iMortgage Services LLC v. Louisiana Real Estate Appraisers Board

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

iMORTGAGE SERVICES, LLC

CIVIL ACTION

VERSUS

19-849-SDD-EWD

LOUISIANA REAL ESTATE APPRAISERS BOARD,

ROLAND M. HALL, GAYLE A. BOUDOUSQUIE,

CHERYL B. BELLA, NEWTON J. LANDRY,

TOMMIE E. MCMORRIS, SR., MICHAEL A. GRAHAM,

CLAYTON F. LIPSCOMB, and TIMOTHY W. HAMMETT

RULING

Before the Court is the Motion to Dismiss1 filed by Defendants Louisiana Real

Estate Appraisers Board (“LREAB” or “the Board”) and Roland M. Hall, Gayle A.

Boudousquie, Cheryl B. Bella, Newton J. Landry, Tommie E. McMorris, Sr., Michael A.

Graham, Clayton F. Lipscomb, and Timothy W. Hammett, in their official capacities as

members of the LREAB (“the Members”) (the Board and the Members are collectively

referred to as “Defendants”). An Opposition2 was filed by Plaintiff iMortgage Services,

LLC (“iMortgage”), to which Defendants filed a Reply.3 For the following reasons, the

Motion is granted, and Plaintiff’s claims are dismissed with prejudice.

I. BACKGROUND

iMortgage brings this action for alleged violations of federal antitrust law by the

Board. iMortgage is an appraisal management company that acts as an intermediary

between residential appraisers and parties such as lenders, borrowers, and brokers.4 The

1 Rec. Doc. 45.

2 Rec. Doc. 51.

3 Rec. Doc. 54.

4 Rec. Doc. 1, ¶ 25.

Board is a state entity tasked with the licensing and regulation of real estate appraisers

in Louisiana.5 It has ten members who are appointed by the governor and confirmed by

the senate.6 Those members are generally licensed real estate appraisers and active

participants in the Louisiana real estate appraisal market.7

In 2013, the Board promulgated Rule 31101.8 The rule required Appraisal

Management Companies (such as iMortgage) to pay appraisal fees equal to or greater

than median market fees.9 According to iMortgage, Rule 31101 “manufacture[d] an

artificial rate floor” that “harmed competition and directly benefitted the majority of the

members of LREAB to the detriment of Louisiana residents and [Appraisal Management

Companies].”10

The FTC shared this sentiment. In May 2017 the FTC instituted a civil

administrative action against the Board, alleging that Rule 31101 unreasonably restrained

price competition for appraisal services in Louisiana.11 In its adjudicatory capacity, the

FTC held that “state action” immunity did not apply to the Board because it was composed

of active market participants who operated beyond sufficient state supervision.12

In 2019, iMortgage filed the instant suit, seeking injunctive and monetary relief

against the Board. Specifically, iMortgage requested (1) a declaration that Rule 31101 is

unenforceable and invalid under federal antitrust laws, (2) injunctive relief against the

Board and its members to prohibit any further application of the rule, and (3) monetary

5 La. Rev. Stat. § 37:3395(A)(1).

6 Id. §§ 37:3394(B), (C).

7 Id.

8 La. Admin. Code tit. 46, pt. LXVII, § 31101 (2013). In 2017, the Board repealed and readopted Rule 31101

with precisely the same language. See La. Admin. Code tit. 46, pt. LXVII, §31101 (2017).

9 Id.

10 Rec. Doc. 51, p. 8.

11 Rec. Doc. 1-3.

12 In re. La. Real Est. Appraisers Bd., Respondent, 2018 WL 1836646, at *21 (F.T.C. Apr. 10, 2018).

damages.13 Upon a Joint Motion,14 the Court stayed proceedings pending resolution of

the FTC action.15

In June 2021, the Board entered into a consent agreement with the FTC.16

Pursuant to the agreement, the FTC issued an order (the “Consent Decree”) preventing

the Board from “adopting, promulgating, or enforcing any regulation or rule that sets,

determines, or fixes compensation . . . including enforcing Rule 31101.”17 The Consent

Decree requires the Board to submit compliance reports to the FTC and grants the FTC

the right to access records under the control of the Board.18 The Consent Decree is set

to terminate on April 1, 2042.19

In May 2022, the Court lifted the stay and re-opened this action.20 Defendants now

seek dismissal of all claims for lack of subject matter jurisdiction.

II. LAW

Rule 12(b)(1) of the Federal Rules of Civil Procedure allows a party to challenge

the subject matter jurisdiction of the district court to hear a case. The party asserting that

the court has jurisdiction bears the burden of proving that the court may adjudicate the

case.21 In determining whether it has subject matter jurisdiction, the court may look at the

complaint alone, the complaint supplemented by undisputed facts in the record, or the

complaint supplemented by undisputed facts plus the court's resolution of disputed

13 Rec. Doc. 36.

14 Rec. Doc. 29.

15 Rec. Doc. 30.

16 In re. La. Real Est. Appraisers Bd., a state agency, No. 9374, 2021 WL 2589273 (F.T.C. June 11, 2021).

17 In re. La. Real Est. Appraisers Bd., a state agency, No. 9374, 2022 WL 1102051, at *2 (F.T.C. Apr. 1,

2022).

18 Id. at *3-4.

19 Id. at *4.

20 Rec. Doc. 35.

21 Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001).

facts.22 A 12(b)(1) motion should be granted only if it appears certain that the party

asserting jurisdiction can prove no set of facts that would entitle him to relief.23

III. ANALYSIS

Defendants dispute subject matter jurisdiction as to each claim. Defendants argue

that iMortgage’s claims for declaratory and injunctive relief are mooted by the repeal of

Rule 31101 pursuant to the Consent Decree. Defendants further assert that iMortgage’s

claim for monetary relief is barred by the Eleventh Amendment. The Court addresses

these arguments in turn.

A. Claims for Declaratory and Injunctive Relief

Defendants argue that iMortgage’s claims for declaratory and injunctive relief are

moot. Specifically, Defendants argue that it would be “redundant for this Court to enjoin

Defendants from fixing prices when the FTC Order prohibits the same conduct.”24

iMortgage responds that the FTC order provides insufficient or incomplete relief and

cannot guarantee that Defendants will refrain from passing Rule 31101 or a similar rule

in the future.

“Mootness is ‘the doctrine of standing in a time frame. The requisite personal

interest that must exist at the commencement of litigation (standing) must continue

throughout its existence (mootness).’”25 “If a case has been rendered moot, a federal

court has no constitutional authority to resolve the issues that it presents.”26 Generally,

“any set of circumstances that eliminates actual controversy after the commencement of

22 Id.

23 Home Builders Ass'n of Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5th Cir. 1998); see

also Ramming, 281 F.3d at 161.

24 Rec. Doc. 45-1, p. 6.

25 Ctr. for Individual Freedom v. Carmouche, 449 F.3d 655, 661 (5th Cir.2006) (quoting U.S. Parole Comm'n

v. Geraghty, 445 U.S. 388, 397, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980)).

26 Env’t Conservation Org. v. City of Dallas (ECO), 529 F.3d 519, 525 (5th Cir. 2008).

a lawsuit renders that action moot.”27 “A case should not be declared moot [a]s long as

the parties maintain a concrete interest in the outcome and effective relief is available to

remedy the effect of the violation . . . .”28

iMortgage advances the general rule that a “voluntary cessation of a challenged

practice does not deprive a federal court of its power to determine the legality of

practice.”29 Under the voluntary cessation doctrine, the party asserting mootness bears

the burden of showing that “there is no reasonable expectation that the wrong will be

repeated.”30 iMortgage contends that there is a “demonstrated probability that iMortgage

will be subject to the same unlawful acts of the Defendants again.”31

Neither the Supreme Court nor the Fifth Circuit has directly addressed whether the

voluntary cessation doctrine applies to cessation of activity pursuant to an FTC consent

decree. However, in Already v. Nike, the Supreme Court held that the voluntary cessation

doctrine remains in force even “when a defendant makes a judicially enforceable

commitment to avoid the conduct that forms the basis for an Article III controversy.”32

There, Nike entered into a covenant not to sue Already for trademark infringement. Nike

argued that the voluntary cessation rule did not apply because Nike lacked an “unfettered

ability to ‘return to [its] old ways.’”33 The Supreme Court rejected this argument, holding

that a defendant “cannot avoid its ‘formidable burden’ by assuming the answer to” the

question that the voluntary cessation test poses—namely, whether the “allegedly wrongful

27 Id. at 527 (quoting Carmouche, 449 F.3d at 661).

28 Id. (citation omitted) (cleaned up).

29 City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S. 283, 289 (1982).

30 Pederson v. La. State Univ., 213 F.3d 858, 874 (5th Cir. 2000) (quoting ACLU v. Finch, 638 F.2d 1336,

1346 (5th Cir.1981)).

31 Rec. Doc. 51, pp. 13-14.

32 Already, LLC v. Nike, Inc., 568 U.S. 85, 92 (2013) (citation omitted).

33 Id.

behavior reasonably [could] be expected to recur.”34

A straightforward application of Already suggests that an FTC consent decree—a

judicially enforceable agreement—does not circumvent the voluntary cessation doctrine.

Indeed, relying on Already, at least one district court has come to the same conclusion,

stating: “Because a consent decree is by its very nature voluntary, the voluntary cessation

exception to mootness applies even though a consent decree, like a covenant not to sue,

is ‘judicially enforceable.’”35

This case is distinguishable from Environmental Conservation Organization v. City

of Dallas (ECO), 529 F.3d 519 (5th Cir. 2008). There, the Fifth Circuit declined to apply

the voluntary cessation doctrine when determining whether a citizen suit under the Clean

Water Act (“CWA”) was mooted by subsequent enforcement action and a court-approved

consent decree.36 Instead, the Fifth Circuit shifted the burden to the plaintiff to

demonstrate a “realistic prospect that the violations alleged in its complaint will continue

notwithstanding the consent decree.”37

Thus far, however, the Fifth Circuit has not applied ECO’s burden-shifting

framework outside the context of citizen suits under federal environmental protection

laws. Citizen suits are creatures of statute, and ECO expressly derives its less-stringent

mootness standard from statutory interpretations and policy considerations unique to

citizen suits and environmental protection laws.38 In ECO, the Fifth Circuit stated that

“[p]lacing the burden on the citizen-suit plaintiff” is “in step with Congressional policy”39

34 Id.

35 In re Vizio, Inc., Consumer Privacy Litig., 2017 WL 11420284, at *4 (C.D. Cal. Jul. 25, 2017) (quoting

Already, 568 U.S. at 92).

36 ECO, 529 F.3d at 528–529.

37 Id. at 528.

38 Id.

39 Id. at 529.

and “respects Congress's intent that citizen suits ‘supplement rather than . . . supplant

government action.’”40 The Fifth Circuit reasoned that its relaxed mootness standard

comports with the CWA's mandate that citizen suits be preempted by diligent government

prosecutions.41

This “clear” congressional policy and intent does not translate to federal antitrust

laws. The Clayton Act provides in separate sections for suits for injunctions by the United

States42 and by private parties.43 In contrast to the CWA, the Act does not contain a

“diligent prosecution” provision. As the Supreme Court has explained, the Act’s “private

and public actions were designed to be cumulative, not mutually exclusive.”44 “Different

policy considerations govern each of these,” and “[t]hey may proceed simultaneously or

in disregard of each other.”45 This stands in stark contrast to citizen suits in the

environmental context which, according to the Senate Report on the CWA, are proper

only “if the Federal, State, and local agencies fail to exercise their enforcement

responsibility.”46 In sum, the Court concludes that ECO’s less-stringent mootness

standard does not apply here. The voluntary cessation doctrine applies in this case.

Now the Court must answer the question that the voluntary cessation test poses—

namely, whether the “allegedly wrongful behavior reasonably [could] be expected to

recur.”47 The Court finds that the threat of future enforcement action by the FTC, including

civil penalties and associated legal costs, precludes a reasonable expectation that the

40 Id. at 528 (quoting Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49, 60 (1987)).

41 Id. (citing 33 U.S.C. § 1365(b)(1)(B)).

42 15 U.S.C.A. § 25.

43 15 U.S.C.A. § 26.

44 United States v. Borden Co., 347 U.S. 514, 518 (1954).

45 Id. at 519 (quoting United States v. Bendix Home Appliances, 10 F.R.D. 73, 77 (S.D.N.Y. 1949)).

46 S. Rep. No. 92-414, at 64 (1971), reprinted in 2 A Legislative History of the Water Pollution Control Act

Amendments of 1972, p. 1482 (1973).

47 Already, 568 U.S. at 92.

wrong will be repeated. The Consent Decree is comprehensive and forward-looking in

scope, requiring the Board to submit compliance reports to the FTC and granting the FTC

the right to access records under the control of the Board.48 The Court cannot reasonably

expect that the Board will attempt to reenact Rule 31101, or would be successful in doing

so, given that the FTC has demonstrated the will and means to swiftly respond to such

violations.

iMortgage points out that the Consent Decree is set to expire in 2042, “after which

LREAB could potentially restart the anticompetitive activity that gave rise to this action.”49

But that is almost 20 years from now, at which point, the Board will be composed of

entirely new members.50 The mere possibility that those future members will re-enact

Rule 31101 is too speculative to keep the controversy live, even under the voluntary

cessation doctrine. Moreover, mootness is “the doctrine of standing in a time frame,” and

Article III standing is contingent upon an “invasion of a legally protected interest which is

. . . actual or imminent.”51 Even assuming that one could predict the actions of the Board

two decades into the future, the alleged threat of enforcement is too remote to be actual

or imminent. The Court will not issue speculative and advisory relief.

iMortgage makes three further arguments against mootness. First, iMortgage

contends that the Consent Decree provides inadequate relief because it contains

“potentially conflicting provisions.”52 As discussed above, the Consent Decree prevents

the Board from directly or indirectly “[a]dopting, promulgating, or enforcing any regulation

48 In re. La. Real Est. Appraisers Bd., a state agency, 2022 WL 1102051, at *3-4.

49 Rec. Doc. 51, p. 11.

50 See La. Rev. Stat. § 37:3394(D) (stating that “[a]ll members shall be appointed for three-year terms” and

[n]o person shall be appointed for more than two consecutive terms”).

51 Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992).

52 Rec. Doc. 51, p. 16.

or rule that sets, determines, or fixes compensation or compensation levels for Real

Estate Appraisal Services.”53 iMortgage argues that this instruction conflicts with another

provision requiring the Board to notify the FTC within 60 days of implementing a “new rule

or an amendment to an existing rule relating to compensation or compensation levels for

Real Estate Appraisal Services.”54

The Court disagrees. The notice provision complements the underlying ban on

fixing rates, enabling the FTC to swiftly respond to any violative conduct that the Board

commits. Further, the two provisions are not coextensive. The notice provision broadly

applies to any rule “relating to compensation” and, thus, could apply to rules that do not

necessarily fix or determine compensation rates (e.g., a rule commissioning an annual

study of compensation levels).55 In short, there is nothing equivocal about the Consent

Decree.

Second, iMortgage argues that the Consent Decree does not go far enough

because “Defendants retain their full arsenal of weapons to harm the Louisiana residential

appraisal market and AMCs.”56 In its Complaint, iMortgage seeks injunctive relief

“prohibiting the Board and the individual defendants from entering into, attempting to enter

into, adhering to, participating in, maintaining, organizing, implementing, encouraging,

inviting, enforcing, offering or soliciting any agreement whether express or implied, to

insulate themselves from competition from AMCs in the relevant market.”57

This additional relief is fatally overbroad. “[T]he scope of injunctive relief is dictated

53 In re. La. Real Est. Appraisers Bd., a state agency, 2022 WL 1102051, at *2.

54 Id. at *3.

55 See id.

56 Rec. Doc. 51, p. 15.

57 Rec. Doc. 1, p. 29.

by the extent of the violation established, and an injunction must be narrowly tailored to

remedy the specific action necessitating the injunction.”58 Federal Rule of Civil Procedure

65(d) requires specificity in framing injunctions “so that those enjoined will know what

conduct the court has prohibited.”59 Here, the action necessitating the injunction—the

Board’s enforcement of Rule 31101—has been enjoined by the Consent Decree. The

Consent Decree prohibits Defendants from “[r]aising, fixing, maintaining, or stabilizing

price levels” or passing a rule that “sets, determines, or fixes compensation” for appraisal

services.60 This prohibition clearly covers iMortgage’s request, per its Complaint, to enjoin

“all efforts by Defendants to force [participants] in the relevant market . . . to pay appraisal

fees that are fixed. . . .”61 iMortgage does not plead injunction of any other specific Board

action or rule. iMortgage hypothesizes that the Board could promote future

anticompetitive acts such as, say, a rule requiring specific forms that would cause

Appraisal Management Companies to incur additional costs. This is mere speculation.

There is no suggestion on the face of the Complaint that the Board has enacted,

proposed, or even contemplated such a rule.

Last, iMortgage contends that, even if its suit is otherwise moot, it falls into a long-

recognized exception to the mootness doctrine for issues “capable of repetition, yet

evading review. . . .”62 To invoke that exception, a party must show that “(1) the challenged

action is in its duration too short to be fully litigated prior to cessation or expiration, and

(2) there is a reasonable expectation that the same complaining party will be subject to

58 Fiber Sys. Int'l., Inc. v. Roehrs, 470 F.3d 1150, 1159 (5th Cir. 2006) (internal quotations omitted).

59 Meyer v. Brown & Root Constr. Co., 661 F.2d 369, 373 (5th Cir.1981).

60 In re. of La. Real Est. Appraisers Bd., a state agency, 2022 WL 1102051, at *2.

61 Rec. Doc. 1, p. 29.

62 S. Pac. Terminal Co. v. Interstate Com. Comm’n, 219 U.S. 498, 515 (1911).

the same action again.”63 Neither of those elements are present here. First, the

challenged conduct is not too short to evade review—indeed, the Board’s violative

conduct has already been reviewed by the FTC and prohibited by the Consent Decree.

Second, for the reasons discussed above, the relevant facts bely a reasonable

expectation that the challenged conduct will be repeated. Accordingly, iMortgage’s claims

for declarative and injunctive relief are moot and shall be dismissed.

B. Claim for Damages

Plaintiff further seeks monetary damages “sustained as a result of the

anticompetitive actions by Defendants.”64 Defendants acknowledge that dismissal of

Plaintiff’s claims for declaratory and injunctive relief does not moot Plaintiff’s claim for

damages for past harm.65 Nevertheless, Defendants argue that Plaintiff’s damages claim

is barred by the Eleventh Amendment, which prohibits private citizens from seeking

damages against the state in federal court.

The Eleventh Amendment states: “The Judicial power of the United States shall

not be construed to extend to any suit in law or equity, commenced or prosecuted against

one of the United States by Citizens of another State, or by Citizens or Subjects of any

Foreign State.”66 “The ‘ultimate guarantee of the Eleventh Amendment’ . . . is that a non-

consenting State may not be sued in federal court by private individuals, including its own

citizens.”67 Although Louisiana has broadly consented to suit in its own courts through

article XII, section 10, of the Louisiana Constitution, and Louisiana Revised Statutes §

63 FEC v. Wis. Right To Life, Inc., 551 U.S. 449, 462 (2007).

64 Rec. Doc. 1, p. 29.

65 Rec. Doc. 45-1, p. 11 (citing Spell v. Edwards, 962 F.3d 175, 180 (5th Cir. 2020)).

66 U.S. Const. amend. XI.

67 Vogt v. Bd. of Com’rs of Orleans Levee Dist., 294 F.3d 684, 688 (5th Cir. 2002) (quoting Bd. of Trustees

of the Univ. of Ala. v. Garrett, 531 U.S. 356, 363 (2001)).

9:2798.1, those provisions do not contain an express consent to suit in federal court and,

thus, do not constitute a waiver of Eleventh Amendment immunity.68

The State’s immunity under the Eleventh Amendment extends to any state agency

or other political entity that is deemed an “alter ego” or “arm” of the State.69 There is no

bright-line test for determining whether a political entity is an arm of the State.70 Rather,

“the matter is determined by reasoned judgment about whether the lawsuit is one which,

despite the presence of a state agency as the nominal defendant, is effectively against

the sovereign state.”71 In making this inquiry, Fifth Circuit courts consider six factors: (1)

whether state statutes and case law characterize the agency as an arm of the state; (2)

the source of funds for the entity; (3) the degree of local autonomy the entity enjoys; (4)

whether the entity is concerned primarily with local, as opposed to statewide, problems;

(5) whether the entity has authority to sue and be sued in its own name; and (6) whether

the entity has the right to hold and use property.72 “[T]he most significant factor in

assessing an entity's status is whether a judgment against it will be paid with state

funds.”73

1. Characterization

The first factor examines how the state, through its constitution, laws, judicial

opinions, attorney general's opinions, and other official statements, perceives the entity

in question.74 If the state characterizes the office in question as an arm of the state, this

68 Fairley v. Stalder. 294 F. App’x 805, 811 (5th Cir. 2008).

69 Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429 (1997).

70 Vogt, 294 F.3d at 689.

71 Id. (quoting Earles v. State Bd. of Certified Pub. Accts. of La., 139 F.3d 1033, 1037 (5th Cir.1998)).

72 Id.

73 Id. (quoting Delahoussaye v. City of New Iberia, 937 F.2d 144, 147–48 (5th Cir.1991)).

74 Hudson v. City of New Orleans, 174 F.3d 677, 683 (5th Cir. 1999).

factor is counted in favor of Eleventh Amendment immunity.75

Here, the Board is undeniably a state entity within the executive branch. Louisiana

Revised Statutes § 37:3394 provides for the creation of the Board “within the office of the

governor.” The Board’s members are appointed by the governor and confirmed by the

Senate.76 Thus, it appears that Louisiana would regard the Board as “an arm of the state”

for Eleventh Amendment purposes. Indeed, Fifth Circuit caselaw compels this conclusion.

On multiple occasions, the Fifth Circuit has found a Louisiana executive department or

one of its subdivisions to be characterized as an arm of the state.77 Accordingly, the first

factor supports Eleventh Amendment immunity.

2. Source of Funding

Turning to the second factor, the Court examines whether a judgment against the

Board will be paid with state funds. This factor is given the greatest weight because one

of the principal purposes of the Eleventh Amendment is to protect state treasuries.78

Here, any judgment against the Board would be paid by the State. The Louisiana

Constitution provides, “[n]o judgment against the state, a state agency, or a political

subdivision shall be exigible, payable, or paid except from funds appropriated therefor by

the legislature or by the political subdivision against which the judgment is rendered.”79

The Fifth Circuit has recognized that “judgments against [Louisiana] state agencies or

departments within the executive branch are treated as liabilities of the state itself.”80

75 Id.

76 La. Rev. Stat. § 37:3394.

77 See, e.g., Earles v. State Bd. of Certified Pub. Accts. of La., 139 F.3d 1033, 1037 (5th Cir. 1998) (State

Board of Certified Public Accountants); Voisin's Oyster House, Inc. v. Guidry, 799 F.2d 183, 186 (5th

Cir.1986) (Louisiana Wildlife and Fisheries Commission); Darlak v. Bobear, 814 F.2d 1055, 1060 (5th

Cir.1987) (Department of Health and Human Services).

78 Cozzo v. Tangipahoa Par. Council—President Gov’t, 279 F.3d 273, 281 (5th Cir. 2002).

79 La. Const. art. 12, § 10(C).

80 Vogt, 294 F.3d at 693.

There is no doubt that the Board qualifies as a state agency in this regard.81 Thus, the

Board is entitled to indemnity by state funds. The second factor supports Eleventh

Amendment immunity.

3. Local Autonomy

The third factor assesses the Board’s degree of local autonomy and control. The

Court should consider the “extent of the [entity's] independent management authority” as

well as “the independence of the individual commissioners” who govern the entity.82

Here, the Board consists of ten members who are appointed by the Governor and

confirmed by the Senate.83 However, the Governor can only remove Board members “for

cause.”84 This differs from other state regulatory boards, such as the State Board of

Certified Public Accountants, whose members serve at the pleasure of the governor.85

The fact that the Board’s members are shielded from the governor’s pleasure pulls toward

a finding of local autonomy.86

As with all state agencies, Louisiana law provides for legislative review of

regulations proposed by the Board.87 However, the Board's proposed rule changes may

simply take effect without any legislative consideration or action whatsoever,88 as was the

case with Rule 31101.89 Moreover, no state branch of government has supervisory control

81 La. Rev. Stat. § 13:5102(A) (defining “state agency” as “any board, commission, department, agency,

special district, authority, or other entity of the state”) (emphasis added).

82 Jacintoport Corp. v. Greater Baton Rouge Port Comm’n, 762 F.2d 435, 442 (5th Cir.1985), cert. denied,

474 U.S. 1057 (1986).

83 La. Rev. Stat. §§ 37:3394(B), (C).

84 Id. § 37:3394(D).

85 Id. § 37:74(C).

86 See Vogt, 294 F.3d at 695.

87 See La. Rev. Stat. § 49:968.

88 See id. § 49:968(H)(1) (if the legislature fails to act on proposed rule changes, the rule may be adopted

ninety days after notice is published in the State Register).

89 In re. La. Real Est. Appraisers Bd., Respondent, 2018 WL 1836646, at *12.

over the Board’s day-to-day operations,90 and the Board’s rulings revoking or suspending

licenses of real estate appraisers are not subject to review by either the executive or

legislative branch.91 Accordingly, this factor does not support Eleventh Amendment

immunity.

4. Local Versus Statewide Problems

The fourth factor asks whether the Board is concerned with local or statewide

problems.92 Generally, territorial limits on an agency’s authority suggest that the agency

is not an arm of the State.93 Here, the Board is charged with regulating the issuance of

real estate appraisal and trainee licenses throughout the State of Louisiana, without

regard for geographic or territorial boundaries.94 This factor weighs in favor of Eleventh

Amendment immunity.

5. Authority to Sue

The fifth factor examines whether the Board has the capacity to sue and be sued.95

Here, unlike other licensing boards in Louisiana, the LREAB has not expressly been

granted the capacity to sue and be sued.96 It remains unclear if the Board has such a

capability. Accordingly, this factor has little effect on the Court's analysis.

6. Right to Hold Property

90 Vogt, 294 F.3d at 694-95 (finding that the Orleans Levee District possessed a “considerable degree of

local autonomy” as “no branch of state government exercises ‘supervisory control’ over the day-to-day

operations of the levee district”).

91 See La. Rev. Stat. § 37:3409(C)(3) (“Any final decision or determination of the board in adjudicatory

proceedings shall be reviewable as to questions of law by the Nineteenth Judicial District Court in the parish

of East Baton Rouge.”).

92 Hudson, 174 F.3d at 690.

93 Vogt, 294 F.3d at 695.

94 See id.

95 Hudson, 174 F.3d at 691.

96 See, e.g., La. Rev. Stat. § 37:1361 (State Plumbing Board “may sue and be sued”); Id. § 37:2161

(Louisiana State Board of Private Investigator Examiners “may sue and be sued”); Id. § 37:2153 (State

Licensing Board for Contractors “may sue and be sued”).

The sixth factor asks whether the Board has the right to hold and use property.

Although there is no express statutory grant of such power to the Board, the powers of

the Board arguably encompass the right to hold and use property. The Board is financially

independent from the State—its funds come from fees levied against real estate

appraisers, which “shall be paid into the operating account of the board for the purpose

of carrying out” its duties.97 The Court finds that this factor weighs against Eleventh

Amendment immunity.

In sum, three factors firmly support Eleventh Amendment immunity, two do not,

and one is neutral. The factors tip in favor of the Board—though the question is closer

than the numbers suggest. It must be noted that the Board exercises a striking amount of

autonomy for an entity that is staffed with active participants in the market it regulates,

and this autonomy well exceeds that of similarly situated boards and entities.98 Ultimately,

however, this consideration is outweighed by the State’s fiscal liability for the Board’s

actions—the most important factor—as well as the Board’s broad authority to regulate the

real estate appraisal market on a statewide basis. The Court therefore concludes that the

Board is “an arm of the state” for purposes of Eleventh Amendment immunity.

This finding does not contradict the FTC’s previous finding that the Board lacks

Parker immunity.99 Parker immunity (or state action immunity) is the doctrine that federal

antitrust law does not apply to the anticompetitive conduct of States acting in their

sovereign capacity.100 “In the context of antitrust suits, courts have recognized that both

97 La. Rev. Stat. § 37:3407(C).

98 Compare La. Rev. Stat. § 37:3394(D) (stating that members of the Louisiana Real Estate Appraisers

Board may be removed for cause) with La. Rev. Stat. § 37:74(C) (stating that members of the State Board

of Certified Public Accountants serve at the pleasure of the governor).

99 See In re. La. Real Est. Appraisers Bd., Respondent, 2018 WL 1836646 (denying motion to dismiss

antitrust claim as moot; active state control had not been shown).

100 Parker v. Brown, 317 U.S. 341, 350-52 (1943).

Parker immunity and sovereign immunity are potential defenses for state entities.”101

Although related, “sovereign immunity and Parker immunity are distinct doctrines,

providing different—if sometimes overlapping—spheres of protection from private federal

antitrust claims.”102

Declining the Board’s plea of Parker immunity, the FTC applied the Supreme

Court’s decision in North Carolina State Board of Dental Examiners v. F.T.C.103 There,

the Supreme Court held that a state regulatory board with a majority of members who

engaged in the active practice of the profession it regulated was not protected by Parker

immunity because it was not actively supervised by the state.104 Importantly, however,

the Supreme Court clarified that Parker immunity and Eleventh Amendment immunity are

not coterminous, stating, “members of regulated occupations” who “participat[ed] in state

government” could sometimes look beyond Parker immunity to sovereign immunity as a

defense.105

In short, the question before the Court is not whether the Board’s actions are

immune from federal antitrust law but, rather, whether the Board “is so closely connected

to the State” that a suit against the Board is effectively against the sovereign state.106

Although the FTC held that a lack of active state supervision deprived the Board of Parker

immunity, such a consideration is only one factor among six for purposes of Eleventh

Amendment immunity.107 Because the Board is characterized as a state agency, is

indemnified with state funds, and is invested with statewide authority, the Board is “an

101 Rodgers v. Louisiana Bd. of Nursing, 665 F. App'x 326, 329 (5th Cir. 2016).

102 Id.

103 574 U.S. 494 (2015).

104 Id. at 511.

105 See id. at 513.

106 See Vogt, 294 F.3d at 689.

107 See id.

arm of the state” for Eleventh Amendment purposes and, thus, enjoys immunity from

iMortgage’s claims for damages.

Finally, iMortgage contends that even if the Board is entitled to Eleventh

Amendment immunity, the Board waived its immunity by invoking federal jurisdiction in

previous suits.108 However, federal courts recognize that waiver in one suit does not

extend to an “entirely separate lawsuit, even one involving the same subject matter and

same parties.”109 Because the Board has taken no action to avail itself of federal court

jurisdiction in this particular suit, the Board has not waived its Eleventh Amendment

immunity.

108 Specifically, iMortgage contends that the Board waived its Eleventh Amendment immunity by (1)

appealing an FTC decision to the Fifth Circuit and/or (2) filing an action against the FTC in this Court under

the Administrative Procedure Act. Rec. Doc. 51, p. 25.

109 A123 Systems, Inc. v. Hydro-Quebec, 626 F.3d 1213, 1219 (Fed. Cir. 2010).

IV. CONCLUSION

For the reasons set forth above, Defendants’ Motion to Dismiss110 is GRANTED,

and Plaintiff’s claims are DISMISSED WITH PREJUDICE.

IT IS SO ORDERED.

Signed in Baton Rouge, Louisiana, this day, February 27, 2023.

S

CHIEF JUDGE SHELLY D. DICK

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

110 Rec. Doc. 45.