May 22, 2013 Top Story

Courts Remain Reluctant to Expand Interlocutory Appeals

Private parties cannot seek interlocutory appeal for issues reserved for state actor

Caitlin Haney

The U.S. Court of Appeals for the Tenth Circuit recently reinforced the Supreme Court’s directive not to expand interlocutory appeals, holding that a private entity cannot use the interlocutory appeal process to obtain review of an order denying it state actor immunity. The court declined to address the question of whether a governmental entity could initiate the same type of appeal.


In Auraria Student Housing at the Regency LLC v. Campus Village Apartments LLC [PDF], Regency, a private apartment complex near University of Colorado, Denver, filed an action against Campus Village, another private apartment complex near the university, in the U.S. District Court for the District of Colorado. Regency alleged that Campus Village conspired with the university to monopolize the student housing market in violation of section 2 of the Sherman Act. The university’s policy (based upon an agreement with Campus Village) required most full-time students to reside at Campus Village for their first two semesters of enrollment.

Campus Village filed a motion to dismiss, arguing it was not subject to the Sherman Act because it was protected under the state actor immunity doctrine. This doctrine, commonly called the Parker immunity doctrine, is based on the U.S. Supreme Court case Parker v. Brown. Parker held that the Sherman Act does not govern anticompetitive activities conducted by a state or its officers or agents. A subsequent case [PDF] clarified that to qualify for Parker immunity, the conduct must be “at least a foreseeable (if not explicit) result of state legislation.”

Campus Village argued that its conduct in this case was protected under the state actor immunity doctrine because both the university’s housing policy and the Colorado statutes demonstrated there was an affirmative expression of a state policy favoring a residency restriction. Thus, the “conduct” at issue was the result of foreseeable state legislation. The district court disagreed and denied Campus Village’s motion to dismiss, finding state action immunity did not extend to a private company under these circumstances.

Interlocutory Appeal

Campus Village immediately filed an interlocutory appeal with the Tenth Circuit. The apartment complex recognized that the district court’s denial of its motion was not a final, appealable order under 28 U.S.C. § 1291. Even so, it argued that this order was one of the “small class” of interlocutory orders that is subject to immediate review under § 1291, the collateral order doctrine. To be appealable under the collateral order doctrine, a non-final order must (1) conclusively determine the disputed question, (2) resolve an important issue completely separate from the merits of the action, and (3) be effectively unreviewable on appeal from a final judgment.

Restricting the Collateral Order Doctrine 

The court noted that circuits are split on the question whether the denial of Parker immunity is effectively unreviewable on appeal. For example, the court noted that the Fourth [PDF] and Sixth Circuits have held such decisions are not appealable, even if the appeal comes from a final judgment, reasoning that although the doctrine is called an “immunity,” it is “actually akin to a defense to a cause of action rather than an entitlement to avoid suit altogether.” The diverging source of opinion, found in the Fifth and Eleventh Circuits, theorizes that state actor immunity protects “important dignitary and public interests,” and thus, these important interests are subject to immediate review. The Fifth Circuit has not limited its decisions to final orders, but has extended interlocutory review [PDF] to denials of Parker immunity.

The Parker Doctrine and Private Litigants 

Despite this introductory analysis, however, the Tenth Circuit ultimately evaded having to rule on the appealability of state immunity claims. The court found that under no circumstances could an interlocutory appeal on state immunity issues be initiated by a private partylike Campus Village. It rejected Campus Village’s reliance on Fifth and Eleventh Circuit cases allowing such appeals by private parties, finding the cases were “wholly devoid of any persuasive justification for its holding in this regard” and noting the “Supreme Court has repeatedly cautioned against expansion of the collateral order doctrine.”

The court ultimately found, “[e]xtending the collateral order doctrine to private parties contesting an order denying Parker immunity does not serve a substantial public interest and would constitute precisely the type of expansion the doctrine discourages.”

Limiting Appellate Review

Courts commonly draw a line between actions of a municipality versus those of a private party in deciding whether the Parker doctrine applies, according to Sonia E. O’Donnell, Miami, cochair of the ABA Section of Litigation’s Appellate Practice Committee. “The distinction may be a little artificial, but it makes sense,” O’Donnell notes. “Private parties are still able to avail themselves of the doctrine, but they must first litigate the issue in the trial court.” In essence, “for private litigants, Parker is just a defense rather than an immunity.”

Further, O’Donnell believes the Tenth Circuit opinion is in line with the Supreme Court directives. “The Supreme Court has made it clear that it wants to curtail, rather than expand, the collateral order doctrine,” notes O’Donnell. Limiting the availability of appellate review “makes sense because otherwise everyone would want unfavorable decisions reviewed.”

Limiting Interlocutory Review

Others note that concerns about the time and expense involved in the early stages of litigation warrant extending the availability of interlocutory review. There is an interest in protecting state and public officials from the ultimate finding of liability, argues Michael B. de Leeuw, New York, cochair of the Section of Litigation’s Antitrust Litigation Committee. De Leeuw argues that it seems unfair to force defendants to “spend a lot of money to go through a trial process they technically should not have been forced to undergo.” It is difficult reconciling these types of cases with cases like Twombly/Iqbal, in which Leeuw believes “the Supreme Court went out of its way to protect defendants from the incredibly expensive and onerous discovery process.”

Given the Supreme Court’s cautionary words on expanding the collateral order doctrine, however, the “Tenth Circuit’s hands were pretty much tied and this was the correct result,” states de Leeuw. “A private party claiming Parker immunity and trying to invoke the collateral order doctrine is pretty unusual,” and, thus, the issue is unlikely to come up very often.

Caitlin Haney is a contributing editor for Litigation News.

Kewyords: appellate practice, collateral order doctrine, antitrust, immunity

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