The Supreme Court on Monday gave companies more time to challenge many regulations, ruling that the six-year statute of limitations for filing lawsuits begins when a regulation first affects a company, not when it is first issued.
The ruling in the case — the latest in a series of challenges to the administration’s authority under that term — could bolster the effect of last week’s blockbuster ruling that overturns a fundamental legal precedent known as Chevron deference, which required federal courts adhere to the agencies’ reasonable interpretations of ambiguous statutes. This decision jeopardizes countless regulations, particularly for the environment, and advances a long-standing goal of the conservative legal movement.
The vote was 6 to 3, split along ideological lines. Justice Amy Coney Barrett, writing for the conservative majority, rejected the government’s argument that the time limit for suing begins when an agency issues a rule.
Under the government’s view, he wrote, “only those fortunate enough to be injured within six years of the publication of a rule” could sue. He added, “Everyone else — no matter how serious the injury or how illegal the rule — has no recourse.”
Dissenting, Judge Ketanji Brown Jackson wrote that the decision, along with the case that overturned Chevron, Loper Bright Enterprises v. Raimondo, was an attack on the agency’s authority. She was joined by other liberals on the court, Justices Elena Kagan and Sonia Sotomayor.
“At the end of a momentous term,” Justice Jackson wrote, “this much is clear: the tsunami of lawsuits against agencies that the court’s holdings in this case and Loper Bright have authorized have the potential to destroy the functioning of the federal government. “
Environmental advocates warned that the combined effect of the rulings on administrative agencies could be particularly profound for the thousands of regulations enacted by the Environmental Protection Agency.
“This is a series of decisions collectively designed to undermine the government’s ability to protect the public from polluters and other corporate bad actors,” said Ian Fein, a senior attorney at the Natural Resources Defense Council, an advocacy group.
Republican attorneys general, who have worked with conservative activists and big industry and corporations in leading a multiyear strategy to sharply reduce the power of the federal government, cheered the decision.
“Federal agencies should be held accountable for their actions, even years after the rule was first issued,” said Patrick Morrissey, the West Virginia attorney general who has taken a leading role in the campaign. and filed a friend-of-the-court brief in support of the plaintiffs.
At first glance, Corner Post v. Board of Governors of the Federal Reserve System, No. 22-1008, appeared to be a technical challenge to debit card charges arising from a truck stop in North Dakota.
It was introduced in 2021 by two trade associations that opposed the rule, which was enacted in 2011.
Such fees “have long been a sore spot for merchants,” Judge Barrett wrote. Payment networks determine the amount of the charge, he wrote, leaving merchants, who would lose business if they refused to accept debit cards, with few options. Without regulation, he said, skid fees “soared.”
In response, Congress stepped in and asked the Federal Reserve Board to set standards for these fees, called interchange fees. In July 2011, the board published a rule that set a maximum fee of 21 cents per transaction, with an additional amount based on the value of the transaction.
Four months later, a group of retail industry trade associations and individual retailers sued the board, arguing that the rule authorized expenses that Congress did not authorize.
After the government moved to dismiss the case on statute of limitations grounds, the unions added a third plaintiff: Corner Post, a truck stop and convenience store in Watford City, ND
The store, in Watford City, a town of about 6,200 in the western part of the state, opened for business in 2018, years after the federal rule took effect. Corner Post claimed it had racked up hundreds of thousands of dollars in these transaction fees since it opened, which meant higher prices for its customers.
In the amended suit, the truck stop argued that it could not sue within six years of the regulation’s enactment because it did not yet exist. He said the clock should have started running when the regulation first affected the company.
Lower courts disagreed, dismissing the case.
As Judge Barrett wrote in the majority opinion, the lower courts’ view was that the six-year statute of limitations began in 2011 and ended in 2017, “before Corner Post swiped its first debit card.”
The government’s concerns that agencies and regulated groups needed to finalize a six-year shutdown because subsequent challenges “impose significant burdens on agencies and courts” were “overstated,” he added.
Under the board’s rule, “only those fortunate enough to suffer an injury within six years of a rule being promulgated,” he wrote, leaving “everyone else — no matter how serious the injury or how illegal the rule” without recourse.
He rejected Justice Jackson’s dire warning that the court’s decision could wreak havoc on the operation of the federal government.
“This contention is confusing — indeed, strange — in a statute of limitations case,” Judge Barrett wrote.
Justice Jackson and the other liberal justices appeared to take a much broader view of the case.
“The flawed reasoning and far-reaching effects of the court’s decision in this case are shocking,” he wrote. He argued that the majority had ignored the text and context of the statute and ignored “the straight, common sense, and individually reasonable reading” of the statute.
Judge Jackson warned that the outcome could lead to abuse of the courts by wealthy groups trying to circumvent the rules.
“It also allows favorable litigants to game the system by creating new entities or finding new plaintiffs whenever the statutory deadline passes,” Justice Jackson wrote. “In doing so, the court wreaks havoc on government agencies, businesses and society at large.”
Coral Davenport contributed to the report.
