(Slip Opinion)              OCTOBER TERM, 2014                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 

, 337.


SUPREME COURT OF THE UNITED STATES

                                       Syllabus

     NORTH CAROLINA STATE BOARD OF DENTAL 

     EXAMINERS v. FEDERAL TRADE COMMISSION


CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                 THE FOURTH CIRCUIT

  No. 13–534.      Argued October 14, 2014—Decided February 25, 2015
North Carolina’s Dental Practice Act (Act) provides that the North Car-
 olina State Board of Dental Examiners (Board) is “the agency of the
 State for the regulation of the practice of dentistry.” The Board’s
 principal duty is to create, administer, and enforce a licensing system
 for dentists; and six of its eight members must be licensed, practicing
 dentists.
    The Act does not specify that teeth whitening is “the practice of
 dentistry.” Nonetheless, after dentists complained to the Board that
 nondentists were charging lower prices for such services than den-
 tists did, the Board issued at least 47 official cease-and-desist letters
 to nondentist teeth whitening service providers and product manu-
 facturers, often warning that the unlicensed practice of dentistry is a
 crime. This and other related Board actions led nondentists to cease
 offering teeth whitening services in North Carolina.
    The Federal Trade Commission (FTC) filed an administrative com-
 plaint, alleging that the Board’s concerted action to exclude
 nondentists from the market for teeth whitening services in North
 Carolina constituted an anticompetitive and unfair method of compe-
 tition under the Federal Trade Commission Act. An Administrative
 Law Judge (ALJ) denied the Board’s motion to dismiss on the ground
 of state-action immunity. The FTC sustained that ruling, reasoning
 that even if the Board had acted pursuant to a clearly articulated
 state policy to displace competition, the Board must be actively su-
 pervised by the State to claim immunity, which it was not. After a
 hearing on the merits, the ALJ determined that the Board had un-
 reasonably restrained trade in violation of antitrust law. The FTC
 again sustained the ALJ, and the Fourth Circuit affirmed the FTC in
2              NORTH CAROLINA STATE BD. OF DENTAL
                        EXAMINERS v. FTC 

                            Syllabus


    all respects.
Held: Because a controlling number of the Board’s decisionmakers are
 active market participants in the occupation the Board regulates, the
 Board can invoke state-action antitrust immunity only if it was sub-
 ject to active supervision by the State, and here that requirement is
 not met. Pp. 5–18.
     (a) Federal antitrust law is a central safeguard for the Nation’s free
 market structures. However, requiring States to conform to the
 mandates of the Sherman Act at the expense of other values a State
 may deem fundamental would impose an impermissible burden on
 the States’ power to regulate. Therefore, beginning with Parker v.
 Brown, 

, this Court interpreted the antitrust laws to
 confer immunity on the anticompetitive conduct of States acting in
 their sovereign capacity. Pp. 5–6.
     (b) The Board’s actions are not cloaked with Parker immunity. A
 nonsovereign actor controlled by active market participants—such as
 the Board—enjoys Parker immunity only if “ ‘the challenged restraint
 . . . [is] clearly articulated and affirmatively expressed as state poli-
 cy,’ and . . . ‘the policy . . . [is] actively supervised by the State.’ ”
 FTC v. Phoebe Putney Health System, Inc., 568 U. S. ___, ___ (quoting
 California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 

, 105). Here, the Board did not receive active supervision of
 its anticompetitive conduct. Pp. 6–17.
        (1) An entity may not invoke Parker immunity unless its actions
 are an exercise of the State’s sovereign power. See Columbia v. Omni
 Outdoor Advertising, Inc., 

, 374. Thus, where a State
 delegates control over a market to a nonsovereign actor the Sherman
 Act confers immunity only if the State accepts political accountability
 for the anticompetitive conduct it permits and controls. Limits on
 state-action immunity are most essential when a State seeks to dele-
 gate its regulatory power to active market participants, for dual alle-
 giances are not always apparent to an actor and prohibitions against
 anticompetitive self-regulation by active market participants are an
 axiom of federal antitrust policy. Accordingly, Parker immunity re-
 quires that the anticompetitive conduct of nonsovereign actors, espe-
 cially those authorized by the State to regulate their own profession,
 result from procedures that suffice to make it the State’s own.
 Midcal’s two-part test provides a proper analytical framework to re-
 solve the ultimate question whether an anticompetitive policy is in-
 deed the policy of a State. The first requirement—clear articula-
 tion—rarely will achieve that goal by itself, for entities purporting to
 act under state authority might diverge from the State’s considered
 definition of the public good and engage in private self-dealing. The
 second Midcal requirement—active supervision—seeks to avoid this
                   Cite as: 574 U. S. ____ (2015)                      3

                              Syllabus

harm by requiring the State to review and approve interstitial poli-
cies made by the entity claiming immunity. Pp. 6–10.
     (2) There are instances in which an actor can be excused from
Midcal’s active supervision requirement. Municipalities, which are
electorally accountable, have general regulatory powers, and have no
private price-fixing agenda, are subject exclusively to the clear articu-
lation requirement. See Hallie v. Eau Claire, 

, 35. That
Hallie excused municipalities from Midcal’s supervision rule for
these reasons, however, all but confirms the rule’s applicability to ac-
tors controlled by active market participants. Further, in light of
Omni’s holding that an otherwise immune entity will not lose im-
munity based on ad hoc and ex post questioning of its motives for
making particular 

, it is all the more nec-
essary to ensure the conditions for granting immunity are met in the
first place, see FTC v. Ticor Title Ins. Co., 

, 633, and
Phoebe 

, at ___. The clear lesson of precedent is that
Midcal’s active supervision test is an essential prerequisite of Parker
immunity for any nonsovereign entity—public or private—controlled
by active market participants. Pp. 10–12.
     (3) The Board’s argument that entities designated by the States
as agencies are exempt from Midcal’s second requirement cannot be
reconciled with the Court’s repeated conclusion that the need for su-
pervision turns not on the formal designation given by States to regu-
lators but on the risk that active market participants will pursue pri-
vate interests in restraining trade. State agencies controlled by
active market participants pose the very risk of self-dealing Midcal’s
supervision requirement was created to address. See Goldfarb v.
Virginia State Bar, 

, 791. This conclusion does not
question the good faith of state officers but rather is an assessment of
the structural risk of market participants’ confusing their own inter-
ests with the State’s policy goals. While Hallie stated “it is likely
that active state supervision would also not be required” for 

, n. 10, the entity there was more like prototypical
state agencies, not specialized boards dominated by active market
participants. The latter are similar to private trade associations
vested by States with regulatory authority, which must satisfy
Midcal’s active supervision 

–106. The
similarities between agencies controlled by active market partici-
pants and such associations are not eliminated simply because the
former are given a formal designation by the State, vested with a
measure of government power, and required to follow some procedur-
al rules. See 

. When a State empowers a group of
active market participants to decide who can participate in its mar-
ket, and on what terms, the need for supervision is manifest. Thus,
4             NORTH CAROLINA STATE BD. OF DENTAL
                       EXAMINERS v. FTC 

                           Syllabus


    the Court holds today that a state board on which a controlling num-
    ber of decisionmakers are active market participants in the occupa-
    tion the board regulates must satisfy Midcal’s active supervision re-
    quirement in order to invoke state-action antitrust immunity.
    Pp. 12–14.
          (4) The State argues that allowing this FTC order to stand will
    discourage dedicated citizens from serving on state agencies that
    regulate their own occupation. But this holding is not inconsistent
    with the idea that those who pursue a calling must embrace ethical
    standards that derive from a duty separate from the dictates of the
    State. Further, this case does not offer occasion to address the ques-
    tion whether agency officials, including board members, may, under
    some circumstances, enjoy immunity from damages liability. Of
    course, States may provide for the defense and indemnification of
    agency members in the event of litigation, and they can also ensure
    Parker immunity is available by adopting clear policies to displace
    competition and providing active supervision. Arguments against the
    wisdom of applying the antitrust laws to professional regulation ab-
    sent compliance with the prerequisites for invoking Parker immunity
    must be rejected, see Patrick v. Burget, 

, 105–106, partic-
    ularly in light of the risks licensing boards dominated by market par-
    ticipants may pose to the free market. Pp. 14–16.
          (5) The Board does not contend in this Court that its anticompet-
    itive conduct was actively supervised by the State or that it should
    receive Parker immunity on that basis. The Act delegates control
    over the practice of dentistry to the Board, but says nothing about
    teeth whitening. In acting to expel the dentists’ competitors from the
    market, the Board relied on cease-and-desist letters threatening
    criminal liability, instead of other powers at its disposal that would
    have invoked oversight by a politically accountable official. Whether
    or not the Board exceeded its powers under North Carolina law, there
    is no evidence of any decision by the State to initiate or concur with
    the Board’s actions against the nondentists. P. 17.
       (c) Here, where there are no specific supervisory systems to be re-
    viewed, it suffices to note that the inquiry regarding active supervi-
    sion is flexible and context-dependent. The question is whether the
    State’s review mechanisms provide “realistic assurance” that a non-
    sovereign actor’s anticompetitive conduct “promotes state policy, ra-
    ther than merely the party’s individual interests.” Patrick, 486 U. S.,
    100–101. The Court has identified only a few constant requirements
    of active supervision: The supervisor must review the substance of
    the anticompetitive decision, see 

the supervisor must
    have the power to veto or modify particular decisions to ensure they
    accord with state policy, see ibid.; and the “mere potential for state
                     Cite as: 574 U. S. ____ (2015)                    5

                                Syllabus

  supervision is not an adequate substitute for a decision by the State,”
  

. Further, the state supervisor may not itself be
  an active market participant. In general, however, the adequacy of
  supervision otherwise will depend on all the circumstances of a case.
  Pp. 17–18.

, affirmed.

KENNEDY, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and GINSBURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined.
ALITO, J., filed a dissenting opinion, in which SCALIA and THOMAS, JJ.,
joined.
                        Cite as: 574 U. S. ____ (2015)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash­
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.


SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 13–534
                                   _________________


   NORTH CAROLINA STATE BOARD OF DENTAL 

     EXAMINERS, PETITIONER v. FEDERAL 

            TRADE COMMISSION

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

           APPEALS FOR THE FOURTH CIRCUIT

                              [February 25, 2015]


  JUSTICE KENNEDY delivered the opinion of the Court.
  This case arises from an antitrust challenge to the
actions of a state regulatory board. A majority of the
board’s members are engaged in the active practice of
the profession it regulates. The question is whether the
board’s actions are protected from Sherman Act regulation
under the doctrine of state-action antitrust immunity, as
defined and applied in this Court’s decisions beginning
with Parker v. Brown, 

(1943).
                              I

                              A

  In its Dental Practice Act (Act), North Carolina has
declared the practice of dentistry to be a matter of public
concern requiring regulation. N. C. Gen. Stat. Ann. §90–
22(a) (2013). Under the Act, the North Carolina State
Board of Dental Examiners (Board) is “the agency of the
State for the regulation of the practice of dentistry.” §90–
22(b).
  The Board’s principal duty is to create, administer, and
enforce a licensing system for dentists. See §§90–29 to
2         NORTH CAROLINA STATE BD. OF DENTAL
                   EXAMINERS v. FTC 

                   Opinion of the Court 


90–41. To perform that function it has broad authority
over licensees. See §90–41. The Board’s authority with
respect to unlicensed persons, however, is more restricted:
like “any resident citizen,” the Board may file suit to
“perpetually enjoin any person from . . . unlawfully prac­
ticing dentistry.” §90–40.1.
   The Act provides that six of the Board’s eight members
must be licensed dentists engaged in the active practice of
dentistry. §90–22. They are elected by other licensed
dentists in North Carolina, who cast their ballots in elec­
tions conducted by the Board. 

must be a licensed and practicing dental hygienist, and he
or she is elected by other licensed hygienists. 

is referred to by the Act as a “consumer” and
is appointed by the Governor. 

3-year terms, and no person may serve more than two con­
secutive terms. 

not create any mecha­
nism for the removal of an elected member of the Board by
a public official. See 

an oath of office, §138A–22(a),
and the Board must comply with the State’s Administra­
tive Procedure Act, §150B–1 et seq., Public Records Act,
§132–1 et seq., and open-meetings law, §143–318.9 et seq.
The Board may promulgate rules and regulations govern­
ing the practice of dentistry within the State, provided
those mandates are not inconsistent with the Act and are
approved by the North Carolina Rules Review Commis­
sion, whose members are appointed by the state legisla­
ture. See §§90–48, 143B–30.1, 150B–21.9(a).
                              B
  In the 1990’s, dentists in North Carolina started whiten­
ing teeth. Many of those who did so, including 8 of the
Board’s 10 members during the period at issue in this
case, earned substantial fees for that service. By 2003,
nondentists arrived on the scene. They charged lower
                 Cite as: 574 U. S. ____ (2015)            3

                     Opinion of the Court

prices for their services than the dentists did. Dentists
soon began to complain to the Board about their new
competitors. Few complaints warned of possible harm to
consumers. Most expressed a principal concern with the
low prices charged by nondentists.
   Responding to these filings, the Board opened an inves­
tigation into nondentist teeth whitening. A dentist mem­
ber was placed in charge of the inquiry. Neither the
Board’s hygienist member nor its consumer member par­
ticipated in this undertaking. The Board’s chief opera­
tions officer remarked that the Board was “going forth to
do battle” with nondentists. App. to Pet. for Cert. 103a.
The Board’s concern did not result in a formal rule or
regulation reviewable by the independent Rules Review
Commission, even though the Act does not, by its terms,
specify that teeth whitening is “the practice of dentistry.”
   Starting in 2006, the Board issued at least 47 cease-and­
desist letters on its official letterhead to nondentist teeth
whitening service providers and product manufacturers.
Many of those letters directed the recipient to cease “all
activity constituting the practice of dentistry”; warned
that the unlicensed practice of dentistry is a crime; and
strongly implied (or expressly stated) that teeth whitening
constitutes “the practice of dentistry.” App. 13, 15. In
early 2007, the Board persuaded the North Carolina
Board of Cosmetic Art Examiners to warn cosmetologists
against providing teeth whitening services. Later that
year, the Board sent letters to mall operators, stating that
kiosk teeth whiteners were violating the Dental Practice
Act and advising that the malls consider expelling viola­
tors from their premises.
   These actions had the intended result. Nondentists
ceased offering teeth whitening services in North Carolina.
                           C
  In 2010, the Federal Trade Commission (FTC) filed an
4         NORTH CAROLINA STATE BD. OF DENTAL
                   EXAMINERS v. FTC 

                   Opinion of the Court 


administrative complaint charging the Board with violat­
ing §5 of the Federal Trade Commission Act, 38 Stat. 719,
as amended, 

. §45. The FTC alleged that the
Board’s concerted action to exclude nondentists from the
market for teeth whitening services in North Carolina
constituted an anticompetitive and unfair method of com­
petition. The Board moved to dismiss, alleging state-
action immunity. An Administrative Law Judge (ALJ)
denied the motion. On appeal, the FTC sustained the
ALJ’s ruling. It reasoned that, even assuming the Board
had acted pursuant to a clearly articulated state policy to
displace competition, the Board is a “public/private hy­
brid” that must be actively supervised by the State to
claim immunity. App. to Pet. for Cert. 49a. The FTC
further concluded the Board could not make that showing.
   Following other proceedings not relevant here, the ALJ
conducted a hearing on the merits and determined the
Board had unreasonably restrained trade in violation of
antitrust law. On appeal, the FTC again sustained the
ALJ. The FTC rejected the Board’s public safety justifica­
tion, noting, inter alia, “a wealth of evidence . . . suggest­
ing that non-dentist provided teeth whitening is a safe
cosmetic procedure.” 

   The FTC ordered the Board to stop sending the cease­
and-desist letters or other communications that stated
nondentists may not offer teeth whitening services and
products. It further ordered the Board to issue notices to
all earlier recipients of the Board’s cease-and-desist orders
advising them of the Board’s proper sphere of authority
and saying, among other options, that the notice recipients
had a right to seek declaratory rulings in state court.
   On petition for review, the Court of Appeals for the
Fourth Circuit affirmed the FTC in all respects. 

, 370 (2013). This Court granted certiorari. 571 U. S.
___ (2014).
                 Cite as: 574 U. S. ____ (2015)           5

                     Opinion of the Court 


                             II

  Federal antitrust law is a central safeguard for the
Nation’s free market structures. In this regard it is “as
important to the preservation of economic freedom and our
free-enterprise system as the Bill of Rights is to the pro­
tection of our fundamental personal freedoms.” United
States v. Topco Associates, Inc., 

, 610 (1972).
The antitrust laws declare a considered and decisive pro­
hibition by the Federal Government of cartels, price fixing,
and other combinations or practices that undermine the
free market.
  The Sherman Act, 26 Stat. 209, as amended, 

.
§1 et seq., serves to promote robust competition, which in
turn empowers the States and provides their citizens with
opportunities to pursue their own and the public’s welfare.
See FTC v. Ticor Title Ins. Co., 

, 632 (1992).
The States, however, when acting in their respective
realm, need not adhere in all contexts to a model of unfet­
tered competition. While “the States regulate their econ­
omies in many ways not inconsistent with the antitrust
laws,” 

in some spheres they impose re­
strictions on occupations, confer exclusive or shared rights
to dominate a market, or otherwise limit competition to
achieve public objectives. If every duly enacted state law
or policy were required to conform to the mandates of the
Sherman Act, thus promoting competition at the expense
of other values a State may deem fundamental, federal
antitrust law would impose an impermissible burden on
the States’ power to regulate. See Exxon Corp. v. Gover-
nor of Maryland, 

, 133 (1978); see also
Easterbrook, Antitrust and the Economics of Federalism,
26 J. Law & Econ. 23, 24 (1983).
  For these reasons, the Court in Parker v. Brown inter­
preted the antitrust laws to confer immunity on anticom­
petitive conduct by the States when acting in their sover­
eign capacity. 

–351. That ruling
6          NORTH CAROLINA STATE BD. OF DENTAL
                    EXAMINERS v. FTC
                    Opinion of the Court

recognized Congress’ purpose to respect the federal bal­
ance and to “embody in the Sherman Act the federalism
principle that the States possess a significant measure of
sovereignty under our Constitution.” Community Com-
munications Co. v. Boulder, 

, 53 (1982). Since
1943, the Court has reaffirmed the importance of Parker’s
central holding. See, e.g., 

–637; Hoover
v. Ronwin, 

, 568 (1984); Lafayette v. Louisi-
ana Power & Light Co., 

, 394–400 (1978).
                             III
   In this case the Board argues its members were invested
by North Carolina with the power of the State and that, as
a result, the Board’s actions are cloaked with Parker
immunity. This argument fails, however. A nonsovereign
actor controlled by active market participants—such as
the Board—enjoys Parker immunity only if it satisfies two
requirements: “first that ‘the challenged restraint . . . be
one clearly articulated and affirmatively expressed as
state policy,’ and second that ‘the policy . . . be actively
supervised by the State.’ ” FTC v. Phoebe Putney Health
System, Inc., 568 U. S. ___, ___ (2013) (slip op., at 7) (quot­
ing California Retail Liquor Dealers Assn. v. Midcal Alu-
minum, Inc., 

, 105 (1980)). The parties have
assumed that the clear articulation requirement is satis­
fied, and we do the same. While North Carolina prohibits
the unauthorized practice of dentistry, however, its Act is
silent on whether that broad prohibition covers teeth
whitening. Here, the Board did not receive active super­
vision by the State when it interpreted the Act as ad­
dressing teeth whitening and when it enforced that policy
by issuing cease-and-desist letters to nondentist teeth
whiteners.
                             A
    Although state-action immunity exists to avoid conflicts
                 Cite as: 574 U. S. ____ (2015)            7

                     Opinion of the Court

between state sovereignty and the Nation’s commitment to
a policy of robust competition, Parker immunity is not
unbounded. “[G]iven the fundamental national values of
free enterprise and economic competition that are embod­
ied in the federal antitrust laws, ‘state action immunity is
disfavored, much as are repeals by implication.’ ” Phoebe

, at ___ (slip op., at 7) (quoting 

).
  An entity may not invoke Parker immunity unless the
actions in question are an exercise of the State’s sovereign
power. See Columbia v. Omni Outdoor Advertising, Inc.,

, 374 (1991). State legislation and “deci­
sion[s] of a state supreme court, acting legislatively rather
than judicially,” will satisfy this standard, and “ipso facto
are exempt from the operation of the antitrust laws” be­
cause they are an undoubted exercise of state sovereign
authority. 

–568.
  But while the Sherman Act confers immunity on the
States’ own anticompetitive policies out of respect for
federalism, it does not always confer immunity where, as
here, a State delegates control over a market to a non-
sovereign actor. See 

(“[A] state does
not give immunity to those who violate the Sherman Act
by authorizing them to violate it, or by declaring that their
action is lawful”). For purposes of Parker, a nonsovereign
actor is one whose conduct does not automatically qualify
as that of the sovereign State itself. See 

–568. State agencies are not simply by their govern­
mental character sovereign actors for purposes of state-
action immunity. See Goldfarb v. Virginia State Bar, 

, 791 (1975) (“The fact that the State Bar is a
state agency for some limited purposes does not create an
antitrust shield that allows it to foster anticompetitive
practices for the benefit of its members”). Immunity for
state agencies, therefore, requires more than a mere fa­
cade of state involvement, for it is necessary in light of
8         NORTH CAROLINA STATE BD. OF DENTAL
                   EXAMINERS v. FTC
                   Opinion of the Court

Parker’s rationale to ensure the States accept political
accountability for anticompetitive conduct they permit and
control. See 

.
   Limits on state-action immunity are most essential
when the State seeks to delegate its regulatory power to
active market participants, for established ethical stand­
ards may blend with private anticompetitive motives in a
way difficult even for market participants to discern. Dual
allegiances are not always apparent to an actor. In conse­
quence, active market participants cannot be allowed to
regulate their own markets free from antitrust account­
ability. See 

(“The national policy in
favor of competition cannot be thwarted by casting [a]
gauzy cloak of state involvement over what is essentially a
private price-fixing arrangement”). Indeed, prohibitions
against anticompetitive self-regulation by active market
participants are an axiom of federal antitrust policy. See,
e.g., Allied Tube & Conduit Corp. v. Indian Head, Inc., 

, 501 (1988); 

(Stevens, J.,
dissenting) (“The risk that private regulation of market
entry, prices, or output may be designed to confer monop­
oly profits on members of an industry at the expense of the
consuming public has been the central concern of . . . our
antitrust jurisprudence”); see also Elhauge, The Scope of
Antitrust Process, 104 Harv. L. Rev. 667, 672 (1991). So it
follows that, under Parker and the Supremacy Clause, the
States’ greater power to attain an end does not include the
lesser power to negate the congressional judgment embod­
ied in the Sherman Act through unsupervised delegations
to active market participants. See Garland, Antitrust and
State Action: Economic Efficiency and the Political Pro­
cess, 96 Yale L. J. 486, 500 (1986).
   Parker immunity requires that the anticompetitive
conduct of nonsovereign actors, especially those author­
ized by the State to regulate their own profession, result
from procedures that suffice to make it the State’s own.
                 Cite as: 574 U. S. ____ (2015)            9

                     Opinion of the Court

See 

; see also 1A P. Areeda & H.
Hovencamp, Antitrust Law ¶226, p. 180 (4th ed. 2013)
(Areeda & Hovencamp). The question is not whether the
challenged conduct is efficient, well-functioning, or wise.
See 

–635. Rather, it is “whether anti­
competitive conduct engaged in by [nonsovereign actors]
should be deemed state action and thus shielded from the
antitrust laws.” Patrick v. Burget, 

, 100
(1988).
   To answer this question, the Court applies the two-part
test set forth in California Retail Liquor Dealers Assn. v.
Midcal Aluminum, Inc., 

, a case arising from
California’s delegation of price-fixing authority to wine
merchants. Under Midcal, “[a] state law or regulatory
scheme cannot be the basis for antitrust immunity unless,
first, the State has articulated a clear policy to allow the
anticompetitive conduct, and second, the State provides
active supervision of [the] anticompetitive conduct.” 

(citing 

).
   Midcal’s clear articulation requirement is satisfied
“where the displacement of competition [is] the inherent,
logical, or ordinary result of the exercise of authority
delegated by the state legislature. In that scenario, the
State must have foreseen and implicitly endorsed the
anticompetitive effects as consistent with its policy goals.”
Phoebe Putney, 568 U. S., at ___ (slip op., at 11). The
active supervision requirement demands, inter alia, “that
state officials have and exercise power to review particular
anticompetitive acts of private parties and disapprove
those that fail to accord with state policy.” 

,
U. S., at 101.
   The two requirements set forth in Midcal provide a
proper analytical framework to resolve the ultimate ques­
tion whether an anticompetitive policy is indeed the policy
of a State. The first requirement—clear articulation—
rarely will achieve that goal by itself, for a policy may
10        NORTH CAROLINA STATE BD. OF DENTAL
                   EXAMINERS v. FTC
                   Opinion of the Court

satisfy this test yet still be defined at so high a level of
generality as to leave open critical questions about how
and to what extent the market should be regulated. See

–637. Entities purporting to act under
state authority might diverge from the State’s considered
definition of the public good. The resulting asymmetry
between a state policy and its implementation can invite
private self-dealing. The second Midcal requirement—
active supervision—seeks to avoid this harm by requiring
the State to review and approve interstitial policies made
by the entity claiming immunity.
   Midcal’s supervision rule “stems from the recognition
that ‘[w]here a private party is engaging in anticompeti­
tive activity, there is a real danger that he is acting to
further his own interests, rather than the governmental
interests of the State.’ ” 

, at 100. Concern
about the private incentives of active market participants
animates Midcal’s supervision mandate, which demands
“realistic assurance that a private party’s anticompetitive
conduct promotes state policy, rather than merely the
party’s individual interests.” 

, at 101.
                               B
    In determining whether anticompetitive policies and
conduct are indeed the action of a State in its sovereign
capacity, there are instances in which an actor can be
excused from Midcal’s active supervision requirement. In
Hallie v. Eau Claire, 

, 45 (1985), the Court
held municipalities are subject exclusively to Midcal’s
“ ‘clear articulation’ ” requirement. That rule, the Court
observed, is consistent with the objective of ensuring that
the policy at issue be one enacted by the State itself.
Hallie explained that “[w]here the actor is a municipality,
there is little or no danger that it is involved in a private
price-fixing arrangement. The only real danger is that it
will seek to further purely parochial public interests at the
                  Cite as: 574 U. S. ____ (2015)           11

                      Opinion of the Court

expense of more overriding state 

.
Hallie further observed that municipalities are electorally
accountable and lack the kind of private incentives charac­
teristic of active participants in the market. See 

n. 9. Critically, the municipality in Hallie exercised a
wide range of governmental powers across different eco­
nomic spheres, substantially reducing the risk that it
would pursue private interests while regulating any single
field. See 

municipalities from
Midcal’s supervision rule for these reasons all but con­
firms the rule’s applicability to actors controlled by active
market participants, who ordinarily have none of the
features justifying the narrow exception Hallie identified.

.
   Following Goldfarb, Midcal, and Hallie, which clarified
the conditions under which Parker immunity attaches to
the conduct of a nonsovereign actor, the Court in Colum-
bia v. Omni Outdoor Advertising, Inc., 

,
addressed whether an otherwise immune entity could lose
immunity for conspiring with private parties. In Omni, an
aspiring billboard merchant argued that the city of Co­
lumbia, South Carolina, had violated the Sherman Act—
and forfeited its Parker immunity—by anticompetitively
conspiring with an established local company in passing
an ordinance restricting new billboard 

–368. The Court disagreed, holding there is
no “conspiracy exception” to Parker. 

.
   Omni, like the cases before it, recognized the importance
of drawing a line “relevant to the purposes of the Sherman
Act and of Parker: prohibiting the restriction of competi­
tion for private gain but permitting the restriction of
competition in the public 

. In
the context of a municipal actor which, as in Hallie, exer­
cised substantial governmental powers, Omni rejected a
conspiracy exception for “corruption” as vague and un­
workable, since “virtually all regulation benefits some
12        NORTH CAROLINA STATE BD. OF DENTAL
                   EXAMINERS v. FTC 

                   Opinion of the Court 


segments of the society and harms others” and may in that
sense be seen as “ ‘corrupt.’ 

. Omni also
rejected subjective tests for corruption that would force a
“deconstruction of the governmental process and probing
of the official ‘intent’ that we have consistently sought to
avoid.” 

cases preceding it ad­
dressed the preconditions of Parker immunity and en­
gaged in an objective, ex ante inquiry into nonsovereign
actors’ structure and incentives, Omni made clear that
recipients of immunity will not lose it on the basis of
ad hoc and ex post questioning of their motives for making
particular decisions.
   Omni’s holding makes it all the more necessary to en­
sure the conditions for granting immunity are met in the
first place. The Court’s two state-action immunity cases
decided after Omni reinforce this point. In Ticor the Court
affirmed that Midcal’s limits on delegation must ensure
that “[a]ctual state involvement, not deference to private
price-fixing arrangements under the general auspices of
state law, is the precondition for immunity from federal

. And in Phoebe Putney the Court
observed that Midcal’s active supervision requirement, in
particular, is an essential condition of state-action immun­
ity when a nonsovereign actor has “an incentive to pursue
[its] own self-interest under the guise of implementing
state policies.” 568 U. S., at ___ (slip op., at 8) (quoting

–47). The lesson is clear: Midcal’s
active supervision test is an essential prerequisite of
Parker immunity for any nonsovereign entity—public or
private—controlled by active market participants.
                            C
  The Board argues entities designated by the States as
agencies are exempt from Midcal’s second requirement.
That premise, however, cannot be reconciled with the
Court’s repeated conclusion that the need for supervision
                 Cite as: 574 U. S. ____ (2015)           13

                     Opinion of the Court

turns not on the formal designation given by States to
regulators but on the risk that active market participants
will pursue private interests in restraining trade.
   State agencies controlled by active market participants,
who possess singularly strong private interests, pose the
very risk of self-dealing Midcal’s supervision requirement
was created to address. See Areeda & Hovencamp ¶227,
at 226. This conclusion does not question the good faith of
state officers but rather is an assessment of the structural
risk of market participants’ confusing their own interests
with the State’s policy goals. See 

–101.
   The Court applied this reasoning to a state agency in
Goldfarb. There the Court denied immunity to a state
agency (the Virginia State Bar) controlled by market
participants (lawyers) because the agency had “joined in
what is essentially a private anticompetitive activity” for
“the benefit of its 

, 792. This
emphasis on the Bar’s private interests explains why
Goldfarb, though it predates Midcal, considered the lack
of supervision by the Virginia Supreme Court to be a
principal reason for denying immunity. 

; see also 

(emphasizing lack
of active supervision in Goldfarb); Bates v. State Bar of
Ariz., 

, 361–362 (1977) (granting the Arizona
Bar state-action immunity partly because its “rules are
subject to pointed re-examination by the policymaker”).
   While Hallie stated “it is likely that active state super­
vision would also not be required” for 

, n. 10, the entity there, as was later the case in
Omni, was an electorally accountable municipality with
general regulatory powers and no private price-fixing
agenda. In that and other respects the municipality was
more like prototypical state agencies, not specialized
boards dominated by active market participants. In im­
portant regards, agencies controlled by market partici­
14        NORTH CAROLINA STATE BD. OF DENTAL
                   EXAMINERS v. FTC 

                   Opinion of the Court 


pants are more similar to private trade associations vested
by States with regulatory authority than to the agencies
Hallie considered. And as the Court observed three years
after Hallie, “[t]here is no doubt that the members of such
associations often have economic incentives to restrain
competition and that the product standards set by such
associations have a serious potential for anticompetitive
harm.” Allied 

. For that reason,
those associations must satisfy Midcal’s active supervision
standard. See 

–106.
   The similarities between agencies controlled by active
market participants and private trade associations are not
eliminated simply because the former are given a formal
designation by the State, vested with a measure of gov­
ernment power, and required to follow some procedural
rules. See 

(rejecting “purely formalis­
tic” analysis). Parker immunity does not derive from
nomenclature alone. When a State empowers a group of
active market participants to decide who can participate
in its market, and on what terms, the need for supervision
is manifest. See Areeda & Hovencamp ¶227, at 226. The
Court holds today that a state board on which a control­
ling number of decisionmakers are active market partici­
pants in the occupation the board regulates must satisfy
Midcal’s active supervision requirement in order to invoke
state-action antitrust immunity.
                            D
  The State argues that allowing this FTC order to stand
will discourage dedicated citizens from serving on state
agencies that regulate their own occupation. If this were
so—and, for reasons to be noted, it need not be so—there
would be some cause for concern. The States have a sov­
ereign interest in structuring their governments, see
Gregory v. Ashcroft, 

, 460 (1991), and may
conclude there are substantial benefits to staffing their
                 Cite as: 574 U. S. ____ (2015)          15

                     Opinion of the Court

agencies with experts in complex and technical subjects,
see Southern Motor Carriers Rate Conference, Inc. v. United
States, 

, 64 (1985). There is, moreover, a long
tradition of citizens esteemed by their professional col­
leagues devoting time, energy, and talent to enhancing the
dignity of their calling.
   Adherence to the idea that those who pursue a calling
must embrace ethical standards that derive from a duty
separate from the dictates of the State reaches back at
least to the Hippocratic Oath. See generally S. Miles, The
Hippocratic Oath and the Ethics of Medicine (2004). In
the United States, there is a strong tradition of profes­
sional self-regulation, particularly with respect to the
development of ethical rules. See generally R. Rotunda &
J. Dzienkowski, Legal Ethics: The Lawyer’s Deskbook on
Professional Responsibility (2014); R. Baker, Before Bio­
ethics: A History of American Medical Ethics From the
Colonial Period to the Bioethics Revolution (2013). Den­
tists are no exception. The American Dental Association,
for example, in an exercise of “the privilege and obligation
of self-government,” has “call[ed] upon dentists to follow
high ethical standards,” including “honesty, compassion,
kindness, integrity, fairness and charity.”       American
Dental Association, Principles of Ethics and Code of Pro­
fessional Conduct 3–4 (2012). State laws and institutions
are sustained by this tradition when they draw upon the
expertise and commitment of professionals.
   Today’s holding is not inconsistent with that idea. The
Board argues, however, that the potential for money dam­
ages will discourage members of regulated occupations
from participating in state government. Cf. Filarsky v.
Delia, 566 U. S. ___, ___ (2012) (slip op., at 12) (warning
in the context of civil rights suits that the “the most tal­
ented candidates will decline public engagements if they
do not receive the same immunity enjoyed by their public
employee counterparts”). But this case, which does not
16         NORTH CAROLINA STATE BD. OF DENTAL
                    EXAMINERS v. FTC
                    Opinion of the Court

present a claim for money damages, does not offer occasion
to address the question whether agency officials, including
board members, may, under some circumstances, enjoy
immunity from damages liability. See 

, n. 22; see also Brief for Respondent 56. And, of
course, the States may provide for the defense and indem­
nification of agency members in the event of litigation.
  States, furthermore, can ensure Parker immunity is
available to agencies by adopting clear policies to displace
competition; and, if agencies controlled by active market
participants interpret or enforce those policies, the States
may provide active supervision. Precedent confirms this
principle. The Court has rejected the argument that it
would be unwise to apply the antitrust laws to professional
regulation absent compliance with the prerequisites for
invoking Parker immunity:
     “[Respondents] contend that effective peer review is
     essential to the provision of quality medical care and
     that any threat of antitrust liability will prevent phy­
     sicians from participating openly and actively in peer-
     review proceedings. This argument, however, essen­
     tially challenges the wisdom of applying the antitrust
     laws to the sphere of medical care, and as such is
     properly directed to the legislative branch. To the ex­
     tent that Congress has declined to exempt medical
     peer review from the reach of the antitrust laws, peer
     review is immune from antitrust scrutiny only if the
     State effectively has made this conduct its own.” Pat-
     

–106 (footnote omitted).
  The reasoning of Patrick v. Burget applies to this case
with full force, particularly in light of the risks licensing
boards dominated by market participants may pose to the
free market. See generally Edlin & Haw, Cartels by An­
other Name: Should Licensed Occupations Face Antitrust
Scrutiny? 162 U. Pa. L. Rev. 1093 (2014).
                 Cite as: 574 U. S. ____ (2015)          17

                     Opinion of the Court

                              E
  The Board does not contend in this Court that its anti­
competitive conduct was actively supervised by the State
or that it should receive Parker immunity on that basis.
  By statute, North Carolina delegates control over the
practice of dentistry to the Board. The Act, however, says
nothing about teeth whitening, a practice that did not
exist when it was passed. After receiving complaints from
other dentists about the nondentists’ cheaper services, the
Board’s dentist members—some of whom offered whiten­
ing services—acted to expel the dentists’ competitors from
the market. In so doing the Board relied upon cease-and­
desist letters threatening criminal liability, rather than
any of the powers at its disposal that would invoke over­
sight by a politically accountable official. With no active
supervision by the State, North Carolina officials may well
have been unaware that the Board had decided teeth
whitening constitutes “the practice of dentistry” and
sought to prohibit those who competed against dentists
from participating in the teeth whitening market. Whether
or not the Board exceeded its powers under North Carolina
law, cf. 

–372, there is no evidence
here of any decision by the State to initiate or concur with
the Board’s actions against the nondentists.
                             IV
   The Board does not claim that the State exercised ac­
tive, or indeed any, supervision over its conduct regarding
nondentist teeth whiteners; and, as a result, no specific
supervisory systems can be reviewed here. It suffices to
note that the inquiry regarding active supervision is flexi­
ble and context-dependent. Active supervision need not
entail day-to-day involvement in an agency’s operations or
micromanagement of its every decision. Rather, the ques­
tion is whether the State’s review mechanisms provide
“realistic assurance” that a nonsovereign actor’s anticom­
18        NORTH CAROLINA STATE BD. OF DENTAL
                   EXAMINERS v. FTC
                   Opinion of the Court

petitive conduct “promotes state policy, rather than merely
the party’s individual interests.” 

, at 100–
101; see also 

–640.
  The Court has identified only a few constant require­
ments of active supervision: The supervisor must review
the substance of the anticompetitive decision, not merely
the procedures followed to produce it, see 

–103; the supervisor must have the power to
veto or modify particular decisions to ensure they accord
with state policy, see ibid.; and the “mere potential for
state supervision is not an adequate substitute for a deci­
sion by the State,” 

. Further, the state
supervisor may not itself be an active market participant.
In general, however, the adequacy of supervision other­
wise will depend on all the circumstances of a case.
                        *    *     *
  The Sherman Act protects competition while also re­
specting federalism. It does not authorize the States to
abandon markets to the unsupervised control of active
market participants, whether trade associations or hybrid
agencies. If a State wants to rely on active market partic­
ipants as regulators, it must provide active supervision if
state-action immunity under Parker is to be invoked.
  The judgment of the Court of Appeals for the Fourth
Circuit is affirmed.
                                            It is so ordered.
                 Cite as: 574 U. S. ____ (2015)           1

                     ALITO, J., dissenting

SUPREME COURT OF THE UNITED STATES
                         _________________

                          No. 13–534
                         _________________


   NORTH CAROLINA STATE BOARD OF DENTAL 

     EXAMINERS, PETITIONER v. FEDERAL 

            TRADE COMMISSION

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

           APPEALS FOR THE FOURTH CIRCUIT

                     [February 25, 2015]


   JUSTICE ALITO, with whom JUSTICE SCALIA and JUSTICE
THOMAS join, dissenting.
   The Court’s decision in this case is based on a serious
misunderstanding of the doctrine of state-action antitrust
immunity that this Court recognized more than 60 years
ago in Parker v. Brown, 

(1943). In Parker,
the Court held that the Sherman Act does not prevent the
States from continuing their age-old practice of enacting
measures, such as licensing requirements, that are de-
signed to protect the public health and welfare. 

The case now before us involves precisely this type of
state regulation—North Carolina’s laws governing the
practice of dentistry, which are administered by the North
Carolina Board of Dental Examiners (Board).
   Today, however, the Court takes the unprecedented step
of holding that Parker does not apply to the North Caro-
lina Board because the Board is not structured in a way
that merits a good-government seal of approval; that is, it
is made up of practicing dentists who have a financial
incentive to use the licensing laws to further the financial
interests of the State’s dentists. There is nothing new
about the structure of the North Carolina Board. When
the States first created medical and dental boards, well
before the Sherman Act was enacted, they began to staff
2           NORTH CAROLINA STATE BD. OF DENTAL
                     EXAMINERS v. FTC
                     ALITO, J., dissenting

them in this way.1 Nor is there anything new about the
suspicion that the North Carolina Board—in attempting to
prevent persons other than dentists from performing
teeth-whitening procedures—was serving the interests of
dentists and not the public. Professional and occupational
licensing requirements have often been used in such a
way.2 But that is not what Parker immunity is about.
Indeed, the very state program involved in that case was
unquestionably designed to benefit the regulated entities,
California raisin growers.
   The question before us is not whether such programs
serve the public interest. The question, instead, is whether
this case is controlled by Parker, and the answer to that
question is clear. Under Parker, the Sherman Act (and
the Federal Trade Commission Act, see FTC v. Ticor Title
Ins. Co., 

, 635 (1992)) do not apply to state
agencies; the North Carolina Board of Dental Examiners
is a state agency; and that is the end of the matter. By
straying from this simple path, the Court has not only
distorted Parker; it has headed into a morass. Determin-
ing whether a state agency is structured in a way that
militates against regulatory capture is no easy task, and
there is reason to fear that today’s decision will spawn
confusion. The Court has veered off course, and therefore
I cannot go along.



——————
  1 S. White, History of Oral and Dental Science in America 197–

214 (1876) (detailing earliest American regulations of the practice of
dentistry).
  2 See, e.g., R. Shrylock, Medical Licensing in America 29 (1967) (Shry-

lock) (detailing the deterioration of licensing regimes in the mid-19th
century, in part out of concerns about restraints on trade); Gellhorn,
The Abuse of Occupational Licensing, 44 U. Chi. L. Rev. 6 (1976);
Shepard, Licensing Restrictions and the Cost of Dental Care, 21 J. Law
& Econ. 187 (1978).
                   Cite as: 574 U. S. ____ (2015)                 3

                        ALITO, J., dissenting

                                I
   In order to understand the nature of Parker state-action
immunity, it is helpful to recall the constitutional land-
scape in 1890 when the Sherman Act was enacted. At
that time, this Court and Congress had an understanding
of the scope of federal and state power that is very differ-
ent from our understanding today. The States were un-
derstood to possess the exclusive authority to regulate
“their purely internal affairs.” Leisy v. Hardin, 

, 122 (1890). In exercising their police power in this
area, the States had long enacted measures, such as price
controls and licensing requirements, that had the effect of
restraining trade.3
   The Sherman Act was enacted pursuant to Congress’
power to regulate interstate commerce, and in passing the
Act, Congress wanted to exercise that power “to the ut-
most extent.” United States v. South-Eastern Underwrit-
ers Assn., 

, 558 (1944). But in 1890, the
understanding of the commerce power was far more lim-
ited than it is today. See, e.g., Kidd v. Pearson, 

, 17–18 (1888). As a result, the Act did not pose a threat
to traditional state regulatory activity.
   By 1943, when Parker was decided, however, the situa-
tion had changed dramatically. This Court had held that
the commerce power permitted Congress to regulate even
local activity if it “exerts a substantial economic effect on
interstate commerce.” Wickard v. Filburn, 

,
125 (1942). This meant that Congress could regulate
many of the matters that had once been thought to fall
exclusively within the jurisdiction of the States. The new
interpretation of the commerce power brought about an
expansion of the reach of the Sherman Act. See Hospital

——————
  3 See Handler, The Current Attack on the Parker v. Brown State

Action Doctrine, 76 Colum. L. Rev. 1, 4–6 (1976) (collecting cases).
4         NORTH CAROLINA STATE BD. OF DENTAL
                   EXAMINERS v. FTC 

                   ALITO, J., dissenting


Building Co. v. Trustees of Rex Hospital, 

,
743, n. 2 (1976) (“[D]ecisions by this Court have permitted
the reach of the Sherman Act to expand along with ex-
panding notions of congressional power”). And the ex-
panded reach of the Sherman Act raised an important
question. The Sherman Act does not expressly exempt
States from its scope. Does that mean that the Act applies
to the States and that it potentially outlaws many tradi-
tional state regulatory measures? The Court confronted
that question in Parker.
   In Parker, a raisin producer challenged the California
Agricultural Prorate Act, an agricultural price support
program. The California Act authorized the creation of an
Agricultural Prorate Advisory Commission (Commission)
to establish marketing plans for certain agricultural com-
modities within the 

–347. Raisins
were among the regulated commodities, and so the Com-
mission established a marketing program that governed
many aspects of raisin sales, including the quality and
quantity of raisins sold, the timing of sales, and the price
at which raisins were sold. 

The Parker
Court assumed that this program would have violated “the
Sherman Act if it were organized and made effective solely
by virtue of a contract, combination or conspiracy of pri-
vate persons,” and the Court also assumed that Congress
could have prohibited a State from creating a program like
California’s if it had chosen to do so. 

Never-
theless, the Court concluded that the California program
did not violate the Sherman Act because the Act did not
circumscribe state regulatory power. 

   The Court’s holding in Parker was not based on either
the language of the Sherman Act or anything in the legis-
lative history affirmatively showing that the Act was not
meant to apply to the States. Instead, the Court reasoned
that “[i]n a dual system of government in which, under the
Constitution, the states are sovereign, save only as Con-
                    Cite as: 574 U. S. ____ (2015)                   5

                         ALITO, J., dissenting

gress may constitutionally subtract from their authority,
an unexpressed purpose to nullify a state’s control over its
officers and agents is not lightly to be attributed to Con-

. For the Congress that enacted
the Sherman Act in 1890, it would have been a truly radi-
cal and almost certainly futile step to attempt to prevent
the States from exercising their traditional regulatory
authority, and the Parker Court refused to assume that
the Act was meant to have such an effect.
   When the basis for the Parker state-action doctrine is
understood, the Court’s error in this case is plain. In
1890, the regulation of the practice of medicine and den-
tistry was regarded as falling squarely within the States’
sovereign police power. By that time, many States had
established medical and dental boards, often staffed by
doctors or dentists,4 and had given those boards the au-
thority to confer and revoke licenses.5 This was quintes-
sential police power legislation, and although state laws
were often challenged during that era under the doctrine
of substantive due process, the licensing of medical profes-
sionals easily survived such assaults. Just one year before
the enactment of the Sherman Act, in Dent v. West Vir-
ginia, 

, 128 (1889), this Court rejected such a
challenge to a state law requiring all physicians to obtain
a certificate from the state board of health attesting to
their qualifications. And in Hawker v. New York, 

, 192 (1898), the Court reiterated that a law

——————
  4 Shrylock 54–55; D. Johnson and H. Chaudry, Medical Licensing and
Discipline in America 23–24 (2012).
   5 In Hawker v. New York, 

(1898), the Court cited state

laws authorizing such boards to refuse or revoke medical licenses. 

n. 1. See also Douglas v. Noble, 

, 166 (1923)
(“In 1893 the legislature of Washington provided that only licensed
persons should practice dentistry” and “vested the authority to license
in a board of examiners, consisting of five practicing dentists”).
6         NORTH CAROLINA STATE BD. OF DENTAL
                   EXAMINERS v. FTC 

                   ALITO, J., dissenting


specifying the qualifications to practice medicine was
clearly a proper exercise of the police power. Thus, the
North Carolina statutes establishing and specifying the
powers of the State Board of Dental Examiners represent
precisely the kind of state regulation that the Parker
exemption was meant to immunize.
                               II
  As noted above, the only question in this case is whether
the North Carolina Board of Dental Examiners is really a
state agency, and the answer to that question is clearly
yes.
   The North Carolina Legislature determined that the
     practice of dentistry “affect[s] the public health, safety
     and welfare” of North Carolina’s citizens and that
     therefore the profession should be “subject to regula-
     tion and control in the public interest” in order to en-
     sure “that only qualified persons be permitted to
     practice dentistry in the State.” N. C. Gen. Stat. Ann.
     §90–22(a) (2013).
   To further that end, the legislature created the North
     Carolina State Board of Dental Examiners “as the
     agency of the State for the regulation of the practice
     of dentistry in th[e] State.” §90–22(b).
   The legislature specified the membership of the
     Board. §90–22(c). It defined the “practice of dentis-
     try,” §90–29(b), and it set out standards for licensing
     practitioners, §90–30. The legislature also set out
     standards under which the Board can initiate disci-
     plinary proceedings against licensees who engage in
     certain improper acts. §90–41(a).
   The legislature empowered the Board to “maintain an
     action in the name of the State of North Carolina to
     perpetually enjoin any person from . . . unlawfully
     practicing dentistry.” §90–40.1(a). It authorized the
     Board to conduct investigations and to hire legal
                 Cite as: 574 U. S. ____ (2015)           7

                     ALITO, J., dissenting

     counsel, and the legislature made any “notice or
     statement of charges against any licensee” a public
     record under state law. §§ 90–41(d)–(g).
    The legislature empowered the Board “to enact rules
     and regulations governing the practice of dentistry
     within the State,” consistent with relevant statutes.
     §90–48. It has required that any such rules be in-
     cluded in the Board’s annual report, which the Board
     must file with the North Carolina secretary of state,
     the state attorney general, and the legislature’s Joint
     Regulatory Reform Committee. §93B–2. And if the
     Board fails to file the required report, state law de-
     mands that it be automatically suspended until it
     does so. 

regime demonstrates, North Caro-
lina’s Board of Dental Examiners is unmistakably a state
agency created by the state legislature to serve a pre-
scribed regulatory purpose and to do so using the State’s
power in cooperation with other arms of state government.
   The Board is not a private or “nonsovereign” entity that
the State of North Carolina has attempted to immunize
from federal antitrust scrutiny. Parker made it clear that
a State may not “ ‘give immunity to those who violate the
Sherman Act by authorizing them to violate it, or by de-
claring that their action is lawful.’ ” Ante, at 7 (quoting

). When the Parker Court disap-
proved of any such attempt, it cited Northern Securities
Co. v. United States, 

(1904), to show what it
had in mind. In that case, the Court held that a State’s
act of chartering a corporation did not shield the corpora-
tion’s monopolizing activities from federal antitrust law.

Nothing similar is involved here. North
Carolina did not authorize a private entity to enter into an
anticompetitive arrangement; rather, North Carolina
created a state agency and gave that agency the power to
regulate a particular subject affecting public health and
8           NORTH CAROLINA STATE BD. OF DENTAL
                     EXAMINERS v. FTC
                     ALITO, J., dissenting

safety.
   Nothing in Parker supports the type of inquiry that the
Court now prescribes. The Court crafts a test under which
state agencies that are “controlled by active market partic-
ipants,” ante, at 12, must demonstrate active state super-
vision in order to be immune from federal antitrust law.
The Court thus treats these state agencies like private
entities. But in Parker, the Court did not examine the
structure of the California program to determine if it had
been captured by private interests. If the Court had done
so, the case would certainly have come out differently,
because California conditioned its regulatory measures on
the participation and approval of market actors in the
relevant industry.
   Establishing a prorate marketing plan under Califor-
nia’s law first required the petition of at least 10 producers
of the particular commodity. 

. If
the Commission then agreed that a marketing plan was
warranted, the Commission would “select a program
committee from among nominees chosen by the qualified
producers.” 

committee
would then formulate the proration marketing program,
which the Commission could modify or approve. But even
after Commission approval, the program became law (and
then, automatically) only if it gained the approval of 65
percent of the relevant producers, representing at least 51
percent of the acreage of the regulated crop. 

This scheme gave decisive power to market participants.
But despite these aspects of the California program, Par-
ker held that California was acting as a “sovereign” when
it “adopt[ed] and enforc[ed] the prorate program.” 

This reasoning is irreconcilable with the Court’s
today.
                             III
    The Court goes astray because it forgets the origin of the
                 Cite as: 574 U. S. ____ (2015)            9

                     ALITO, J., dissenting

Parker doctrine and is misdirected by subsequent cases
that extended that doctrine (in certain circumstances) to
private entities. The Court requires the North Carolina
Board to satisfy the two-part test set out in California
Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 

(1980), but the party claiming Parker immunity in
that case was not a state agency but a private trade asso-
ciation. Such an entity is entitled to Parker immunity,
Midcal held, only if the anticompetitive conduct at issue
was both “ ‘clearly articulated’ ” and “ ‘actively supervised
by the State itself.’ 

. Those require-
ments are needed where a State authorizes private parties
to engage in anticompetitive conduct. They serve to iden-
tify those situations in which conduct by private parties
can be regarded as the conduct of a State. But when the
conduct in question is the conduct of a state agency, no
such inquiry is required.
   This case falls into the latter category, and therefore
Midcal is inapposite. The North Carolina Board is not a
private trade association. It is a state agency, created and
empowered by the State to regulate an industry affecting
public health. It would not exist if the State had not
created it. And for purposes of Parker, its membership is
irrelevant; what matters is that it is part of the govern-
ment of the sovereign State of North Carolina.
   Our decision in Hallie v. Eau Claire, 

(1985),
which involved Sherman Act claims against a municipal-
ity, not a State agency, is similarly inapplicable. In Hal-
lie, the plaintiff argued that the two-pronged Midcal test
should be applied, but the Court disagreed. The Court
acknowledged that municipalities “are not themselves

. But recognizing that a munic-
ipality is “an arm of the State,” 

the Court held
that a municipality should be required to satisfy only the
first prong of the Midcal test (requiring a clearly articu-
lated state 

. That municipalities
10        NORTH CAROLINA STATE BD. OF DENTAL
                   EXAMINERS v. FTC
                   ALITO, J., dissenting

are not sovereign was critical to our analysis in Hallie,
and thus that decision has no application in a case, like
this one, involving a state agency.
   Here, however, the Court not only disregards the North
Carolina Board’s status as a full-fledged state agency; it
treats the Board less favorably than a municipality. This
is puzzling. States are sovereign, Northern Ins. Co. of
N. Y. v. Chatham County, 

, 193 (2006), and
California’s sovereignty provided the foundation for the
decision in 

. Municipalities are not
sovereign. Jinks v. Richland County, 

, 466
(2003). And for this reason, federal law often treats mu-
nicipalities differently from States. Compare Will v. Mich-
igan Dept. of State Police, 

, 71 (1989)
(“[N]either a State nor its officials acting it their official
capacities are ‘persons’ under [

.] §1983”), with
Monell v. City Dept. of Social Servs., New York, 

, 694 (1978) (municipalities liable under §1983 where
“execution of a government’s policy or custom . . . inflicts
the injury”).
   The Court recognizes that municipalities, although not
sovereign, nevertheless benefit from a more lenient stand-
ard for state-action immunity than private entities. Yet
under the Court’s approach, the North Carolina Board of
Dental Examiners, a full-fledged state agency, is treated
like a private actor and must demonstrate that the State
actively supervises its actions.
   The Court’s analysis seems to be predicated on an as-
sessment of the varying degrees to which a municipality
and a state agency like the North Carolina Board are
likely to be captured by private interests. But until today,
Parker immunity was never conditioned on the proper use
of state regulatory authority. On the contrary, in Colum-
bia v. Omni Outdoor Advertising, Inc., 

(1991), we refused to recognize an exception to Parker for
cases in which it was shown that the defendants had
                  Cite as: 574 U. S. ____ (2015)           11

                      ALITO, J., dissenting

engaged in a conspiracy or corruption or had acted in a
way that was not in the public interest. 

The
Sherman Act, we said, is not an anticorruption or good-
government 

. We were unwilling
in Omni to rewrite Parker in order to reach the allegedly
abusive behavior of city 

–379.
But that is essentially what the Court has done here.
                              III
   Not only is the Court’s decision inconsistent with the
underlying theory of Parker; it will create practical prob-
lems and is likely to have far-reaching effects on the
States’ regulation of professions. As previously noted,
state medical and dental boards have been staffed by
practitioners since they were first created, and there are
obvious advantages to this approach. It is reasonable for
States to decide that the individuals best able to regulate
technical professions are practitioners with expertise in
those very professions. Staffing the State Board of Dental
Examiners with certified public accountants would cer-
tainly lessen the risk of actions that place the well-being of
dentists over those of the public, but this would also com-
promise the State’s interest in sensibly regulating a tech-
nical profession in which lay people have little expertise.
   As a result of today’s decision, States may find it neces-
sary to change the composition of medical, dental, and
other boards, but it is not clear what sort of changes are
needed to satisfy the test that the Court now adopts. The
Court faults the structure of the North Carolina Board
because “active market participants” constitute “a control-
ling number of [the] decisionmakers,” ante, at 14, but this
test raises many questions.
   What is a “controlling number”? Is it a majority? And if
so, why does the Court eschew that term? Or does the
Court mean to leave open the possibility that something
less than a majority might suffice in particular circum-
12          NORTH CAROLINA STATE BD. OF DENTAL
                     EXAMINERS v. FTC
                     ALITO, J., dissenting

stances? Suppose that active market participants consti-
tute a voting bloc that is generally able to get its way?
How about an obstructionist minority or an agency chair
empowered to set the agenda or veto regulations?
   Who is an “active market participant”? If Board mem-
bers withdraw from practice during a short term of service
but typically return to practice when their terms end, does
that mean that they are not active market participants
during their period of service?
   What is the scope of the market in which a member may
not participate while serving on the board? Must the
market be relevant to the particular regulation being
challenged or merely to the jurisdiction of the entire agency?
Would the result in the present case be different if a
majority of the Board members, though practicing den-
tists, did not provide teeth whitening services? What if
they were orthodontists, periodontists, and the like? And
how much participation makes a person “active” in the
market?
   The answers to these questions are not obvious, but the
States must predict the answers in order to make in-
formed choices about how to constitute their agencies.
   I suppose that all this will be worked out by the lower
courts and the Federal Trade Commission (FTC), but the
Court’s approach raises a more fundamental question, and
that is why the Court’s inquiry should stop with an exam-
ination of the structure of a state licensing board. When
the Court asks whether market participants control the
North Carolina Board, the Court in essence is asking
whether this regulatory body has been captured by the
entities that it is supposed to regulate. Regulatory cap-
ture can occur in many ways.6 So why ask only whether
——————
  6 See,
       e.g., R. Noll, Reforming Regulation 40–43, 46 (1971); J. Wilson,
The Politics of Regulation 357–394 (1980). Indeed, it has even been
                    Cite as: 574 U. S. ____ (2015)                  13

                         ALITO, J., dissenting

the members of a board are active market participants?
The answer may be that determining when regulatory
capture has occurred is no simple task. That answer
provides a reason for relieving courts from the obligation
to make such determinations at all. It does not explain
why it is appropriate for the Court to adopt the rather
crude test for capture that constitutes the holding of to-
day’s decision.
                             IV
  The Court has created a new standard for distinguish-
ing between private and state actors for purposes of fed-
eral antitrust immunity. This new standard is not true to
the Parker doctrine; it diminishes our traditional respect
for federalism and state sovereignty; and it will be difficult
to apply. I therefore respectfully dissent.




—————— 

charged that the FTC, which brought this case, has been captured by 

entities over which it has jurisdiction. See E. Cox, “The Nader Report”

on the Federal Trade Commission vii–xiv (1969); Posner, Federal Trade

Commission, Chi. L. Rev. 47, 82–84 (1969).