Federal Trade Commission v. Indiana Federation Of Dentists

476 U.S. 447 (1986)

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Nature of the Case

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Facts

'Alternative benefits' insurance plans, require evaluation by the insurer of the diagnosis and recommendation of the treating dentist, either in advance of or following the provision of care. In order to carry out such evaluation, insurers frequently request dentists to submit, along with insurance claim forms requesting payment of benefits, any dental x rays that have been used by the dentist in examining the patient as well as other information concerning their diagnoses and treatment recommendations. Such review of diagnostic and treatment decisions has been viewed by some dentists as a threat to their professional independence and economic well-being. An Association comprising some 85% of practicing dentists in the State of Indiana, initiated an aggressive effort to hinder insurers' efforts to implement alternative benefits plans by enlisting member dentists to pledge not to submit x rays in conjunction with claim forms. In 1979, the Association consented to a P order requiring them to cease and desist from further efforts to prevent member dentists from submitting x rays. In 1976, a group of such dentists formed D in order to continue to pursue the Association's policy of resisting insurers' requests for x rays. D styled itself a 'union' in the belief that this label would stave off antitrust liability, immediately promulgated a 'work rule' forbidding its members to submit x rays to dental insurers in conjunction with claim forms. P issued a complaint against D, alleging in substance that its efforts to prevent its members from complying with insurers' requests for x rays constituted an unfair method of competition in violation of § 5 of the Federal Trade Commission Act. P deemed the practice an unreasonable restraint on trade in violation of the Sherman Act by eliminating the competition of dentists who were willing to provide X-rays. D sought judicial review in the Appeals for the Seventh Circuit, which vacated the order on the ground that it was not supported by substantial evidence. P appealed, and the Supreme Court granted certiorari.