Traversing the Law: Regulatory Overreach
I never have been a big proponent of regulation, but I have recognized for a long time that regulation of the surveying profession is probably a good thing. I do have certain reservations about that, but we don’t have the time or the space to get into that conversation now. As we have discussed on many occasions in this column, there is only one reason to license and regulate the land surveying profession, and that is to protect the health, safety and welfare of the citizens of the state.
There is really only one thing that the land surveyor does that has an impact on the health, safety and welfare of the citizens and that is when we come into contact with the people’s private property rights vis-à-vis a property boundary survey.
All other forms of surveying (data gathering activities, the manipulation of data that has been gathered, the tools used to do the gathering and manipulation, and the presentation of that data in some suitable format) have very little, if any, impact on private property rights. At least not nearly to the extent of the direct impact moving property boundaries around has on those rights. This is why, as a general proposition, land surveying boards cannot prevent others from also gathering and manipulating data, utilizing the same tools we use, and presenting that data in a form that can be consumed by a willing buyer. Where is the danger to private property rights when Google sends a vehicle down your street armed with a camera and GPS receiver?
In my career as a land surveyor, now spanning 40 years, I have heard many cries for expanded regulation over things and activities that surveyors felt should be exclusively theirs. When GPS first hit the scene a few decades ago, there were calls in the surveying profession to regulate GPS and bring it under the exclusive control of the surveying profession. How ridiculous that seems today. In Florida we were going to legislate that only land surveyors could perform construction staking. The contractors showed us how foolhardy that thought was. There are many other examples of attempts at overreaching that we could recall, but that isn’t the point.
Anticompetitive and unfair methods of competition
One of the thoughts circulating in the land surveying profession for a long time (and other professions I imagine) is that our boards could regulate things like GPS and GIS, and activities such as gathering and manipulating data if it had some relationship to surveying. Along with this thought was the conjoined notion that our regulatory boards are in the business of restricting free trade relative to certain businesses and practices, e.g. land surveying and engineering. With the arrival of the Supreme Court (SCOTUS1) decision in the North Carolina State Board of Dental Examiners v. Federal trade Commission,2 we can probably put those two thoughts to bed.
The North Carolina State Board of Dental Examiners (the “Board”), is just like many other regulatory boards. It was created by the state for the purpose of protecting the health, safety and welfare of the citizens of North Carolina. It is made up primarily of practitioners from the dental profession — what SCOTUS referred to as “market participants.” There is also one dental hygienist and one consumer member on the Board.
In the 1990s, dentists in North Carolina began whitening teeth. In the early 2000s non-dentist teeth whitening service providers hit the scene, charging lower prices than the dentist. The dentists then started complaining to their Board and the Board sent out “cease-and-desist” letters to the non-dentist practitioners threating prosecution for the unlawful practice of dentistry, even though teeth whitening was not defined as the practice of dentistry under North Carolina law.
Eventually the Federal Trade Commission (FTC) got involved (we are not told why, perhaps a complaint filed by one of the non-dentist practitioners caused the FTC to act), filing an administrative complaint against the Board for anticompetitive and unfair methods of competition. Following other proceedings, the case went before an Administrative Law Judge who upheld the FTC’s determinations.
The Board appealed the ruling to the Fourth Circuit Court of Appeals where the FTC’s ruling was also upheld. From there it went to the United States Supreme Court, where, in a 6-3 vote, SCOTUS upheld the ruling in favor of the FTC.
The heart of the matter is the federal antitrust laws, primarily the Sherman Act, and whether they apply to state regulatory boards. As a general matter, the antitrust laws do not apply to the states or state agencies.
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 protection of our fundamental personal freedoms. … While the States regulate their economies in many ways not inconsistent with the antitrust laws, in some spheres they impose restrictions 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.3
So the question then became, is a regulatory board made up of market participants an agency of the state? If so, then just like the state, the Board would have immunity to federal antitrust laws. In answering this question, the court turned to a previous decision in Parker v. Brown,4 where a two-part test for state immunity was established.
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. The parties have assumed that the clear articulation requirement is satisfied, 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 supervision by the State when it interpreted the Act as addressing teeth whitening and when it enforced that policy by issuing cease-and-desist letters to nondentist teeth whiteners.5
So what constitutes state supervision? Obviously, since the ruling went in favor to the FTC, delegation of state authority to market participants does not constitute adequate state supervision to invoke state immunity.
The Court holds today that a state board on which a controlling number of decision makers are active market participants in the occupation the board regulates must satisfy [the] active supervision requirement in order to invoke state-action antitrust immunity.6
Beyond that, the court wasn’t too specific.
It suffices to note that the inquiry regarding active supervision is flexible 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 question is whether the State’s review mechanisms provide realistic assurance that a nonsovereign actor’s anticompetitive conduct promotes state policy, rather than merely the party’s individual interests.7
Justice Alito penned the dissent, joined by the other two conservatives on the court, Scalia and Thomas. To Alito, this is a simple case:
Today  the Court takes the unprecedented step of holding that Parker does not apply to the North Carolina 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. … 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 [does] not apply to state agencies; the North Carolina Board of Dental Examiners is a state agency; and that is the end of the matter.8
Be that as it may, the six other Justices went the other way.
So, what does it all mean?
What it means is we are not alone when it comes to a great deal of what we do as land surveyors. Unless something changes with the structure of our boards, the boards are not immune to federal antitrust laws. I have been saying this for years, with the right tools and a little bit of training, who can’t be an expert measurer? If expert measuring ability is all we have, then we have nothing moving forward.
We have exactly one niche that no one else can exploit (at least not while we are still a regulated profession), and that is the rendering of a well-reasoned opinion on the only question open to us: Where is the property line located on the ground — in dirt-space? But are we actually doing that job, or are we simply slapping math on the ground and letting the “chips fall where they may,” moving people’s property boundaries around with the whim of the next surveyor that comes along with new expert measurements? If that’s all that we are doing, then what are we doing that can’t be accomplished more efficiently and economically in paper-space — that is to say GIS? Absolutely nothing is the answer to that question.
In the politically charged environment we presently find ourselves living in, perception is everything and the truth is irrelevant. When it is perceived that a GIS map is just as good as a survey, then it will be. What’s that sound I hear? It’s the sound of 418,0009 mouse clicks entering property lines into the GIS database.
- SCOTUS – Supreme Court of the United States.
- North Carolina State Board of Dental Examiners v. Federal Trade Commission, 191 L.Ed.2d 35 (2015).
- Id. at 47. Internal citations and quotations marks omitted.
- Parker v. Brown, 87 L.Ed. 315 (1943).
- Board of Dental Examiners v. FTC, at 47, 48. Internal citations and quotations marks omitted.
- Id. at 53. Internal citations and quotations marks omitted.
- Id. at 55. Internal citations and quotations marks omitted.
- Id. at 55, 56. Internal citations and quotations marks omitted.
Estimated number of GIS occupations in the United States, 2008 Labor Department statistics.
Neither the author nor POB intend this column to be a source of legal advice for surveyors or their clients. The law changes and differs in important respects for different jurisdictions. If you have a specific legal problem, the best source of advice is an attorney admitted to the bar in your jurisdiction.