Court of Appeals — Pre-emption: New York State Attorney General v. First American Corporation, et al.

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New York State Court of Appeals

Pre-emption

Real Estate Appraisal Reports

New York State Attorney General v. First American Corporation, et al.
No. 184
Judge Ciparick

Background: The New York state attorney general brought an action seeking injunctive, monetary relief, and civil penalties for the defendants’ violation of New York’s Executive Law and Consumer Protection Act. Specifically, the Attorney General alleged that the defendants were unjustly enriched through a process that was inflating the appraised value of real estate. The defendants moved to dismiss on preemption grounds arguing that the federal statutory scheme occupied the entire field of real estate appraisals.

Ruling: The Court of Appeals held that federal law did not preclude the Attorney General from pursuing the claims against the defendants. Specifically, the Court of Appeals found that Financial Institutions Reform, Recovery and Enforcement Act governed the regulation of appraisal management companies, but explicitly “envisioned a cooperative effort” between federal and state authorities to ensure that real estate appraisal reports comport with the federal standards.

Andrew L. Deutsch for the appellants; Richard P. Dearing for the respondent