Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Louisiana Real Estate Appraisers Board’s request for stay rejected, (Jan 18, 2018)

By Thomas G. Wolfe, J.D.

In an FTC administrative action against the Louisiana Real Estate Appraisers Board (LREAB), alleging that the Board unreasonably restrained price competition for appraisal services, the Commission has denied the LREAB’s request for a stay of the administrative proceedings and to move the presently scheduled May 30, 2018, evidentiary hearing date to late August. In its January 12, 2018, order denying the LREAB’s expedited motion, the FTC noted that the presiding administrative law judge and Commission "have already stayed this proceeding and delayed commencement of the evidentiary hearing by four months." The Commission rejected the Board’s argument that it was seeking to avoid discovery expenses and pretrial preparation that might prove unnecessary depending on how the Commission resolves other pending motions. In connection with those pending motions, the FTC, in a separate scheduling order, determined that it will hear oral argument on February 22, 2018, on both LREAB’s motion to dismiss the complaint and FTC complaint counsel’s motion for a partial summary decision; the Commission extended the deadline for its rulings on these respective motions to April 9, 2018 (In the Matter of Louisiana Real Estate Appraisers Board, FTC Dkt. 9374).

In response to the subprime mortgage crisis, Louisiana created the LREAB, a state agency controlled by licensed real estate appraisers, as a way of assuring appraisal independence. Since 2013, the Board has regulated fees that appraisal management companies pay for real estate appraisal services. However, the FTC claims that the appraisal services of the LREAB constitute a form of price fixing in violation of federal antitrust laws.

In its complaint, the agency alleged, among other things, that the LREAB’s regulations have exceeded federal and state law requirements that appraisal management companies pay a customary and reasonable rate for appraisal services performed in the pertinent market area of the property being appraised.

Meanwhile, in seeking dismissal of the FTC’s administrative action, the LREAB has contended that the Board’s creation was a "state action" and that applicable 2017 law changes provided adequate supervision by an independent state actor—thus alleviating the risk of antitrust behavior and rendering the complaint moot. In opposition to the Board’s request for dismissal, the FTC disputes that the 2017 law modifications have had this effect.

Attorneys: Lisa Kopchik, FTC, Complaint Counsel. W. Stephen Cannon (Constantine Cannon LLP) for Louisiana Real Estate Appraisers Board.

Companies: Louisiana Real Estate Appraisers Board

News: Antitrust FederalTradeCommissionNews