On July 1, 2024, the United States Supreme Court extended the deadline for challenging agency actions under the Administrative Procedure Act (“APA”), holding that the statute of limitations period does not begin to run “until the plaintiff is injured by final agency action.” Corner Post, Inc. v. Board of Governors of the Federal Reserve System, 603 U.S. __ (2024). The decision is a change of course from previous appellate court holdings that interpreted the APA limitations period as beginning to run when the agency action, such as rule promulgation, adjudication, or permit approval or denial, was final.
The case at issue dealt with a challenge to a 2011 Federal Reserve Board regulation that set a certain fee on transactions involving debit cards as a form of payment. The plaintiff in the case, Corner Post, was a truck stop and convenience store that opened for business in 2018, years after the Board published the regulation in dispute. However, after three years of doing business, Corner Post “became frustrated by interchange fees,” and in 2021, joined a suit brought against the Board under the APA.
28 U.S.C. § 2401(a) sets the default statute of limitations period for actions against the federal government, which include those brought seeking to challenge agency action pursuant to the APA. Specifically, § 2401(a) provides that the action “shall be barred unless the complaint is filed within six years after the right of action first accrues.” The Federal Reserve Board argued that a right of action under the APA “accrues” when the agency action is “final.” Under the circumstances of the case at issue, the Board claimed that § 2401’s six-year limitations period began in 2011 when it finalized the regulation, and it expired in 2017, barring Corner Post’s action brought in 2021.
The district court agreed with the Federal Reserve Board and dismissed the suit. Thereafter, the Eighth Circuit affirmed based on then-existing precedent. On review by the Supreme Court, the Board reiterated its arguments, but the Court disagreed, explaining that “[a]n 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.” The Court concluded that because Corner Post filed its suit challenging the Board’s regulation within six years of its injury, § 2401(a) did not bar its action.
The dissenting Justices disagreed with the majority’s findings, stating that the ruling means “there is effectively no longer any limitations period for lawsuits that challenge agency regulations on their face.” The dissenting Justices also warned that the Supreme Court’s recent decision to overturn the Chevron doctrine of deference to agency interpretations in Loper Bright Enterprises v. Raimondo, combined with the Corner Post decision, forebodes a “tsunami of lawsuits against agencies,” which “has the potential to devastate the functioning of the Federal Government.” The dissenting Justices warned that “every legal claim conceived of in [the] last four decades—and before—can possibly be brought before courts newly unleashed from the constraints of any [Chevron] deference.”
While the Corner Post ruling significantly broadens the timeline for challenging agency actions under the APA, it should be noted that certain statutes, such as the Clean Air Act, have specific language requiring litigation to be brought within a specified time period after issuance of the final rule. These statute-specific timeframes supersede § 2401(a)’s general statute of limitations period, which applies “unless the timing provision of a more specific statute displaces it.” In addition to the Clean Air Act, the Clean Water Act and Resource Conservation and Recovery Act have similar specific statutory language with respect to the statute of limitations for challenging issued rules.
A general increase in litigation surrounding both old and new agency action, however, can be expected based on the Supreme Court’s recent combination of decisions. Corner Post opens the door for newly injured plaintiffs to challenge potentially decades old agency action. Additionally, while the Court in Corner Post noted that “major regulations are typically challenged immediately, [so] courts entertaining later challenges often will be able to rely on binding Supreme Court or circuit precedent,” the recent Loper Bright decision invalidating Chevron deference raises questions of how and whether courts will rely on previous judicial rulings upholding regulations if those rulings relied on Chevron deference.
Corner Post dealt with a facial challenge to agency rulemaking, and it remains uncertain whether the scope of the effects of the Court’s opinion will extend to other agency actions, such as permitting decisions or enforcement. Regardless, it is clear that where the governing statute does not provide a specific statute of limitations for challenging agency rulemaking, the timeline defaults to that of § 2401(a), where under Corner Post, the statute of limitations begins based on each potential plaintiff’s injury.
These rulings could create an opportunity for industry to challenge final agency action that up until now had been considered immune from judicial review.
For more information on the impacts of these decisions, please contact Liskow attorneys Greg Johnson, Clare Bienvenu, Emily von Qualen and Colin North and visit our Energy Litigation practice page.
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