Corner Post, Inc. v. Board of Governors of the Federal Reserve
Washington, DC, July 01, 2024 (GLOBE NEWSWIRE) — Today, the U.S. Supreme Court revived Corner Post’s lawsuit against a Federal Reserve regulation, ruling 6-3 that the North Dakota convenience store and truck stop’s six-year deadline to challenge the rule had not yet expired when it filed its lawsuit. Corner Post did not exist until 2018, more than six years after the 2011 rule was issued, and it filed its lawsuit just over three years after it opened. The New Civil Liberties Alliance filed an amicus brief in Corner Post, Inc. v. Board of Governorsurging the Court to treat the six-year limitation period provided under the Administrative Procedure Act (APA) for acting as an agency as the limitation period that it is.
The Federal Reserve Board of Governors (Fed) adopted Regulation II in 2011, establishing fees for debit card transactions. Corner Post began operations in 2018 and filed a lawsuit challenging Regulation II in 2021, claiming it incurred excessive interchange fees under the rule. The U.S. Court of Appeals for the Eighth Circuit ruled that Corner Post’s ability to sue expired in 2017, six years after the rule was first enacted.
Agree with NCLA’s arguments amicus In short, the Supreme Court recognized that federal law allows Corner Post to bring its lawsuit within six years of the time the damages caused by Regulation II began to accrue—which it did—regardless of when the rule was first promulgated. To impose the statute of limitations within six years of the promulgation of the regulation would absurdly require Corner Post to have brought its lawsuit before it was even created. The justices held that the APA entitles Corner Post to adequate and meaningful judicial review of the rule in court.
“Because an APA plaintiff cannot sue and obtain relief until she has suffered an injury as a result of the agency’s final action, the statute of limitations does not begin to run until she is injured,” Judge Barrett wrote.
The government claimed that Corner Post’s ability to ask the Fed to amend Regulation II through rulemaking, and then challenge any denial of such a request, was a viable alternative to a lawsuit asking the courts to cancel the rule. But the Supreme Court recognized that this would not constitute “a sufficient substitute for new a judicial review[.]“As NCLA has pointed out, federal agencies have a history of using lengthy delays to avoid requests for review, thereby circumventing petitioners’ constitutional and statutory rights. The Fed could have easily delayed a Corner Post petition in this manner. The request for review of a petition’s potential denial would then have occurred, if at all, under a much more deferential standard of review in favor of the government, making relief unlikely.
NCLA released the following statements:
“This decision is a significant victory for individuals and businesses that have been subject to problematic regulations but have been unable to challenge them due to the passage of time. As this case demonstrates, it makes little sense to deny a party the ability to challenge harmful regulations based on the date they were enacted rather than the date the harm occurred. To do so would be to upend the traditional claims process.”
– Kara Rollins, litigation attorney, NCLA
“The language of the APA makes clear that the six-year period for challenging the rules is a statute of limitations. Such a limitation period does not arise, that is, begin to run, until the rule has harmed the plaintiff. The Court was entirely correct in recognizing that Corner Post’s challenge to Rule II was not time-barred under the APA.
— Mark Chenoweth, President, NCLA
For more information, visit amicus page here.
ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights group founded by distinguished legal scholar Philip Hamburger to protect constitutional liberties from violations by the administrative state. NCLA’s public interest litigation and other pro bono advocacy work aims to rein in the unlawful power of state and federal agencies and foster a new civil liberties movement that will help restore Americans’ fundamental rights.
CONTACT: Ruslan Moldovanov New Civil Liberties Alliance 202-869-5237 ruslan.moldovanov@ncla.legal
