California Dental Association v. Federal Trade Commission

Brief Fact Summary. The Federal Trade Commission’s (FTC) (Defendant) holding, that the California Dental Association’s (CDA) (Plaintiff) restrictions on advertising violated antitrust laws, was upheld on appeal.

Synopsis of Rule of Law. When the great likelihood of anticompetitive effects can be easily determined, quick-look analysis is appropriate.

Facts. The Federal Trade Commission (FTC) (Defendant) held that advertising restrictions imposed by the California Dental Association (CDA) (Plaintiff) on its members violated antitrust laws.  The Ninth Circuit sustained the FTC’s (Defendant) jurisdiction and concluded that in this case an abbreviated or “quick look” rule of reason analysis was proper.  The CDA (Plaintiff) appealed, arguing that a more thorough investigation into the consequences of the advertising restraints was called for.

Issue. When the great likelihood of anticompetitive effects can be easily determined, is quick-look analysis appropriate?

Held. (Souter, J.)  Yes.  When the great likelihood of anticompetitive effects can be easily determined, quick-look analysis is appropriate.  The credibility of competing claims regarding the effects of the professional advertising restrictions rules out the indulgently abbreviated review to which this matter was treated.  Plaintiff’s advertising restrictions could credibly have a net precompetitive effect or possibly no effect at all on competition.  The obvious anticompetitive effect that triggers abbreviated analysis has not been shown.  Vacated and remanded.

Dissent. (Breyer, J.)  The FTC (Defendant) has jurisdiction over this case, but I would affirm the FTC (Defendant) just as the court of appeals did below.  I hope the courts’ effort to blend the precompetitive objectives of the law of antitrust with administrative necessity has not been abandoned.

Discussion. On remand, the Ninth Circuit dismissed the case.  That court relied on expert testimony.  The Ninth Circuit did not remand the case back to the FTC (Defendant) for further proceeding.