La. Real Estate Appraisers Bd. v. Fed. Trade Comm'n ( 2019 )

Case: 18-60291 Document: 00514855761 Page: 1 Date Filed: 02/28/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 18-60291
FILED
February 28, 2019
Lyle W. Cayce
LOUISIANA REAL ESTATE APPRAISERS BOARD, Clerk
Petitioner
v.
FEDERAL TRADE COMMISSION,
Respondent
On Petition for Review of an Order of the
Federal Trade Commission
Before KING, HIGGINSON, and COSTA, Circuit Judges.
PER CURIAM:
The Louisiana Real Estate Appraisers Board asks the court to review an
order of the Federal Trade Commission, arguing that the Commission erred in
concluding that the Board could not assert its state-action immunity defense
in the underlying administrative proceeding. This appeal is premature.
Accordingly, we DISMISS the petition for review for lack of jurisdiction.
I.
The Louisiana Real Estate Appraisers Board (the “Board”) is a state
agency tasked with licensing and regulating commercial and residential real
estate appraisers and appraisal management companies. La. Stat. Ann.
§§ 37:3395, 37:3415.21. Each of the Board’s ten members is appointed by the
Governor and confirmed by the state senate, and members are removable by
Case: 18-60291 Document: 00514855761 Page: 2 Date Filed: 02/28/2019
No. 18-60291
the Governor for cause. Id. § 37:3394. Of the ten members, four must be general
appraisers, and two must be residential appraisers. § 37:3394(B)(2).
After Congress passed the Dodd–Frank Wall Street Reform and
Consumer Protection Act (“Dodd–Frank”), requiring lenders to compensate fee
appraisers “at a rate that is customary and reasonable for appraisal services
performed in the market area of the property being appraised,” 15 U.S.C.
§ 1639e(i)(1), the Louisiana legislature amended its own laws. Specifically, the
Louisiana legislature amended its Appraisal Management Company Licensing
and Regulation Act (the “AMC Act”) to require that appraisal rates be
consistent with § 1639e and its implementing regulations. La. Stat. Ann.
§ 37:3415.15(A). The legislature also gave the Board authority to “adopt any
rules and regulations in accordance with the [Louisiana] Administrative
Procedure Act necessary for the enforcement of [the AMC Act].” § 37:3415.21.
In the exercise of this power, the Board adopted Rule 31101, requiring
that licensees “compensate fee appraisers at a rate that is customary and
reasonable for appraisal services performed in the market area of the property
being appraised and as prescribed by La. Stat. Ann. § 34:3415.15(A).” La.
Admin. Code. tit. 46, § 31101. Unlike the federal regulations, which instruct
that appraisal fees are “presumptively” customary and reasonable if they meet
certain conditions, Rule 31101 prescribed three ways by which a licensed
appraisal management company can establish that a rate is customary and
reasonable. Compare id., with 12 C.F.R. § 226.42(f)(2), (3).
The Board published Rule 31101 in the Louisiana Register, solicited
comments from the public, and submitted the Rule to the Louisiana House and
Senate Commerce Committees for review. Neither chamber conducted a
hearing. Therefore, under Louisiana law at the time, the Rule took effect 45
days after submission to the legislature. The Governor did not exercise his
authority to veto the Rule.
2
Case: 18-60291 Document: 00514855761 Page: 3 Date Filed: 02/28/2019
No. 18-60291
In May 2017, the Federal Trade Commission (“FTC”) issued an
administrative complaint against the Board, alleging that it had
“unreasonably restrain[ed] competition by displacing a marketplace
determination of appraisal fees.” Because Rule 31101 established an exclusive
list of ways by which appraisal management companies could determine
compensation for appraisers, the FTC alleged that the Rule “prevents
[appraisal management companies] and appraisers from arriving at appraisal
fees through bona fide negotiation and through the operation of the free
market.” Additionally, the FTC alleged that the Board’s enforcement of the
Rule unlawfully restrained price competition. In its answer, the Board argued,
inter alia, that it was immune from federal antitrust liability.
After the FTC filed its complaint, the Governor of Louisiana issued an
executive order adding oversight to the Board. Pursuant to the order, the Board
must now submit any new customary-and-reasonable-fee regulation to the
Louisiana Commissioner of Administration or the Commissioner’s designee for
approval, rejection, or modification. In addition, the Division of Administrative
Law must preapprove certain Board enforcement activities. The Board
thereafter re-issued a revised Rule 31101, following the same procedures it had
undertaken in 2013 as well as the new procedures outlined in the Governor’s
executive order.
After the Board repromulgated its revised Rule 31101, it moved to
dismiss the FTC’s complaint. The Board argued that its postcomplaint
measures eliminated the prior effects of the old Rule and provided for active
supervision going forward. Thus, it argued, the complaint was moot. The same
day, the FTC moved for partial summary decision on the Board’s state-action
defenses, arguing that the Board is controlled by active market participants
and the state’s supervision was still inadequate.
3
Case: 18-60291 Document: 00514855761 Page: 4 Date Filed: 02/28/2019
No. 18-60291
The Commission 1 denied the motion to dismiss and granted the FTC’s
motion. The Commission has not issued a final cease-and-desist order. The
Board petitions us for review, arguing that it is immune from the
administrative action pursuant to the state-action doctrine.
II.
Although the Board urges us to reach the merits of its appeal, we must
first “assure ourselves of our own federal subject matter jurisdiction.” Keyes v.
Gunn, 890 F.3d 232, 235 n.4 (5th Cir. 2018). “Federal courts are courts of
limited jurisdiction, and absent jurisdiction conferred by statute, lack the
power to adjudicate claims.” Texas v. Travis Cty., Tex., 910 F.3d 809, 811 (5th
Cir. 2018) (quoting Stockman v. FEC, 138 F.3d 144, 151 (5th Cir. 1998)).
Therefore, to adjudicate this appeal, there must be a statute allowing us to
review the Commission’s order on a motion to dismiss or motion for partial
summary decision.
The Board seemingly concedes that the Federal Trade Commission Act
(“FTCA”) does not expressly authorize us to hear this appeal. Title 15 of the
United States Code, Section 45 provides: “Any person, partnership, or
corporation required by an order of the Commission to cease and desist from
using any method of competition or act or practice may obtain a review of such
order in the court of appeals of the United States . . . .” Accordingly, we have
noted that “[t]he jurisdiction of this Court to review an order of the Federal
Trade Commission . . . . arises only from a cease and desist order entered by
the Commission.” Texaco, Inc. v. FTC, 301 F.2d 662, 663 (5th Cir. 1962)
(emphasis added). Therefore, because the Commission’s order denying the
Board’s motion to dismiss and granting the FTC’s motion for partial summary
1 We refer to the FTC acting in its role as complaint counsel as “the FTC” and the FTC
acting in its adjudicatory role as the “Commission.”
4
Case: 18-60291 Document: 00514855761 Page: 5 Date Filed: 02/28/2019
No. 18-60291
decision is not a cease-and-desist order, the statute does not expressly
authorize us to exercise jurisdiction here.
Nonetheless, the Board argues that we have jurisdiction under the
collateral-order doctrine. The collateral-order doctrine first emerged in Cohen
v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949), in which the Supreme
Court considered the application of 28 U.S.C. § 1291. Section 1291 instructs
that the courts of appeals “shall have jurisdiction of appeals from all final
decisions from the district courts.” § 1291 (emphasis added). The Court rejected
the argument that the statute only allows appeals from final judgments. See
Cohen, 337 U.S. at 545-46. Instead, the Court held that there is a “small class
[of decisions] which finally determine claims of right separable from, and
collateral to, rights asserted in the action, too important to be denied review
and too independent of the cause itself to require that appellate consideration
be deferred until the whole case is adjudicated.” Id. at 546-47. Thus, a district
court’s order is reviewable if it “(1) conclusively determine[s] the disputed
question, (2) resolve[s] an important issue completely separate from the merits
of the action, and (3) [is] effectively unreviewable on appeal from a final
judgment.” Will v. Hallock, 546 U.S. 345, 349 (2006) (quoting P.R. Aqueduct &
Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144 (1993)). 2
In concluding that some intermediate orders are immediately
appealable, the Cohen Court reasoned that “[t]he effect of [§ 1291] is to disallow
appeal from any decision which is tentative, informal or incomplete.” 337 U.S.
at 546. Therefore, when a district court’s decision is final, a court of appeals
may undertake review of that decision, even if that decision does not end the
2The Board notes that we have held that a district court’s rejection of a state-action
defense is a collateral order. See Martin v. Mem’l Hosp. at Gulfport, 86 F.3d 1391, 1393-97
(5th Cir. 1996). The FTC disputes the vitality of Martin, but we need not address that
question because we conclude that the FTCA provision allowing direct appeals to the court
of appeals does not include collateral orders.
5
Case: 18-60291 Document: 00514855761 Page: 6 Date Filed: 02/28/2019
No. 18-60291
litigation. Id. But the Court emphasized that § 1291 only permits review of
final decisions; when a district court’s decision is “but steps towards final
judgment,” the statute does not permit an appeal. Id. In subsequent cases, the
Court has explained that the collateral-order doctrine is “best understood not
as an exception to the ‘final decision’ rule laid down by Congress in § 1291, but
as a ‘practical construction’ of it.” Dig. Equip. Corp. v. Desktop Direct, Inc., 511
U.S. 863, 867 (1994) (quoting Cohen, 337 U.S. at 546).
But Cohen does not resolve this case. Cohen only holds that § 1291
permits collateral review of district court decisions. Here, we must determine
whether the FTCA permits collateral review of the Commission’s decisions. As
an initial matter, we note that Cohen’s rationale can be applied to
administrative decisions, and courts have applied Cohen’s “practical
construction” reasoning to other statutes with similar language. For example,
courts have recognized that the Administrative Procedure Act’s (“APA”) “final
agency action” requirement is analogous to § 1291’s “final decision”
requirement. See Chehazeh v. Attorney Gen., 666 F.3d 118, 135 (3d Cir. 2012)
(“A provision analogous to Section 704’s ‘final agency action’ requirement is
found in 28 U.S.C. § 1291, which permits appellate review only of ‘final
decisions’ of a district court.”). Therefore, the APA can reasonably be
interpreted as permitting courts to undertake collateral review of agency
decisions that are conclusive, but do not end the agency proceeding. Likewise,
courts have applied Cohen’s reasoning to the Mine Act, which gives courts of
appeals jurisdiction to review “an order of the” Federal Mine Safety and Health
Review Commission. Meredith v. Fed. Mine Safety & Health Review Comm’n,
177 F.3d 1042, 1047-51 (D.C. Cir. 1999) (quoting 30 U.S.C. § 816(a)(1)).
We thus consider whether the language of the FTCA can be interpreted
to allow appellate review of collateral orders. The FTCA’s language is narrower
than the above examples, only authorizing the courts of appeals to review
6
Case: 18-60291 Document: 00514855761 Page: 7 Date Filed: 02/28/2019
No. 18-60291
“cease and desist” orders. 15 U.S.C. § 45(c). This language is plainly more
restrictive than those statutes authorizing judicial review of “final decisions,”
“final agency action,” or “an order.” Given that Congress has expressly limited
our jurisdiction to review of cease-and-desist orders, we cannot consider the
Board’s petition for review of the Commission’s denial of its motion to dismiss
and granting of the FTC’s motion for partial summary decision.
Admittedly, other circuits have taken a different approach when
considering whether the collateral-order doctrine applies to similarly
restrictive statutes. For example, in Rhode Island v. EPA, 378 F.3d 19 (1st Cir.
2004), the First Circuit exercised jurisdiction to hear an appeal of a collateral
order rendered under the Clean Water Act. In doing so, the court held that the
collateral-order doctrine is “generally applicable” to administrative decisions
for three reasons. First, the court noted that “the Supreme Court has strongly
signaled . . . that Cohen’s rationale carries over to administrative
determinations.” 378 F.3d at 24. Second, the court found “no overriding policy
reason to apply a wholly different rule of finality to review of agency
determinations.” Id. And finally, the court found that “every circuit to have
considered the question to date has determined (often with little or no analysis)
that the collateral order doctrine applies to judicial review of administrative
determinations.” Id. at 25. The court acknowledged that the plain text of the
relevant Clean Water Act provision allowed appeals only from the “issuance or
denial” of a pollution-discharge permit. Id. at 22-23; see 33 U.S.C. §
1369(b)(1)(F). Though this text is not amenable to Cohen’s “practical
construction,” the court did not think the text foreclosed application of the
collateral-order doctrine.
We decline to adopt the First Circuit’s reasoning. We agree that the
collateral-order doctrine may apply to judicial review of some administrative
decisions, as illustrated above in our discussion of the APA and the Mine Act.
7
Case: 18-60291 Document: 00514855761 Page: 8 Date Filed: 02/28/2019
No. 18-60291
But we disagree that courts of appeals may intervene in administrative
proceedings as a general matter. This approach conflicts with Cohen, which
relied on a “practical construction” of § 1291’s statutory language; we must look
to the text of the statute at hand to determine whether Congress has
authorized us to review the agency’s decision.
Thus, the argument that “every circuit” has applied the collateral-order
doctrine to administrative determinations is overly broad. Although courts of
appeals have found the collateral-order doctrine to apply to some
administrative proceedings, the cases do not prove that the collateral-order
doctrine will necessarily apply to every administrative proceeding. As the First
Circuit pointed out, most circuits have applied the collateral-order doctrine in
the administrative context with “little or no analysis.” Rhode Island, 378 F.3d
at 25. Some of the cases the First Circuit cited concerned the Mine Act which,
as discussed above, contains language that mirrors § 1291’s “final decision”
language. E.g., Meredith, 177 F.3d at 1050-51; Jim Walter Res., Inc. v. Fed.
Mine Safety & Health Review Comm’n, 920 F.2d 738, 744 (11th Cir. 1990). The
other decisions the First Circuit cited have language more specific than the
APA or the Mine Act, but still broader than the FTCA. E.g., Osage Tribal
Council ex rel. Osage Tribe of Indians v. U.S. Dep’t of Labor, 187 F.3d 1174,
1179-80 (10th Cir. 1999) (applying collateral-order doctrine to statute allowing
judicial review of “order[s] issued under paragraph (2),” 42 U.S.C. § 300j-
9(i)(3)(A), which in turn details procedures for entire administrative
proceeding); Carolina Power & Light Co. v. U.S. Dep’t of Labor, 43 F.3d 912,
916 (4th Cir. 1995) (similar); Donovan v. Oil, Chem., & Atom. Workers Int’l
Union & Its Local 4-23, 718 F.2d 1341, 1344-45 (5th Cir. 1983) (similar). But
none of the cases the First Circuit cited concerns the FTCA’s specific language
expressly restricting judicial review to “an order of the Commission to cease
8
Case: 18-60291 Document: 00514855761 Page: 9 Date Filed: 02/28/2019
No. 18-60291
and desist.” § 45(c). We need not comment therefore on the approaches taken
in prior decisions to other statutes.
Although the First Circuit, the Board, and amici writing in support of
the Board identify practical reasons for permitting collateral-order review in
the administrative context, these arguments do not resolve our lack of
jurisdiction. Even when faced with compelling reasons to intervene, we cannot
act without authority from Congress or the Constitution. Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 378 (1994) (“Federal courts are
courts of limited jurisdiction. They possess only that power authorized by the
Constitution and statute, which is not to be expanded by judicial decree.”
(internal citations omitted)).
In sum, Cohen held that § 1291’s use of “final decision” could be
“practically construed” to give a court of appeals authority to hear an appeal
from a district court’s final decision on an issue, even if the decision did not
resolve the entire case. But Cohen’s reasoning cannot be used to stretch the
limitations of the FTCA, in which Congress authorized us to hear appeals only
from the Commission’s cease-and-desist orders. The Board does not argue that
we have jurisdiction under another statute, and we are aware of no statute
that allows direct appeal to the court of appeals at this stage of the case. 3
Therefore, we are without jurisdiction to hear this appeal.
III.
For the foregoing reasons, the petition is DISMISSED for lack of
jurisdiction.
3The Board does not argue that it seeks review under the APA, nor could it; it brought
this appeal directly in this court, bypassing the district court. See 5 U.S.C. § 704. Unlike the
FTCA, § 704 does not allow direct appeals from agency proceedings to the courts of appeals.
Therefore, if the Board were to appeal the Commission’s decision under the APA, that action
would have to originate in the district court under its federal-question jurisdiction. See 28
U.S.C. § 1331.
9