Case: 23-30480 Document: 161-1 Page: 1 Date Filed: 08/26/2024
`
`United States Court of Appeals
`for the Fifth Circuit
`____________
`
`No. 23-30480
`____________
`
`Tesla, Incorporated; Tesla Lease Trust;
`Tesla Finance, L.L.C.,
`
`
`United States Court of Appeals
`Fifth Circuit
`
`FILED
`August 26, 2024
`
`Lyle W. Cayce
`Clerk
`
`Plaintiffs—Appellants,
`
`
`
`versus
`
`
`Louisiana Automobile Dealers Association, In itself and on
`behalf of its members, executive committee, and board of directors;
`Gregory Lala, In his official capacity as Chairman of the Louisiana Motor
`Vehicle Commission; Allen O. Krake, In his Official capacity as a
`Commissioner of the Louisiana Motor Vehicle Commission and his private
`capacity; V. Price Leblanc, Jr., In his Official capacity as a
`Commissioner of the Louisiana Motor Vehicle Commission and his private
`capacity; Eric R. Lane, In his Official capacity as a Commissioner of the
`Louisiana Motor Vehicle Commission and his private capacity; Kenneth
`Mike Smith, In his Official capacity as a Commissioner of the Louisiana
`Motor Vehicle Commission and his private capacity; P.K. Smith Motors,
`Incorporated; Keith P. Hightower, In his Official capacity as a
`Commissioner of the Louisiana Motor Vehicle Commission and his private
`capacity; Keith M. Marcotte, In his Official Capacity as a
`Commissioner of the Louisiana Motor Vehicle Commission and his private
`capacity; Wesley Randal Scoggin, In his Official capacity as a
`Commissioner of the Louisiana Motor Vehicle Commission and his private
`capacity; Scott A. Courville, In his Official Capacity as a
`Commissioner of the Louisiana Motor Vehicle Commission; Donna S.
`Corley, In her Official capacity as a Commissioner of the Louisiana Motor
`Vehicle Commission and her private capacity; Terryl J. Fontenot, In his
`Official capacity as a Commissioner of the Louisiana Motor Vehicle Commission
`and his private capacity; T & J Ford, Incorporated; Maurice C.
`
`

`

`Case: 23-30480 Document: 161-1 Page: 2 Date Filed: 08/26/2024
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`
`
`Guidry, In his Official capacity as a Commissioner of the Louisiana Motor
`Vehicle Commission and his private capacity; Golden Motors, L.L.C.;
`Raney J. Redmond, In his Official capacity as a Commissioner of the
`Louisiana Motor Vehicle Commission; Joseph W. Westbrook, In his
`Official capacity as a Commissioner of the Louisiana Motor Vehicle Commission
`and his private capacity, also known as Bill Westbrook; Stephen Guidry,
`In his Official capacity as a Commissioner of the Louisiana Motor Vehicle
`Commission and his private capacity; Joyce Collier LaCour, In her
`Official capacity as a Commissioner of the Louisiana Motor Vehicle Commission;
`Thomas E. Bromfield, In his Official capacity as a Commissioner of the
`Louisiana Motor Vehicle Commission; Edwin T. Murray, In his Official
`capacity as a Commissioner of the Louisiana Motor Vehicle Commission and his
`private capacity; Ford of Slidell, L.L.C., doing business as Supreme
`Ford of Slidell; Gerry Lane Enterprises, Incorporated,
`doing business as Gerry Lane Chevrolet; Holmes Motors,
`L.L.C., doing business as Holmes Honda; Airline Car Rental,
`Incorporated, doing business as Avis Rent-A-Car; Shetler-
`Corley Motors, Limited; Leblanc Automobiles. L.C.,
`incorrectly named as Leblanc Automobiles, Inc.; Morgan Buick
`GMC Shreveport, Incorporated, incorrectly named as Morgan
`Pontiac, Inc.; P.K. Smith Motors, Incorporated, in his
`private capacity; Commissioners of the Louisiana Motor
`Vehicle Commission and their Dealerships;
`Stephen L. Guidry, Jr.,
`
`
`Defendants—Appellees.
`______________________________
`
`
`
`
`
`
`Appeal from the United States District Court
`for the Eastern District of Louisiana
`USDC No. 2:22-CV-2982
`______________________________
`
`2
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`

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`No. 23-30480
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`Before Smith, Haynes,* and Douglas, Circuit Judges.
`
`Jerry E. Smith, Circuit Judge:
`
`Louisiana law generally prohibits automobile manufacturers from sell-
`
`ing directly to consumers or performing warranty services for cars that the
`
`manufacturers do not own. The Commission, which by law is composed of
`
`market incumbents, is tasked with enforcing those provisions.
`
`Plaintiffs are three Tesla entities (together, “Tesla”). Defendants are
`
`Commissioners of the Louisiana Motor Vehicle Commission in their private
`
`and official capacities, the Louisiana Automobile Dealers’ Association
`
`(“LADA”), and dealerships owned by the Commissioners. Tesla challenged
`
`the aforementioned law, alleging, inter alia, violations of (1) federal antitrust
`
`law, (2) its federal due process rights, and (3) its federal equal protection
`
`rights. The district court dismissed, and Tesla appeals. We reverse the dis-
`
`missal of the due process claim, vacate and remand the dismissal of the anti-
`
`trust claim, and affirm the dismissal of the equal protection claim.
`
`I.
`
`Tesla began manufacturing cars in 2008. Its business model has sev-
`
`eral distinct features. Most relevant is that it exclusively markets, sells, and
`
`leases its cars directly to consumers and through a network of stores that it
`
`owns and operates. It does not do so through third-party dealers.
`
`Louisiana passed the first rendition of its dealership-regulation regime
`
`in 1954. Benson & Gold Chevrolet, Inc. v. La. Motor Vehicle Comm’n,
`
`403 So. 2d 13, 16 (La. 1981). Before 2017, that law provided that no manu-
`
`_____________________
`
`* Judge Haynes concurs in full in the affirmance of the dismissal of the equal pro-
`tection claim and concurs in the judgment only as to the reversal of the dismissal of the due
`process claim and the vacatur and remand of the antitrust claim.
`
`
`
`3
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`facturer (save for a few exceptions) may “sell or offer to sell a new or unused
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`motor vehicle directly to a consumer.” La. Rev. Stat. Ann. § 32:1261-
`
`(A)(1)(k)(i) (2016)).
`
`In 2017, Louisiana amended the statute. 2017 La. SB 107. Tesla avers
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`that, before the amendment, it would have been allowed to sell because
`
`“state law then only prohibited franchising manufacturers from competing
`
`with their own franchise dealers.” Defendants disagree. LADA notes that
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`“Tesla has never lawfully sold its cars directly to consumers in Louisiana.”
`
`(Emphasis added.) The Commission avers that though “[t]here is no pre-
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`2017 caselaw interpreting [the relevant] language,” direct-to-consumer sales
`
`by a manufacturer would have violated the law “full stop.” Either way, there
`
`is no dispute that after the amendment, Tesla would not be permitted to sell
`
`directly to consumers except through an in-state dealer. Tesla contends that
`that change was made “at the behest of Tesla’s competitors.”1 LADA
`concedes that it successfully lobbied the legislature to, as they put it,
`
`“clarify” the law. Tesla says that because of that change, “if Tesla wishes to
`
`participate in the market for automobiles in the State of Louisiana, Tesla
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`must forgo its successful (and necessary) business model.”
`
`Though Tesla does have a license to lease vehicles in Louisiana, it has
`
`not sought a license to sell vehicles there. Tesla posits, however, that there
`
`is an exception in Louisiana law that allows it to perform warranty repairs in
`
`_____________________
`
`
`
`1 Tesla limits the scope of its challenge to the 2017 amendment:
`
` Plaintiffs do not challenge the enactment of this law as part of their
`antitrust or unfair trade practice claims. Nevertheless, a plaintiff may
`properly include evidence of immune lobbying activity in its antitrust alle-
`gations insofar as that evidence serves to illustrate the context and motive
`underlying the alleged anticompetitive conduct.
`
`(Cleaned up.)
`
`4
`
`

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`the state—namely, though Louisiana law generally prohibits “a manufac-
`
`turer . . . [from] operat[ing] a satellite warranty and repair center,” there is
`
`an exception for “fleet owner[s].” La. Rev. Stat. Ann. § 32:1261-
`
`(A)(1)(t). Tesla maintains that, through its entities, it is a fleet owner.
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`As of early 2023, there were “thousands of registered Tesla vehicles
`
`in Louisiana” even without direct sales. It currently provides warranty
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`services at its New Orleans service center. Tesla worries that the Commis-
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`sion threatens this practice by being able, as Tesla puts it, “improperly [to]
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`construe” the “fleet-owner provision . . . to exclude Tesla.”
`
`Tesla avers that its “competitors have pursued every avenue to bar
`
`Tesla from the market,” including “block[ing] Tesla from local markets
`
`altogether by promoting protectionist legislation and by coopting state reg-
`
`ulatory authority.” Tesla avers that the loss of its ability to perform warranty
`
`repairs in the state would make it unable to compete in that market. Tesla
`
`sees the 2017 restrictions on direct sales as one example of interference by
`
`competitors. It also avers that competitors in the state have coopted the
`
`Commission.
`
`The Commission is the body charged with enforcing much of state law
`
`governing “distribution and sale of motor vehicles.” La. Rev. Stat.
`
`Ann. §§ 32:1251, 32:1253(E). And it is given broad powers to do so. Id.
`
`§ 32:1253(E). The Executive Director of the Commission “has the authority
`
`to issue all licenses upon receipt of applications that comply with the statutes
`
`and rules of the commission.” La. Admin. Code tit. 46 § V.105(A). He
`
`or she also has subpoena power. Id. § V.303(B). “The commission has the
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`responsibility to consider and determine the action necessary upon all
`
`charges of conduct which fail to conform to” the laws the Commission is
`
`charged with enforcing. Id. § V.301(A).
`
`According to Tesla, competing dealerships “comprise[] a controlling
`
`5
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`

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`No. 23-30480
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`majority of the government” Commission. Tesla adds that the Commission
`
`seeks to “drive Tesla from the . . . market” by interpreting existing Louisiana
`
`law in a way that would bar Tesla’s leasing and warranty repair activity in the
`
`state. The Commission has also used its power to “initiate a costly
`
`investigation of Tesla.”
`
`The Commission is composed of 18 members, 15 of whom exercise
`the power relevant here. See generally La. Rev. Stat. Ann. § 32:1253.2
`Each of those 15 members must be a licensee of the Commission. Id.
`
`§ 32:1253(A)(2). Nine of those 15 are associated with competitor dealerships
`and defendants in this case.3 They are also all members of defendant
`LADA—which “represent[s] nearly 350 new motor vehicle car and heavy
`
`truck dealers in Louisiana.” At least one commissioner has served on the
`
`board of LADA. LADA met with the Commission numerous times over the
`
`course of five years to urge it to revise its interpretation of Louisiana law in a
`
`way not favorable to Tesla.
`
`Once Tesla announced that it would be opening a New Orleans ser-
`
`vice center in 2018, there was a flurry of activity. The former Chairman of
`
`the Commission and a member of LADA, Ray Brandt, forwarded an article
`
`about the announcement to the Commission’s Executive Director, Lessie
`
`House, who responded “I am on it.” Another member of LADA, Matt Baer,
`
`also raised the issue with House, to which House responded, “We are on top
`
`of this.” Paul Stroed, a member of Louisiana’s largest dealer group, said, in
`
`an email ultimately forwarded to House, that it “[was] not good for the future
`
`_____________________
`
`2 See also id. § 32:1253(A)(3)(a) (laying out a more limited role for 3 of the 18 mem-
`
`bers of the Commission who are appointed from the state at large). The Commission agrees
`with Tesla that those members’ responsibilities are not relevant to this case.
`
`3 The other 6 commissioners are involved in the motor vehicle industry but are not
`
`direct competitors with Tesla, though they might associate with direct competitors.
`
`6
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`

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`No. 23-30480
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`of our business if the state lets” Tesla open the center. House responded,
`“On top of it.”4 And LADA admits that it “lobb[ied] the Commission . . . to
`rule that Tesla could not do as it planned.”
`
`Much later, in March 2020, LADA wrote a letter to the then-
`
`Chairman, Allen Krake, suggesting ways to impede Tesla’s ability to open
`
`the service center. In June of that year, a state representative, Phillip Devil-
`
`lier, requested a formal opinion from the Attorney General of Louisiana about
`
`the lawfulness of Tesla’s activities and suggested that LADA’s answers were
`
`correct. The Attorney General turned to the Commission, which sided with
`
`Tesla. The Commission’s opinion was quite clear:
`
`(1) “It is not a violation of law for a manufacturer or distributor to lease
`
`new vehicles directly to consumers.”
`
`(2) “[A] manufacturer . . . may perform warranty services directly with-
`
`out using a dealer . . . when the manufacturer . . . is a fleet owner and
`
`performs warranty work on its own fleet.”
`
`
`
`Tesla took issue with the fact that the Commission’s answer was
`
`based on the implicit assumption that Tesla was a “fleet owner”—a deter-
`
`mination made by the Commission. But the opinion also plainly states that
`
`the “definition [of ‘fleet owner’] applies to Tesla Lease Trust.” The Com-
`
`mission also referenced its discussions with LADA and expressed concerns
`
`about potential antitrust liability for itself and its members. Though LADA
`
`had tried numerous times “to convince [the Commission] to revise its
`
`interpretations,” the Commission “has always openly held (and directly
`
`stated to LADA) that it would issue a license to Tesla if Tesla met the
`
`statutory guidelines.” In fact, it had done just that, approving a motor vehicle
`
`_____________________
`
`
`
`4 None of Brandt, House, Baer, or Stroed is a defendant.
`
`7
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`

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`lessor license for Tesla Lease Trust in 2019. Nevertheless, in August 2020,
`
`the Attorney General sided with LADA and against the Commission.
`
`Five days before the Attorney General’s opinion was published, the
`
`Commission began an investigation of Tesla and issued a subpoena to Tesla
`Lease Trust (“TLT”).5 LADA avers that that subpoena was motivated by
`the “complaints [to the Commission] that Tesla was skirting the law by
`
`performing warranty repairs on vehicles not titled to TLT.” TLT responded
`
`to this first subpoena. Tesla says that it responded because it was “[u]naware
`
`of the illegal conspiracy” and because the subpoena had a “narrow scope.”
`
`A month later, the Commission issued a second subpoena, which was
`
`withdrawn, for records stretching back to 2013. In February 2021, the Com-
`
`mission issued a third subpoena “for any records identifying vehicles leased
`
`in Louisiana by Tesla Lease Trust and identifying and/or referencing
`
`warranty service and/or warranty repair performed on any and all motor
`
`vehicles in Louisiana from June 1, 2019, to the present” (cleaned up). In
`
`Tesla’s words, “This third subpoena expressly targeted Tesla Lease Trust
`
`over Tesla’s performance of warranty repairs in alleged violation of La. Stat.
`
`§ 32:1261(A)(l)(t)(i), under a strained interpretation of ‘fleet owner’ by the
`
`Commission.” The Commission characterizes the subpoena differently:
`
`“[T]he commission asked Tesla Lease Trust, as a ‘fleet owner,’ to identify
`
`its ‘fleet’ and then identify whether it was performing warranty repairs on
`
`cars beyond its fleet—which would be unlawful” (footnote omitted).
`
`Tesla objected, stating that it was a “fleet owner” and therefore out-
`
`side the authority of the Commission. In continuing to press the subpoena,
`
`Tesla alleges that the Commission has revealed “it intends to adopt the view
`
`that Tesla is not a fleet owner.” In April, the Commission filed a motion to
`
`_____________________
`
`
`
`5 The subpoena was issued by House, who again is not a defendant.
`
`8
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`compel Tesla to respond to the subpoena in proceedings before the Com-
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`mission. Tesla asked for a continuance and for a determination of whether it
`
`was a fleet owner. The Commission denied the continuance and ordered
`
`Tesla to respond to the subpoena. But it also stayed Tesla’s obligation to
`
`respond while Tesla sought judicial review. Tesla asked for rehearing on the
`
`motion to compel, which was denied. Tesla’s direct competitors participated
`in those votes.6
`
`Tesla sought review of those decisions in state court. Those proceed-
`
`ings are ongoing. Tesla has continued to perform warranty repairs in Louisi-
`
`ana. The Commission avers this service extends to “vehicles beyond Tesla
`
`Lease Trust’s fleet” (footnote omitted).
`
`Tesla filed this lawsuit in August 2022. As relevant here, the first
`
`amended complaint asserts (1) a violation of federal antitrust law, (2) a viola-
`
`tion of Tesla’s due process rights under the Fourteenth Amendment, and
`
`(3) a violation of
`
`its equal protection rights under the Fourteenth
`
`Amendment.
`
`The district court dismissed each claim with prejudice. On antitrust,
`
`it reasoned that the private defendants were immune from liability under the
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`Sherman Act, and that Tesla had not plausibly pleaded a Sherman Act
`
`violation against the governmental defendants under Twombly. On due
`
`process, it decided that there was insufficient probability of actual bias to rise
`
`to the level of a constitutional violation. On equal protection, the district
`
`court ruled that the regulations passed rational-basis review.
`
`_____________________
`
`6 For the purposes of our proceedings, “Tesla does not ask this Court to enjoin
`
`those proceedings or to issue any declaration on the requirements of state law. Rather,
`Tesla asks this Court to declare that—whatever the proper construction of state law—the
`Commission as currently structured is not constitutionally fit to answer those questions
`consistent with Due Process.”
`
`9
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`

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`No. 23-30480
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`II.
`
`Our standard of review is well established:
`
` We review a Rule 12(b)(6) dismissal de novo. . . . Although
`we accept all well-pled facts as true, construing all reasonable
`inferences in the complaint in the light most favorable to the
`plaintiff, conclusory allegations, unwarranted factual infer-
`ences, or legal conclusions are not accepted as true.
`
`Hodge v. Engleman, 90 F.4th 840, 843 (5th Cir. 2024) (cleaned up).
`
`III.
`
`Tesla’s sense that there is something wrong with this scheme is vindi-
`
`cated by its due process claim. We reverse the dismissal of that claim.
`
`The Gibson-Wall Framework. The seminal due process case on indus-
`
`try self-regulation is Gibson v. Berryhill, 411 U.S. 564 (1973). It involved the
`
`Alabama Board of Optometry, which was composed only of independent
`
`optometrists. See id. at 567. That board sought to revoke the licenses of non-
`
`independent optometrists. See id. That attempt was enjoined by a three-
`judge district court. Id. at 570.7 “For the District Court, the inquiry was not
`whether the Board members were ‘actually biased but whether, in the natural
`
`course of events, there is an indication of a possible temptation to an average
`
`man sitting as a judge to try the case with bias for or against any issue pre-
`
`sented to him.’” Id. at 571 (citation omitted).
`
`The Supreme Court affirmed the district court, which had found, in
`
`part, that where the composition of the board meant that “success in the
`
`Board’s efforts would possibly redound to the personal benefit of members of
`
`the Board, sufficiently so that in the opinion of the District Court the Board
`
`was constitutionally disqualified from hearing the charges filed.” Id. at 578
`
`_____________________
`
`
`
`7 And appealed directly to the Supreme Court. 411 U.S. at 572.
`
`10
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`

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`No. 23-30480
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`(emphasis added). And the Court did so quite explicitly: “[W]e affirm, only
`
`on the . . . ground of possible personal interest.” Id. at 579 (emphasis added).
`
`The Court concluded that “those with substantial pecuniary interest in legal
`
`proceedings should not adjudicate . . . disputes” governing revocation of a
`competitor’s license to practice in the relevant industry. Id. at 579.8
`
`More color is provided by Wall v. American Optometric Association,
`379 F. Supp. 175, 178–79 (N.D. Ga.), aff’d mem., 419 U.S. 888 (1974).9
`There, the district court stopped a board composed of mainly “dispensing”
`
`optometrists from exercising “complete control over who may enter the
`
`optometry profession in Georgia.” Id. at 179. That includes control over
`
`“prescribing” optometrists who distribute their products to customers in a
`different way. Id. at 178.10
`
`Tesla need not plead actual bias. Tesla maintains that actual bias is not
`a pleading requirement.11 Tesla criticizes the actual-bias requirement used
`by the district court and drawn in part from Megill v. Board of Regents,
`
`_____________________
`
`8 “This fundamental right applies equally to proceedings before an administrative
`
`agency.” Ford Motor Co. v. Tex. DOT, 264 F.3d 493, 511 (5th Cir. 2001) (citing Gibson,
`411 U.S. at 569).
`
`9 At least in some contexts, summary affirmances by the Supreme Court can be
`
`“highly persuasive—if not controlling.” Rios v. Dillman, 499 F.2d 329, 334 n.8 (5th Cir.
`1974). Such affirmances are particularly salient where the Supreme Court has later relied
`on the summarily affirmed case. See Friedman v. Rogers, 440 U.S. 1, 18 (1979) (discussing
`“Gibson and Wall.”)
`
`10 The Commission fails to distinguish Wall. It places undue emphasis on the dis-
`
`trict court’s observation that “every current incumbent member of the board [was] a mem-
`ber of the” trade association. 379 F. Supp. at 188. That cannot be fairly read to say that a
`plaintiff can obtain relief only where every member of a board is financially interested. Is
`there any reason to believe that a board skewed 99-1 would not be a problem, but a board
`skewed 100-0 would?
`
`11 See Marshall v. Jerrico, Inc., 446 U.S. 238, 242 (1980) (noting that the Due Pro-
`
`cess Clause “preserves both the appearance and reality of fairness.” (citation omitted)).
`
`11
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`

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`541 F.2d 1073, 1079 (5th Cir. 1976), as having been “drawn from a line of
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`inapposite cases that uniformly involve tenure and disciplinary proceedings
`
`at universities.” Those cases are different, says Tesla, because (1) the
`
`adjudicators do not have the same sort of structural economic incentives for
`
`bias, (2) those cases were further along in the litigation process when there
`
`was enough evidence to adjudicate actual bias, and (3) “federal courts should
`
`be loath to intrude into internal school affairs.” Megill, 541 F.2d at 1077.
`
`Tesla also notes that in Megill, pecuniary bias does not seem to have been
`alleged. See id. at 1079.12
`
`The Commission points to Withrow v. Larkin, 421 U.S. 35, 47 (1975)
`
`as a “good example of why Tesla entities’ due-process claim fails.” There
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`the Court upheld what the Commission sees as a lawful investigation by an
`
`agency. As the Commission describes it, in Withrow the “Court then rejected
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`the plaintiff’s claim that the board was unconstitutionally biased because its
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`investigatory efforts allegedly dictated how it would adjudicate potential
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`discipline.” As Tesla notes, that’s not so much about regulating direct
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`competitors but is, instead, about the negative effects of the “combination of
`
`the investigative and adjudicative functions.” Id. That is not the issue here.
`
`Moreover, it is true that Withrow uses the language “actual bias”
`
`three times. But in two of those instances—spoken about in the immediate
`
`context of pecuniary interest—the Court used the phrases “probability of
`
`actual bias” and “risk of actual bias.” Withrow, 421 U.S. at 47. There is no
`apparent daylight between “risk of actual bias” and “possible bias.”13 The
`third instance is in a footnote that discusses an issue not reached by the dis-
`
`_____________________
`
`12 Though the procedural posture of Megill is unclear, it also seems to be at a stage
`
`other than the motion to dismiss. See id.
`
`13 Risk
` Risk, Merriam-Webster,
`is the “possibility of . . . injury.”
`
`https://www.merriam-webster.com/dictionary/risk (emphasis added).
`
`12
`
`

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`No. 23-30480
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`trict court and is apparently about bias based on deeply held ethical differ-
`
`ences. See id. at 54 n.21.
`
`Tesla is right that there is no need for it to plead actual bias, for at least
`
`three reasons. First, Gibson and Wall do not impose a showing of actual bias;
`
`rather, the most natural reading strongly suggests that possible bias is suffici-
`
`ent. See, e.g., Gibson, 411 U.S. at 579 (affirming on a “ground of possible
`
`personal interest.”). Second, for the reasons Tesla advances, neither Megill
`
`nor Withrow adds such a requirement. Finally, it is hard to imagine what a
`
`pleading of actual bias at the motion-to-dismiss stage would even mean.
`What is “plausible actual bias” other than “possible bias?”14
`
`We need not wait longer to intervene if there is a due process violation. The
`
`Commission points out that the district court in Wall initially withheld relief
`
`when the plaintiffs made a claim just based on the board’s composition. See
`
`Wall, 379 F. Supp. at 180. Only once the board levied a disciplinary action
`
`against an optometrist did the court act. See id. In Gibson, “disciplinary pro-
`
`ceedings had been instituted against the plaintiffs.” Friedman, 440 U.S. at
`
`18. Here, the Commission posits that “the commission has not taken any
`
`disciplinary or enforcement action against any Tesla entity.” Any such
`
`action is—at this point— merely potential.
`
`Tesla responds that the Court intervened in Gibson and Wall only after
`
`hearings had been noticed but before the actual hearings. Gibson, 411 U.S.
`
`_____________________
`
`14 Were we to reach whether Tesla has plausibly pleaded actual bias, we should still
`
`reverse. At the motion-to-dismiss stage, it is impermissible to do the sort of weighing that
`the Commission and LADA want us to do. Cf. Gen. Land Office of Tex. v. Biden, 71 F.4th
`264, 274 (5th Cir. 2023) (“[A]t the pleading stage, they are not yet obliged to produce spe-
`cific evidence to counter the . . . defendants’ merits arguments.”). Tesla has alleged that
`various dealers reached out to the Commission and received responses along the lines of
`“We’re on it.” The Commission subsequently started investigating Tesla for regulatory
`violations. That is plausible actual bias based on well-pleaded facts.
`
`13
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`

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`Case: 23-30480 Document: 161-1 Page: 14 Date Filed: 08/26/2024
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`No. 23-30480
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`at 569; Wall, 379 F. Supp. at 180. The court in Gibson found that the fact
`
`“that the administrative body itself was unconstitutionally constituted”
`
`rendered it “not entitled to hear the charges filed against the appellees.”
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`411 U.S. at 577.
`
`In other words, there is no need to wait for the unconstitutional hear-
`
`ing to occur; notice of intent is sufficient. Tesla is right on this point. The
`
`Commission has already begun exercising power over Tesla at the very least
`by issuing subpoenas to TLT.15
`
`Friedman, 440 U.S. at 18, does not indicate otherwise. That decision
`
`foreclosed pre-enforcement challenges to regulatory authority based on the
`
`composition of the regulatory body alone. See id. It held that a plaintiff
`
`“ha[d] no constitutional right to be regulated by a Board that is sympathetic”
`
`to his preferred business model. Id. The Court distinguished Gibson, saying
`
`that in that case “courts were able to examine in a particular context the pos-
`
`sibility that the members of the regulatory board might have personal inter-
`
`ests that precluded a fair and impartial hearing of the charges.” Id. On the
`
`other hand, “the Friedman plaintiffs never alleged the Board members would
`
`act out of self-interest instead of fairness, only that the board’s composition
`
`itself was unfair.” Ass’n of Am. R.R.s, 821 F.3d at 35.
`
`In short, Tesla does not have a right to a specific Commission com-
`
`position, but it does have a “right to a fair and impartial hearing.” Friedman,
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`440 U.S. at 18. Tesla reads Friedman as standing at most for the proposition
`
`_____________________
`
`15 One might draw a line between adjudicative and executive—here, investigatory
`
`—power. In this context, that is a distinction without a difference. It would be odd to
`suggest that a board which cannot constitutionally adjudicate a claim because of bias could
`investigate and prosecute that claim. Prosecutors and judges alike recuse when they are
`personally biased. There is reason to believe that authorities with rule-making power differ.
`See Ass’n of Am. R.R.s v. U.S. Dep’t of Transp., 821 F.3d 19, 27 n.3 (2016). But this clearly
`falls on the adjudicative/executive rather the rulemaking side.
`
`14
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`Case: 23-30480 Document: 161-1 Page: 15 Date Filed: 08/26/2024
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`No. 23-30480
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`that “some action must be taken against a plaintiff before suing.” Tesla is
`
`correct. Friedman supports the earlier requirement that some action must be
`
`taken. That criterion is met here.
`
`Gibson and Wall control this case. Ultimately, we must determine
`
`whether Tesla’s claim falls within the Gibson and Wall line of cases. Tesla
`
`avers that it does, pointing to allegations that members of the Commission
`
`compete directly with Tesla, that they have a general interest in the
`
`franchised-dealer model, and that Commissioners have strong financial
`
`incentives to keep Tesla out of Louisiana. Tesla also notes that dealers have
`
`made statements to the effect that its entry into Louisiana is “not good for
`
`the future of our business.” Tesla points to examples of what it sees as
`
`“concrete evidence that the Commissioners have joined with other private
`
`dealers in the common purpose to exclude Tesla from the market,” including
`
`• votes against Tesla,
`issuance of subpoenas,
`•
`further votes to enforce those subpoenas,
`•
`• numerous meetings between LADA and the Commission to try to get
`the Commission interpretively to exclude Tesla from the market,
`• an email from a dealer to Executive Director House complaining about
`Tesla’s entry, and House’s response that he was “[o]n top of it,” and
`the Commission’s determination that the fleet-owner exception does
`not allow warranty repairs on sold vehicles.
`
`•
`
`LADA avers that these concrete examples are insufficient because the
`Commission sided with Tesla against LADA and the attorney general.16
`
`_____________________
`
`16 Tesla responds that even if it were proper to consider the siding of the Commis-
`
`sion against the Attorney General at this stage of the pleading, it is still not dispositive.
`After all, the Commission’s decision letter suggests that the Commission may have been
`driven by fear of antitrust liability rather than neutral interpretation of the law. Tesla avers
`that the Commission would obviously not adopt what it sees as a “facially absurd” legal
`interpretation where then are other more perceptibly neutral ways to achieve its anti-
`competitive goals, such as barring Tesla from servicing sold vehicles and discouraging other
`
`15
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`

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`Case: 23-30480 Document: 161-1 Page: 16 Date Filed: 08/26/2024
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`No. 23-30480
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`LADA defends the subpoenas as lawfully issued and urges that the only way
`
`to demonstrate that they were the products of bias is to show that they were
`
`completely off-base legally. In defendants’ view, the Commission was just
`
`acting as the enforcer of Louisiana law. That’s especially apparent when
`
`“the subpoenas are a logical outgrowth of the Commission’s decision to side
`
`with Tesla in determining that TLT could lease and service cars in the state
`
`if it complied with the terms of the fleet exception.”
`
`The Commission expands on the context relevant here, adding