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Latham & Watkins
Antitrust & Competition Practice June 15, 2017 | Number
2160
Ninth Circuit Nixes Immediate Appeals of Denials of State
Action Immunity
Decision from largest judicial circuit establishes majority position that denials of state
action immunity are not immediately appealable collateral orders.
On June 12, 2017, the US Court of Appe als for the Ninth Circuit held that a defendant cannot immediatel y
appeal a finding that the defendant lacks immunity from federal antitrust law under the state action
doctrine. See SolarCity v. Salt River Pr oject Ag. Improvement & Power D ist., No. 15-17302, 2017 W L
2508992 (9th Cir. June 12, 2017). This decisio n tips the scales in a circuit sp lit between the Fourth, Sixth
and now Ninth Circuits — which do n ot allow immediate appeals — and the Fifth and Eleventh Circuit s,
which do.
Background: State action immunity and the collateral order doctrine
The state action doctrine (or state ac tion immunity) arose from the princ iple that the federal antitrust laws
were not “intended to restrain state ac tion or official action directed b y a state.”1 For that re ason, “the
antitrust laws confer immunity on ant icompetitive conduct by the States when acting in their sovereign
capacity.”2 But state act ion immunity extends beyond the state itself. A state board or agenc y that is
controlled by active participants in an industry may also be immune if its res traint of competition is clearly
and affirmatively expressed as state policy and the state actively super vises that policy. 3
Antitrust defendants often raise the s tate action defense early in litigation in an eff ort to avoid the
expense, delay and inconvenience of discover y and trial. In some courts, a defen dant may consider
immediately appealing a district court’s decision to deny a motion to dism iss rather than waiting until the
end of the litigation. The timing of an appeal may be significant to bot h parties. An immediate appeal
gives a defendant a second chance t o avoid liability bef ore discovery, and when a defendant’s other
defenses are weak, it may postpone an i nevitable unfavorable result. T he average federal appeal in 2016
took seven months to resolve, and cases in the Nin th Circuit lasted an average of 15 months .4 On the
flipside, for a plaintiff that claim s it is being unlawfully excluded from a market, the passage of time c an
cause substantial hardship.
In most cases, a defendant ma y appeal only after a final decision is entered terminating the litigation. But
the “collateral order doctrine” enables a party to immediately appeal a n on-final decision that is
conclusive, resolves an important iss ue completely separate from the merits, and would be effectively
unreviewable if the defendant waited un til after the litigation ended to appeal. 5 Denials of some
