Under the Administrative Procedure Act, Entities Formed Within the Last Six Years Can Now Challenge Regulations That Have Stood for Decades
Days after overruling Chevron deference, the U.S. Supreme Court issued another consequential administrative law decision on July 1, 2024, expanding the time period in which plaintiffs can challenge agency action. The decision was issued in Corner Post, Inc. v. Board of Governors of the Federal Reserve System, No. 22-1008, 603 U.S. ___ (2024).
In Corner Post, a North Dakota truck stop challenged a Federal Reserve Board regulation setting a maximum "interchange fee" that banks can charge merchants per debit card transaction, arguing that the fee ceiling under the regulation exceeded the allowable amount under the Dodd-Frank Act. The Board promulgated the regulation in 2011, but the truck stop – which opened for business in 2018 – did not file suit until 2021.
The District Court thereafter dismissed the suit as untimely because it was brought outside the six-year window set by 28 U.S.C. § 2401(a), the applicable statute of limitations. The U.S. Court of Appeals for the Eighth Circuit affirmed, holding that the limitations period for a facial challenge to an agency regulation begins to run on the date of publication – not when the plaintiff is injured. The decision further deepened a circuit split where at least six Circuits (U.S. Court of Appeals for the District of Columbia Circuit, the Federal Circuit and the Fourth, Fifth, Eighth and Ninth Circuits) had expressed similar views, and the Sixth Circuit, by contrast, had held that the limitations period runs when a plaintiff is injured by agency action regardless of publication.
In a 6-3 decision, the Supreme Court resolved this Circuit split and reversed the Eighth Circuit. Writing for the Court, Justice Amy Barrett began the analysis recognizing that a plaintiff can only sue under the Administrative Procedure Act (APA) "unless and until she suffers an injury," under Section 702, and if there has been "final agency action," under Section 704. Op. at 4-5. The applicable statute of limitations, 28 U.S.C. § 2401(a), allows complaints to be filed "within six years after the right of action first accrues." The Court stated that a right of action accrues when a plaintiff can "file suit and obtain relief," and thus held that an APA plaintiff cannot sue "until she suffers an injury from final agency action, so the statute of limitations does not begin to run until she is injured." Id. at 6. Because Corner Post sued within six years after being injured by the Board's regulation – even though the regulation was promulgated in 2011 – the Court found the action timely. Id.At 23.
Like the Court's decision overruling Chevron, the Corner Post decision is expected to have a material impact on challenges to agency action. Prior to Corner Post, most Circuits had held that plaintiffs could not challenge agency regulations unless they filed suit within six years of the regulation's publication, regardless of the date of injury. Now, the Supreme Court has directed courts to permit APA challenges so long as a plaintiff has been injured by the regulation within the preceding six years, regardless of the date of publication. Thus, Corner Post significantly expands opportunities for APA challenges, as it allows entities formed within the last six years to challenge regulations that have stood for decades.
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