Solarcity Corp. v. Salt River Project Agric. Improvement & Power Dist.

• Decision Date: 12 June 2017
• Docket Number: No. 15-17302,15-17302
• Citation: 859 F.3d 720
• Parties: SOLARCITY CORPORATION, Plaintiff-Appellee, v. SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

859 F.3d 720

SOLARCITY CORPORATION, Plaintiff-Appellee,

v.SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, Defendant-Appellant.

No. 15-17302

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 18, 2016, San Francisco, California

Filed June 12, 2017

Daniel Volchok (argued), Thomas G. Sprankling, David Gringer, and Christopher E. Babbitt, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C.; Molly S. Boast, Wilmer Cutler Pickering

Hale and Dorr LLP, New York, New York; Christopher T. Casamassima, Wilmer Cutler Pickering Hale and Dorr LLP, Los Angeles, California; Karl M. Tilleman and Paul K. Charlton, Steptoe and Johnson LLP, Phoenix, Arizona; for Defendant-Appellant.

Richard A. Feinstein (argued), Amy J. Mauser, Karen L. Dunn, and William A. Isaacson, Boies Schiller & Flexner LLP, Washington, D.C.; Sean P. Rodriguez, John F. Cove Jr., and Steven C. Holtzman, Boies Schiller & Flexner LLP, Oakland, California; Roopali H. Desai and Keith Beauchamp, Coppersmith Brockelman PLC, Phoenix, Arizona; for Plaintiff-Appellee.

Chris L. Schmitter, Janine W. Kimble, Bethany D. Krueger, and John M. Baker, Greene Espel PLLP, Minneapolis, Minnesota, for Amici Curiae American Public Power Association and Large Public Power Council.

Steven Mitz (argued), James J. Fredricks, and Kristen C. Limarzi, Attorneys; Renata B. Hesse, Principal Deputy Assistant Attorney General; Antitrust Division, United States Department of Justice, Washington, D.C.; for Amicus Curiae United States of America.

Before: Alex Kozinski, Ronald Lee Gilman,^* and Michelle T. Friedland, Circuit Judges.

OPINION

FRIEDLAND, Circuit Judge:

Solar-panel supplier SolarCity Corporation filed a federal antitrust lawsuit against the Salt River Project Agricultural Improvement and Power District (the Power District), alleging that the Power District had attempted to entrench its monopoly by setting prices that disfavored solar-power providers. The Power District moved to dismiss the complaint based on the state-action immunity doctrine. That doctrine insulates states, and in some instances their subdivisions, from federal antitrust liability when they regulate prices in a local industry or otherwise limit competition, as long as they are acting as states in doing so. See, e.g. , N.C. State Bd. of Dental Exam'rs v. FTC , ––– U.S. ––––, 135 S.Ct. 1101, 1109, 191 L.Ed.2d 35 (2015) ; FTC v. Phoebe Putney Health Sys., Inc. , 568 U.S. 216, 133 S.Ct. 1003, 1007, 185 L.Ed.2d 43 (2013) ; Parker v. Brown , 317 U.S. 341, 352, 63 S.Ct. 307, 87 L.Ed. 315 (1943).

The district court denied the motion, and the Power District appealed. We must decide whether we can consider the appeal immediately under the collateral-order doctrine, or whether any appeal based on state-action immunity must await final judgment.¹ We join the Fourth and Sixth Circuits in holding that the collateral-order doctrine does not allow an immediate appeal of an order denying a dismissal motion based on state-action immunity.

I

SolarCity sells and leases rooftop solar-energy panels. These solar panels allow its customers to reduce but not eliminate the amount of electricity they buy from other sources.

Many SolarCity customers and prospective customers live near Phoenix, Arizona, where the Power District is the only supplier of traditional electrical power. Allegedly to prevent SolarCity from installing more panels, the Power District changed its rates. Under the new pricing structure, any customer who obtains power from his own system must pay a prohibitively large penalty. As a result, SolarCity claims, solar panel retailers received ninety-six percent fewer applications for new solar-panel systems in the Power District's territory after the new rates took effect.

SolarCity filed a complaint in federal district court in Arizona. Among other claims, it alleged that the Power District had violated the Sherman and Clayton Acts because it had attempted to maintain a monopoly over the supply of electrical power in its territory.

The Power District is not only a supplier of power; it is also a political subdivision of Arizona. See Ariz. Rev. Stat. § 48-2302 ; accord, e.g. , City of Mesa v. Salt River Project Agric. Improv. & Power Dist. , 101 Ariz. 74, 416 P.2d 187, 188–89 (1966) (summarizing the Power District's history and status); Salt River Project Agric. Improv. & Power Dist. v. City of Phoenix , 129 Ariz. 398, 631 P.2d 553, 555 (1981) (same). It moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing, among other things, that it has authority to set prices under Arizona law and so is immune from federal antitrust lawsuits. The district court denied the motion, citing uncertainties about the specifics of the Power District's state-law authority and business. The district court also decided not to certify an interlocutory appeal, but the Power District appealed nonetheless.

II

Federal circuit courts have jurisdiction over appeals from "final decisions" of district courts. Mohawk Indus., Inc. v. Carpenter , 558 U.S. 100, 103, 130 S.Ct. 599, 175 L.Ed.2d 458 (2009) (quoting 28 U.S.C. § 1291 ). "A ‘final decision’ is typically one ‘by which a district court disassociates itself from a case.’ " Id. at 106, 130 S.Ct. 599 (alteration omitted) (quoting Swint v. Chambers Cty. Comm'n , 514 U.S. 35, 42, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995) ). If non-final decisions were generally appealable, cases could be interrupted and trials postponed indefinitely as enterprising appellants bounced matters between the district and appellate courts. Bank of Columbia v. Sweeny , 26 U.S. (1. Pet.) 567, 569, 7 L.Ed. 265 (1828) ; Alaska v. United States , 64 F.3d 1352, 1357–58 & n.9 (9th Cir. 1995). Costs would be inflated by such a multiplication of proceedings, Firestone Tire & Rubber Co. v. Risjord , 449 U.S. 368, 374, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981), and district courts would be inhibited in their ability to manage litigation efficiently, Richardson-Merrell, Inc. v. Koller , 472 U.S. 424, 436, 105 S.Ct. 2757, 86 L.Ed.2d 340 (1985). Moreover, "piecemeal appeals would undermine the independence of the district judge." Firestone , 449 U.S. at 374, 101 S.Ct. 669.

In limited circumstances, however, appeals may be allowed before a final judgment. For example, a district court may certify an order for an immediate appeal. See 28 U.S.C. § 1292(b). Alternately, some statutes and rules allow an early appeal of decisions on certain specific issues.² Relief from a court order may also be obtained in extraordinary circumstances through a writ of mandamus. See Cheney v. U.S. Dist. Court , 542 U.S. 367, 380–81, 124 S.Ct. 2576, 159 L.Ed.2d 459 (2004). Or, as the Power District argues is true here, a piece of the case may become effectively "final" under the collateral-order doctrine, even though the case as a whole has not ended. See Cohen v. Beneficial Indus. Loan Corp. , 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).

The collateral-order doctrine has three requirements. First, an interlocutory order can be appealed only if it is "conclusive." See Mohawk Indus. , 558 U.S. at 106, 130 S.Ct. 599 (quoting Swint , 514 U.S. at 42, 115 S.Ct. 1203 ). Second, the order must address a question that is "separate from the merits" of the underlying case. Id. Third, the separate question must raise "some particular value of a high order" and evade effective review if not considered immediately. Will v. Hallock , 546 U.S. 345, 351–53, 126 S.Ct. 952, 163 L.Ed.2d 836 (2006) ; see also Dig. Equip. Corp. v. Desktop Direct, Inc. , 511 U.S. 863, 878–79, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994). All three requirements must be satisfied for the ruling to be immediately appealable. McElmurry v. U.S. Bank Nat'l Ass'n , 495 F.3d 1136, 1140 (9th Cir. 2007).

The Supreme Court has repeatedly emphasized that these requirements are stringent and that the collateral-order doctrine must remain a narrow exception. See, e.g. , Mohawk Indus. , 558 U.S. at 106, 130 S.Ct. 599 ; Will , 546 U.S. at 349–50, 126 S.Ct. 952 ; Dig. Equip. , 511 U.S. at 868, 114 S.Ct. 1992. In addition, the Court has held that in evaluating these three requirements, we must consider "the entire category to which a claim belongs." Dig. Equip. , 511 U.S. at 868, 114 S.Ct. 1992. "As long as the class of claims, taken as a whole, can be adequately vindicated by other means, ‘the chance that the litigation at hand might be speeded, or a particular injustice averted,’ does not provide a basis for jurisdiction under § 1291." Mohawk Indus. , 558 U.S. at 107, 130 S.Ct. 599 (alterations omitted) (quoting Dig. Equip. , 511 U.S. at 868, 114 S.Ct. 1992 ).

III

The Power District argues that an interlocutory order denying state-action immunity is immediately appealable under the collateral-order doctrine. We begin our analysis by summarizing the state-action immunity doctrine, so as to provide context for our evaluation of the Power District's argument.

State-action immunity was first recognized in Parker v. Brown , 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). In Parker , a California raisin producer alleged that a state commission that set supra-competitive raisin prices had violated federal antitrust law. Id. at 346–49, 63 S.Ct. 307. The Supreme Court assumed the state's price program would violate federal antitrust law if it were privately operated. Id. at 350, 63 S.Ct. 307. It also assumed that Congress could have prohibited California from setting such prices. Id. But because the commission "derived its authority ... from the legislative command of the state" and "nothing in the language of the Sherman Act or in its history ... suggest[ed] that its purpose was to restrain a state ... from activities directed by its legislature," the Court held that the commission's price-setting did not violate antitrust law. Id. at 350–51, 63 S.Ct. 307. As the Court explained, "In a dual system of government in which, under the Constitution, the states are sovereign, save only as...