In NCLA Amicus Win, Supreme Court Upholds Small Business’s Right to Judicial Review
July 01 2024 - 12:09PM
Today, U.S. Supreme Court revived Corner Post’s lawsuit challenging
a Federal Reserve regulation, ruling 6-3 that the six-year limit on
challenging the rule had not yet expired for the North Dakota
convenience store and truck stop when it filed suit. Corner Post
did not exist until 2018, more than six years after the 2011 rule
issued, and it filed suit just over three years after opening for
business. The New Civil Liberties Alliance filed an amicus
curiae brief in Corner Post, Inc. v. Board of
Governors, urging the Court to treat the Administrative Procedure
Act’s (APA) six-year time bar on agency action as the statute of
limitations that it is.
The Board of Governors of the Federal Reserve
System (the Fed) adopted Regulation II in 2011, establishing fees
for debit-card transactions. Corner Post began operating in 2018
and filed its lawsuit challenging Regulation II in 2021, claiming
it had incurred excessive interchange fees under the rule. The U.S.
Court of Appeals for the Eighth Circuit ruled that Corner Post’s
opportunity to file suit had expired in 2017, six years after the
rule first issued.
Agreeing with arguments in NCLA’s amicus brief,
the Supreme Court recognized that federal law allows Corner Post to
sue within six years of when its injury from Regulation II began to
accrue—which it did—regardless of when the rule was originally
promulgated. Placing the statute of limitations within six years of
the regulation’s promulgation would absurdly require Corner Post to
have taken legal action before it was even founded. The Justices
ruled that the APA entitles Corner Post to adequate and meaningful
judicial review of the rule in court.
“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,” Justice Barrett wrote.
The Government claimed Corner Post’s ability to
petition the Fed to change Regulation II via rulemaking, and then
to challenge any denial of such a petition, was a viable
alternative to a suit asking courts to strike down the rule. But
the Supreme Court recognized that this would not be “a sufficient
substitute for de novo judicial review[.]” As NCLA pointed out,
federal agencies routinely use lengthy delays to avoid review
petitions, circumventing petitioners’ constitutional and statutory
rights. The Fed could have easily delayed a petition by Corner Post
in this manner. Requesting review of a petition’s eventual denial
would then have occurred, if at all, under a far more deferential
standard of review favoring the government, which would have made
obtaining relief unlikely.
NCLA released the following
statements:
“This decision is a tremendous win for
individuals and businesses who have been subject to problematic
regulations but were barred from challenging them because of the
passage of time. As this case shows, it makes little sense to deny
a party the opportunity to challenge harmful regulations based on
when they were promulgated versus when the harm occurred. Doing so
would flip the traditional claims-accrual process on its head.”–
Kara Rollins, Litigation Counsel, NCLA
“The APA’s language clearly indicates that
the six-year bar on rule challenges is a statute of limitations.
Such a limit accrues, that is, it begins to run, only when the rule
has harmed the plaintiff. The Court was absolutely correct to
recognize that Corner Post’s challenge to Regulation II is not time
barred under the APA.”— Mark Chenoweth, President,
NCLA
For more information visit the amicus
page here.
ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights
group founded by prominent legal scholar Philip Hamburger to
protect constitutional freedoms from violations by the
Administrative State. NCLA’s public-interest litigation and other
pro bono advocacy strive to tame the unlawful power of state and
federal agencies and to foster a new civil liberties movement that
will help restore Americans’ fundamental rights.
Ruslan Moldovanov
New Civil Liberties Alliance
202-869-5237
ruslan.moldovanov@ncla.legal