South Carolina State Bd. v. F.T.C.

Decision Date01 May 2006
Docket NumberNo. 04-2006.,04-2006.
Citation455 F.3d 436
CourtU.S. Court of Appeals — Fourth Circuit

Kenneth Paul Woodington, Davidson, Morrison & Lindemann, P.A., Columbia, South Carolina, for Petitioner. Michael Daniel Bergman, Federal Trade Commission, Washington, D.C., for Respondent.


Lynne W. Rogers, General, South Carolina Department of Labor, Licensing & Regulation, Columbia, South Carolina; William H. Davidson, II, Andrew F. Lindemann, Davidson, Morrison & Lindemann, P.A., Columbia, South Carolina, for Petitioner. Jeffrey Schmidt, Director, Jeffrey Brennan, Associate Director, Bureau of Competition, William Blumenthal, General, John F. Daly, Deputy General for Litigation, Federal Trade Commission, Washington, D.C., for Respondent.

Before MOTZ and TRAXLER, Circuit Judges, and JAMES P. JONES, Chief United States District Judge for the Western District of Virginia, sitting by designation.

Dismissed by published opinion. Judge MOTZ wrote the opinion, in which Judge JONES joined. Judge TRAXLER wrote an opinion concurring in part and concurring in the judgment.



The Federal Trade Commission ("FTC") brought this action against the South Carolina State Board of Dentistry ("Board") alleging that the Board engaged in unfair competition by promulgating an emergency regulation that prevented oral hygienists from performing certain services in school settings unless a dentist had first examined a student and prescribed a course of treatment. The Board countered, inter alia, that it was immune from suit under the "state action antitrust immunity" doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). After the FTC refused to grant that protection, the Board brought this interlocutory appeal, arguing that the denial of Parker protection falls within the narrow class of "collateral orders" that may be appealed notwithstanding their lack of finality. We disagree, and dismiss the appeal for lack of jurisdiction.


In 2000, South Carolina amended its Dental Practice Act. The legislature, concerned that many school children in low-income areas were receiving inadequate dental care because of the scarcity of providers, relaxed the restrictions on oral hygienists performing oral prophylaxis1 and applying sealants in schools. Prior to the 2000 amendments, hygienists could only perform those services in schools if a dentist had personally examined the patient within the preceding 45 days and had authorized such treatment. See S.C.Code Ann. § 40-15-80(C) (West Supp.1999). After the 2000 amendments, however, hygienists could perform those services so long as they were under the "general supervision" of a dentist. Id. § 40-15-80 (West Supp.2003). "General supervision," in turn, "means that a licensed dentist ... has authorized the procedures to be performed but does not require that a dentist be present when the procedures are performed." Id. § 40-15-85(2) (West Supp. 2003) (emphasis added). The amended statute did not define the term "authorized."

In January 2001, Health Promotion Services ("HPS"), a private dental services firm, began sending hygienists to schools in South Carolina to provide preventative dental care. HPS's hygienists performed oral prophylaxis and applied sealants on students that had not been pre-examined by dentists. In early July of that year, the Board received reports of "substandard patient care" by those hygienists.

On July 27, 2001, in order to prevent any future harm, the Board enacted an emergency regulation pursuant to its rulemaking authority under S.C.Code Ann. § 40-15-40 (West 2001). That regulation reinserted the preexamination requirement into § 40-15-85(B) by defining the term "authorized" to mean:

the supervising dentist must have clinically examined the patient and actually determined the need for any specific treatment. Before treatment may be performed by a dental hygienist, the supervising dentist must provide a written work order for the procedure(s) to be performed by the dental hygienist. A clinical examination must be conducted by the supervising dentist for each patient not more than fortyfive (45) days prior to the date the dental hygienist is to perform the procedure for the patient.

25-7 S.C. Reg. 79-80 (July 27, 2001). Under South Carolina law, this emergency regulation expired after 180 days, in January 2002. See S.C.Code Ann. § 1-23-130(C) (West 2005).2

On September 12, 2003 — twenty months after the emergency regulation had expired and three months after the South Carolina legislature had enacted compromise legislation supported by both the Board and hygienists3 — the FTC instituted this action against the Board. Under 15 U.S.C.A. § 45(b) (West 1997), such actions are adjudicated in an administrative hearing before the FTC. If the FTC issues a cease-and-desist order, the defendant may appeal directly to this court. See id. § 45(c).

The Board asserted two defenses during the FTC proceeding. First, it claimed the action was moot in light of the 2003 amendments to the Dental Practice Act. Second, it argued that it was entitled to "state action antitrust immunity" under Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), in which the Supreme Court held that the Sherman Act should not be presumed to apply to states. On July 28, 2004, the FTC denied the Board's request for Parker protection but determined that it could not resolve the mootness issue without additional discovery into whether the challenged conduct was likely to recur. It therefore referred the case to an ALJ for limited discovery on that question.4 The Board then filed this interlocutory appeal of the FTC's rejection of the state action antitrust exemption.


The central question in this case is whether the Board may presently appeal the FTC's determination that it is not entitled to Parker protection. Generally, a party may only appeal from an order that "ends litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945). See also 28 U.S.C.A. § 1291 (West 1993) ("The courts of appeals ... shall have jurisdiction of appeals from all final decisions of the district courts of the United States....").5 The Supreme Court has, however, allowed interlocutory appeals in a "small class" of cases that "finally determine claims of right separable from, and collateral to, rights asserted in the action." Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).

Although the collateral order doctrine has never been expansive, the Court's recent pronouncements on the subject stress that only a very few types of interlocutory orders can qualify as immediately appealable collateral orders, lest the doctrine "overpower the substantial finality interests § 1291 is meant to further." Will v. Hallock, ___ U.S. ___, ___, 126 S.Ct. 952, 957, 163 L.Ed.2d 836 (2006); see also id. at 958 ("[W]e have not mentioned applying the collateral order doctrine recently without emphasizing its modest scope."); Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994) ("[T]he `narrow' exception should stay that way ....") (citation omitted)).

The Court has thus reserved "collateral order" status only for orders that meet three "stringent" conditions: an order must "[1] conclusively determine the disputed question, [2] resolve an important issue completely separate from the merits of the action, and [3] be effectively unreviewable on appeal from a final judgment." Will, 126 S.Ct. at 957. See also Digital Equip. Corp., 511 U.S. at 867, 114 S.Ct. 1992. "If the order fails to satisfy any one of these requirements, it is not an immediately appealable collateral order." Carefirst of Md., Inc. v. Carefirst Urgent Care Ctr., 305 F.3d 253, 258 (4th Cir.2002).

There is no dispute that the denial of Parker protection satisfies the first collateral order requirement; a decision that the Board is not entitled to such protection "conclusively determines" the question of whether the Board is subject to the Federal Trade Commission Act restrictions on anticompetitive conduct. The circuits are divided, however, as to whether the denial of Parker protection satisfies the final two requirements. Two circuits have said that it does. See Martin v. Memorial Hosp., 86 F.3d 1391, 1394-97 (5th Cir.1996); Commuter Transp. Sys. v. Hillsborough Cty. Aviation Auth., 801 F.2d 1286, 1289 (11th Cir.1986). Two others have suggested the same in dicta. See We, Inc. v. City of Philadelphia, 174 F.3d 322, 329 (3rd Cir.1999); Segni v. Commercial Office of Spain, 816 F.2d 344, 346 (7th Cir.1987). The Sixth Circuit, however, has held that the denial of Parker protection fails to meet either of the final two collateral order requirements. See Huron Valley Hosp., Inc. v. City of Pontiac, 792 F.2d 563, 567 (6th Cir.1986). Because we too conclude that the Parker analysis is neither "completely separate from the merits" nor "effectively unreviewable" after trial, we join the Sixth Circuit in holding that the denial of Parker protection is not an immediately appealable collateral order.


An order is only "collateral" to the merits of a case if it does not "involve[] considerations that are `enmeshed in the factual and legal issues compromising the plaintiff's cause of action.'" Coopers & Lybrand v. Livesay, 437 U.S. 463, 469, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) (quoting Mercantile Nat'l Bank v. Langdeau, 371 U.S. 555, 558, 83 S.Ct. 520, 9 L.Ed.2d 523 (1963)). The issues raised in an interlocutory appeal need not be identical to those to be determined on the merits to fail under this...

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