Corner Post, Inc. v. Federal Reserve Board
WASHINGTON, D.C., July 01, 2024 (GLOBE NEWSWIRE) — The U.S. Supreme Court today ruled 6-3 to revive Corner Post’s lawsuit challenging Federal Reserve regulations, holding that the North Dakota convenience store/truck stop’s six-year deadline to challenge had not yet expired at the time the lawsuit was filed. Corner Post did not come into existence until 2018, more than six years after the 2011 regulations were issued, but filed its lawsuit just over three years after opening. The New Civil Liberties Alliance revived Corner Post’s lawsuit challenging Federal Reserve regulations, ruling 6-3 to hold that the North Dakota convenience store/truck stop’s six-year deadline to challenge had not yet expired. Corner Post Co. v. Board of Directorsurged the court to treat the Administrative Procedure Act’s (APA) six-year statute of limitations on agency actions as the statute of limitations it provides.
The Federal Reserve Board adopted Regulation II in 2011, establishing fees for debit card transactions. CornerPost began operations in 2018 and filed a lawsuit challenging Regulation II in 2021, alleging that it incurred excessive interchange fees under the regulation. The U.S. 8th Circuit Court of Appeals ruled in 2017, six years after the regulation was first promulgated, that CornerPost’s opportunity to sue had expired.
I agree with NCLA’s argument. Amicus In summary, the Supreme Court recognized that federal law allows Corner Post to sue within six years after harm from Regulation II begins to occur, regardless of when the Regulation was first promulgated (which it did). A limitation period of six years from the Regulation’s promulgation would unreasonably require the lawsuit to be filed before Corner Post was incorporated. The justices ruled that the APA entitles Corner Post to proper and meaningful judicial review of the Regulation in court.
“Because APA plaintiffs cannot sue and obtain relief until they are harmed by a final agency action, the statute of limitations does not run until a plaintiff suffers harm,” Justice Barrett wrote.
The government argued that the ability of corner posts to petition the Federal Reserve to change Article II through rulemaking and then challenge such petitions if they were denied was a viable alternative to litigating in court to invalidate the rules, but the Supreme Court found that this was “not a sufficient alternative.” Newly Judicial Review[.]As NCLA has noted, federal agencies routinely use lengthy delays to circumvent petitioners’ constitutional and statutory rights and avoid review petitions. The Fed could have easily delayed corner-post petitions in this manner. Requests for review of the petition’s ultimate denial would have been made under a much stricter standard of review in favor of the government, and relief would have been difficult to obtain.
The NCLA released the following statement:
“This decision is a major victory for individuals and businesses that were subject to problematic regulations but were unable to challenge them because of the passage of time. As this case illustrates, it makes little sense to deny parties the opportunity to challenge harmful regulations based not on when they were promulgated but when the damage occurred. To do so would upend the traditional claims accrual process.”
– Kara Rollins, NCLA Litigation Counsel
“The APA’s language makes clear that the six-year limitation on challenging the rule is time-barred. Such limitation only kicks in when the rule causes injury to the plaintiff — that is, when the limitation starts to run. The Court is entirely correct to find that Corner Post’s challenge to Rule II is not time-barred under the APA.”
— NCLA President Mark Chenoweth
For more information, Amicus page here.
About NCLA
NCLA is a nonpartisan, nonprofit civil rights organization founded by renowned legal scholar Philip Hamburger to protect against infringement of constitutional freedoms by the administrative state. NCLA’s public interest litigation and other pro bono advocacy work seeks to curb the unlawful power of state and federal agencies and foster a new civil rights movement that helps restore Americans’ fundamental rights.
CONTACT: Ruslan Moldovanov New Civil Liberties Alliance 202-869-5237 ruslan.moldovanov@ncla.legal
