This term, SCOTUS delivered two big wallops to the administrative state in the decisions eliminating Chevron deference (Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Dept of Commerce, see this Pubco post) and the use of administrative enforcement proceedings seeking civil penalties ( SEC v. Jarkesy, see this PubCo post). But that wasn’t all. There were at least a couple of other cases this term that reflected the same kind of skepticism toward the administrative state. They might be worth your attention. One of them, Corner Post, Inc. v. Board of Governors of the Federal Reserve System, discussed below, concerned the statute of limitations under the Administrative Procedure Act. For our purposes, though, the potentially critical repercussion of Corner Post was articulated in the dissent by Justice Ketanji Brown Jackson, who argued that the case effectively decimated the limitations period for facial challenges to agency regulations, setting up the potential for a never-ending series of challenges to long-standing regulations and perhaps even, yes, gaming of the system.
Majority opinion. The question posed in Corner Post was, under the APA, at what point is the statute of limitations initially triggered? The statute requires that “every civil action commenced against the United States…be barred unless the complaint is filed within six years after the right of action first accrues.” But when does the right first accrue?
The case concerned a North Dakota truck stop and convenience store, Corner Post, that opened in 2018. As payment for purchases, the store accepts debit cards, for which it must pay fees set by the payment networks. Over time, these fees had ballooned, which led the Fed (authorized under Dodd-Frank) to step in by setting a maximum fee in 2011. Still frustrated with the charges, Corner Post joined a suit under the APA against the Fed in 2021, claiming that the regulation allowed the payment networks to charge higher fees than the statute permitted. The Eighth Circuit held that the case was time-barred. Distinguishing between challenges like Corner Post’s, which are “facial” challenges, and challenges to a rule “as-applied” to a particular party, the court ruled that the six-year limitations period began in 2011. SCOTUS granted cert.
The Fed contended that the claim under the APA “accrued” when agency action was “‘final’ for purposes of §704—injury, it says, is necessary for the suit but irrelevant to the statute of limitations.” But the majority, in an opinion written by Justice Amy Coney Barrett, “disagree[d]. A right of action ‘accrues’ when the plaintiff has a ‘complete and present cause of action’—i.e., when she has the right to ‘file suit and obtain relief.’… An APA plaintiff does not have a complete and present cause of action until she suffers an injury from final agency action, so the statute of limitations does not begin to run until she is injured.” That interpretation was “standard” under prior precedent, she wrote, and nothing in the language of the statute “gives any indication that it begins to run before the plaintiff has a complete and present cause of action.” The statute, she said, was not a statute of repose—that is, a statute that would set a limitations period “measured not from the date on which the claim accrues but instead from the date of the last culpable act or omission of the defendant.” Rather, this case involved a statute of limitations, which “embodies the plaintiff-centric traditional rule that a statute of limitations begins to run only when the plaintiff has a complete and present cause of action.” As such, the “rule vindicates the APA’s ‘basic presumption’ that anyone injured by agency action should have access to judicial review.” The majority rejected the Fed’s contention that “facial challenges to agency rules are different, accruing when agency action is final rather than when the plaintiff can assert her claim.” That view, the majority reasoned, is inconsistent with the “immutable obstacle” of the text of the statute.
To the Fed’s policy concerns that, in the absence of a final six-year cutoff date, “facial challenges impose significant burdens on agencies and courts” and could “upset the reliance interests of the agencies and regulated parties that have long operated under existing rules,” the majority, citing precedent, concluded that “pleas of administrative inconvenience” do not “‘justify departing from the statute’s clear text.’” Beyond that, the majority rebuffed the Fed’s policy concerns as “overstated”: a statute can always be challenged for exceeding statutory authority. The dissent’s imagined “alternative reality of total finality…simply does not exist.” The majority found “bizarre” the claim of the dissent that “today’s opinion will ‘devastate the functioning of the Federal Government.’… The Solicitor General, whose mandate is to protect the interests of the Federal Government, comes nowhere close to suggesting that a plaintiff-centric interpretation of §2401(a) spells the end of the United States as we know it.” Was the dissent suggesting that the Code of Federal Regulations was replete with vulnerable regulations? If the limitations provision in the APA was a poor fit for modern litigation, the majority concluded, Congress could “enact a distinct statute of limitations for the APA.”
Concurring opinion. Justice Brett Kavanaugh wrote a concurring opinion to make the point that unregulated plaintiffs, like Corner Post, “can obtain meaningful relief only if the APA authorizes vacatur of the agency rule, thereby remedying the adverse downstream effects of the rule on the unregulated plaintiff.” But the Government, he said, had recently “advanced a far-reaching argument that the APA does not allow vacatur,” instead contending that “the APA’s authorization to ‘set aside’ agency action does not allow vacatur, but instead permits a court only to enjoin an agency from enforcing a rule against the plaintiff.” If that were the case, he maintained, the APA “would supply no remedy for most other unregulated but adversely affected parties who traditionally have brought, and regularly still bring, APA suits challenging agency rules. The Government’s position would revolutionize long-settled administrative law—shutting the door on entire classes of everyday administrative law cases.” Consequently, an important question “is whether the APA authorizes vacatur of unlawful agency actions, including agency rules. The answer is yes—in light of the text and history of the APA, the longstanding and settled precedent adhering to that text and history, and the radical consequences for administrative law and individual liberty that would ensue if vacatur were suddenly no longer available.”
Dissent. In her dissent, Justice Ketanji Brown Jackson, joined by Justices Sonia Sotomayor and Elena Kagan, contended that the majority was mistaken in attempting to “‘define for all purposes when a “cause of action” first “accrues.”’ Rather, “[w]hen a claim accrues depends on the nature of the claim”: she would distinguish between facial and as-applied challenges. In her view, it was plain from the text and context of the statute that,
“for facial challenges to agency regulations, the 6-year limitations period…starts running when the rule is published. The Court says otherwise today, holding that the broad statutory term ‘accrues’ requires us to conclude that the limitations period for [APA] claims runs from the time of a plaintiff ’s injury. Never mind that this Court’s precedents tell us that the meaning of ‘accrues’ is context specific. Never mind that, in the administrative law context, limitations statutes uniformly run from the moment of agency action. Never mind that a plaintiff ’s injury is utterly irrelevant to a facial APA claim. According to the Court, we must ignore all of this because, for other kinds of claims, accrual begins at the time of a plaintiff’s injury.”
But most importantly, the “baseless conclusion” of the majority “means that there is effectively no longer any limitations period for lawsuits that challenge agency regulations on their face. Allowing every new commercial entity to bring fresh facial challenges to long-existing regulations is profoundly destabilizing for both Government and businesses. It also allows well-heeled litigants to game the system by creating new entities or finding new plaintiffs whenever they blow past the statutory deadline.”
The dissent first looked through the majority’s characterization of the case as concerning a single truck stop in North Dakota. “Not quite,” she wrote, in fact, the lawsuit was first filed in 2021, 10 years after the regulations were adopted, by “two large trade groups”; Corner Post was not even a party—until, that is, the Government sought to dismiss the claim as time-barred. Then, the trade groups added Corner Post, which had commenced business in 2018, as a plaintiff, making this case a “poster child for the type of manipulation that the majority now invites—new groups being brought in (or created) just to do an end run around the statute of limitations.” The district court, “following the lead of every court of appeals that had ever addressed accrual of an APA facial challenge,” dismissed the claim, and the Eighth Circuit affirmed. Although the majority reached its conclusion by “maintain[ing] that the text of §2401(a) demands this result[,] if that answer is so obvious, one wonders why no court proclaimed it until more than 75 years after all the statutory pieces were in place.” Rather, in the dissent’s reading, “the meaning of accrue for the purpose of a statute of limitations is determined by the particular ‘right of action’ at issue.” And in a facial challenge, “Congress has repeatedly made clear, through various statutory enactments, that in the administrative-law context, the statute of limitations for filing a claim that seeks to invalidate the agency action runs from the moment of final agency action.”
According to the dissent, the majority’s position undermines the “basic policy goals” of statutes of limitation: “‘repose, elimination of stale claims, and certainty about a plaintiff’s opportunity for recovery and a defendant’s potential liabilities.’” As interpreted by the majority, there is now “nothing to prevent agency rules from being forever subjected to legal challenge by newly formed entities,” creating the potential for every rule to “perpetually be challenged,” with the result that “no policy determination can ever be put to rest.” The majority’s decision “means that, from this day forward, administrative agencies can be sued in perpetuity over every final decision they make.” Her prime example: the Fifth Circuit’s recent rejection of an APA challenge to the FDA’s “approval of the abortion medication mifepristone that was brought more than two decades after the relevant agency action.” “No more,” the dissent asserted,
“After today, even the most well-settled agency regulations can be placed on the chopping block. And please take note: The fallout will not stop with new challenges to old rules involving the most contentious issues of today. 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. A brand new entity could pop up and challenge a regulation that is decades old; perhaps even one that is as old as the APA itself. No matter how entrenched, heavily relied upon, or central to the functioning of our society a rule is, the majority has announced open season.”
Moreover, she professed, the majority’s interpretation will be “profoundly destabilizing” to the economy, with the potential to “harm all entities in a regulated industry” who have operated in reliance on the existing rules, “‘hinder[ing] the ability of businesses to plan effectively.’” In minimizing the impact of this decision, she contended, the majority overlooked the impact of the other decisions handed down this term, such as Loper Bright, “that likewise invite and enable a wave of regulatory challenges—decisions that carry with them the possibility that well-established agency rules will be upended in ways that were previously unimaginable. Doctrines that were once settled are now unsettled, and claims that lacked merit a year ago are suddenly up for grabs.” To be sure, she maintained, the majority’s decision compounds the impact of overturning Chevron: “Put differently, a fixed statute of limitations, running from the agency’s action, was one barrier to the chaotic upending of settled agency rules; the requirement that deference be given to an agency’s reasonable interpretations concerning its statutory authority to issue rules was another. The Court has now eliminated both. Any new objection to any old rule must be entertained and determined de novo by judges who can now apply their own unfettered judgment as to whether the rule should be voided.”
Together, these rulings, the dissent asserts, green light a “tsunami of lawsuits against agencies” with the “potential to devastate the functioning of the Federal Government.” That cannot be what Congress had in mind. But, she recommends, Congress now has the opportunity to correct this problem by clarifying the meaning of the statute: “‘the ball is in Congress’ court.’”
