Oumsoumsal licensing for jobs such as cosmotology. And teachers. This is an hour and 15 minutes. Get started. Im happy to see some familiar faces in the audience. For those who dont know me, y name is koren. Im going to pause for a minute. We also have people joining us online. Thats what youre hearing. Again, to everyone in the room, welcome and thank you for coming. It is a privilege for me to be here today in my capacity as coalong with josh right of the antitrust and Consumer Protection working Group Transparency project. This project was launched in 2016 to foster a National Conversation around the regular excess and the harms it causes. Working ts of 12 groups. Policy ranging from Environmental Energy to race and sex. In june of this year, each of the working groups started to release various issue papers, podcasts and short video crows which among other things can be found on our website which s reg product. Org. Todays spaniel the first of these conversations for the antitrust and Consumer Protection working group and it is devoted to occupational licensing and other restraints on competitions. It over to turn my comoderator and our hosts were today, lisa kimmel. Thank you very much, koren. My name is lisa kimmel and im senior account with your in. At the antitrust group like everyone else that you hear from on the panel today, before joining the law firm i spent some time at the federal trade commission where was the antitrust advisor to former chairwoman edith ramirez. I worked very focused on my work there focused on antitrust and competition matters in that particular sector in the intersection of intellectual property. We really want to welcome everybody to the firm and thank you for the opportunity to host this program. Ith that, ill introduce our very Prestigious Group of panelists. First of all, we have maureen. He was sworn in this 2012. Before joining the commission, she was a partner at Wilkinson Barker where she focused on f. T. C. Issues. I want to say the acting chairman has a long history of f. T. C. Service. Before rejoining the commission, she had served as the Deputy Director and the director of the f. T. C. s office of policy planning. E was also an turn advisor for f. T. C. Commissioner Orson Swindle and she began her ftc career in the general counsels office. Let me also add before joining the ftc for that first stent, she has spent five years at the u. S. Courts of appeal for the d. C. Circuit serving as a law clerk and staff attorney. She graduated with distinction from the Antonin Scalia law school at George Mason University and with honors from university of virginia. Thank you for joining us and well, to the program. To my immediate right we have Professor James cooper, professor cooper is an associate professor of law at Antonin Scalia law school at George Mason University. James brings over a decade of public and private sector expensed as research and teaching work. James also spent time at the federal trade commission where he served as the deputy and acting director of the office of policy planning and is an attorney advisor to the federal trade commission or bill. I wanted note james also spent some time here with the antitrust group, a fairly fine firm Crowell Moring in his earlier career. We are happy to welcome james back. His research at the law school focuses on competition and Consumer Protection issues including privacy, data security, state restraints on competition, behavioral economics and antitrust treatment and prices commission. Discrimination. James has a ba from university of South Carolina and a phd in economics from emory university. James holds a law degree magna cum laude from the Antonin Scalia law school at George Mason University. And last but not least we have sarah allen, a Senior Assistant attorney general in unit manager the antitrust unit in the Virginia Attorney Generals Office. She currently cochairs the National Association of attorneys generals state action working group, so the right person to be on this panel. She successfully argued the Summary Judgment motion and Fourth Circuit appeal on behalf of the virginia board of medicine in six of his individual Board Members against an antitrust claim that a chiropractor who was sanctioned by the board for practicing outside the statutory scope of practice. Most recently she represented the commonwealth of virginia n the federal and multistate challenges to the aetna humana and anthem Cigna Mergers and has worked with federal enforcer to challenge and settle other mergers. Before coming to the Virginia Attorney Generals Office sarah has spent time eight years at the federal trade commission. So thank you very much,and with that i will turn it back over. Great. The format is will try to do interactive discussion led by the moderators and then will reserve about 1015 minutes at the and for questions from the audience. By way of background occupational licensing and state restraints on trade, competition have received significant bipartisan attention in recent years. For example, in 2015 the Obama Administration released a report outlining the growth of such restraints, its cost and benefits, the impact on workers and work arrangements. Earlier this year acting chairman ohlhausen through the ftc launched the Economic Liberty Task force which im sure she will tell us some about. So chairman ohlhausen, if you could start us off to just give us a little overview of what the main concerns are in issues with respect to restraint. Thank you everyone and for osting us today. One of my favorite topics come something into to my heart. I spent all of my career focusing on it. Its no accident that it something the ftc has focused quite a bit on. We are in agency that this Consumer Protection and antitrust. The occupational licensing kind of is at the intersection of those two issues. Where very often these restraints on entry to a profession are put forth and necessary for Consumer Protection reasons. I think were particularly well placed as anthink about that and to say agency to does that make sense to us. So the issue is occupational licensing. I think it has come to the forefront because occupational licensing has exploded. A ng back to the 1950s, Study Suggests about fewer than 5 of occupations required a license. Today that number is approaching 30 . So what changed in that time. And the number of occupations in the types of occupations that licensing has expanded to has gotten i think beyond what e can say of course you want your jobs to be licensed, you want someone whos doing a health and safety related thing to be licensed but we have cases where florists are licensed, where interior designers are licensed, or hair breakers are licensed. And so you start to say what is the rationale for that . Why is it happening . That is where the antitrust side of the analysis comes into play. One way i have characterized this is as the antitrust enforcers we need to be alert to private anticompetitive conduct but the actions of the government can also be anticompetitive. In a way that is a lot less likely to be eroded by market dynamics. I often called what i call the brother may i problem, and its where you need your competitors permission to enter the market. Thats one of the issues weve seen when we have boards of active Market Participants saying well, you need this license or the practice of our North Carolina dental case that we won in the Supreme Court they said the practice of dentistry now includes tooth whitening in the state of North Carolina. What are some of the problems . I think the problems are manifold. One of them certainly is anticompetitive problem where you say consumers may be paying more for a service or have fewer choices or there may be less innovation happening because of these onerouus licensing retirements. Theres also an impact on workers where workers have lost the ability to enter a field more freely. I see clark neeley back there. Clark has paid wonderful attention to this issue and destined fantastic work in this area. But i think thats what of the issues here is what about the individual worker and their ability, even if they have a kill that we all agree requires a license, if they are moving from state to state, they have to undergo that licensing all over again. Certainly that isnt necessarily an ftc antitrust issue. We have focused more on where you have an active Market Participants saying you cant compete with me, but, on our advocacy role at the ftc thats what weve tried to talk to states and really even other parts of the federal government about some of these issues. They are hitting certain populations quite a bit more ownerously than others. One is believe it or not military spouses, members of the military move a lot, get deployed to different places around the country and the trailing spouse has a license, a job requires a license. They have to get relicensed, recertified, pay these fees, undergo time to train even if they been active in the field already. It has led to i think its one of the contributors to the fact that youve got an appointment rate of almost 20 in that population. So thats why ive launched my Economic Liberty Task force at the ftc. I see it as an attempt to shine a real spotlight on this issue. Certainly we can continue to bring Enforcement Actions here appropriate but it is mainly an at advocacy role. I talked often about being a coalition of the willing because i think a lot of groups, consumer organizations, you mentioned bipartisan appeal of this has extended to a lot of the interest in this topic to a lot of different areas and i worked with states, Governor Scott walker and i did a joint oped on this issue. I think were in a particularly good time to make progress on this issue, but the problem is the lack of competition, the higher prices, lower innovation but also the effects on the workers. Thank you, acting chairman. Sarah, we are really interested to hear from the states perspective on the occupational licensing issues the acting chairman. Thank you to the Federalist Society and koren wongervin and george mason for inviting me to be on the panel today to be the spoiler on the panel. Id like to start with a disclaimer that the opinions express today are only mine. They dont reflect necessarily the opinions of virginia ags ffice or any other participants in the National Association of attorneys general. And it is a little odd for me because at 95 of the time i am the antitrust counterparts are or enforcers like the federal agencies that we work with quite often, the ftc and dha. But in this one little area with flip and would become Defense Attorneys for state boards and state agency that arches up at a competitive behavior because were the antitrust experts in the state. So being the state apologist on this panel is a little backwards to me, but so is the position of otherwise staunch state rights advocates like senator mike lee and senator ted cruz, but we will talk bout their oumsal occupational licensing bill in a minute. So my personal perspective from the stateside is that i see a lot of value to this wider philosophical discussion about whether to many occupations required licenses. I also basically agree with the Supreme Courts decision in c versus dental pick but at the end of the day it should be left up to the states to decide how to structure their economies, how to structure their government and how to provide for the health and safety and welfare of their citizens. I applaud the ftcs efforts to educate state legislatures and others about the dangers to the National Economy of too much licensing. I support their enforcement efforts. However, i do not support the federal government attempts to preempt states abilities to decide these issues for themselves or to dangle state action immunity as a carrot in rder to coerce states into providing active super vision or a manner it sees fit to adopting its glossy about the appropriate professions to license. Under current case law principles of federalism allow states to decide which occupations they will license as opposed to professions that only require certification, registration or have no restrictions at all. Once a state legislature has authorized a licensing scheme with a board of active Market Participants as Board Members, the only question that remains in order for the board and its members receive state action immunity are whether they meet the two prongs, which is one of them was the board following a clearly articulated and affirmatively expressed state policy to displace competition, and whether the board was actively supervised by a disinterested state official to ensure the boards actions were consistent with that policy. There is some ambiguity in the nc dental opinion about whether the active supervisor only had to determine that the boards actions were consistent with state policy or whether there to go beyond that to look to see whether it was unduly burdensome. But there is no requirement that the active supervisor inquiry into whether the board used the least restrictive alternatives to achieve the legislatures goal. There is no ability for the active supervisor or the state courts to disregard the state legislatures intent to displace competition in favor of a licensing scheme. Moreover, states could easily decide to give it all of their get rid of all of their state boards and switch to the oversight of license occupations from the boards to traditional state agencies with fulltime salaried state employees. That gets rid of the need for active supervision but has many disadvantages, the most obvious being it would add millions to the budget to employ all those people because state Board Members currently serve with no pay in most cases. It would also not necessarily change the state legislatures philosophy about which occupations to license. While making it harder to actually maintain an antitrust challenge against the state. While it would take care of the problem of Board Members acting in their individual selfinterest, it would not address a different problem which is regulatory capture of the state employees who start sympathizing with the people and industries that they egulate. Finally i would add that a large majority of the work does not restrict competition. Board members who practice in the profession are usually the best people to vault standard of care cases. Many cases involve ethics violations or behavioral standards of licenseees. Licensees who operate when intoxicated or lawyers who dip into their escrow funds. While licensing a regime itself may restrict competition, most individual licensing decisions involve no discretion on the part of the Board Members. Either they can check the boxes for to receive the license or she doesnt. In that case it seems massively unfair to subject the board or Board Members to trust damage liability for a decision that the state legislature made and that the Board Members were required to follow. Thank you. I really appreciate the diversity of views. We want to have a conversation on these. Im hoping well have a dialogue. Any thoughts from the other speakers . I would like to weigh in on your points. I think we agree on many, many things. I also am sensitive to the fact that we operate in a federal system. They can take these actions. There is a twofold question here. Should they be taking these actions . I hear a lot about liberties. I want to advocate that before any policy maker, whether it is at the federal level or the state level. Yming that is a lot of what were trying to do here is to say is this really best for your citizens . It is a twoapplication public choice hearing where we have concentrated benefits to the providers and they are going to lobby and say here are all the good things this licensing regime is going to do. The consumers who are paying the price dont know whats happening. They are not going to be there. Were trying to step into the shoes to have consumers and the workers and say hey, consider these things too. But on the second issue, for state action doctrine, i think thats what it is really trying to do. It is trying to say is this truly an action of the state rather than the state and one of my my favorite phrases is casting a dicey cloak, a state authority on what is essentially private economic conduct, so i think that is kind of the other factor, is it truly the states of action rather than devolving that to a private actors who will often act in the own private nterest. I know you wanted to weigh in. Quickly respond that Board Members, if you talk to them they are really trying to do their best and the most instances. Maybe theyre acting in their self interest. Sometimes its pretty blatant like the North Carolina dentist case. I think a lot of these cases are really on the margins where they really think theyre doing the right thing. It seems a little paternal for the federal government to say should you be making these decisions . We dont think you should and we will make it so you dont et state action immaturity immunity unless you do it the way we think you should do it. That was my point on that. I think sarah and chairman ohlhausen covered both of the here, of the ground but i want to add is i didnt want to make sure we are talked about occupational licensing regimes that i think sarah alluded to this that we talking more broadly not just limiting, in fact, setting up credentials and saying if you dont get score x on your marks and you can be an attorney, or thats the quintessential case you cant be a hair braiders is if you dont have x number of hours. Thats one level that a lot of the work i did when i started at the ftc in the office of policy planning was looking at a host of state restrictions on competition that maybe you can put them in the occupational licensing category but attorney, limits on attorney advertising. We have had several Supreme Court cases on first and then issue surrounding but there still to this day state bars that try to limit the ability of attorneys to advertise. Does that fit into occupational licensing . You can maybe put in that but its a different animal, minimum service requirements. There was an issue with that hen the internet was burgeoning and online real estate providers, and the traditional real estate providers didnt like that. What did they do . A try to increase state set up minimum requirements that sit if youre going to be Real Estate Agent, youve got to do house showings injected all these sort of things, why . To prevent this intermediation. Again, in several occupational licensing . And wasnt about when you can be a Real Estate Agent or not. It was regulations that are promulgated by these boards. North carolina dental wasnt so much of it who could be a dentist and who couldnt be. It was in some ways about scope of practice but had a lot to, so the only thing i want to emphasize, i think we touched on it, in my view most of the mischief of these boards do, i think all the points that chairman ohlhausen brought out as far as limiting economic mobility or Labor Mobility really, really important has to do with the regime itself to say youve got to have this qualification to be in this profession. Those are bad and have their own anticompetitive effects but i think to meet the core mischief here is the regulations these self and these selfinterest boards often promulgate. Not so much the restrictions in the profession in and of itself thats the only thing i would add to that. I want to come back to the federalism issue. I dont want us to forget that, but professor cooper, we can stay with you as both an economist and a lawyer. Can you tell us what the empirical evidence on the effects of these restraints, whether, what are the potential costs and other benefits for quality and other things . Thanks. So most of these regulations, and on painting a broad brush strokes, some kind of form of the following story, consumers cant discern the quality ex ante of what provider x does. Provide x may be a dentist. They may be an ophthalmologist or optometrist. They may be an interior designer. You cant figure out before hand the quality of the service and so this leads to what economists refer to going back to the article, the womens market, the basic idea is if you cant figure out quality ahead of time, consumers know that, they go to the marketplace and the discount, didnt know if theyre going to get a good provider or a bad provider so theyre only willing to pay a certain price that discounts the probability. In the limit, the good providers completely exit the market because the equilibrium price the consumer is going to pay us a high enough to attract the good providers into the market and so you end up with this unraveling. Thats often the horror story that is told of justify these regulations, that we need, the market would unravel into a womens market if we didnt have this. I do want to say in fairness that i think these arguments and can i think chairman ohlhausen alluded to this, earlier these rguments mance some purchase when we talk about severe information as symmetries, doctors and lawyers. F course i want to protect our guild, right . But there can be severe information asymmetries of what economists sometimes called go to doctors recommend you get some kind of treatment and you get and you get better, you have no idea what they told you to do whats right thing. You know you got better, you dont know. Even if you can evaluate, say you go to a doctor or maybe an attorney doing some kind of complex transaction, maybe custody, something where the stakes are high or your life in a capital murder case, you may find out after the fact that my lawyer, my doctor was no good because you die or you et the death penalty, right . If the costs are really high i can ing out, ok, figure out this was a really bad service and then reputation and market place can take effect. But when the costs of figuring that are really high maybe this would want to step in and say ok, were going to set some kind of level. Should the states set the level or have private certification. Those are certainly areas of their debate. Although this argument may have some purchase for these severe asymmetric information problems, its harder to make that, the hair braiders, the interior designer. You go get your hair cut, you get a bad haircut, you can know that pretty quickly. I figure it out and the cost relatively low. May be leaving aside for states of job interviews but for the most part these asymmetric information theoretically this idea of a lemons market for hair raiders or interior designer or barbers doesnt really hold much water. Thats kind of the theory behind it. They are pretty much, suggest what you would think. The ftc did a lot of cutting edge work back in the 80s mostly an optometry to find, these were not quite occupational licensing but had to do what were called ommercial practice restrictions when eye doctors were allowed to partner up with lenscrafters. In fact, just a little bit of trivia, virginia you still can. If you go to lenscrafters notice you walk on the side door because the dr. Smith cant be legally associated with lenscrafters. There are still some states that the socalled due to two door requirements. But there is good evidence in the 80s that these restrictions and restrictions in advertising, that are promulgated by these boards dont do much. Theres also more modern literature and i would commend everyone to look at in president obamas council of Economic Advisor report from last year, they do a great review of the literature the old stuff and the new stuff, and its almost 100 unanimous that theres no impact on quality from these licensing, no matter how you measure it. And that these laws do tend to increase price. I think the price effect is a little, they certainly limit mobility. They certainly limit entry. The Price Effective maybe not as robust as the lack of quality effect that is there, but one thing i want to add is just because you see a licensing regime increases the level call it doesnt mean its good for consumers either. Because everyone i do and doesnt need to buy a mercedes, right . You could make a regulation that every car must have all these features which means we all paying 50,000 for a car and its a really nice car. The same thing could be true, you could force anyone to go to an ophthalmologist who has spent five years boardcertified to get just her eye exam. Now if anyone has been together eye exam recently due to stick your head in something with the receptionist does it for you and they get your prescription really, really close and the eye doctor kind of tweaks it a little bit. Maybe if i called it a go to the ophthalmologist but she would all be forced into Higher Quality . It shouldnt be the case. So anyway i will just leave it at that but thats kind of where we are. I think the empirics say strongly that these tend to limit competition dont really provide any benefits for consumers. I want to follow up on the price effects. I know in the obama report, you said Something Like the cost to consumers was around 100, 100 million. Can you talk more, you said about i mean, again i would commend anyone to look at that, great literature review. I think its hard to tease out price effects in this. Thats the main problem. Im not exactly sure where they got that, the number. Theres no doubt these are accosted to consumers. I would just as an economist and reviewing the literature i would think the price effect literature is perhaps not quite as robust but it is there. I want to be careful with what im saying. Not so much on the price effects but asking empirics, what do we know. Think one of the most factssting factorses or that ive seen is that only about 60 occupations are licensed in every state. But there are over 1100 occupations that are licensed in at least one state. So to the extent that we are saying well, other states like for example, other states than North Carolina you could go to for tooth kiosk whitener where were seeing bad effects on consumers health. The answer was no, we work. I think you start to put your finger on this great disparity, so we have 60 words seems like every kind of agrees ccb license and as you get further and further out from the core area where you got a lot of states agreeing, i think thats where you can at least put your finger on like theres probably not a really good health or safety or quality argument for having that, that license. Just real quick add in to kind of echo that. Back to what i said before, we have to think about where the mischief in these boards come rom. Maybe do we agree that maybe a dentist should be licensed . Maybe. Thats a reasonable position. There are arguments on both sides, and even if we agree that dentist should be license and they may have to have some minimal quality should they have to say kiosks, and by the way, you cant get your consumers, you can get your teeth white native or else except my office for a lot of money. I would say that North Carolina and excellent cases show what active supervision is really good idea for these boards. Because that would never have happened if there was a disinterested state official that was actively supervising that board. Then we would never all this kerfuffle. You know, i dont have a lot of substantive things to add. Iwould like to credit my colleague, the current chair of the antitrust task force and works in the ags office and he says whenever you start wondering whether this occupational regulation should exist, just substitute lawyer for whatever occupation theyre talking about and then you will probably be fine with it. [laughing] one other thing that i just want to mention, and its not necessary and binary choice of licensing or no licensing. Theres also the issue of how strict a licensed to you need and that something the ftc is paid a lot of attention to as allowing people like Nurse Practitioners or dental therapists, dental agendas to practice to the top with her license. There was a case that preceded the North Carolina dental case called South Carolina dental and we settled with the dental board there, but the issue there was the state had said weve got a problem with getting dental care to poor children, very Poor Dental Health in the state, and this gets just were not getting basic cleaning and screening kind of stuff. So they rescinded the requirement that a dental hygienist had operate under the immediate supervision of a entist when providing that care so that the hygienist could go out into the poor schools and give these kids some basic dental care. And the dentists went and reinstituted that requirement as an emergency regulation. Could it be clear the state want something different. But the thing there was the degree of licensing. It wasnt saying well, there shouldnt be any licensing. It was allowing them to practice we done a lot of that. What are the projects i worked on when i headed out of the office plank was allowing Nurse Practitioners to practice in bigbox stores like cvs, target, things like that, where you really are expand access to people who couldnt take time off from work, may not have health insurance. N saturday morning, the kids got im a mother of four, seeing all this, you know, its Christmas Eve and you got an eye infection. The doctor is close. You do want to go to the emergency room. You want to have this kind of care. I think thats the other thing is expanding access to services and to care, most acute in the health space. Were going to be moving into the world of telemedicine. Were going to have to get a licensing right to allow that to happen, to allow the Nurse Practitioner to be with the patient when the doctor is diagnosing remotely. So its not a binary thing either. Lets come back to the federalism issue and professor cooper, id like to hear from you. What role is there for, if any, for federal antitrust law and what about federalism . Thats a good question since this is sponsored by the Federalist Society, right . Anyway, i think again, weve already started at least to touch on this but the state action doctors, magic people are interested in this in our panel, you all may, many of ou already speak to this but apologize if this is just a review but the state action doctrine is really kind of a compromise. The Supreme Court has crafted a compromise between the National Policy in favor freemarket competition as evidenced in the federal antitrust laws and federalism, which is part of our system, part of the constitution. What if the state action doctrine, how do you apply it, sara alluded to this already dental, talked about is that there are two prongs, was called clear articulation, the action that come if you start with private actors or a board, is what theyre doing, is it pursuant to a clearly articulated policy where some of the litigation issues come in here and the ftc with putney and there have been, what is, how specific the policy have to be . Do you have, does it have to be do you have to be acting, does the state have to spell it out precisely . If you go beyond that youre in trouble, or i think its a generally the idea reasonably foreseeable but theres always some which was it has to be you cant use the states that i can regulate so that i can do anything. There has to be a state policy that says were going to displace competition. Then theres the active supervision problem. Again, something the Supreme Court hasnt elucidated what hat means in detail. They have said a lot about what active supervision means. Im sorry, what clear articulation means that not what about active supervision. North carolina dental was a landmark case because of said self interested boards would be subject to this. Going back, before north arolina dental, it was clear that munice palts were subject only to this clear articulation. So if it down decides to limit competition, garbage, who can pick up garbage, we dont need o have someone supervising he municipality of the but the munice palt is not sovereign, so they dont get, then have the benefits of federalism but if either acting pursuant to state policy thats ok. Thats enough. Ntil North Carolina dental rolled about it was unclear whether the self interested boards would be more like it down and just be acting, if youre acting pursuant to state policy thats enough. Did you just go out and license and regulate how you want to. Or with the consent more like private actors and what was a landmark in something again the federal trade commission has been at forefront of trying to push this and find cases to test this proposition. What was revolution about North Carolina do is they suggest if there is a board that is composed of self interested actors, a decisive majority who control, who are active, then will just treat them like a private cartel, like a trade association and, herefore, theyll be subject to active supervision. Thats kind of what are now. Thats how the Supreme Court has made that balance, and now with North Carolina dental and in many ways where having this panel and ive been on several panels with sarah about this is that it has opened up a whole pandoras box of federalism issues. How are states going to implement this . When are they allowed to regulate the professions . This was front and center in the dissent in North Carolina dental written by Justice Alito about, i am paraphrasing but this is a state issue, states regulate profession forever and if they want to say teeth whitening is a practice of dentistry let them do that and let them allow dentists, practicing dentists comprise the board to do that. Some of the boundaries, that will be one issue. What does it mean to be actively supervising, how expensive will that be for states . Will that mean they will have to dismantle some of these licensing regimes . Another issue, something of written about, shameless plug, is what is antichrist antti trust inquiry going to look like . Weve now they get. Lets see you litigated the substance of North Carolina dental and jetta do it under a rule of reason. We know from National Society professional engineers and other cases that you dont let noncompetition concerns into an inquiry. So i want to regulate the use of teeth whitening because i was concerned that consumers are going to be harmed because they would have too much fluoride or too much oxidation or whatever, they would burn their gums, whatever it is. All that may be true but that is typically, that would not be a justification just like the engineers cant say we are worried that bridges are going to fall down like the dentists are worried we are going to burn our gums. That is a very unanswered question as to what sort of defense is once youre to litigate the substance of this. What are the defenses left for the board . I argue it could be the factor per se which case it would lead to whats called antitrust preemption but thats another issue. But i will just kind of leave it there. Not only, i mean, boards are required to follow state law. So where is, where does that fit in to their dissent under a full blown reason of analysis . The board was saying i was following the law and you are not letting me put on a defense. I do have a big problem with National Society, of professional engineers saying that, if the legislature has made the decision to restrict competition for health and safety reasons, it wasnt the boards decision. It was the state legislatures decision. So why are you making the board defend the legislatures decision when they had no discretion whether not to follow that rule. Its a very complicated issue and its really unfair to state boards and state Board Members to have to defend that. Since nc dental has been a lot of pushback from individual Board Members were no longer illing to serve on state boards because they are individually liable for treble damages if they are individually sued like they were in the case i was involved in. And some states constitutions dont allow them to indemnify Board Members. They are not getting paid to do this. They are doing this as a Public Service and then they will be hauled into court and made to defend a fullblown rule of reason antitrust case with one hand tied behind her back. Its not a workable situation t all. I dont know if you wanted to get into the bill. I have one thing it fits in well with what i completely t we go back to history of the doctrine a lot of it was motivated by a desire so lochner said you can use process so lets use antitrust laws to go after state law. In some ways, not a somewhat, in very real ways the state action doctrine was in the way to cabin an attack on states, state sovereignty in that respect. Now with North Carolina what youre saying is we think about what a rule of reason looks like, we would be back, and you can say whether its good or bad. The argument whether my faculty says lochner was, theres nothing wrong with lochner. So what we would have without a rule of reasoning inquiry with a federal court review weighing a states, a state legislatures decision to say we think the injury should be exit we think health and safety reason should be, as of this i think it does raise a host of federalism issues and how we would deal with the underlying the state action is one thing but once we get past that we can have an antitrust case. How do we deal with that and still respect federalism is a big question. Just to go back to the fundamental state action doctrine or if the state has clearly articulated that tooth whitening is the practice of dentistry, right, and the board just promulgates that, that meets the state action, they satisfied that, right . Because one of the things i really go the way i tried to think about how this works is going back to what the Supreme Court has said over time, which is this is supposed to assign political responsibly, not at security. So if the state itself is saying well, we think that this common practice that in every other state is come you can go to the drugstore and just get it yourself, that we will say the price is interesting in our state, people dont like it, they can say the legislature, what are you doing . We dont like that. Rather than this murky think, some board member decided on his own. So if the state, thats what clear articulation is, right . No, no. I think thats right. You dont have the active supervision but if you have speed together self interested board, your point is well taken that maybe theres imagine statute said that. Legislated it, not board. I think that is a fair point. This would imply when there is more discretion, that violates the antitrust law. If then we would have to try to defend it. How do we get into that. We bring in health and safety. We would Balance Health and safety a different way than you did. You mentioned the bill. The recent proposal intended to take these into account. Im interested to hear your thoughts on this. How much time do we have left there is a lair of bureaucratic oversight. Purpose of active supervision . If it is to ensure the actions are consistent . It is to ensure that members of the state regulatory board of or private individuals are state statutes authorizing that act to me. A is not to substitute judges opinion of what the licensing regime should be from the state legislature. Stateill would subject courts to much Higher Standards to receive state action. It would have to meet under the current case law. Metal does the bill summary criticized the state past the statute, it would invalidate those statutes. The requirement goes jan that. Out willd actions set receive immunity. Board actions that use the least restrictive will be immunized. That is not a requirement. There seems to be some cost to national problems. This allows the state court judge to substitute its judgment for the state legislature. It is contradictory to the presumption of anticompetitive affect. There appears to be a next requirement the state act in good face to implement reforms you are to receive immunity. The board also changes the standard of review. The it was substantially related. There are a lot of standards. The plaintiff only has to make at a case of the substantially burden to engage in that profession, to switch the burden to the order to justify behavior. The term is not defined. It seems it would cover any restriction the board imposes. The board must defend its actions without the court being allowed to order referred to the legislature. Like i said before, its like eating asked to fight with one arm tied behind your back. You, getting one several hundred thousand dollars. Efforts like this bill that will increase litigation will add to states. I do want to be too snarky about it. I think this highlights a common problem. It doesnt have any idea how difficult and timeconsuming and expensive it is to implement these big ideas into 51 existing and different State Governments. How many revisions would be required to do so . Contradict with the virginia code. Not just the administrative process. At a minimum, this creates an unfunded federal mandate for states to requite create a board and restructure its judicial review procedures. It will cause revisions to state codes. This is unworkable for states to implement. It leaves states with no immunity or decisions. Do i have any thoughts . I understand. Im not familiar with build. I have looked at it. I thought a little about it. Think the part of this bill that i do like is the idea of changing the challenges to intermediate scrutiny. I like that notion of intermediate scrutiny, you just cant say womens markets so we win. Its not much of an exaggeration. I have to be able to justify these. These, i understand the. Ederalism is only thing i would say this. Just its amazing to think when i left this place here and started working a lot on the state here weve got a Democratic Administration which is very influential. There is a Democratic Administration with occupational life. There is a lot of improvement here. We have influential republicans editors presenting the bill the takes serious aim at the problem. I think that its on a National Stage now and there is bipartisan consensus, something needs to be done. I like antitrust as a tool. There lots of inks the like in this hill. Thats where i am with it. The goals of the bill are very consistent with what the fcc has been doing. Things i am left with cases int get our these situations. We went to reserve some antitrust oversight. , some sensitivity to what creates the state. You have at your finger on it. See this as ae problem. This is a problem for consumers and workers in the economy. We need to fix it. The parts of the bill that was introduced is from a model built. Several states did introduce the bill based on that model built. As far as i know, not a single one pass. State legislatures are looking at these issues, they are just not there yet. Included in the bill was also mandatory review of a certain number of board every year. I think they are moving. In most ofing here the states dont have an active supervision bill, including virginia. A couple of other questions we would like to make sure we save time for. I see one in the back. The mike is going to go around. If you would just introduce yourself. I will start i saying to sarah, having worked in this area for several years, you have no more fear of this bill being enact did as unicorns. Dont worry about that. There is a real tension here. The failure of the state to get their house in order. Everybody agrees that occupational overregulation is huge problem. We can talk about after abuse. Have a college in florida. Home it requires a Funeral Directors licensed to sell caskets. As a failure of the state to get their own houses in order and the failure with any interest in getting their houses in order continues, i think as a practical matter it just going to invite federal attention you may not want. What has the state of virginia done that was a significant step in getting its house in order . Virginia,monwealth of im not 100 sure weve done anything that is noteworthy in that regard. An actived supervision bill that is been introduced. One went pretty far. It still did not pass. Had one of those model bills that requires review. Licensing is a huge problem in this country. It seems an overstatement. I think we can agree that maybe those should be licensed in every state. Lets pick the outliers like stop making the people that are in the professions that should be licensed feel threatened. Facet they are going to antitrust cases. When you say there should be licensed, what is that taste on . I dont want to go in an airplane that isnt flown by a licensed pilot. I dont want to be operated on by a person who is not a licensed doctor. There are occupations that we can agree there needs to be some form of licensing. The court system is not adequate unlicensed. Gainst i think those are legitimate issues that should be recognized. What do we do with the interior . Those have selfregulation. There are standard care cases all the time of the board of medicine. There are people that lose their license to practice law all the time. Think doctors of the best people to determine what the standard of care whether doctors was adequate. Right eurocrats are the people to determine that. Someouldnt there be choice for consumers . Some one a hired hand care . Some consumers in certain areas are willing to accept noncertified if the risk is low. Shouldnt they be able to make those choices . What about the consumer doesnt have enough money and is forced to choose the lowerpriced lower quality person . Shouldnt there be a minimum standard . When we frame it that way, cadillacut can ward care and just isnt getting any. We need to be sensitive to that. Mindnk we need to keep in there is good evidence about the fact that competition leads to better quality. When was he regimes that are cutting off real competition, we should be concerned. That was the professional engineer case. I think we have strong evidence that competition leads to better quality. James, you mentioned the case. They won a victory in the Supreme Court, but could not stop the murdered monopoly from happening. I had our economist take a look. We had some quality going down. Thats the other thing, the competition will give way to choice. We all agree on that. Looking at the license or not licensed, what is the profession . That is the issue of whether you need to be an attorney to do real estate policy. In most states, you dont. You look at the statute to what is the practice of law. Wantvorite is they attorneys to do. May be good say golf is the practice of law. When you mail a letter for real estate closing and put it in the mail, that had to be a lawyer that did that. How is that sensible . There is the ef that is fine. That makes sense. I think one of the issues is its unclear why the state needs to be that entity that does that. There could be private certification. Maybe not for doctors. I dont know. Say that rid of the virginia board of medicine and replace it with a private certification regime and up of doctors, a doctor could hang out a shingle and say ive and certified by the private board like the Good Housekeeping seal of approval. Drugs, the private certification regimes. I think we need to think about whether we may need some way to get out. Its unclear even if we say we need something, it has to be government rather than private. I think that something we need to think about. One think you are switching self protectionist regime for another. Whenever you have doctors deciding the qualifications for doctors, you have situations aree you probably displacing some competition. Why is a private Company Better than the State Government to determine that . Its just going to be a different barrier during there is a case that had to do saying thisjust laser surgery, they said this method is no good. Somebody sued. This was basically free speech. Becausenization, just you say it, consumers can choose. The idea is it would not be illegal to practice if you dont have a certification. That would be the biggest difference. We are starting with the hardest case first. There are so many other things where you say make up artist or hairstylist or florist. Provideedia reviews can that function. We dont need the state saying that. We have the Health Department that comes in makes sure it is clean. Consumer is not going in. I think there is a whole host of those things. Lets start with the low hanging fruit. States is you can see the quality stuff. In some states, you have Nurse Practitioners are able to crack this. Can see what the effect is. Thats instead of being able to visualize the licensing regime. The health ones are very appealing. There is such a need there. Sure doctors who perform brain surgery should not be licensed. That is not the focus. Should you be able to go to the Nurse Practitioner to get a flu shot . Yes, that would probably be good. We have about five months left. We have a question over here. Thank you. Question has to do with Small Businesses. The industry seems to be blowing up Small Business coworker and work andustry like we those shared spaces. So me new businesses are coming in that are unregulated, unlicensed probably. What about those organizations, shouldnt there be who they accept. I wouldnt want to say there should be regulation put on the coworking space. You can only accept these kind of business. I think reputation is going to be part of. If you create a reputation for being a place where youve got unethical businesses or problematic businesses, your reputation is going to suffer. I think there is a market mechanism. Like who rents in an office park or other commercial buildings. That would have a similar dynamic. Any comingou have what to identify market failure. You still need to do a cost if it analysis. Going toegulation solve the problem and not the worse. Any other questions . Am my question is related to how the bill for into the larger framework. Is a completely here that the bill would displace the tests the Supreme Court has been in other cases . Something happen when is promulgating a rule related to something that is not Life Insurance . Tothe rule is not related else,e its or something how would this law fit in . Are you talking about the bill introduced in congress . I think the fundamental holding where the board would need to immunities, they would still need to be following a clearly articulated state policy. It would also need to have act supervision. You dont have to have act of supervision. All the things you have to do to , as farve supervision as the rule, the board is hampered of what it in do read my old section sued me. Right after i left. I agreed with the fcc on that. Settled and it was very neat and tidy. I hope that answers your my reading of the bill is it only covers the licensure decision. It suggests the other type of regulations are in regulations. Be,atter how limited it may one patency active supervision path. The other is right of action challenge, tumors people who cant rack there are fresh and because of the law. That is my reading of it during i dont claim to be an expert there. That is at least my take. We are out of time. Please join me in thanking our excellent panelists. [applause] live coverage today, friday, saturday he spent. A q a about30 a. M. , elections happening this year. We will also look at the midterm landscape. A discussion on standing up to working families and embracing regressive values. That 230, a look at winning back power. Developing strategies for the type of society progressives want to see. Elizabeth warren and ben jealous speak at the congress. Pamela and al gore, join us for live coverage of the net roots nation conference on cspan. At the Supreme Court term, a panel of judges talk from the key cases are in the university of california at
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