Pharmacy Law Source has heard from state board of pharmacy members in a few states, all with the same concern. What does the US Supreme Court’s holding in North Carolina Board of Dental Examiners v. Federal Trade Commission mean to boards? How does this affect Board members?
This case arose when non-dentists in North Carolina began providing teeth whitening services. Such services under NC law did not require a dentist or licensed person to be a provider. Thus, dozens of entities opened for business to provide teeth-whitening, usually at a cost lower than at a dentist’s office.
The NC Board of Dental Examiners, the majority or which are dentists, issued “cease and desist” letters to the non-licensed entities, demanding they stop providing the service. Some of these entities contacted the Federal Trade Commission, which filed suit on their behalf. When lower courts held against the NC Board, the Board members claimed their immunity from lawsuit. The case went all the way to the US Supreme Court which held “When a controlling number of the decision makers on a state licensing board are active participants in the occupation the board regulates, the board can invoke state-action immunity only if it is subject to active supervision by the state.” SCOTUSblog.com
In short, the NC Board, being made up of dentists who had or may have had a financial interest in the decision to mail the “cease and desist” letters, created a conflict of interest which required a level of state supervision. The dentists on the NC Board needed to be subject to an authority within state government that could determine the conflict of interest and act accordingly.
The case has, to date, led to about thirty lawsuits against administrative agencies in various states.
PLS notes two issues arising out of NC Board. First, how does this affect the qualified immunity enjoyed by members of an administrative agency? Second, will this ruling adversely affect the autonomy of administrative agencies?
State boards of pharmacy exist to protect the public by regulating and overseeing the profession of pharmacy. They do not exist to promote the profession. However, most of the time from my years of observing board actions as well as a year serving on a state board of pharmacy, these two goals more often than not walk hand-in-hand.
Board of pharmacy members enjoy what is called qualified, or conditional, immunity for their acts while performing as a board member. This immunity protects the board member from legal action against the person for actions taken by the board. Though many state statutes refer only to a requirement that the board act “in good faith,” a second criteria for this immunity is that the board must follow applicable law (though not stated in many states’ immunity statutes, those states consider following the law to be implied).
However, the NC Board case brings to light an issue faced, from time to time, by many administrative agencies. These boards, always filled with a majority of practitioners of that profession, are going to be faced with financial issues that either do or seem to create a conflict of interest. An example from many states was the board of pharmacy limiting the sales of pseudoephedrine products (including the small convenience paks) to pharmacies only. Do boards that make these financial decisions in good faith according to applicable law still enjoy their qualified immunity? The answer, per NC Board, seems to be saying “Not if there exists no corresponding state supervision.”
The second question above naturally follows this point. The autonomy of a board could well be hobbled, if not endangered. Placing an administrative agency under state supervision is not going to be limited to financial issues where the decision-making entity are active participants. Is every decision made by a board of pharmacy going to be subject to supervision by an entity that 1) is not in any manner related to that profession and 2) whose motivation may be political gain? It would be hoped that such supervision would be as objective as possible, with no thoughts leaning to either financial or political gain. However, the best intentions of a non-pharmacist entity are going to be impaired by the lack of knowledge or experience in the field. And will a board act in the best interests of the people it was created to protect, or will it be unduly influenced the state looking over its shoulder? Asking the same question of pharmacists filling CS Rxs these days, and concerns over keeping a license often override all others.
And what happens when the supervision supports a decision by the board? Does the aggrieved party then have no legal recourse?
Of course they do. The court system remains available for an injured party to seek redress. This, however, begs the question: if the courts are available to seek to overturn bad law, why is the state supervision mandated by SCOTUS necessary? A party that suffers harm by an act of an administrative agency can sue in state court that the act was unconstitutional. A party that suffers harm by an act of an administrative agency can sue the board members in federal court under 14 USC 1983. In short, remedies are available without the necessity of state supervision.
(PLS recognizes that state supervision could be more timely and at much less cost for an injured party. Our criticism of NC Board is not 100%. PLS simply considers the immunity being made more qualified and the loss of autonomy to state boards to have more weight in this argument.)
PLS recognizes that this case sought to address a bad act by a state administrative agency. The NC Board of Dental Examiners did act wrongly and illegally. PLS merely contends that the entities that received the “cease and desist” orders had other and adequate means to seek legal redress without further state involvement.
DISCLAIMER: This is the legal opinion of Peter Cohron and Pharmacy Law Source. It is not the opinion of any state board of pharmacy.