The Sky Is Not Falling

State Board Report

March 2017

I have avoided writing about the infamous “North Carolina Dental Board case” for some time, in the belief that not spotlighting the topic while NASBA was working on practical solutions to the consequences of the case was the best strategy. I still believe that would be the right approach, but as others have resurrected the discussion with articles, which have been quickly picked up and reprinted or posted on various blogs, I have to speak up.

In my view, this case and the related rulings have often been misinterpreted, misapplied and exaggerated, including in some recently published articles. That being said, the fact that NASBA is spending tens of thousands of dollars working for legislative and other remedies to the threats associated with the case is indicative that we are taking it seriously. Just look at our webpage (https://nasba.org/mc/legislativesupport/north-carolina-dental-case/). I will admit that NASBA participated in building concern about this case as it slowly worked its way through the legal system. Early on we communicated at conferences that the court and the Federal Trade Commission had gotten it wrong based on the perceived immunity implications. Perhaps we should have been placing greater scrutiny on the conduct that led to the rulings. As our webpage shows, we have since tried to remedy that.

I am often accused of attempting to practice law, so I would caution any reader to remember that I am not a lawyer. However, I am a strong believer in trying to clearly understand intent and, as importantly, doing what is right. I am reporting based on my research, not on any legal expertise.

From the start, I began to read everything I could get my hands on coming from this case including testimony, evidence and commentary by the Justices. It was eye-opening. While I am not a legal expert, I have probably attended more Board of Accountancy meetings across the United States in the past dozen years, or so, than anyone in the country. As I read the case’s materials, I quickly realized that I had rarely, if ever, seen any U.S. Accountancy Board demonstrate or permit the type of behavior that was cited in this case. And yet, like other conscientious regulatory boards, Accountancy Boards were caught up and equally impacted by these rulings.

Let me discuss my (non-lawyer) interpretation of the Federal Trade Commission’s and the Supreme Court’s ultimate decisions. I recognize the common sense in their rulings, their logical conclusions and, most importantly, that the rulings were relatively narrow as to what regulatory boards do and the rulings were primarily focused on antitrust matters and immunity. This certainly does not eliminate the threat to boards or board members, but it does allow consideration of ways to mitigate those threats.

It is critically important to consider some of the commentary by the Supreme Court. As this was a 6 – 3 ruling, I was particularly interested in the dissenting opinions. Justice Samuel Alito began his ruling by noting “there is nothing new about the structure of the North Carolina Board” and that “self-serving by such boards is, likewise, not new.” Remembering that Justice Alito was a dissenter, I am more concerned by his comments than the technical arguments of the majority. I would argue that very few, if any, Accountancy Boards are structured as was the board in this case. In the rare instances when I have heard an Accountancy Board member raise anything close to self-serving or competitive arguments, he or she was quickly admonished by other Board members.

Real threats resulting from some of the recent articles are that they could scare away some highly qualified individuals from serving on state boards, or firms may decide not to allow their members to serve. Those would be horrible outcomes. For more than one hundred years, CPAs have stepped up to provide a balanced and fair regulatory system that results in rulings based solely on public protection and interpretation of statutes and rules. A very small percentage of those cases have anti-trust implications, but in a post North Carolina Dental Board case environment there needs to be enhanced caution and scrutiny as to how such cases are handled. NASBA has provided guidance in that area and will continue to provide support as needed to you and your counsel.

NASBA is working both unilaterally and in a coalition of other high quality regulatory associations to find remedies that provide not only protection, but also peace of mind to our volunteers who play such an important role in the regulation of the profession. In the meantime, be smart, be cautious, but remember what you do for the public and profession is critically important — and the sky is not falling!

Semper ad meliora (Always toward better things).

-Ken L. Bishop
President & CEO