Antitrust and the Politics of State Action

In North Carolina State Board of Dental Examiners, the Court refused to exempt the board from the second element of Parker immunity (active supervision by the state) because the Board was made up largely of “active market participants.” This paper argues that the “active market participant” rule laid out in North Carolina State Board, while intuitively appealing, ignores important political values represented by antitrust law, values most evident in the context of state action immunity. By focusing on the potential market harm from self-interested regulators, the Court ignored a series of political harms inherent in the structure of the North Carolina State Board of Dental Examiners, harms having little to do with whether the members of the board were market participants. The result in North Carolina State Board is misguided, but should not be surprising. It is the natural result of the Court’s reliance on an economically oriented test – the Midcal/Hallie framework – for what is a political rather than an economic problem. Thus, North Carolina State Board is not so much a mis-application of the modern antitrust law of state action as it is a demonstration of how state action law has gone awry and how the Court can return the doctrine to its political roots.