United States District Court, M.D. Louisiana
RULING AND ORDER
A. JACKSON UNITED STATES DISTRICT COURT JUDGE.
the Court is Petitioner's Motion to Stay
Administrative Proceedings (Doc. 9-1 at p. 1).
Defendants oppose this motion. (Doc. 23-2). Oral argument is
not required. For the reasons stated herein, Petitioner's
motion is GRANTED.
matter arises from allegations that the United States Federal
Trade Commission ("FTC" or "Defendant")
is unlawfully attempting to force the Louisiana Real Estate
Appraisers Board ("Board" or
"Petitioner") to undergo federal antitrust
enforcement proceedings. (Doc. 1 at ¶ 1). The Board is a
state governmental regulatory agency empowered to regulate
appraisal management companies which secure appraisals that
support residential mortgage transactions. See La. Stat. Ann.
§ 37:3394, et seq. (Doc. 9-1 at p. 3). The
Board is also empowered to collect "customary and
reasonable" fees for the agents of mortgage lenders.
about May 30, 2017, the FTC filed an administrative complaint
against the Board, alleging that setting certain
"customary and reasonable" fees for mortgage
lenders' agents violated certain federal antitrust rules
(Doc. 1 at par. 4). In particular, the FTC alleges that the
Board is controlled by active market participants, not the
state, and that the manner in which fees are set amounts to
unlawful price fixing. (Doc. 1 at ¶ 4). In response to
the complaint, the Governor's Office issued Executive
Order 17-16, which re-promulgated the manner in which fees
are fixed. The Board moved for a dismissal of the
administrative complaint based on its assertation that the
alleged impropriety identified by the FTC had been rectified.
(Id.). The Board claimed that all branches of
Louisiana government accepted a supervisory role and
"political accountability" for the alleged
anti-competitive practices cited by the FTC, as required
under N.C. S. Bd. of Dental Exam'rs v FTC, 135
S.Ct. 1101, 1111 (2015), and that it is therefore entitled to
be relieved from participation in the administrative
proceedings on the basis of the "state-action
immunity" defense. (Doc. 1 at ¶ 5). State-action
immunity from suit is applicable when a state establishes
that anticompetitive conduct is created, overseen, and guided
by the state, without the influence or control of parties who
have not been conferred regulatory powers by the state.
F.T.C. v. Phoebe Putney Health Sys., Inc., 568 U.S.
216, 225 (2013). To qualify for state-action immunity, a
state must establish that the anticompetitive act is a
clearly articulated state policy, and that such activity is
actively supervised by the state. (Id.).
April 10, 2018, the FTC issued an order ("FTC
Order") rejecting the Board's state-action immunity
defense. (Id. at ¶ 6). The Board then filed a
lawsuit requesting that the Court set aside the FTC Order on
the grounds that it was issued in an arbitrary and capricious
manner. (Id. at ¶ 9).
the Board filed a petition for review of the FTC Order before
the United States Court of Appeals for the Fifth Circuit,
claiming that the FTC Order was an appealable collateral
order under the FTC Act. (Doc. 9-1 at p. 14). The Fifth Circuit
granted the Board's request to stay administrative
proceedings pending appellate review, but ultimately found
that the FTC Act did not allow direct appeals from collateral
orders. (Id.). The Fifth Circuit opined that the
"final agency action" language of the
Administrative Procedure Act ("APA") may allow a
district court to review the FTC Order prior to the final
administrative adjudication of the action. Louisiana Real
Estate Appraisers Bd. v. Fed. Trade Comm'n, 917 F.3d
389, n.3 (5th Cir. 2019). Following the Fifth Circuit ruling,
the Board moved for rehearing en banc, and urged the
FTC to stay its administrative proceeding pending a
resolution of the petition. (Doc 9-1 at p. 14.). The Fifth
Circuit denied rehearing, and the FTC denied Petitioner's
request to stay the administrative proceedings.
(Id.). The Board now seeks relief under the APA to
stay the FTC administrative proceedings until such time as
this Court completes a review of the merits of the FTC Order.
Code of Federal Regulations gives the FTC and a court of
competent jurisdiction the power to stay an administrative
proceeding. 16 C.F.R. § 3.41 (f)(1)(i). Additionally,
Section 705 of the APA allows a reviewing court to
"issue all necessary and appropriate process to postpone
the effective date of an agency action or to preserve status
or rights pending conclusion of the review proceedings."
5 U.S.C. §705.
Supreme Court of the United States found that the term
"court of competent jurisdiction" is any state or
federal court already endowed with subject-matter
jurisdiction over the suit. "Lightfoot v. Cendant
Mortg. Corp., 137 S.Ct. 553, 561 (2017).
Administrative Procedure Act
[a]gency action[s] made reviewable by statute[, ] and final
agency aetion[s] for which there is no other adequate remedy
in a court[, ] are subject to judicial review. A preliminary,
procedural, or intermediate agency action or ruling not
directly reviewable is subject to review [only] on the review
of the final agency action. 5 U.S.C. § 704.
under normal circumstances, agency actions are only
reviewable at such time as the ...