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 cohost along with josh wright 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. It consists of 12 working 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 is regproduct. 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. Im going to turn it over to 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. Antitrustthere on 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. With that, ill introduce our very Prestigious Group of panelists. First of all, we have maureen. She was sworn in this 2012. Before joining the commission, she was a partner at Wilkinson Barker where she focused on ftc issues. Competition law, technology, and privacy. I want to say the acting chairman has a long history of ftc service. Before rejoining the commission, she had served as the Deputy Director and the director of the ftcs office of policy planning. She was also an turn advisor for ftc 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 experience to his 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 to 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 price discrimination. Imagine statute said that. We also have virginia who cochairs a working group. Argued a motion in full circuit appeal on behalf of the virginia board of medicine and its Board Members fornst an antitrust case practicing outside statutory scope of practice. Most recently she represented andcommonwealth of virginia has worked with federal enforcers to challenge other mergers. Before coming to the Virginia Attorney generals office, she spent eight years at the federal trade commission. Thank you very much and with that i will turn it back over. The format today is interactive discussion led by the moderators. We will reserve 1015 minutes at the end for audience questions. Occupational licensing and state restraints on trade has made competition receives significant bipartisan attention. In 2015, the Obama Administration outlined the growth of such restraints and the impacts on worker and work arrangements. Earlier this year, acting chairman all have said of the ftc launched a task force which im sure she will tell us about. Chairman, if you could start us off to give us an overview of the main concerns and issues. Thank you everyone. Thank you to the Federalist Society for posting today. This is one of my favorite topics. I spent a lot of micro focusing on this. It isno accident something the ftc has focused quite a bit on because we do Consumer Protection and occupational licensing. This is at the intersection of those issues. Very often the restraint on entry to a profession is put forth as necessary for Consumer Protection reasons. Wellplacedcularly to think about that. Does that make sense to us . The issue of occupational licensing has come to the forefront because occupational licensing has exploded. Going back to the 1950s, a study suggested fewer than 5 of occupations required a license. Today that is approaching 30 . What has changed during that time . The number of occupations and types of occupations licensing has extended to has gone beyond someone can say, well who is doing a healthy and safety related thing needs to be licensed but we have cases now licensed. Ists are interior designers are licensed. Licensed. Rs are why is that happening . That is on the antitrust of analysis comes into play. As we needized this to be alert to private and competitive conduct but the actions of the government can also be anticompetitive and in a way that is a lot less likely to be eroded by market dynamics. What i called the brother may i program. You need your competitors permission to enter the market. That is one issue we have seen where we have a board of active Market Participants saying, you need this license. Our North Carolina dental case, they said the practice of requires more in the state of North Carolina. I think the problems here are manifold. Anticompetitive program where you say, consumers may be pay more for a service or have fewer choices or there may be less innovations happening because of these onerous practices. Workers have lost the ability to enter an occupation more freely. Clark back there has paid wonderful attention to this and done great work in this area. I think that is one of the issues here, what about the individual worker and their ability even if they have a skill 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 is not necessarily an antitrust issue. We focus more on where you have an active Market Participants saying, you cannot compete with me. But on our advocacy role that is statese tried to talk to and other parts of the government about these issues because they are hitting certain populations quite a bit more onerous lead that others. One of them is members of the , the spouses. Members of the military move a lot and get deployed to different places around the country and often their spouse has a job that requires a license. They have to undergo tons of training even if they are been active in the field already. It has led to i think it is one of the contributors the fact that weve got an Unemployment Rate of almost 20 in that population. So that is why i launched my Economic Liberty Task orders 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 where 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 i express today are only mine. They dont reflect necessarily the opinions of virginia ags office 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 about their 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 too 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 order to coerce states into providing active supervision into a manner it sees fit or 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 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 regulate. 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 licensees. 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 criteria toctive receive a 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. And that the states are sovereign and 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. 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 of the 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 favorite phrases is casting a gauzy 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 interest. I know you wanted to weigh in. I would 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. But i think a lot of these cases are really on the margins where they really think theyre doing the right thing. So 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 get state action 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 most of the ground here, but i want to add is i just 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 braider 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 Amendment 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 when the internet was burgeoning and online real estate providers, and the traditional real estate providers didnt like that. What did they do . Statesied to in various minimum requirements that if youre going to be a real soate agent youve got to do 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 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 are there 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 beforehand the quality of the service and so this leads to what economists refer to going back to the article, the lemons 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 lemons market if we didnt have this. I do want to say in fairness that i think these arguments and i think chairman ohlhausen alluded to this, earlier these arguments had some purchase when we talk about severe information assymmetries, doctors and lawyers. Of 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 get the death penalty, right . [laughter] if the costs are really high in figuring out, ok, i can figure out this was a really bad service and then reputation and marketplace 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 fair 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 is relatively low. May be leaving aside for states or job interviews but for the most part these asymmetric information theoretically this idea of a lemons market for hair braiders or interior designer or barbers doesnt really hold much water. Thats kind of the theory behind it. Empirics 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 commercial 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 twodoor 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. Just because you see a regime increasing quality that does not mean is good for consumers. Everyone does not need a mercedes. All these features which means we are all paying 50,000 for 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 billion. 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. I think one of the most interesting factors or facts 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 regular mall kiosk for tooth 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 from. 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 dentist 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. On 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 you 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 when she talked about dental, 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 that 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 Carolina dental, it was clear that municipalities were subject only to this clear articulation. So if it down decides to limit competition, garbage, who can pick up garbage, we dont need to have someone supervising the municipality of the but the municipality 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. Until 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, therefore, 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 antitrust 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 willing 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 at all. I dont know if you wanted to get into the bill. I have one thing it fits in well with what i completely it 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 nothing so the facts of North Carolina dental were different and it didnt give the board any discretion to expand or contract the scope of what of dentistry was, we perhaps it would not have had North Carolina general. The scope of dentistry included teeth whitening in mall kiosks. The legislature did it not the board. 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 western mark there is a lair of bureaucratic oversight. What is the 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 following state statutes authorizing that act to me. It is not to substitute a judges opinion of what the licensing regime should be from the state legislature. This bill would subject state 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. Only board actions set out will 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. This bill would subject stored store higher standard than private citizens acting. Ursuant to state policy summary does the criticized the states that have passed statutes but the bill itself will invalidate those. The bills requirements go significantly beyond by mandating only board actions complying with the policy in section five b will receive immunity. That is not a requirement of incidental. There are significant constitutional problems with the bills requirements that state boards cannot give any deference to the state legislature. This, again, allows the judge to substitute its judgment for the decision of the state legislature and is contrary to me president s that the to haveor presumed competitive effects of the statute and pass them anyway. In addition there appears to be an extra requirement that the state act in good faith to implement licensing reform in order to receive immunity for any board decision. The board also changes the standard of review to clear and clear evidence and puts the burden on the board to show its actions were not only to protect the government interest but that the restriction was related to that interest. And that it acted in good faith. 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. As i can tell you, getting one case can cost 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 . This would 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. At the end of the day, this bill is really 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. I certainly 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. Some of these, i understand the federalism. The only thing i would say is beyond just this. Its amazing to think when i left this place here and started working a lot on the state competition, 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. One of the things i am left with, we dont get our cases in these situations. We went to reserve some antitrust oversight. , some sensitivity to what creates the state. You have at your finger on it. A lot of people see this as a 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. Its happening here in most of the states dont have an active supervision bill, including virginia. Would have 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. You have to have a College Degree to do home in florida. 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 . The commonwealth of virginia, im not 100 sure weve done anything that is noteworthy in that regard. We have had an active supervision bill that is been introduced. One went pretty far. It still did not pass. We 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 funeral ears, stop making the people that are in the professions that should be licensed feel threatened. , that they are going to face 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 to protect against unlicensed. 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. I think doctors of the best people to determine what the standard of care whether doctors was adequate. I dont think that bureaucrats are the right people to determine that. Shouldnt there be some choice for consumers . Some one a hired hand care . Some may want a higher standard of care. There is a cost tradeoff. Accept abe willing to noncertified if the risk is low shouldnt they have the ability to make those choices . That is a fairly affluent consumer who can determine those things. 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, you cut out the consumer who cant afford the cadillac care and just isnt getting any. We need to be sensitive to that. I think we need to keep in mind 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. My favorite is they want 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. You could 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. That was how 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. I think you are switching one self protectionist regime for another. Whenever you have doctors deciding the qualifications for doctors, you have situations where you probably are 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 the up moll just saying this laser surgery, they said this method is no good. Somebody sued. This was basically free speech. One organization, just because 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. Social media reviews can provide 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. Great about 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. Im not 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 . The answer is yes, that would probably be good. We have about five months left. We have a question over here. Thank you. My question has to do with Small Businesses. The industry seems to be blowing up Small Business coworker and space industry like we work and 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 mr. Mnuchin mr. Mnuchin mr. Mnuchin mechanism. Its much like who rents in an office park or other commercial buildings. That would have a similar dynamic. Before you have any coming what to identify market failure. You still need to do a cost if it analysis. Is this regulation going to solve the problem and not the worse. Any other questions . 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 . What would happen when something is promulgating a rule related to something that is not Life Insurance . If the rule is not related to license its or something else, 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 make those 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 get active supervision, as far as the rule, the board is hampered of what it in do read my old section sued me. Right after i left. Sued the funeral board in virginia for us having a regulation that was not enabled by any corresponding state legislation and the funeral board. It was my old section sued me. Right after i left. I agreed with the fcc on that. It settled and it was very neat and tidy. I hope that answers your question. My reading of the bill is it only covers the licensure decision. Section four a suggests that it is about not the other type of regulations. There are two paths. One path to immunity under this bill, however limited it may be, to license your decisions. One path is the active supervision path. Actionother is private that allows them to challenge workers or people who cannot practice their profession because of the law. Potentiallyt would completely displace the medical immediatealysis for scrutiny. That is my reading and 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] washington journal, live every day with news and policy issues that impact here. Coming up this morning, Arms Control Association executive talksor Derek Kimball about advancements in north Koreas Nuclear capability. The Editor Foreign Affairs discussesicket department on the bus standoff and president trumps relationship with traditional u. S. Allies. On the cost of renovations to the white house. The cost of operating the executive mansion. 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