Meaningful Oversight Task Team Recommends Supervision for Boards

Meaningful Oversight

A task force charged with studying the need for “meaningful oversight” has reported its findings and recommends that the state create an oversight panel to review critical decisions by state boards, in particular those that involve anti-trust concerns.

The group published it report on December 29, 2016, titled, “Meaningful Oversight of State Regulatory Boards: Task Force Recommendations to Acquire State Action Immunity.” Task force chair, Stephen Russo, Esq., Louisiana Department of Health Executive Counsel and task force cochair, Angelique Duhon Freel, Esq., Assistant Attorney General, authored the report.

“The Task Force believes that the best system would utilize a three member panel that would be available to actively supervise decisions of the respective boards that they feel are anti-competitive in nature.”

The authors noted that for most boards the panel could consist of one designee from Louisiana Department of Health, one from the Attorney General, and one from Boards and Commissions.

“This review panel would have the ability to approve, disapprove or modify any decision or policy that was placed before them for anti-trust review.”

According to the report, the group determined that “active market participants,” that is, individuals who activity compete in the marketplace, are needed on boards as subject matter experts. So, then “…development of a structure that provides active supervision is paramount if the legislature wants to cloak certain board decisions with stateaction immunity.”

The authors noted that boards have the power to seek injunctions and to issue cease-and-desist orders. While an injunction is overseen by the court system, a cease-and-desist order is not, and so “would expose the board members to antitrust liability, assuming control by active market participants and lack of active supervision…”

A poll of task members revealed that the cease-and-desist order was fairly rare, said the authors, fewer than five per year being issued in most cases. However, the authors wrote that “…some of the boards may not have a keen understanding on what types of decisions may have anti-trust implications.”

The task force recommendation was, “… the Legislature should explore the possibility of implementing a system that would provide for state-action immunity but still act efficiently without undue delay.”

The authors said that the system should be placed in statue.

According to the authors, the Federal Trade Commission (FTC) offered guidance to the states in October 2015 after a Supreme Court decision found that the state dental board had violated anti-trust laws, North Carolina v. F.T.C.

The January report noted several warnings from the FTC for states designing compliant systems. “A state legislature should empower a regulatory board to restrict competition only when it is necessary to protect against a credible risk of harm, such as health and safety risks to consumers.” And, “A state legislature may, and generally should, prefer that a regulatory board be subject to the requirements of the federal antitrust laws,” said the authors.

And, “The applicability of any state action defense is very fact-specific and contextdependent.”

Dr. Darla Burnett served on the task force for the state psychology board. The task force also included representatives from the Louisiana Behavior Analyst Board, Louisiana Licensed Professional Counselors Board of Examiners, the Louisiana Addictive Disorder Regulatory Authority, Louisiana State Board of Medical Examiners, Louisiana State Board of Nursing, Louisiana State Board of Social Work Examiners, among many others.

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