State licensing boards are not entitled to automatic immunity from antitrust laws, the nation’s highest court ruled in late February. Instead, state licensing boards can be held liable under antitrust laws to the same extent as private corporations for acts that unfairly restrict trade.
New rule: state licensing boards enjoy automatic immunity from suit only where the board is “actively supervised” by a state legislature under “clearly articulated policies.”
The decision will have important consequences for architectural and engineering licensure boards across the country, including here in Ohio. Acts that do not fall carefully within the board’s defined scope of practice can subject that board to civil lawsuits. If the board is not actively supervised by the state, the board could face heavy penalties under antitrust laws.
The National Society of Professional Engineers (NSPE) denounced the decision as weakening the legal and regulatory enforcement mechanisms of state engineering licensure boards. The National Council of Examiners for Engineering and Surveying (NCEES) argued in the case that the decision would make it more difficult to recruit qualified professionals to serve as board members.
Architects and engineers have self-regulated for many decades through professional boards. The boards have a natural tendency to become anticompetitive as board members feel obliged to keep their industries prosperous and successful, often by propping up insiders, and by keeping outsiders out.
In a divided opinion, the Supreme Court of the United States ruled that self-regulating boards are not automatically immune from antitrust laws. While licensure boards are often officially designated as “agencies” of the state, the board must be supervised by the state before immunity applies.
“When a State empowers a group of active market participants to decide who can participate in its market, and on what terms, the need for supervision is manifest,” explained Justice Anthony Kennedy, writing for the six Justice majority.
Before immunity applies, a state must actually review board decisions and must have the power to overrule or change board decisions.
The opinion can be found here.