Supreme Court eases time limits on challenging federal rules

The Supreme Court on Monday made it easier to challenge long-standing federal laws, the latest in a series of rulings that give the federal judiciary greater influence over federal government policy.

The 6-3 majority decision in Corner Post Inc. v. Board of Governors of the Federal Reserve System reopened debit card fee regulations first issued in 2011 and set new standards for how agency rules can be challenged in court.

Previously, a rule issued under the Administrative Procedure Act, or APA, could be challenged within six years of its finalization. In the majority opinion, Justice Amy Coney Barrett wrote that each entity has six years from the time it becomes subject to the rule.

Extending the statute of limitations will allow judges to decide more disputes and potentially allow new challenges to long-standing rules.

In that case, Corner Post, a North Dakota grocery store and truck stop founded in 2017, argued that the Federal Reserve had allowed banks to charge debit card interchange fees higher than those allowed under the 2010 financial reform law known as Dodd-Frank.

The Supreme Court’s decision Monday said the Corner Post can still challenge the 2011 rule. “An APA plaintiff does not have a complete and current cause of action until she suffers an injury as a result of a final agency action, so the limitations period does not begin to run until she suffers an injury,” Barrett wrote.

The APA governs the federal rulemaking process and thousands of regulations issued by hundreds of federal agencies across the executive branch. Barrett wrote that while several statutes specifically say that a party filing a challenge may sue only within a specified time after the rule is issued, the APA only applies to situations where someone is harmed by the rule.

Barrett wrote that the court simply applied the standard it applies to most lawsuits, and that Congress can change the statute of limitations for agency complaints.

“If it is unsuitable for contemporary litigation under the APA, the solution is for Congress to enact a separate statute of limitations for the APA,” Barrett wrote.

Justice Ketanji Brown Jackson, in dissent joined by Justices Elena Kagan and Sonia Sotomayor, said the majority had destroyed any sense of finality in federal rulemaking. Jackson said the decision ignores the way Congress has structured administrative law and puts every federal rule enacted since 1948 to the test.

“Starting today, administrative agencies can be sued indefinitely for any final decision they make,” Jackson wrote.

Reading from the judge’s dissenting opinion, Jackson said the majority decision encourages questioning of all rules in order to gain a competitive advantage.

“No matter how deeply ingrained, how relied upon, or how central a rule is to the functioning of our society, most have declared open season,” Jackson said.

Barrett downplayed the seriousness of the decision and its potential ramifications. She emphasized that most major regulations are challenged almost immediately, and future courts can rely on decisions the courts issued in the original cases to decide new ones.

Not all the rules

Kevin Minoli, a partner at Alston & Bird and former acting general counsel and deputy general counsel at the EPA, said the Corner Post ruling would not apply to all federal regulations, and its reach would depend on the law under which the regulation was issued.

For example, he added, the Clean Air Act specifies when a rule can be challenged in a number of cases, beyond the general rule under the APA.

The exchange between Barrett and Jackson, Minoli said, was “a continuation of a series of decisions that have reviewed administrative law and have actually changed administrative law this semester.”

“One side sees this as an important step to properly limit administrative power, while the other side sees it as an attempt to abolish many regulations,” Minoli said.

Devon Ombres, senior director of the Center for American Progress, in a statement Monday criticized the decision because it allows companies to challenge long-standing federal safety rules.

“These rulings threaten thousands of regulations passed over decades, opening the door to ongoing legal challenges to rules that have protected Americans from rogue actors and corporate abuse for decades,” Ombres said.

The decision was the latest of three cases this term in which the Supreme Court has given federal judges greater influence over the functioning of the federal government.

That includes a decision that agencies must bring fine cases in federal court and another that struck down a 40-year-old doctrine known as the Chevron deference rule, which required judges to defer to administrative agencies’ interpretations of vague regulations when deciding a particular rule.

“Doctrines that were once settled are now unsettled, and claims that had no merit a year ago are suddenly in dispute,” Jackson said.

Minoli said the combination of the Corner Post decision with the decision overturning the Chevron decision could increase uncertainty over rules that have been in place for years.

“When you put those two issues together, any previous interpretation is subject to review if the plaintiff is able to prove a new injury,” Minoli said.

Minoli said that especially when it comes to environmental regulations, regulated entities can face costly decisions, such as purchasing new equipment, and “making those decisions is much easier if they have the certainty that the regulations will be in place for some time.”

Jackson, in her dissenting opinion, said Congress has little chance to “address this absurdity and prevent the coming chaos” from further litigation over federal regulations.

Citing a 2007 decision on pay discrimination, Jackson said “it’s up to Congress to make the decision” to solve the problem.