Supreme Court Expands Window to Challenge Federal Regulations Under APA
Plaintiffs not initially affected by a regulation may now bring an Administrative Procedure Act ("APA") challenge to the regulation up to six years after they are first affected.
On July 1, 2024, the U.S. Supreme Court decided Corner Post, Inc. v. Board of Governors of the Federal Reserve System, holding that an APA claim only "accrues" once a plaintiff is injured by final agency action. The six-year statute of limitations for APA claims runs from that accrual, meaning plaintiffs who are not affected initially by a regulation will still have their six-year window to bring an APA challenge once they actually are harmed by the regulation.
In its decision, the Court explained that the term "accrues" has had a "well-settled" meaning for more than 75 years. Traditionally, a right accrues when it comes into existence or when the plaintiff has a complete and present cause of action, including a cognizable injury. For purposes of the APA, then, a plaintiff's claim accrues when the plaintiff is injured by final agency action. Notably, the majority determined that the statute's "clear text" prevailed over policy considerations such as the dissent's warning that the decision could lead plaintiffs simply to create new companies to evade the statute of limitations and challenge old rules.
The case involved a Federal Reserve regulation regarding debit-card transaction fees. Petitioner Corner Post, a North Dakota truck stop, opened for business more than six years after the Federal Reserve issued the regulation. Thus, if the limitations period ran from the date the rule was finalized, its APA claim never would have accrued.
Corner Post ensures that newly formed or newly affected businesses and individuals have the same opportunity to challenge unlawful agency action under the APA as those affected when the action is taken. The six-year clock to bring an APA claim starts for each when the harm caused by the agency's action actually befalls the plaintiff.
