition, despite being
unsupervised.180 The Court reasoned that, for municipalities, supervision is
unnecessary because there is no “real danger that [it] is acting to further
[its] own interests, rather than the governmental interests of the State.”181
Although Hallie did not provide a test for determining which entities, in
addition to municipalities, are entitled to this fast track to immunity, a
footnote provided a hint: “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.”182
Many lower courts have applied Hallie’s footnote, though dicta, as law.183
But by and large these courts have not interpreted the footnote to mean that
all entities with a colorable claim to being a “state agency”—which probably
includes occupational licensing boards—are automatically exempt from the
supervision requirement.184 Rather, most lower courts analyze the function,
composition, and accountability of the entity claiming immunity when
considering its status under the Hallie footnote.185 The circuits, too, are split
on this question of how state occupational licensing boards fare under this
analysis.186
Some courts have concluded that occupational boards are among the
“state agencies” to which the Hallie Court was referring, and thus exempted
them from Midcal’s supervision prong. For example, in Earles v. State Board
of Certified Public Accountants of Louisiana, the Fifth Circuit declined to apply
Midcal’s supervision prong to a state board and thus rejected Sherman Act
claims against it.187 The opinion reasoned that Louisiana’s Board of Certified Public Accountants “is functionally similar to a municipality” because
“the public nature of the Board’s actions means that there is little danger of
a cozy arrangement to restrict competition.”188 Similarly, in Hass v. Oregon
State Bar, the Ninth Circuit held that the state bar, as an agent of the
Oregon Supreme Court, “is a public body, akin to a municipality for the

180
181
182
183
184

471 U.S. 34, 47 (1985).
Id.
Id. at 46 n.10.
Elhauge, supra note 168, at 693.
See 1A PHILIP E. AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW ¶ 225c, at
160 (3d ed. 2006) (describing state court cases after Hallie); C. Douglas Floyd, Plain Ambiguities in
the Clear Articulation Requirement for State Action Antitrust Immunity: The Case of State Agencies, 41
B.C. L. REV. 1059, 1063-64 (2000).
185 See sources cited supra note 184.
186 Id.
187 139 F.3d 1033, 1041 (5th Cir. 1998).
188 Id.

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purposes of the state action exemption.” 189 The court cited the board’s three
(of fifteen) nonlawyer members, public meetings, and open records as
evidence of the board’s public nature.190 Finding no danger that the bar
(acting as a state licensing board) was “pursuing interests other than those
of the state,” the court did not apply the supervision prong.191
Not all courts have been as comfortable eliding Midcal’s second prong
when considering action by a state agency, especially when that agency is an
occupational licensing board. But until last year, the only circuit cases that
suggested state agencies must pass both prongs did so in dicta, providing
relatively weak support for potential antitrust plaintiffs. Even now, the only
circuit decision squarely holding that a state agency must satisfy both
prongs has some language suggesting that it could have narrow application.
Before last year’s Fourth Circuit decision, precedent supporting the supervision requirement for licensing boards was weak because the cases at
most implied that supervision would apply. For example, in FTC v. Monahan, Judge Breyer (then writing for the First Circuit) rejected a licensing
board’s claim that state action immunity automatically allowed it to circumvent a federal subpoena in an antitrust case.192 The court explained that
whether the state supervision condition applies “depends upon how the
Board functions in practice,” which in turn depends on the information
requested in the subpoena.193 The opinion thus ordered the board to comply
with the subpoena, but made no holding on the merits of the board’s claim
that its public nature meant it need not show state supervision to enjoy
Parker immunity.194 Similarly, the Ninth Circuit, in an opinion that does not
cite its somewhat contrary opinion in Hass, has observed that a board “may
not qualify as a state agency” because its “private members have their own
agenda which may or may not be responsive to state labor policy.”195 As in
Monahan, the court did not issue a merits opinion after the remand.
Without an opinion squarely holding a licensing board to antitrust scrutiny, case law such as Hass and Earles has caused scholars to assume away the
possibility of an antitrust suit against a licensing board and to deter litigants

189
190
191
192
193
194

883 F.2d 1453, 1460 (9th Cir. 1989).
Id.
Id. at 1459.
832 F.2d 688 (1st Cir. 1987).
Id. at 690.
Id. (“[W]e cannot now say, without knowing more facts, whether or not this additional
‘state supervision’ condition will apply.”).
195 Wash. State Elec. Contractors Ass’n, Inc. v. Forrest, 930 F.2d 736, 737 (9th Cir. 1991)
(emphasis added).

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from pursuing such suits.196 Even if courts acknowledged that the doctrinal
question of Parker immunity for occupational boards was technically open,197
scholars and litigants seem to assume that, as a practical matter, the courtroom door was closed.
Last year, however, the Fourth Circuit took these holdings out of the
hypothetical realm and squarely applied Midcal’s second prong to a licensing
board in North Carolina State Board of Dental Examiners v. FTC.198 The
decision thus created a circuit split with the Ninth and Fifth Circuits—a
split that the Supreme Court recently decided to review.199 As we noted
earlier, the breadth of the Fourth Circuit holding is unclear.200 According to
the concurrence in the Fourth Circuit, the holding is very narrow; it leaves
many boards—as presently comprised—immune from suit. Specifically, the
Fourth Circuit upheld an FTC decision that struck down North Carolina’s
dentistry board’s claim for immunity based on the board’s failure to show
adequate supervision.201 In a lengthy opinion, the Commission explained
that whether an entity must satisfy Midcal’s supervision prong depends not
on its formal label as a “state agency,” but rather on the “tribunal’s degree of
confidence that the entity’s decision-making process is sufficiently independent from the interests of those being regulated.”202 The Fourth Circuit
agreed, holding that “when a state agency appears to have the attributes of a
private actor and is taking actions to benefit its own membership . . . both
parts of Midcal must be satisfied.”203
The potential narrowness of the Fourth Circuit holding arises because
the panel concluded that a board dominated by practitioners elected by
other industry members fits that description.204 The concurrence contended
196 See, e.g., Havighurst, supra note 50, at 597 (observing that, despite the FTC’s success in a
case against the Texas State Board of Accountancy, “[t]here were few follow-up cases of this
kind”).
197 Some scholars have recognized this doctrinal uncertainty. See, e.g., Bobrow, supra note 50,
at 1489; Bona, supra note 50, at 42.
198 717 F.3d 359 (4th Cir. 2013).
199 N.C. Bd. of Dental Exam’rs v. FTC, No. 13-534, 82 U.S.L.W. 3260 (2013), granting cert. to
N.C. State Bd. of Dental Examiners, 717 F.3d 359.
200 See supra note 38.
201 Id. at 375 (“[T]he Board’s status as a group of professionals does not condone its anticompetitive practices.”).
202 N.C. Bd. of Dental Exam’rs, 151 F.T.C. 607, 619 (2011). In this respect, the opinion echoes
the FTC’s State Action Task Force Report, which advocated supervision for organizations where
members essentially make rules for their own industries. STATE ACTION TASK FORCE, supra
note 84, at 55. The idea follows from Areeda and Hovenkamp’s argument that “bodies engaged in
self-regulation of their members’ commercial activities need active supervision by a more public
body to satisfy the Midcal requirements.” AREEDA & HOVENKAMP, supra note 184, ¶ 227, at 208.
203 N.C. State Bd. of Dental Exam’rs, 717 F.3d at 369 (italics added).
204 Id. at 370.

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that practitioner-dominance is not alone sufficient to show that a board is a
“private actor” in need of state supervision under the rule of the case. The
case’s holding, according to the concurrence, “turns on the fact that the
members of the Board, who are market participants, are elected by other
private participants in the market.” 205 Under the concurrence’s reading,
boards comprised of private competitors appointed by a governor (ubiquitous among licensing boards206) would not be subject to Midcal’s supervision
prong and therefore would almost always enjoy Parker immunity.
We argue that the concurrence’s interpretation—which results in a broad
state action immunity—has a weak foundation under Supreme Court
precedent or sound public policy, even if several circuit courts might agree.
A presumption of such a broad state action immunity has, in many circuits,
relegated plaintiffs to ill-suited constitutional challenges to boards’ anticompetitive actions.
2. The Common Route to Challenging State Licensing Restraints:
Due Process and Equal Protection
With powerful antitrust immunities in place, the only viable avenue for
consumers or would-be professionals seeking to challenge the actions of
state licensing boards is to make a constitutional claim.207 Like all state
regulation, professional licensing restrictions must not violate the Due
Process and Equal Protection Clauses of the Fourteenth Amendment. Due
process prevents a state from denying someone his liberty interest in
professional work if doing so has no rational relation to a legitimate state
interest. 208 Similarly, equal protection requires that states distinguish
licensed professionals from those excluded from practice on some rational
basis related to a legitimate state goal.209 The two analyses typically conflate
into one question: Did the licensing restriction serve, even indirectly or
inefficiently, some legitimate state interest?210

205
206
207

Id. at 376 (Keenan, J., concurring).
Almost all the licensing boards we surveyed are appointed by the governor. See Appendix.
See Katsuyama, supra note 168, at 567-69 (“The two principle [sic] means through which
licensing regulations have been challenged are the Fourteenth Amendment’s Due Process Clause
and the Sherman Antitrust Act.”).
208 See generally Anthony B. Sanders, Comment, Exhumation Through Burial: How Challenging
Casket Regulations Helped Unearth Economic Substantive Due Process in Craigmiles v. Giles, 88
MINN. L. REV. 668, 671-74 (2004) (explaining economic regulation and modern rational basis
jurisprudence).
209 See id. at 674-78 (noting the parallels between economic substantive due process and
equal protection jurisprudence).
210 Katsuyama, supra note 168, at 567-69.

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That burden is easy to meet, as illustrated by the leading Supreme Court
case on the constitutionality of professional licensing schemes. In Williamson v. Lee Optical, the Supreme Court upheld a state statute preventing
opticians from fitting patients’ existing lenses in new frames without a
prescription from an ophthalmologist or optometrist. 211 The Williamson
plaintiffs sued on the theory that the scheme was designed to artificially
increase demand for optometry services and therefore violated the Due
Process and Equal Protection Clauses.212 The Court implicitly recognized a
liberty right under the Due Process Clause to pursue one’s chosen occupation.213 But since that right is not sufficiently “fundamental” to give rise to
strict scrutiny214 and because opticians are not a protected class under the
Equal Protection Clause, both claims were subject only to rationality
review.215 The Court rejected the plaintiffs’ challenge, making clear that any
possible justification for the restriction, however thin, was enough.216 Other
cases have further held that the proffered justification need not have
actually motivated the legislature to survive rationality review; it may be
post-hoc and prepared only for litigation.217
The Supreme Court has only once found an occupational licensing restriction to fail rationality review, in Schware v. Board of Bar Examiners of
New Mexico,218 and then only because an otherwise valid licensing requirement was unlawfully applied to an individual. Like most states, New

211 348 U.S. 483, 486 (1955). Although the case considered state legislative activity, subsequent cases have clarified that the case’s analysis is applicable to administrative rules promulgated
by state licensing boards. See, e.g., Powers v. Harris, 379 F.3d 1208, 1221 (10th Cir. 2004) (suggesting that “merely a citation to Williamson would have sufficed to dispose of” a case involving a
statute).
212 Williamson, 348 U.S. at 484.
213 Although the Williamson Court did not make this explicit, subsequent cases have articulated this finding. See, e.g., Meadows v. Odom, 360 F. Supp. 2d 811, 813 (M.D. La. 2005), vacated as
moot, 198 F. App’x 348 (5th Cir. 2006) (“The right to pursue the ‘common occupations of life’ is a
protected liberty interest, subject to reasonable limitations.” (quoting Blackburn v. City of
Marshall, 42 F.3d 925, 941 (5th Cir. 1995))).
214 See Craigmiles v. Giles, 312 F.3d 220, 223-24 (6th Cir. 2002) (“Although the licensing
requirement has disrupted the plaintiffs’ businesses, the regulations do not affect any right now
considered fundamental and thus requiring more significant justification.”).
215 Williamson, 348 U.S. at 487-88.
216 Id. It found enough rationality in the fact that “in some cases the directions contained in
the prescription are essential, if the glasses are to be fitted so as to correct the particular defects of
vision or alleviate the eye condition.” Id. at 487. Thus the Court upheld the statute even though it
conceded that “[t]he Oklahoma law may exact a needless, wasteful requirement in many cases.” Id.
217 See, e.g., Clark Neily, No Such Thing: Litigating Under the Rational Basis Test, 1 N.Y.U. J.L.
& LIBERTY 898, 905-07 (2005) (explaining that actual reasons are irrelevant because legislatures
need not articulate reasons for statutes).
218 353 U.S. 232 (1957).

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Mexico requires attorneys to exhibit good moral character in order to sit for
the bar exam. In Schware, the Court found a rational basis for such a
requirement on its face, but it held that the New Mexico Supreme Court
did not have a rational justification for denying a former communist
permission to sit for the exam.219 Because of its politically charged subject
matter, Schware has largely been limited to its facts. In any case, it expressly
approved of a state’s ability to require its bar applicants to possess a quality
as subjective as “good moral character.”220
In applying Schware to the activity of state licensing boards, lower courts
have found even extremely thin justifications for anticompetitive licensing
restrictions to suffice for rationality review. In Meadows v. Odom, a Louisiana
district court accepted the state board’s contention that licensing florists
helped promote health and safety by decreasing the risk of pricks by wires
in haphazardly arranged bouquets.221 Similarly, a California district court
upheld the California Structural Pest Control Board’s requirement that
exterminators of rats, mice, and pigeons—but not those of skunks and
squirrels—obtain a state license.222
One circuit has even held that insulating professionals from competition
is itself a legitimate state interest, making matters even more difficult for
plaintiffs alleging harm to competition. The Tenth Circuit in Powers v.
Harris distinguished intrastate protectionism, which it considered constitutionally permissible, from interstate protectionism, which it acknowledged
was illegitimate under the Dormant Commerce Clause.223
Contrary holdings are rare. The Sixth Circuit gave the campaign to
invalidate anticompetitive state licensing on constitutional grounds224 its
219
220
221

Id. at 238.
Id. at 239.
360 F. Supp. 2d 811, 823-24 (M.D. La. 2005), vacated, 198 F. App’x 348 (5th Cir. 2006).
The court quoted the testimony of a retail florist, testifying as an expert, to support the assertion
that licensing florists reflected the state’s “concern for the safety and protection of the general
public.” Id. at 824. The florist testified, “I believe that the retail florist does protect people from
injury . . . . We’re very diligent about not having an exposed pick, not having a broken
wire, . . . and I think that because of this training, that prevents the public from having any
injury.” Id.
222 Merrifield v. Lockyer, 388 F. Supp. 2d 1051, 1058-61 (N.D. Cal. 2005), aff ’d in part, rev’d in
part, 547 F.3d 978 (9th Cir. 2008). It was enough to pass rationality review that the covered pests
were more commonly found inside structures than the noncovered pests, suggesting that they were
a more natural target for regulation. Id. at 1058. Although the holding was reversed on appeal, the
case illustrates that some courts find even very weak justifications colorable.
223 379 F.3d 1208, 1219 (10th Cir. 2004), cert. denied, 544 U.S. 920 (2005).
224 Institute for Justice, a public interest law firm, is at the forefront of this movement, and
many of the cases cited in this section were argued by their attorneys. See IJ Cases, INST. FOR
JUSTICE, http://www.ij.org/cases (last visited Mar. 22, 2014).

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most significant victory in Craigmiles v. Giles.225 Using reasoning that was
explicitly rejected in Powers, the Craigmiles court invalidated Tennessee’s
restriction on unlicensed casket sales.226 The court was unusually skeptical
about the justifications advanced by the state board, which argued that
shoddy caskets presented a public health risk.227 The court found that only
one justification did not reek with “the force of a five-week-old, unrefrigerated fish”228: the scheme would allow funeral directors to collect monopolistic profits in selling coffins.229 Unlike the Powers court, the Sixth Circuit
deemed such economic protectionism “illegitimate” and invalidated the
restrictions because they failed even “the slight review required by rational
basis review.”230
Powers’ condemnation of interstate protectionism suggests that the
Dormant Commerce Clause may be an alternative means of attacking the
constitutionality of occupational licensing restrictions.231 Yet cases brought
on this theory have failed. Most states do not recognize occupational licenses
from other states, and plaintiffs have argued that such “nonreciprocity”
violates the dormant commerce clause by discriminating against out-of-state
commerce in favor of in-state interests. But courts have rejected this claim,
explaining that states have a legitimate interest in applying their own
particular requirements to professionals. 232 “Nonreciprocity” licensing
schemes pass rationality review as long as they apply the same licensing
requirements to in-state and out-of-state applicants.

225
226
227
228
229

312 F.3d 220 (6th Cir. 2002).
Id. at 229.
Id. at 225-26.
Id. at 225 (citation omitted).
Id. at 228. The court noted that the restriction allowed funeral homes to “mark up the
price of caskets 250 to 600 percent.” Id. at 224.
230 Id. at 228-29.
231 See Herbert Hovenkamp, Federalism and Antitrust Reform, 40 U.S.F. L. REV. 627, 646
(2006) (“[O]ne can imagine egregious situations in which the impact of state regulation falls
almost entirely on out-of-state interests, but then it seems the dormant Commerce Clause would
be sufficient to handle the problem.”).
232 See, e.g., Locke v. Shore, 634 F.3d 1185, 1197 (11th Cir. 2011) (finding Florida’s interior
design license requirement constitutional); Kirkpatrick v. Shaw, 70 F.3d 100, 104 (11th Cir. 1995)
(finding Florida Bar rules constitutional); Scariano v. Justices of the Supreme Court of the State
of Ind., 38 F.3d 920, 928 (7th Cir. 1994) (finding Indiana’s waiver of bar exam requirements for
select out-of-state applicants constitutional).

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III. THE NORMATIVE CASE: WHY SHERMAN ACT LIABILITY
FOR STATE LICENSING BOARDS IS A GOOD IDEA
State action immunity for occupational licensing boards is an anachronism with an ever-increasing price tag as more professionals and more
services come under board authority. Constitutional suits have done little to
solve the problem. This Part makes the normative case for lifting antitrust
immunity for state licensing boards. It begins by illustrating the close fit
between the harms that the Sherman Act sought to combat and the economic
harm from heavy-handed licensing regulation. We argue that it is antitrust
law, not constitutional law, that provides the most logical and effective
mechanism to evaluate the costs and benefits of occupational licensure.
We then contend that the principal argument against broadening Sherman
Act liability—that it disrupts the balance of power between the states and
the federal government—is especially unpersuasive in the licensing context.
As the scholarly debate flowing from Midcal reveals, concerns for federalism
are at their peak when federal laws displace state regulations enacted by a
locally accountable government with constituent participation. This does
not describe restrictions created by practitioner-dominated licensing boards.
A. Antitrust Liability for Professional Licensing: An
Economic Standard for Economic Harm
The Sherman Act—famously called “the Magna Carta of free enterprise”233—protects competition as a way to maximize consumer welfare.
According to courts and economists alike, competition is harmed when
competitors restrict entry or adhere to agreements that suppress incentives
to compete. When these kinds of restrictions are naked and horizontal,
liability attaches per se, but even when they are not, competitors must prove
that they provide a net benefit to consumers in order to pass muster under
the rule of reason.234 At bottom, both the per se rule and the rule of reason
ask a single question: Is competition (and therefore are consumers) harmed
or helped by this activity? Because this test, unlike rationality review under
the Constitution, best safeguards consumer welfare, it should be used to
evaluate occupational licensing restrictions.

233
234

United States v. Topco Assocs., Inc., 405 U.S. 596, 610 (1972).
See Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 885 (2007) (“In its
design and function the rule [of reason] distinguishes between restraints with anticompetitive
effect that are harmful to the consumer and restraints stimulating competition that are in the
consumer’s best interest.”).

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1. Sherman Act Policy and the Competitive Harm of Licensing:
A Close Fit
Without the veneer of “professional licensing,” some board restrictions
epitomize the evil at which modern antitrust policy is aimed. Like all
agreements between competitors, licensing schemes can be used for competitive good or competitive evil. The normative question in both traditional
cartel cases and licensing contexts should be the same: Does the combination, on net, improve consumer welfare?235 To ensure that this important
question is asked and answered in the licensing context, antitrust law and its
tools for balancing pro- and anticompetitive effects should be brought to
bear on licensing schemes.
This close fit between the Sherman Act’s intended target and the economic harm of excessive licensing can be seen in the functional equivalence
of the restrictions promulgated by occupational boards and the business
practices held unlawful under § 1. To cut hair legally in Tennessee, a
candidate must pass a test—designed by her would-be competitors—
proving she can file and polish nails.236 But when a gas burner manufacturer
was denied approval by a private standard-setting association that used a
test influenced by his competitors and “not based on objective standards,”
the Supreme Court found Sherman Act liability appropriate.237 Similarly,
the Ohio Rules of Professional Conduct prohibit attorneys from advertising
their prices using words such as “cut rate,” “discount,” or “lowest.”238 But
when similar restrictions on price advertising are imposed by private
associations of competitors, rather than as a licensing requirement, they are
per se illegal.239 Additionally, all lawyers must prove their “good moral
standing” to join a state bar.240 But when a multiple listing service (a private

235 Cf. Timothy Sandefur, Equality of Opportunity in the Regulatory Age: Why Yesterday’s Rationality Review Isn’t Enough, 24 N. ILL. U. L. REV. 457, 484-85 (2003–2004) (“If the government
must protect consumers from the ill effects of monopolies, then monopolistic practices by
government licensing agencies should also be prohibited. The potential victims are the same
(consumers); the potential injury is the same (unreasonable prices); and the potential wrongdoers
are the same (monopolistic producers).”).
236 See TENN. CODE. ANN. §§ 62-4-102; 62-4-110; 62-4-111 (West 2009) (requiring applicants for a cosmetologist’s license to prove that they have passed a course of instruction in practice
and theory at a school of cosmetology).
237 Radiant Burners, Inc. v. Peoples Gas Light & Coke Co., 364 U.S. 656, 658, 660 (1961).
238 OHIO RULES OF PROF’L CONDUCT R. 7.1 cmt. 4.
239 See AREEDA & HOVENKAMP, supra note 184, ¶225c, at 160 (discussing such cases).
240 For more information on bar qualifications, see NAT’L CONFERENCE OF BAR EXAM’RS &
AM. BAR ASS’N SECTION OF LEGAL EDUC. & ADMISSION TO THE BAR, COMPREHENSIVE
GUIDE TO BAR ADMISSION REQUIREMENTS (2014), available at http://www.ncbex.org/
assets/media_files/Comp-Guide/CompGuide.pdf.

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entity not created by the state) comprised of competing real estate agents
tried to impose a “favorable business reputation” requirement on its members, a court found the requirement to violate the rule of reason because the
standard was vague and subjective.241 The requirement failed Sherman Act
scrutiny because it gave the listing service the power to exclude competitors
in arbitrary and anticompetitive ways.242
Sometimes the match between a licensing restriction and an unlawful
private restriction on trade is more analogical than literal, but the anticompetitive risk is the same. For example, nonrecognition of out-of-state
licenses subdivides the national market for services and insulates professionals in one state from competitors in another. Market allocation, which
has a comparable economic effect, is per se illegal under § 1 of the Sherman
Act when agreed to by private competitors. Similarly, when a licensing
board dominated by practitioners tightly controls the standards of professional practice, it acts as a standard-setting association passing judgment on
its competitor’s products. In both contexts, there is potential for consumer
benefit and opportunistic self-dealing, but only private standard-setting
associations are subjected to antitrust scrutiny.243
Thus, licensing schemes can be similar to cartel agreements in substance,
which alone may justify antitrust liability. But making matters even worse
for consumers, licensing schemes come in a particularly durable form.
Licensing boards, by their very nature, face few of the cartel problems that
naturally erode price and output agreements between competitors. By
centralizing decisionmaking in a board and endowing it with rulemaking
authority through majority voting, professional competitors overcome the
hurdle of agreement that ordinarily inhibits cartel formation. Cheating is
prevented by imposing legal and often criminal sanctions—backed by the
police power of the state—on professionals who break the rules.244 Finally,
most cartels must fend off new market entrants from outside the cartel that
hope to steal a portion of its monopoly rents. For licensed professionals,
licensing deters entry and ensures that all professionals (at least those
practicing legally) are held to its restrictions.
241
242
243

United States v. Realty Multi-List, Inc., 629 F.2d 1351, 1376 (5th Cir. 1980).
Id. at 1385-86.
13 HERBERT HOVENKAMP, ANTITRUST LAW ¶ 2230, at 430 (3d ed. 2012); cf. C-OTwo Fire Equip. Co. v. United States, 197 F.2d 489, 493-94 (9th Cir. 1952) (finding that the jury
could reasonably infer that the defendant corporations were maintaining noncompetitive prices in
order to sell to both dealers and the public), cert. denied, 344 U.S. 892 (1952).
244 Ninety-five percent of Florida licensing boards and seventy-six percent of Tennessee
boards are backed up by criminal sanctions. See Appendix.

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We highlight the similarities between cartel activity and licensing restrictions to suggest that licensing is a natural target for regulation under
the Sherman Act. But just because both kinds of restrictions can be held to
antitrust scrutiny does not mean that the outcome of that analysis will (or
should) be the same. As we explain in detail in Part IV, per se condemnation of most board activity is inappropriate. And, under our proposed
modification to the rule of reason, some restrictions—restrictions that
would be condemned if used by a private cartel—will be approved. The
point here is that if excessive licensing threatens competition, then it should
be held to a standard designed to address competitive harm. Modern
antitrust law provides just that standard.
2. Constitutional Suits and Their Limited Ability to
Protect Consumers
Constitutional suits alone cannot curtail the anticompetitive effects of
professional licensing for two reasons. First, and perhaps most important,
they are almost impossible to win.245 Second, successful challenges vindicate
an individual’s right to work, not a consumer’s right to low prices driven
down by robust competition.246 It is a happy coincidence that these interests
are often tethered. But because the constitutional question is framed as a
struggle between the individual and the state, the standard—rational basis—
requires no direct inquiry into competitive effects. Therefore, it is antitrust
law, not constitutional law, that can directly address the economic evils of
licensing by requiring restrictions to be economically reasonable. And it is
the rule of reason, not rationality review, that can balance pro- and anticompetitive effects of a restriction and ensure that only the efficient survive.
Suits challenging state licensing restrictions on constitutional grounds
are rarely successful because plaintiffs must overcome powerful presumptions in favor of the state. In the professional licensing context, “the
demands of rational basis review are not impossible to overcome, but they
are extraordinarily high.”247 A law for which “there is any conceivable state
of facts that could provide a rational basis” will survive constitutional
challenge; 248 even the flimsiest justification will do. The legitimizing

245
246

See supra subsection II.B.2.
See, e.g., McCormack, supra note 92, at 457 (asserting that the Supreme Court has created
a right to livelihood and suggesting that it should be used as the basis for due process challenges to
regulation).
247 Sanders, supra note 208, at 692.
248 FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 313 (1993).

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rationale may be post hoc, unsupported by facts or evidence,249 or even
supplied by the judge himself 250 if the state fails to articulate a sufficient
rational basis in its brief. As one judge puts it, rational basis scrutiny
“invites us to cup our hands over our eyes and then imagine if there could
be anything right with the statute.”251 With so many ways to validate a
statute, plaintiffs are forced “to prove a negative—a nearly impossible
task.”252
When constitutional suits are successful, the right vindicated is that of
the individual against the government, not the right of the consumer against
a self-dealing industry. Sometimes these interests are aligned; robust
protection for an individual’s right to work means more competitors in the
profession, which in turn could mean lower prices for consumers. But
scholars have framed the campaign to invoke constitutional rights against
heavy-handed professional regulation as a revival of the right to livelihood,253 not as a consumer-welfare movement. Thus, courts hearing constitutional challenges to licensing schemes are confronted with arguments
about what kinds of economic activity a state may regulate in the first place,
not arguments about whether the benefits of licensing outweigh its costs.
When the dispute is framed as a question about when states can legitimately
use their police power for economic regulation, courts can invoke the
specter of Lochner254 to justify a hands-off approach.
Nowhere is it more apparent that constitutional law and antitrust law
serve different purposes than in Powers v. Harris. In that case, the Tenth
Circuit upheld a licensing restriction as rationally related to Oklahoma’s
“legitimate state interest” in insulating incumbent professionals from
competition.255 The court noted that “while baseball may be the national
249 Neily, supra note 217, at 905-07 (providing examples of regulations upheld merely because
a legislature does not have to articulate any reason or factual basis for adopting it).
250 Lana Harfoush, Grave Consequences for Economic Liberty: The Funeral Industry’s Protectionist
Occupational Licensing Scheme, The Circuit Split, and Why It Matters, 5 J. BUS. ENTREPRENEURSHIP & L. 135, 153 (2011) (noting that plaintiffs must anticipate not only rationales “stated in the
regulation, or . . . stated in the legislative records, but also whatever the judge may think of
while on the bench”).
251 Arceneaux v. Treen, 671 F.2d 128, 136 n.3 (5th Cir. 1982) (Goldberg, J., concurring).
252 Sandefur, supra note 235, at 500 & n.234 (illustrating the difficult challenge that plaintiffs
face).
253 See, e.g., McCormack, supra note 92, at 404 (pointing out that the right of livelihood does
not fit within the normal construction of constitutional principles because it does not involve “the
political relation of the individual to government”).
254 Lochner v. New York, 198 U.S. 45 (1905) (holding that New York could not legitimately
exercise its state police power to limit the number of hours that a baker could work each day and
week).
255 Powers v. Harris, 379 F.3d 1208, 1222-23 (10th Cir. 2004), cert. denied, 544 U.S. 920 (2005).

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pastime of the citizenry, dishing out special economic benefits to certain instate industries remains the favored pastime of state and local governments.” 256 Although other circuits have held otherwise, 257 the Supreme
Court refused to grant certiorari to resolve the circuit split, leaving the
Tenth Circuit’s holding as one possible interpretation of “legitimate state
interest.” This interpretation eviscerates constitutional law’s ability to
safeguard robust competition and its benefits to consumer welfare.
B. Antitrust Federalism: Its Modern Justifications and Applicability to
Sherman Act Liability for Licensing Boards
The most serious argument against Sherman Act liability for state licensing
boards is that it would upset the balance between state and federal power
struck in Parker and its progeny. As discussed above, the doctrinal question
is technically unsettled, even if most courts and commentators take for
granted that boards are immune under Parker.258 That doctrinal uncertainty
raises a normative question: Should boards enjoy state action immunity? In
this Section, we argue that they should not.
We reveal the normative foundation of antitrust federalism by surveying
the Midcal case law and the voluminous scholarship interpreting it. Although the various accounts differ in other ways, they all agree that selfdealing, unaccountable decisionmakers should face antitrust liability. We
argue that state licensing boards fall squarely in this category when a
majority of members are competitors subject to or benefitting from the
boards’ rules. Therefore, all practitioner-dominated boards should be subject
to Midcal’s supervision requirement, regardless of who selects their members.
1. The Parker Debate: Accountability Is Key
Over a dozen Supreme Court cases since Parker have wrestled with defining exactly who, and what kind of conduct, enjoys antitrust immunity.259
Likewise, much ink has been spilled in law reviews over the normative
commitments behind the Court’s handwringing. Do we require state
supervision because without it, federalism, the underlying justification for
256
257

Id. at 1221.
See, e.g., Craigmiles v. Giles, 312 F.3d 220, 224 (6th Cir. 2002) (holding that “protecting a
discrete interest group from economic competition is not a legitimate government purpose”).
258 See supra subsection II.B.1.c.
259 For a listing of the cases decided after Midcal, see supra note 157. The cases decided between
Parker and Midcal include City of Lafayette v. La. Power & Light Co., 435 U.S. 389 (1978); Bates v.
State Bar of Ariz., 433 U.S. 350 (1977); Cantor v. Detroit Edison Co., 428 U.S. 579 (1976); and
Goldfarb v. Va. State Bar, 421 U.S. 773 (1975).

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immunity, is not implicated? Or do we require supervision because we trust
governments (but not private entities) to restrict competition only as
necessary to serve the public interest? Since Parker, both commentators and
courts have rejected pure comity justifications for antitrust federalism.
Instead, the law reserves state action immunity for bodies whose structures and processes ensure they act in the public interest. In other words,
political accountability is the price a state must pay for antitrust immunity.260
So held the Court in FTC v. Ticor Title Insurance Co., explaining that
“[s]tates must accept political responsibility for actions they intend to
undertake” by active supervision.261 The Court further emphasized state
accountability: “Federalism serves to assign political responsibility, not to
obscure it.”262
The scholarship interpreting Midcal echoes this sentiment. Three of the
most cited commentators from the debate are William Page, John Shepard
Wiley, Jr., and Einer Elhauge. Each wrote within a decade after Midcal, and
all called for reforms to the state action doctrine that would more effectively
sort captured regulation from politically legitimate regulation. Each proposed a different theory and disagreed with the others in significant ways,
but all three would deny immunity for licensing boards—at least as they
operate presently.
In the year following Midcal, Page applauded the clear articulation
requirement as protection against industry self-dealing through state agency
capture.263 If a state wanted to enjoy federal antitrust immunity, it had to
make a clear statement—through an elected and politically accountable
body—expressing a policy in conflict with the Sherman Act.264 To Page,
these legislative statements assured “valid popular consent” for anticompetitive
regulations, even if an unelected agency or committee subsequently hashed
out the details.265

260 See Havighurst, supra note 50, at 591 (“The active-supervision requirement . . . may
also embody a federal expectation that any state that denies consumers the benefits of competition
must provide some alternative protection for their interests.”).
261 504 U.S. 621, 636 (1992).
262 Id.
263 See William H. Page, Antitrust, Federalism, and the Regulatory Process: A Reconstruction and
Critique of the State Action Exemption After Midcal Aluminum, 61 B.U. L. REV. 1099, 1125 (1981)
(noting that the clear articulation requirement enables courts and regulated firms to “predict
accurately whether their activities are exempt”).
264 Id. at 1122.
265 Id. at 1117.

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Five years later, Wiley took an opposing view in criticizing Midcal,266
but like Page, assumed that an essential ingredient of antitrust federalism is
public participation.267 Wiley’s proposal allows Sherman Act scrutiny when
state restrictions result from producer capture, implying that federal
antitrust law should bow to state regulation only when that regulation is at
least minimally responsive to the public.268
Elhauge disagreed with the framing of the Midcal debate, both by the
Supreme Court (in post-Midcal cases such as 324 Liquor Corporation v.
Duffy269 and Fisher v. City of Berkeley270) and by commentators like Page and
Wiley, precisely because it obscured the role that politically unaccountable
self-dealing played in antitrust federalism.271 He argued against what he
called the “conflict paradigm”—in which state action immunity is perceived
as a battle between federal interest in free markets and state interest in
protectionism—in favor of his “more straightforward approach” of simply
asking whether “under the [state’s] statutory scheme, the person controlling
the terms of the restraint . . . was financially interested.”272 Thus, Elhauge’s
vision of antitrust federalism overlaps with Page’s and Wiley’s where it sees
local political legitimacy—to Elhauge, financial disinterest—as a prerequisite to immunity.273
266 John Shepard Wiley Jr., A Capture Theory of Antitrust Federalism, 99 HARV. L. REV. 713,
715, 729 (1986).
267 Id. at 731-32.
268 Id. at 788-89.
269 479 U.S. 335 (1987).
270 475 U.S. 260 (1986).
271 Elhauge, supra note 168, at 674-78.
272 Id. at 685.
273 Many other scholars have argued that separating politically accountable decisionmaking
from self-dealing should be the main goal of the state action test. See, e.g., Merrick B. Garland,
Antitrust and Federalism: A Response to Professor Wiley, 96 YALE L.J. 1291, 1294 (1987) (stating that
the underlying rationale of the state action exemption is “respect for the decisions for elected local
governments”); Hovenkamp, supra note 231, at 633 (arguing that “antitrust need not countenance
restraints in which the effective decision makers are the market participants themselves”); Robert
P. Inman & Daniel L. Rubinfeld, Making Sense of the Antitrust State-Action Doctrine: Balancing
Political Participation and Economic Efficiency in Regulatory Federalism, 75 TEX. L. REV. 1203, 1253
(1997) (concluding that regulations are immune from antitrust scrutiny “provided those regulations
were decided by an open, participatory political process”); Thomas M. Jorde, Antitrust and the New
State Action Doctrine: A Return to Deferential Economic Federalism, 75 CALIF. L. REV. 227, 249-50
(1987) (highlighting the importance of opportunities for public participation); David McGowan &
Mark A. Lemley, Antitrust Immunity: State Action and Federalism, Petitioning and the First Amendment,
17 HARV. J.L. & PUB. POL’Y 293, 332 (1994) (“Arguments about state action and petitioning
immunity ultimately converge on substantive ideas of democracy and democratic values.”); Jim
Rossi, Political Bargaining and Judicial Intervention in Constitutional and Antitrust Federalism, 83
WASH. U. L.Q. 521, 561 (2005) (“State-action immunity, implied from the Sherman Act, affords
immunity for purposes of promoting federalism—valued because of the democratic legitimacy it

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When the FTC published its State Action Task Force Report in 2003, it
adopted what had become the consensus view: antitrust federalism is
defensible only when a state could be held accountable for an anticompetitive restriction.274 According to the report, state action immunity exists to
exempt laws and regulations that are attractive to voters because they
restrict competition that harms some market participants but simultaneously
benefits the public.275 Immunity is necessary because nearly all government
action changes the competitive environment and creates some market losers.
However, the FTC report recognized that meaningful voter support is
necessary to justify immunity.276 Unless the decisions of private actors are
properly supervised by political actors subject to election, the support
justifying immunity is lacking.
2. State Licensing Boards: Self-Interested and Unaccountable
Consortiums of Competitors
The scholarly perspectives on Parker and Midcal suggest that state action
immunity is not appropriate where the temptation of self-dealing is especially high and the potential for holding officials accountable especially low.
For state licensing boards, both conditions hold, resulting in absurd
licensing restrictions. First, those most hurt by excessive professional
restrictions—consumers—are particularly ill-represented in the political
process of licensure. Second, and most important, occupational licensing is
currently left up to members of the profession themselves. When Parker is
used to protect the efforts of incumbent professionals to restrict entry into
their markets, it creates the very situation Midcal warned against—it casts a
“gauzy cloak of state involvement over what is essentially a private pricefixing arrangement.”277
Public participation in state board activity is very low because the typical state board is comprised of appointed professionals, not consumers or

affords, not because state decisions in and of themselves are sacrosanct.”); Matthew L. Spitzer,
Antitrust Federalism and Rational Choice Political Economy: A Critique of Capture Theory, 61 S. CAL.
L. REV. 1293, 1312 (1988) (criticizing Wiley’s state action test as unjustified because it does not
“proffer[] an appealing theory of democratic legitimacy”).
274 STATE A CTION TASK FORCE, supra note 84, at 14 (discussing scholarship and recent
Supreme Court case law addressing the active-supervision requirement).
275 Id. at 1.
276 Id. at 54 (“Through the active supervision requirement, the Court . . . ensur[es]
that . . . the state’s legislators will not be ‘insulated from the electoral ramifications of their
decisions.’”) (quoting New York v. United States, 505 U.S. 144, 168-69 (1992)).
277 Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 106 (1980).

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other public members.278 While most states’ sunshine laws require publication of minutes and require that board meetings be open to the public, only
members typically attend. 279 Individual consumers lack the incentive to
participate in the process of licensing regulation; rarely would it be rational
for a consumer to take the time and effort to try to change a licensing rule
in the hopes of getting a cheaper haircut. Lobbying groups could theoretically fill this void by aggregating consumer interests, but public choice
theory illustrates that meaningful consumer participation in the political
process is difficult even with this mechanism.280 The most motivated public
participants are the practitioners at the margins of the regulated professions
hoping for entry.281 As discussed above, the incentives of would-be professionals are sometimes aligned with those of consumers—but not always.282
Second, as our study of boards in Florida and Tennessee suggests, most
state licensing boards are dominated by practitioners in the field.283 On one
hand, practitioner dominance is inevitable. Tailoring restrictions to benefit
the public (namely, encouraging competent practice) usually requires
experience in the profession. Laypersons are generally unable to make
judgments about the quality and risks of professional service; indeed, that is
how licensing boards justify their actions. But the need for expertise creates
a problem: those who have the most to gain from reduced consumer welfare
in the form of higher prices are tasked with protecting consumer welfare in
the form of health and safety—the fox guards the henhouse.
The most influential accounts of antitrust immunity would exclude practitioner-dominated boards from Parker protection. In his straightforward
process-based account of state action, Elhauge recognized the anticompetitive inevitability of self-regulation. 284 His normative vision of antitrust
federalism, modest compared to Wiley’s and Page’s in its call to expose state
regulation to antitrust liability, would deny immunity to entities whose
278 Nominees are often selected from lists provided by regulated professional groups themselves. Havighurst, supra note 50, at 596. Some boards are comprised of members elected directly
by members of the profession. See, e.g., N.C. Bd. of Dental Exam’rs, 151 F.T.C. 607, 626 (2011)
(“[T]he six dentist members of the Board are elected directly by their professional colleagues, the
other licensed dentists in North Carolina.”).
279 See, e.g., FLA. STAT. ANN. § 286.011 (West 2012) (requiring open meetings and publication of minutes); TENN. CODE ANN. §§ 8-44-102, 8-44-104 (West 2012) (same).
280 See Ginevra Bruzzone, Deregulation of Structurally Competitive Services: Economic Analysis
and Competition Advocacy, in THE ANTICOMPETITIVE IMPACT OF REGULATION 5, 21
(Giuliano Amato & Laraine L. Laudati eds., 2001).
281 Cf. Kleiner, supra note 2, at 197 (discussing barriers to entry).
282 See supra Section II.A.
283 See supra notes 49-50 and accompanying text and Appendix.
284 Elhauge, supra note 168, at 668 (“[T]he effect and intent of state and local regulation is
generally to restrain competition.”).

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members stand to profit financially from anticompetitive regulation.285 This
would certainly describe the typical practitioner-dominated licensing board.
As Elhauge observes, “[A]ntitrust stands for the . . . limited proposition
that those who stand to profit financially from restraints of trade cannot be
trusted to determine which restraints are in the public interest and which
are not.”286
If state licensing fails Elhauge’s test for immunity, then it must also fail
under Wiley’s and Page’s broader definitions of illegitimate capture. Capture is often subtle and debatable. Some would argue that the Federal
Reserve Board is captured by Wall Street because so many of its members
come from or go to Wall Street banks, or because banks have so much access
to the Federal Reserve that Federal Reserve board members begin to think
like bankers. Whether the Federal Reserve is captured in these senses
depends on where one draws the line between enough and too much
regulatory access. In the case of occupational licensing, however, this linedrawing is not a problem. By dint of their membership, boards are literally
and explicitly captured: practitioners enjoy a majority—often a supermajority—
among the decisionmakers.287 Licensing boards are born captured.288
Cases that exempt state licensing boards from Midcal’s supervision
prong (such as Hass and Earles) are wrong because they fail to recognize this
basic feature of board decisionmaking. These cases analogize licensing
boards to municipalities because boards are “public,” citing open meetings,
public-minded mandates, and an affiliation with the state.289 The cases,
however, fail to recognize that these features cannot meaningfully check
self-dealing in the way that elections and public visibility check municipal
officers from self-dealing at the expense of their constituents. These cases
are also inconsistent with Bates, where the state bar of Arizona was treated
as a private actor requiring state supervision to claim state action immunity
for its actions.

285
286
287

Id. at 671.
Id. at 672.
Here we have, to use Wiley’s terminology, direct evidence of capture. He suggests that
judges should “demand . . . plaintiffs . . . identify producers who profit from the regulation’s
competitive restraint and who played a decisive political role in its adoption.” Wiley, supra note
266, at 769.
288 In Tennessee and Florida, for example, the legislation creating the boards makes the vast
majority of boards majority-dominated by participants in the regulated industry. See Appendix.
289 See, e.g., Earles v. State Bd. of Certified Pub. Accountants, 139 F.3d 1033, 1041 (5th Cir.
1998) (“[T]he public nature of the Board’s actions means that there is little danger of a cozy
arrangement to restrict competition.”).

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A more searching, case-by-case approach—such as the one the FTC advocated in North Carolina Board of Dental Examiners290—would look to the
actual accountability of the board to determine when there is “an appreciable risk that the challenged conduct may be the product of parties pursuing
their own interests rather than state policy.”291 The FTC, echoing Elhauge’s
argument, would find that such risk is present whenever the entity “consist[s] in whole or in part of market participants,”292 and certainly where the
entity is dominated by market participants. We agree.
Such an entity differs significantly from the municipality in Hallie. The
Hallie Court found that when a municipality regulates, “there is little or no
danger that it is involved in a private price-fixing arrangement.”293 Although
the Court does not provide reasoning for this conclusion, it is easily supplied. A municipality makes decisions through elected officials and civil
servants. These decisionmakers are charged with maximizing the public
good294 and—although only a very antiquated view of government would
hold that the officials’ self-interest is irrelevant—their subjugation to the
electorate achieves the level of accountability and democratic legitimacy
that we require to grant immunity.
The flaw of Hallie’s footnote ten is its failure to articulate why state
agencies and municipalities are so similar that “there is little or no danger”295 of self-dealing in both.296 There is a diversity of state agencies, and it
may be reasonable to presume that those not dominated by competitors or
captured by the regulated industry do in fact pursue the state’s governmental interest. 297 But, the mere fact that a legislature declares a body to be a
state agency as the legislature in North Carolina Board of Dental Examiners
did, cannot itself eliminate the “real danger that [the board] is acting to
further [members’] own interests, rather than the governmental interests of
290
291
292
293
294

151 F.T.C. 607, 618 (2011).
STATE ACTION TASK FORCE, supra note 84, at 15.
Id. at 55.
Town of Hallie v. City of Eau Claire, 471 U.S. 34, 47 (1985).
See Steven Semeraro, Demystifying Antitrust State Action Doctrine, 24 HARV. J.L. & PUB.
POL’Y 203, 282 (2000) (explaining that the state action doctrine “posit[s] a social structure in
which government actors are supposed to act in the public interest”).
295 Hallie, 471 U.S. at 47.
296 Bobrow, supra note 50, at 1500 (listing key differences between state agencies and municipalities).
297 As the FTC has noted, “Whatever the case may be with respect to state agencies generally . . . the Court has been explicit in applying the antitrust laws to public/private hybrid entities,
such as regulatory bodies consisting of market participants.” N.C. Bd. of Dental Exam’rs, 151
F.T.C. 607, 619 (2011). Clark Havighurst has also advocated for a case-by-case analysis of state
agencies. See Havighurst, supra note 50, at 598 (“[C]ourts applying the state action doctrine should
shape their inquiries to give proper weight to federal antitrust concerns as well as federalism.”).

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the State,” which the Hallie Court viewed as the reason private actors must
be state supervised to escape antitrust review.298 Who could seriously argue
that an unsupervised group of competitors appointed to regulate their own
profession can be counted on to neglect their selfish interests in favor of the
state’s?299 That would require blindness to Adam Smith’s observation that
“[p]eople of the same trade seldom meet together, even for merriment and
diversion, but the conversation ends in a conspiracy against the public, or in
some contrivance to raise prices.”300
The Fourth Circuit’s analysis in North Carolina State Board of Dental
Examiners dilutes the importance of a competitor-dominated board of
dentists’s self-interest by conflating that self-interest with the self-interest
of the dentists who elect the board.301 Self-interest does not compound like
other interest; the self-interest of the board is enough to require supervision. The notion that governor appointment can meaningfully solve the
problem of self-dealing is also unrealistic. Indeed, all influential accounts
of antitrust federalism, from Wiley’s focus on capture302 to Elhague’s focus
on financial self-interest,303 focus on the identity of the decisionmakers, not
their means of appointment. A narrow reading of North Carolina Board of
Dental Examiners’s holding would allow governors—however wellintentioned they may be in the appointment process—to hand the controls
of regulation over to the regulated themselves and walk away without any
oversight responsibility.
Sound public policy requires that any consortium of competitors be
supervised by disinterested state agents, be subject to antitrust laws, or
both. That the consortium of competitors is called a state board and given
power by the state to regulate its profession does not make it more trustworthy. The grant simply makes the board more powerful and therefore
more dangerous. Supervision by disinterested state agents should be a
minimum requirement for a state board to receive antitrust immunity under
Hallie and Midcal, Hallie’s footnote notwithstanding. If true independence is
impossible, which is arguably the case in the licensing context given that
industry expertise is essential to decisionmaking, there is even greater need
for active supervision to justify immunity. Common sense tells us that
298
299

Hallie, 471 U.S. at 47.
See Havighurst, supra note 50, at 596-99 (noting that the composition of state licensing
boards qualifies them as “more professional than governmental in character”).
300 SMITH, supra note 100, at 134.
301 717 F.3d 359, 366-70 (4th Cir. 2013) (“[W]hen a state agency is operated by market participants who are elected by other market participants, it is a ‘private’ actor.”).
302 Wiley, supra note 266.
303 Elhauge, supra note 168.

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competition law cannot abdicate control when a powerful consortium of
competitors regulates its own industry, even if the state has granted them
power to do so. Thus, the Supreme Court should use the circuit split as an
opportunity to embrace the Fourth Circuit’s holding in North Carolina State
Board of Dental Examiners—but then go further by clarifying that all practitioner-dominated boards are subject to both Midcal prongs, regardless of the
appointment process.
In one sense, such a holding would be modest because it would not call
into question vast amounts of state law; many areas of state regulation are
not delegated to majority-industry boards, or at least are actively supervised
by the state itself. The California Department of Insurance, for example,
has an elected politician as its current head—one who never worked in the
insurance industry.304 Likewise, many state agencies are largely comprised
of civil servants and have only nominal participation from industry members. But in another sense the change would be significant. Most licensing
boards would fail the supervision prong if subjected to it; requiring state
supervision for licensing boards that claim state action immunity creates the
potential for sweeping changes to regulations affecting over a third of the
nation’s workforce.
IV. THE MECHANICS OF ANTITRUST LIABILITY FOR
STATE LICENSING BOARDS
Since our proposal would put thousands of boards under the Sherman
Act’s microscope, we dedicate the last Part of this Article to describing the
logistics of such a regime. Section A outlines how Sherman Act suits against
professional boards might proceed. Since boards resemble private professional associations in their composition and incentives and the parties
involved parallel those in a traditional § 1 suit, we borrow the mechanics of
suits under that provision. This Section also recommends modifying the
rule of reason in the licensing context to a standard that allows as procompetitive arguments gains to public safety and quality of service, even when
these gains flow directly from limitations on competition. We then address
questions related to standing and the single-entity doctrine. Section B
predicts how states might react and evaluates the competitive consequences
of those reactions.

304 About Us: About the Commissioner, CAL. DEP’T INS. (Oct. 2, 2013), http://www.insurance.ca.gov/
0500-about-us/0200-commissioner.

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A. Imagining a New Regime
Some rules, such as the traditional rule of reason, should be altered to
accommodate arguments unique to licensing. But other doctrines, such as
standing, treble damages, and the single-entity defense, translate well into
the licensing context.
1. The Standard: Rule of Reason as Applied to Licensing
The basic rule of § 1 is the rule of reason. Under this rule, and since
Standard Oil Co. of New Jersey v. United States, only unreasonable restraints
of trade are illegal.305 Restraints without acceptable justification (or whose
justifications are too implausible) are either held per se illegal or illegal
under a quick-look rule of reason.306 The full-blown rule of reason ferrets
out the good and the bad to determine if a restraint is justified.
The full-blown rule of reason is used for “agreements whose competitive
effect can only be evaluated by analyzing the facts peculiar to the business,
the history of the restraint, and the reasons why it was imposed.”307 The
central question under a § 1 rule-of-reason analysis is whether a restraint
will tend to substantially limit competition. Justice Brandeis formulated the
test as “whether the restraint imposed is such as merely regulates and
perhaps thereby promotes competition or whether it is such as may suppress
or even destroy competition.”308 Modern courts frame the question as one
of balancing pro- and anticompetitive effects of the restraint.309
However, not all benefits are considered “procompetitive” under the rule
of reason. In perhaps the strongest condemnation of social-welfare justifications, the Supreme Court in National Society of Professional Engineers v.
United States rejected a professional society’s rule hindering comparison
price-shopping for engineering services. 310 The engineers argued that
“awarding engineering contracts to the lowest bidder, regardless of quality,
would be dangerous to the public health, safety, and welfare.”311 The Court
called the engineers’ attempt to so justify the restraint “nothing less than a

305
306

221 U.S. 1, 66 (1911) (discussing the rule of reason).
See, e.g., Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679, 692 (1978) (describing
the “two complementary categories of antitrust analysis”).
307 Id. at 692.
308 Chicago Bd. of Trade v. United States, 246 U.S. 231, 238 (1918).
309 See United States v. Microsoft Corp., 253 F.3d 34, 59 (D.C. Cir. 2001) (“The plaintiff
must demonstrate that the anticompetitive harm of the conduct outweighs the procompetitive
benefit.”).
310 435 U.S. 679.
311 Id. at 685.

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frontal assault on the basic policy of the Sherman Act.”312 In particular,
public safety benefits that flow directly from a reduction of competition do
not escape scrutiny because “the statutory policy precludes inquiry into the
question whether competition is good or bad.”313 Under a conventional ruleof-reason analysis, a permissible agreement must directly enhance competition in some way, such as when a group of copyright holders creates a new
and valuable product together.314 Of course, the most plausible benefits of
many (and perhaps most) licensing restraints flow directly from their
limitations on competition. Curing the lemons problem or eliminating
externalities, therefore, might not be seen as procompetitive under the
Professional Engineers holding.
The basic policy justifications for licensing boards flow from the belief
that free and unfettered competition will lower the quality of service
provided to the public.315 Under Professional Engineers, such justifications
might not be viewed as procompetitive and therefore might be held illegal.
This, we think, would be a step too far.
The argument that boards protect the public from charlatans is not inherently implausible and deserves respect. We therefore advocate a modified
rule of reason that would allow licensing boards to cite public safety and
quality enhancement justifications even when those alleged benefits flow
directly from eliminating or limiting competition. When courts balance the
competitive effects of a licensing restriction, they should place service
quality and public safety benefits on the procompetitive side of the scale.
Modifying the rule of reason to incorporate public health and safety
arguments may not actually be as large of a shift in doctrine as it may
appear at first glance. Although courts often purport to find public interest
justifications irrelevant to a § 1 analysis, this rejection is neither universal
nor complete. Courts have been willing to consider appeals to health and
safety, especially in the context of reviewing restrictions imposed by
professional associations.
For example, even in Professional Engineers, the Court acknowledged that
Goldfarb, which it had decided just three years earlier, “noted that certain
practices by members of a learned profession might survive scrutiny under

312
313
314

Id. at 695.
Id.
See Broad. Music, Inc. v. Columbia Broad. Sys., Inc., 441 U.S. 1, 24-25 (1979) (holding
that the issuance of blanket licenses to copyrighted musical compositions at negotiated fees does
not constitute price fixing).
315 For a discussion of why licensing boards would likely pass rational basis review, see supra
subsection II.B.2.

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the Rule of Reason even though they would be viewed as a violation of the
Sherman Act in another context.”316
Lower courts have used this mixed message from the Supreme Court to
find a place for social welfare justifications in rule-of-reason analysis. For
example, in United States v. Brown University, the Third Circuit remanded a
suit challenging an agreement among elite universities about financial aid
packages.317 The court required the district court to undertake a full-blown
rule-of-reason analysis and place “social welfare justifications”—which the
lower court had previously rejected—on the procompetitive side of the
scale.318 The court said that proper rule-of-reason analysis would consider
the benefits of making higher education available to the “needy” and of
having a more diverse student body at the elite schools.319 The court explained that the financial aid agreement in place among the schools “may in
fact merely regulate competition in order to enhance it, while also deriving
certain social benefits,” and noted that such an agreement would survive
Sherman Act scrutiny.320
Brown University may occupy the outer boundary of a court’s willingness
to entertain social welfare justifications for agreements restricting competition, but even the Supreme Court has softened its hard line against these
arguments. In a decision that paralleled that in Brown University, California
Dental Association v. FTC remanded a challenge against a dental association’s
advertising ban that failed the lower court’s quick-look rule of reason
analysis.321 By calling for a less-abbreviated analysis of the restraint, the
Court implied that the association’s defenses of the ban—that it promoted
quality of care and information by restricting one dimension of competition—were legitimate under the Sherman Act.322
California Dental and Brown University set a foundation for the proper
standard for Sherman Act analysis of licensing board restrictions. As
discussed in Part II, unregulated markets for professional services can harm
social welfare in two ways. Offering consumers a choice between lowquality, low-price services and high-quality, high-cost services is inefficient
because consumers choosing the low-quality option will not fully internalize
316
317
318
319
320
321
322

Professional Engineers, 435 U.S. at 686.
5 F.3d 658 (3d Cir. 1993).
Id. at 678.
Id. at 677-78.
Id. at 677.
526 U.S. 756 (1999).
Id. at 779-81 (suggesting that there is “generally no categorical line to be drawn between
restraints that give rise to an intuitively obvious inference of anticompetitive effect and those that
call for more detailed treatment”).

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its costs (the externalities problem). Furthermore, even if a full range of
quality were socially desirable, information asymmetries would cause the
market for high-quality services to unravel (the lemons problem). If licensing works to remedy these market failures, then the average or minimum
quality of service will be higher than under an unlicensed regime.
To solve these problems, courts should apply a modified rule-of-reason
analysis in licensing cases as follows. First, courts should accept arguments
that a restriction improves consumer access to information or raises quality
of service as procompetitive justifications. Measuring quality of service is
difficult, especially when it is impossible to observe a market unfettered by
licensing. But the difficulty of quantifying competitive benefits is nothing
new in rule-of-reason cases. Professional boards should be induced to bring
their best evidence of procompetitive effects to the suit. Second, claims of
quality improvement should be specific and tied to a theory of market
failure that justifies government interference. 323 In other words, for a
licensing restriction to pass muster under the rule of reason, it should
closely fit the problem it is designed to solve. Finally, courts should consider
whether other regulations could restore information symmetry or raise
quality of service with less cost to competition. Put another way, courts
should consider whether there are less restrictive alternatives to the challenged licensing scheme.
This three-prong system for analyzing a licensing restriction—
identifying a legitimate reason for the licensing restriction, analyzing the fit
between the restriction and the problem, and inquiring into less restrictive
alternatives—resembles the constitutional standard applied to equal protection or due process claims. But it can also be understood as a framework for
the balancing that the traditional rule of reason demands. Under the first
two prongs, a court places the benefits of restriction on the procompetitive
side of the scale. Under the last prong, the court places the restriction’s
competitive burden on the anticompetitive side of the scale, asking whether
there is an alternative less destructive to competition that achieves the same
benefits.
Revisiting the specific examples discussed above will illustrate the kinds
of arguments that will be persuasive to a court analyzing a state board’s
restriction under our modified rule of reason. Louisiana’s rule forbidding
casket sales by anyone other than a licensed funeral director would fail the
323 This recommendation is similar to one of Wiley’s requirements for lifting state action
immunity where the regulation does not “respond[] directly to a substantial market efficiency.”
Wiley, supra note 266, at 743.

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first prong of the test. There is no empirical evidence that caskets are of
poor quality or that consumers cannot determine the value of a casket in
states without such a restriction. Further, the state would have difficulty
raising even a theoretical argument that inferior-quality caskets present a
public health and safety issue because it does not even require burial by
casket at all. Nor could it easily argue that the free market for caskets would
suffer from information asymmetries given that one can comparison shop
for caskets on websites like Amazon.com, which offers consumer reviews,
detailed specifications, and photographs.324 Therefore, the restriction fails
the first prong because it fails to address any significant market failure—in
practice or theory.
Restrictions on nurse practitioners would also fail the first prong, but
not because there are no theoretical failures in an unregulated market for
medicine. In theory, low-quality healthcare creates externalities when the
cost of fixing (or living with) bad outcomes falls on other individuals or the
government. This is almost certainly the case in our system, in which the
effects of poor care are felt everywhere, from emergency rooms and innercity clinics to schools and the workplace. But despite the strong theoretical
argument that any given regulation on a nurse’s right to practice improves
quality and therefore addresses a market failure, there is no empirical
evidence that supervised nurses have better outcomes than unsupervised
ones.325 Thus, licensing restrictions that require nurse practitioners to be
supervised would fail the first prong for lack of data suggesting that such
restrictions improve the quality of care.
State cosmetology boards’ attempts to bring African hair braiding under
their jurisdiction, on the other hand, would fail the second prong of our
modified rule-of-reason analysis. Whatever health and safety issues arise
from the unlicensed practice of braiding, they are not addressed by requiring
practitioners to attend up to 1800 hours of schooling on the use of chemicals, dyes, and other beauty techniques that do not relate to African hair
braiding. There is simply a poor fit between the restriction and the problem
that it purportedly addresses. Similarly, a state restriction requiring a
cosmetology license for brow threaders would fail the second prong, as
would requiring a degree in veterinary medicine for horse teeth floaters
when veterinary schools teach nothing about the practice.326

324 Amazon.com lawfully sells caskets online to customers living in states without regulations
similar to Louisiana’s.
325 See CHRISTIAN & DOWER, supra note 21, at 6.
326 See Challenging Barriers to Economic Opportunity, supra note 58.

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If a restriction survives the first two prongs, the court should balance the
benefit of the restriction against its cost to competition. For example, some
regulation of horse teeth floating may be justifiable since horse owners may
not be able to evaluate the quality of a floater’s service. In that case, the
third prong would be the crucial factor: making teeth floaters attend
veterinary school is an outsized requirement. Rather, a state might be able
to justify a less restrictive licensing requirement that is specific to horse
teeth floaters and mandates a short educational unit followed by a test
narrowly tailored to assessing competency in teeth floating.
In balancing the anticompetitive effects of the restriction, courts should
also consider other governmental regulations that are less restrictive than
licensing. For example, labor economists hail certification as a superior
option to licensing where a free market may suffer from information
asymmetry. 327 Certification is similar to licensing in that the state sets
educational or testing criteria for professionals; passing these hurdles
signals to consumers the individual’s minimum quality and competency. But
unlike under licensing schemes, uncertified practitioners may still practice
as long as they do not claim a “certified” title. Certification thus solves the
information asymmetry problem because consumers seeking higher-quality
services can pay more for certified practitioners. But it does so at a lower
cost to competition, since certification is not an absolute barrier to entry for
low-cost practitioners. Accordingly, Louisiana’s restriction on unlicensed
flower arranging would likely fail the third prong of the test. Since market
failure in the flower industry is at most information asymmetry, not externalities, offering state certification programs to florists could easily address
the problem.
2. The Parties: Standing to Sue and Available Damages
Changing the state action regime for licensing boards raises several logistical questions. Who would sue? What would be the remedy? And would
board members pay damages? As a descriptive matter, the answers are
relatively easy: lifting state action immunity for state boards means that the
parties who sue and are sued would be the same as in a run-of-the-mill § 1
case.328 Government enforcement agencies such as the DOJ and the FTC,
327 KLEINER, supra note 3, at 152-57 (identifying certification and registration as policy alternatives); Michael Pertschuk, Needs and Licenses (noting that certification is one alternative that
provides information without creating a barrier to entry), in OCCUPATIONAL LICENSURE AND
REGULATION, supra note 97, at 347.
328 Of course, under the Eleventh Amendment, federal courts could not entertain suits
against the boards as “arms” of the state. But under the holding of Ex parte Young, 209 U.S. 123

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as well as private individuals capable of proving antitrust injury, could bring
suit against the conspirators (here, members of an industry serving on a
board) seeking equitable and monetary relief. But this analogy leads to an
important normative question: Does this regime create incentives that
ensure optimal enforcement of antitrust norms? This subsection argues that,
for the most part, it does.
Since anticompetitive licensing restrictions often further local state interests, federal enforcement will be essential to police self-dealing. The DOJ
and the FTC will be able to bring suits based on the claim that a given
licensing regulation violates the Sherman Act. Without the bar of state
action immunity, the agencies will also be able to seek equitable relief under
§ 4 of the Sherman Act329 and § 15 of the Clayton Act330 to invalidate and
prevent a board from implementing an anticompetitive regulation. Federal
agencies will bring the knowledge, expertise, and resources for empirical
investigations necessary to identify anticompetitive targets.331
That said, licensing boards and private cartels should be treated differently under criminal law despite their many similarities. Just as the potential benefits of licensing make per se condemnation inappropriate, they
should also preclude criminal prosecution. State licensing board activity,
while full of anticompetitive potential, is hardly among the hard-core
violations that serve as the primary target for criminal enforcement.
Lifting the state action ban on suits against boards will also allow private
individuals capable of showing antitrust injury to bring suit. These plaintiffs, like other antitrust plaintiffs, can be divided into two categories:
consumers and competitors. Although consumers of a professional service
may not have enough financial incentive to bring a suit individually, they
could use class action suits to aggregate damages to a litigable amount. And
§ 15 of the Clayton Act, of course, strengthens the incentive to sue by
providing plaintiffs with treble damages.332

(1908), individual board members could be sued in federal court in their official capacities. See
Earles v. State Bd. of Certified Pub. Accountants, 139 F.3d 1033, 1039-41 (5th Cir. 1998) (noting
that the Ex parte Young rule has been viewed as allowing a federal court to entertain suits against
individual officials).
329 15 U.S.C. § 3 (2012).
330 15 U.S.C. § 15 (2012).
331 In fact, even without the added incentive created by the power to bring suits, the FTC
has invested in numerous studies of the economic impact of professional regulation. See, e.g., COX
& FOSTER, supra note 23, at 31 (summarizing the percentage increase in prices due to businesspractice restrictions); LIANG & OGUR, supra note 20, at 44-47 (providing empirical results on
dental restrictions).
332 15 U.S.C. § 15(a) (2012).

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Similarly, competitors—most likely would-be professionals—could sue
to receive three times the wages they would have earned but for the anticompetitive barrier to entry. These wages may be difficult to prove but not
necessarily more difficult to prove than lost earnings caused by cartel
activity. Would-be professionals could also use the Sherman Act as a shield
rather than a sword; lifting Sherman Act immunity would mean that wouldbe professionals could defend against a board’s enforcement action by
invoking the invalidity of the board’s regulation.333
If lifting state action immunity would allow competitors and consumers
to sue for monetary damages, who would pay? In cartel cases, the industry
members who conspire must financially compensate their victims. So, too,
should be the case in licensing board suits: the industry members on the
board would be liable for treble damages to competitors and consumers
harmed by their agreement.334 This is the result under current law when
courts deny professional associations state action immunity; Goldfarb v.
Virginia is an example.335
Individual financial liability for board members may seem like an unjust
or unworkable regime, but § 1983 imposes similar liability on individual
state actors for violations of constitutional rights.336 States have responded
to the prospect of financial ruin for their employees by indemnifying them
against § 1983 suits as a term of employment.337 With the deeper pockets of
333 The Supreme Court used state action doctrine to reject such a defense in Bates v. State
Bar of Arizona, 433 U.S. 350, 359 (1977). In Bates, lawyers who advertised their services in
contravention of the Bar’s rules argued that the rule was invalid under the Sherman Act. Id. at 35456. But the Sherman Act challenge failed on state action grounds because the Arizona rules against
lawyer advertising “‘reflect[ed] a clear articulation of the State’s policy with regard to professional
behavior’ and were ‘subject to pointed reexamination by the policymaker—the Arizona Supreme
Court—in enforcement proceedings.’” Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminum, 445
U.S. 97, 105 (1980) (alteration in original) (quoting Bates, 433 U.S. at 362).
334 John E. Lopatka & William H. Page, State Action and the Meaning of Agreement Under the
Sherman Act: An Approach to Hybrid Restraints, 20 YALE J. ON REG. 269, 292 (2003) (“[A]ny hybrid
restraint that violates the antitrust laws and fails the tests for immunity leaves private parties
exposed to the whole panoply of antitrust remedies.”).
335 The plaintiffs in Goldfarb, a class of consumers of legal services, sued the state bar association for Sherman Act violations. The Supreme Court, in holding that the Bar acted in contravention of state policy—and therefore without adequate state delegation—remanded the case to allow
the class to hold individual members of the Bar liable for treble damages. Goldfarb v. Va. State
Bar, 421 U.S. 773, 791 (1975).
336 42 U.S.C. § 1983 (2012) (providing a private right of action for money damages to compensate victims of constitutional violations).
337 In the case of law enforcement, the state or local government that employs the officer
typically promises to indemnify him in the case of a § 1983 suit. See, e.g., Jonathan Day & Jeffrey
W. Jacobs, Opening the Deep Pocket—Sovereign Immunity Under Section 1983, 31 BAYLOR L. REV.
389, 408 (1979) (“[V]oluntary assumption of employees’ liability by governmental entities . . . ha[s]
already been adopted in most jurisdictions, at least to the extent of assuming the burden of

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the government available, victims have a meaningful opportunity for
compensation. Moreover, even though individual employees may not be
personally liable, the indemnification structure gives states the incentive to
train employees, tightly control conduct, and create disciplinary systems to
deter violations.338 States might choose to adopt a similar indemnification
structure for individual board members in case of a treble damages suit
under the Sherman Act.
3. The Defense: Boards as Single Entities?
Board activity easily fulfills the § 1 requirement of agreement because
board members meet face-to-face and explicitly agree on licensing
restrictions, often by formal majority vote. Again, these agreements are
among competitors; licensing boards often have only nominal representation from nonprofessionals. Boards may argue, however, that their rules and
restrictions are not the products of conspiracies because they operate as
single entities. Conspiring with others on the board, so the argument would
go, is like conspiring with oneself.
This argument is likely to fail. The Supreme Court has held that professional associations, similar to boards in composition and incentives, can be
conspiracies under § 1. Recently, the Supreme Court rejected the National
Football League’s argument that individual teams could not conspire with
one another since they had a single economic incentive to maximize profits
from licensing team merchandise and ticket sales.339 The Court held that
the teams, absent the agreement, would have had individual profit incentives to compete with one another, so the agreement “deprives the marketplace of independent centers of decisionmaking” in violation of § 1.340 To
the extent that there was a unitary financial goal among the teams, it was to
suppress competition among themselves.341
Although the Supreme Court has not considered whether a state licensing board is a single entity under § 1, the FTC has rejected this defense to
Sherman Act liability on several occasions. In FTC v. Massachusetts Board of
defending civil rights claims.”); Alexandra White Dunahoe, Revisiting the Cost-Benefit Calculus of the
Misbehaving Prosecutor: Deterrence Economics and Transitory Prosecutors, 61 N.Y.U. ANN. SURV. AM.
L. 45, 63-64 & n.83 (2005).
338 But see generally Daryl J. Levinson, Making Government Pay: Markets, Politics, and the Allocation of Constitutional Costs, 67 U. CHI. L. REV. 345 (2000) (arguing that governments do not
internalize costs in the same way that private firms do).
339 Am. Needle, Inc. v. Nat’l Football League, 130 S. Ct. 2201, 2207 (2010).
340 Id. at 2212 (citation omitted).
341 Id. at 2213 (“[I]llegal restraints often are in the common interests of the parties to the
restraint, at the expense of those who are not parties.”).

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Registration in Optometry, the FTC explained that the optometry board was
not acting as a single entity in passing advertising restrictions: “Each
optometrist on the Board is principally engaged in the private practice of
optometry in the market that the Board regulates . . . . [I]n the absence
of those regulations, the Board optometrists would compete with each other
by individually deciding whether to advertise.”342 Similarly, federal courts
and the Supreme Court have held that private professional organizations, in
promulgating standards of practice, certification, and licensing, cannot claim
to be acting as a single entity under the antitrust laws.343
B. Possible State Responses and Their Likely Effects
Applying Sherman Act pressure to state licensing boards will alter the
equilibrium of a complex system of regulation, so a thorough analysis of its
benefits must also consider how that system will likely adjust. As this
Section illustrates, states wishing to regulate professions without having to
answer to an antitrust suit will have several options. Each option will
require a departure from the current practice of using practitionerdominated administrative boards to promulgate rules and regulations—and
thus a step toward politically accountable, procompetitive regulation.
1. Actively Supervising Board Activity
If the Court requires occupational boards to show supervision in order
to enjoy immunity from antitrust suits, then the most straightforward way
for states to insulate boards from antitrust scrutiny is to actively supervise
them. Supervision, at least in theory, will complete the link between a
board’s anticompetitive restrictions and the accountable, elected body that

342 110 F.T.C. 549, 582 (1988). Likewise, after the NFL case, the FTC held that the singleentity defense was not available to the North Carolina Board of Dental Examiners for the same
reason. The FTC explained that since board members “stand to reap economic gains when the
Board takes actions to exclude non-dentists from competing to provide certain services,” it could
not be said to be acting to further a financial goal independent of those of the individual members.
N.C. Bd. of Dental Exam’rs, 151 F.T.C. 607, 628-29 (2011).
343 See, e.g., Daniel v. Am. Bd. of Emergency Med., 802 F. Supp. 912, 924-25 (W.D.N.Y.
1992) (holding that a private certification association can be a § 1 conspiracy); PHILLIP E.
AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW ¶ 1477 (3d ed. 2006) (“Trade associations are routinely treated as continuing conspiracies or ‘combinations’ of their members, as are
bodies promulgating rules or standards for the competitive conduct of their members, such as the
National Society of Professional Engineers. The most significant attribute of trade associations
dictating that conclusion is that the individual members continue to have business separate from
the association itself.” (footnote omitted)).

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demanded them.344 Formal review and approval by the state will afford
consumers and would-be professionals a stronger voice against heavyhanded restrictions since they could vote out officials approving unjustifiable regulations.
Although consumer interests will likely always be more diffuse than
those of practitioners, forcing states to answer for and stand behind a
board’s restrictions exposes these decisions to at least some political accountability. As the Court explained in Ticor, “For States which do choose
to displace the free market with regulation . . . insistence on real compliance with both parts of the Midcal test will serve to make clear that the
State is responsible for the price fixing it has sanctioned and undertaken to
control.”345
2. Changing Board Composition
Another way in which a state could protect a licensing board from antitrust scrutiny would be to change its composition. A state could limit a
board’s exposure to antitrust liability by reducing practitioner representation and filling the rest of the board seats with members representing other
interests. Having a diverse membership that includes consumers, civil
servants, labor economists, and members from adjoining professions may
serve as a prophylactic against liability. Such a board’s decisions are more
likely to have considered and resolved the concerns of the antitrust laws.
3. Moving Licensing to the Interior of State Government
States may, however, find cutting professional participation to token
levels or implementing costly mechanisms for supervision unattractive. An
alternative would be to directly regulate through sovereign branches of the
state itself. Even under the current regime, some professional entry and
practice requirements are passed as state statutes, and these acts of sovereign
authority are always immune under Parker.346 Such decisions would not be
subject to antitrust scrutiny, even under the change proposed in this Article.
344 See, e.g., Inman & Rubinfeld, supra note 273, at 1257 (concluding that Midcal’s supervision
prong “gives meaning to the first [prong], for without supervision, interested individuals cannot be
assured that their initial participation in the political process will be meaningful.”). But see
Havighurst, supra note 50, at 599 (disagreeing with the federal antitrust agencies’ apparent belief
that “giving greater weight to the active-supervision requirement is the best way to discourage
state licensing and regulatory boards from acting in anticompetitive ways”).
345 FTC v. Ticor Title Ins. Co., 504 U.S. 621, 636 (1992).
346 See Hoover v. Ronwin, 466 U.S. 558, 567-68 (1984) (“[U]nder the Court’s rationale in
Parker, when a state legislature adopts legislation, its actions constitute those of the State, and ipso

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This change, like adding meaningful state supervision over board activity,
would facilitate competition by deterring regulation that benefits only
practitioners. Elected officials would be made to answer for and stand
behind decisions restricting entry and practice. Restrictions would be
proposed and debated openly in the legislature, allowing for more participation from the constituents currently absent from professional licensing
boardrooms. Requiring that the state place its imprimatur on regulation is
at least better than the status quo, in which states too often delegate selfregulation to professionals and walk away.
CONCLUSION
Licensed occupations have been free to act like cartels for too long without
Sherman Act scrutiny. With nearly a third of workers subject to licensing
and a continuing upward trend, it is time for a remedy. We do not propose
an end to licensing or a return to a Dickensian world of charlatan healers
and self-trained dentists. But the risks of unregulated professional practice
cannot be used to rationalize unfettered self-regulation by the professionals
themselves. The law needs to strike a balance.
That balance is the same one sought in any modern rule of reason case: a
workable tradeoff between a restriction’s salutary effects on the market and
its harm to competition. Immunity from the Sherman Act on state action
grounds is not justified under antitrust federalism when those doing the
regulation are the competitors themselves, where they are not accountable
to the body politic, where they have too often abused the privilege, and
where the anticompetitive dangers are so clear. The threat of Sherman Act
liability can provide the necessary incentives to occupational regulators
trading off competition for public safety and welfare. Without it, selfdealing occupational boards will continue to be cartels by another name.

facto are exempt from the operation of the antitrust laws . . . . [A] state supreme court, when
acting in a legislative capacity, occupies the same position as that of the state legislature.” (citation
omitted)).

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APPENDIX: FLORIDA
Majority
Licensed
Professionals

Appointing
Body

Rulemaking
Authority

Criminal
Enforcement

Occupational Board

Statutory
Citation

Board of
Acupuncture

§ 457.101
et seq.

Yes

Governor

Yes

Yes

Board of Athletic
Training

§ 468.70
et seq.

Yes

Governor

Yes

Yes

Board of
Chiropractic
Medicine

§ 460.401
et seq.

Yes

Governor

Yes

Yes

Board of Clinical
Laboratory
Personnel

§ 483.800
et seq.

Yes

Governor

Yes

Yes

Board of Clinical
Social Work,
Marriage and
Family Therapy,
and Mental Health
Counseling

§ 491.002
et seq.

Yes

Governor

Yes

Yes

Board of Dentistry

§ 466.001
et seq.

Yes

Governor

Yes

Yes

Board of Hearing
Aid Specialists

§ 484.0401
et seq.

Yes

Governor

Yes

Yes

Board of Massage
Therapy

§ 480.031
et seq.

Yes

Governor

Yes

Yes

Advisory Council of
Medical Physicists
(under authority of
Department of
Health)

§ 483.901
et seq.

No

FL Surgeon
General

No

Yes

Board of Medicine

§ 458.301
et seq.

Yes

Governor

Yes

Yes
(continued)

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Board of Nursing

§ 464.001
et seq.

Yes

Governor

Yes

Yes

Board of Nursing
Home
Administrators

§ 468.1635
et seq.

No

Governor

Yes

Yes

Board of
Occupational
Therapy Practice

§ 468.201
et seq.

Yes

Governor

Yes

Yes

Board of Opticianry

§ 484.001
et seq.

Yes

Governor

Yes

Yes

Board of Optometry

§ 463.0001
et seq.

Yes

Governor

Yes

Yes

Board of Orthotists
and Prosthetists

§ 468.80
et seq.

Yes

Governor

Yes

Yes

Board of
Osteopathic
Medicine

§ 459.001
et seq.

Yes

Governor

Yes

Yes

Board of Pharmacy

§ 465.001
et seq.

Yes

Governor

Yes

Yes

Board of Physical
Therapy Practice

§ 486.011
et seq.

Yes

Governor

Yes

Yes

Board of Podiatric
Medicine

§ 461.001
et seq.

Yes

Governor

Yes

Yes

Board of Psychology

§ 490.001
et seq.

Yes

Governor

Yes

Yes

Board of
Respiratory Care

§ 468.35
et seq.

Yes

Governor

Yes

Yes

Board of SpeechLanguage Pathology
& Audiology

§ 468.1105
et seq.

Yes

Governor

Yes

Yes

Board of
Architecture and
Interior Design

§ 481.201
et seq.

Yes

Governor

Yes

Yes
(continued)

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Board of
Auctioneers

§ 468.381
et seq.

Yes

Governor

Yes

Yes

Barbers' Board

§ 476.014
et seq.

Yes

Governor

Yes

No

Building Code
Administrators and
Inspectors Board

§ 468.601
et seq.

Yes

Governor

Yes

Yes

Regulatory Council
of Community
Association
Managers

§ 468.431
et seq.

Yes

Governor

Yes

Yes

Construction
Industry Licensing
Board

§ 489.101
et seq.

Yes

Governor

Yes

Yes

Board of
Cosmetology

§ 477.011
et seq.

Yes

Governor

Yes

No

Electrical
Contractors’
Licensing Board

§ 489.501
et seq.

Yes

Governor

Yes

Yes

Board of Employee
Leasing Companies

§ 468.520
et seq.

Yes

Governor

Yes

Yes

Board of Landscape
Architecture

§ 481.301
et seq.

Yes

Governor

Yes

Yes

Board of Pilot
Commissioners

§ 310.001
et seq.

No

Governor

Yes

Yes

Board of
Professional
Geologists

§ 492.101
et seq.

Yes

Governor

Yes

Yes

Board of Veterinary
Medicine

§ 474.201
et seq.

Yes

Governor

Yes

Yes

Board of
Professional
Engineers

§ 471.001
et seq.

Yes

Governor

Yes

Yes
(continued)

1160

University of Pennsylvania Law Review

[Vol. 162: 1093

Board of Funeral,
Cemetery, and
Consumer Services

§ 497.001
et seq.

Yes

Governor

Yes

Yes

Board of
Professional
Surveyors and
Mappers

§ 472.001
et seq.

Yes

Commissioner
of Agriculture

Yes

Yes

Board of
Accountancy

§ 473.301
et seq.

Yes

Governor

Yes

Yes

Real Estate
Commission

§ 475.001
et seq.

Yes

Governor

Yes

Yes

98%

95%

Total Boards: 41

90%

2014]

1161

Cartels by Another Name

APPENDIX: TENNESSEE

Occupational Board

Statutory
Citation

Majority
Licensed
Professionals

Appointing
Body

Rulemaking
Authority

Criminal
Enforcement

Board of Accountancy

§ 62-1-101
et seq.

Yes

Governor

Yes

Yes

Board of Examiners
for Architectural and
Engineering
Examiners

§ 62-2-201
et seq.

Yes

Governor

Yes

Yes

Board of Barber
Examiners

§ 62-3-101
et seq.

Yes

Governor

Yes

Yes

Board of
Cosmetology

§ 62-4-101
et seq.

Yes

Governor

Yes

Yes

Board of Funeral
Directors and
Embalmers

§ 62-5-201
et seq.

Yes

Governor

Yes

Yes

Board for Licensing
Contractors

§ 62-6-101
et seq.

Yes

Governor

Yes

Yes

Real Estate
Commission

§ 62-13-201
et seq.

Yes

Governor

Yes

Yes

Board of Examiners
for Land Surveyors

§ 62-18-101
et seq.

Yes

Governor

Yes

Yes

Auctioneer
Commission

§ 62-19-101
et seq.

Yes

Governor

Yes

Yes

Collection Service
Board

§ 62-20-101
et seq.

No

Governor

Yes

Yes

Private Investigation
and Polygraph
Commission

§ 62-26-301
et seq.

Yes

Governor

Yes

Yes
(continued)

1162

University of Pennsylvania Law Review

[Vol. 162: 1093

Board for Licensing
Alarm System
Contractors

§ 62-32-301
et seq.

Yes

Governor

Yes

Yes

Real Estate
Appraiser
Commission

§ 62-39-201
et seq.

Yes

Governor

Yes

Yes

Motor Vehicle
Commission

§ 55-17-103
et seq.

Yes

Governor

Yes

Yes

Soil Scientist
Advisory Committee
(under authority of
Commissioner of
Commerce and
Insurance)

§ 62-18-201
et seq.

Yes

Commissioner
of Commerce
& Insurance

No

No

Geology Advisory
Committee (under
authority of
Commissioner of
Commerce and
Insurance)

§ 62-36-101
et seq.

Yes

Commissioner
of Commerce
& Insurance

No

No

Home Inspectors
Advisory Committee
(under authority of
Commissioner of
Commerce and
Insurance)

§ 62-6-301
et seq.

Yes

Commissioner
of Commerce
& Insurance

No

No

Advisory Committee
for Acupuncture

§ 63-6-1001
et seq.

Yes

Governor

Yes

No

Board of Athletic
Trainers

§ 63-24-101
et seq.

Yes

Governor

Yes

No

Board of Alcohol
and Drug Abuse
Counselors

§ 68-24-601
et seq.

Yes

Governor

Yes

No

Board of
Chiropractic
Examiners

§ 63-4-101
et seq.

Yes

Governor

Yes

Yes
(continued)

2014]

1163

Cartels by Another Name

Committee for
Clinical
Perfusionists

§ 63-28-101
et seq.

Yes

Governor

Yes

Yes

Board of
Communications
Disorders and
Sciences

§ 63-17-101
et seq.

Yes

Governor

Yes

Yes

Board of Dentistry

§ 63-5-101
et seq.

Yes

Governor

Yes

Yes

Board of
Dietitian/Nutritionis
t Examiners

§ 63-25-101
et seq.

Yes

Governor

Yes

No

Board of Dispensing
Opticians

§ 63-14-101
et seq.

Yes

Governor

Yes

Yes

Emergency Medical
Services Board

§ 68-140-301
et seq.

No

Governor

Yes

Yes

Council for
Licensing Hearing
Instrument
Specialists

§ 63-17-201
et seq.

Yes

Governor

Yes

Yes

Massage Licensure
Board

§ 63-18-101
et seq.

Yes

Governor

Yes

No

Board of Medical
Examiners

§ 63-6-101
et seq.

Yes

Governor

Yes

Yes

Medical Laboratory
Board

§ 68-29-101
et seq.

Yes

Governor

Yes

Yes

Board of Nursing

§ 63-7-201
et seq.

Yes

Governor

Yes

Yes

Board of Examiners
for Nursing Home
Administrators

§ 63-16-101
et seq.

No

Governor

Yes

No

Board of
Occupational
Therapy

§ 63-13-201
et seq.

Yes

Governor

Yes

Yes

Board of Optometry

§ 63-8-101
et seq.

Yes

Governor

Yes

Yes
(continued)

1164

[Vol. 162: 1093

University of Pennsylvania Law Review
Board of
Osteopathic
Examination

§ 63-9-101
et seq.

Yes

Governor

Yes

Yes

Board of Pharmacy

§ 63-10-301
et seq.

Yes

Governor

Yes

Yes

Board of Physical
Therapy

§ 63-13-301
et seq.

Yes

Governor

Yes

Yes

Committee on
Physician Assistants
(under authority of
Board of Medical
Examiners)

§ 63-19-101
et seq.

Yes

Governor

Yes

No

Board of Podiatric
Medical Examiners

§ 63-3-101
et seq.

Yes

Governor

Yes

Yes

Polysomnography
Professional
Standards
Committee (under
authority of Board of
Medical Examiners)

§ 63-31-101
et seq.

Yes

Governor

Yes

Yes

Board for
Professional
Counselors,
Licensed Marital
and Family
Therapists, and
Licensed Clinical
Pastoral Therapists

§ 63-22-101
et seq.

Yes

Governor

Yes

Yes

Board of Examiners
in Psychology

§ 63-11-101
et seq.

Yes

Governor

Yes

Yes

Board of Respiratory
Care

§ 63-27-101
et seq.

Yes

Governor

Yes

Yes

Board of Social
Worker Licensure

§ 63-23-101
et seq.

Yes

Governor

Yes

No

Board of Veterinary
Medical Examiners

§ 63-12-101
et seq.

Yes

Governor

Yes

Yes

93%

76%

Total Boards: 46

93%



---

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