California Dental Association v. Federal Trade Commission case brief

California Dental Association v. Federal Trade Commission case brief summary
526 U.S. 756 (1999)

CASE SYNOPSIS

Petitioner nonprofit professional association sought review of a Court of Appeals for the Ninth Circuit decision that upheld respondent agency's assertion of jurisdiction over petitioner, and upheld respondent's finding that petitioner's restrictions on discount advertising was illegal per se and that price and nonprice advertising restrictions were violative of the Sherman and Federal Trade Commission acts under rule-of-reason analysis.

CASE FACTS
Petitioner nonprofit professional association challenged an appellate court decision upholding the assertion of jurisdiction by respondent agency over petitioner and challenged respondent's ultimate holding that the restrictions on discount advertising imposed by petitioner on its members were per se illegal and that petitioner's price and nonprice advertising restrictions violated the Sherman and Federal Trade Commission (FTC) acts under an abbreviated rule-of-reason analysis.

DISCUSSION

• The Supreme Court vacated the appellate court decision and remanded. 
• Respondent did have jurisdiction over petitioner under 15 U.S.C.S. § 45(a)(2) because petitioner provided substantial economic benefits to its for-profit members. 
• But because the anticompetitive effects of the restraints on advertising were not intuitively obvious, a more detailed inquiry into the consequences of advertising restraints was required under the rule-of-reason analysis. 
• Petitioner's advertising restrictions might plausibly be thought to have a net pro-competitive effect or no effect at all on competition because the restrictions were designed to avoid false or deceptive advertising.

CONCLUSION
The Supreme Court vacated an appellate court decision that upheld respondent agency's assertion of jurisdiction over petitioner nonprofit professional association and finding that petitioner's restrictions on its members' advertising were illegal and remanded. Jurisdiction was proper because petitioner provided substantial economic benefits to its members, but an abbreviated rule-of-reason analysis was insufficient.

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