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

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

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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.

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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.

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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.”

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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.

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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

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“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.

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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

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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.

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