Response to TAAOM v TBCE, Part III
Written by Franz Klein, DC   
Tuesday, April 08, 2014 05:15 PM

Please allow my presentation of this third response to my previous two responses submitted concerning the TAAOM lawsuit filed against the Texas Board of Chiropractic Examiners. I humbly submit the following additional facts and again my personal questions (Which remain unchanged).

FACTS

Following are excerpts from the Federal Trade Commission in (The entire document is also attached):

In the Matter of

THE NORTH CAROLINA BOARD OF DENTAL EXAMINERS

Docket No. 9343

Opinion of the Commission

…This case involves the efforts of the North Carolina Board of Dental Examiners (“Respondent” or the “Board’) to prevent non-dentists from providing teeth whitening services in North Carolina. P. 1

…We agree with Chief Administrative Law Judge D. Michael Chappell (the “ALJ”) that Respondent’s conduct constituted concerted action, that Respondent’s conduct had a tendency to harm competition and in fact did harm competition, and that Respondent has failed to advance a legitimate precompetitive justification. P. 2

…The Complaint alleged that the Board’s actions have had the effect of restraining competition unreasonably and injuring consumers in North Carolina by preventing and deterring non-dentists from providing teeth whitening services; depriving consumers of the benefits of price competition; and reducing consumer choice for the provision of teeth whitening services. P. 6

…The ALJ concluded that the antitrust laws do not permit a defense based on social welfare or public safety concerns, as asserted by the Board. P. 8

…Under per se analysis, “certain agreements or practices are so ‘plainly anticompetitive,’…and so often ‘lack’…any redeeming virtue,’…that they are conclusively presumed illegal without further examination.” P. 10

…Second, the Court held that even if the restriction in question was “not sufficiently ‘naked’ to call this principle into play, the Commission’s failure to engage in detailed market analysis [was] not fatal to its finding of a violation of the Rule of Reason,” because the record contained direct evidence of anticompetitive effects. P. 11

…Instead, the “relevant inquiry…is whether there is a ‘contract, combination…or conspiracy’ amongst separate economic actors pursing separate economic interests, such that the agreement deprives the marketplace of independent centers of decision making” necessary to raise Section 1 concerns. P. 14

…Nevertheless, the Court has “repeatedly found instances in which members of a legally single entity violated § 1 when the entity was controlled by a group of competitors and served, in essence, as a vehicle for ongoing concerted activity.” P. 14

…Respondent’s economic expert acknowledged that Board members have a financial interest in the challenged restrictions.  Respondent’s economist testified that state regulatory boards can be, and have been, used to excluded competition and augment the income of licensed practitioners. P. 15

…we conclude that the challenged conduct of the Board can reasonably be characterized as “giv[ing] rise to an intuitively obvious inference of anticompetitive effect.” P. 19

…No advanced degree in economics is needed to recognize that exclusion of products from the marketplace that are desired by consumers is likely to harm competition and consumers, absent a compelling justification. P. 20

…Agreements to exclude and entire class of competitors from the marketplace by foreclosing access to suppliers, customers, or the market itself have long been treated as per se illegal or presumptively illegal under the antitrust laws. P. 21

…The Supreme Court has likewise held that agreements to exclude a single competitor are per se illegal or presumptively illegal.  P. 21

…Participants in standards organizations have “the power to frustrate competition in the marketplace…[and] to harm their employers’ competitors through manipulation of [the standards organization’s] codes. P. 22

…The Court has noted the significant potential for competitive injury stemming from concerted conduct among private parties enforced by state agencies. P. 23

…Some medical boards and other professional healthcare boards continue to engage in these anticompetitive practices. P. 23

…Courts have rejected social welfare and public safety concerns as cognizable justifications for restraints on competition. P. 24

Id. At 485; see also Wilk v. AMA, 719 F.2d 207, 228 (7th Cir. 1983) (“[A] generalized concern for the health, safety and welfare of members of the public…, however genuine and well-informed such a concern may be, affords no legal justification for economic measures to diminish competition with [chiropractors] by [some medical doctors].”) P. 25

…Respondent has not identified any evidence that the Board concluded prior to embarking on the challenged conduct that non-dentist teeth whitening was an unsafe practice, P. 27

…(“the Sherman Act cannot ‘be evaded by good motives.  The law…cannot be set up against it in a supposed accommodation of its policy with the good intention of parties….” P. 28                 

…In addition to increasing prices, the Board’s conduct deprived consumers of choice. P. 32

…To ensure the Board cannot indirectly accomplish what it has been barred from doing directly, Section II.G of the Final Order also prohibits the Board from inducing or assisting any other person in discouraging the provision of teeth whitening by non-dentist providers. P. 34

PERSONAL QUESTIONS

Are the TAAOM’s board members private actors and/or separate economic actors and/or actual/potential competitors and/or private market participants?

Would anticompetitive actions by the board members of the TAAOM make them subject to prosecution for a felony and if convicted make them subject to a fine of up to $1,000,000 and imprisonment up to 10 years or both?

Should the actions of the TAAOM be referred to the FTC for analysis?

Should the past and current actions of other organizations such as the Texas Medical Association, the Texas Board of Medical Examiners, etc. be referred to the FTC for analysis?

Would anticompetitive actions by the board members of the Texas Medical Association, the Texas Board of Medical Examiners, etc. make them subject to prosecution for a felony and if convicted make them subject to a fine of up to $1,000,000 and imprisonment up to 10 years or both?

I humbly ask these questions as my grasp of the law is very shallow and limited.  Thank you for your time and consideration.