SCOTUS Clarifies Statute of Limitations for APA Claims
In Corner Post, Inc. v. Board of Governors of the Federal Reserve System, 603 U.S. ____ (2024), the U.S. Supreme Court held that a claim under the Administrative Procedure Act (APA) does not accrue for purposes of 28 U.S.C. § 2401(a)’s default six-year statute of limitations until the plaintiff is injured by final agency action. The Court’s decision gives plaintiffs significantly more time to bring APA claims against the federal government.
Facts of the Case
Like many retailers, petitioner Corner Post accepts debit cards as a form of payment. As the Supreme Court explained in its opinion, debit card transactions require merchants to pay an “interchange fee” to the bank that issued the card. The fee amount is set by the payment networks (such as Visa and MasterCard) that process the transaction.
In 2010, Congress tasked the Federal Reserve Board with making sure that interchange fees were “reasonable and proportional to the cost incurred by the issuer with respect to the transaction.” The Board subsequently published Regulation II, which sets a maximum interchange fee of $0.21 per transaction plus .05% of the transaction’s value.
In 2021, Corner Post joined a suit brought against the Board under APA. The complaint challenged Regulation II on the ground that it allows higher interchange fees than the statute permits. The District Court dismissed the suit as time-barred under 28 U. S. C. §2401(a), the default six-year statute of limitations applicable to suits against the United States. The Eighth Circuit affirmed, holding that “when plaintiffs bring a facial challenge to a final agency action, the right of action accrues, and the limitations period begins to run, upon publication of the regulation.”
Supreme Court’s Decision
The Supreme Court reversed by a vote of 6-3. According to the majority, an APA claim does not accrue for purposes of §2401(a)’s 6-year statute of limitations until the plaintiff is injured by final agency action.
As Justice Amy Coney Barrett explained, a right of action “accrues” when the plaintiff has a “complete and present cause of action,” which is when she has the right to “file suit and obtain relief.” Because an APA plaintiff may not file suit and obtain relief until she suffers an injury from final agency action, the statute of limitations does not begin to run until she is injured.
The majority gave little weight to Board’s argument that agencies and regulated parties need the finality of a six-year cutoff, and that successful facial challenges filed after six years upset the reliance interests of those that have long operated under existing rules. As Justice Barrett explained, “[P]leas of administrative inconvenience . . . never justify departing from the statute’s clear text” (internal citation omitted). She added that Congress could have chosen different language in §2401(a) or created a general statute of repose for agencies, but did not.
The majority also concluded that the Board’s policy concerns were “overstated.” Justice Barrett noted that regulated parties can always challenge the regulation as it applies to them. She further emphasized that “the opportunity to challenge agency action does not mean that new plaintiffs will always win or that courts and agencies will win or that courts and agencies will need to expend significant resources to address each new suit.” Justice Ketanji Brown Jackson authored a dissent, which was joined by Justices Sonia Sotomayor and Elena Kagan. According to the dissenters, the majority’s decision has the potential to be “profoundly destabilizing.” “Any established government regulation about any issue — say, workplace safety, toxic waste, or consumer protection — can now be attacked by any new regulated entity within six years of the entity’s formation,” Justice Jackson wrote.
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