The decision opens the possibility for plaintiffs newly subject to a long-since-final regulation to bring a facial challenge to the regulation. But there are important restrictions on that ability, including that the regulation be one that is challenged under the Administrative Procedure Act directly (APA), rather than more-specific (and often more-limited) agency-review provisions.

The majority opinion: All suits against the federal government must be brought within six years of when the right of action “accrues,” unless another statute provides a more-specific time-frame. In 2011, the Federal Reserve Board (the Board) published a regulation governing debit-card transaction fees, meaning the six-year limitations period for existing entities newly subject to the rule ran in 2017. In that time period, retail industry trade associations and individual retailers challenged the Board’s regulations in the D.C. federal courts, with the regulations eventually upheld by the D.C. Circuit. Corner Post, a truck stop that accepts debit cards, opened its doors in 2018 and sought to challenge the Board’s regulations in 2021 in an APA suit brought in the North Dakota district court, which was not bound by the D.C. Circuit’s decision upholding the regulations. The district court dismissed the suit as untimely and the Eighth Circuit affirmed.

The Supreme Court reversed. Under the lawsuits against the federal government statute, which applies to more than APA suits, the plaintiff must sue within six years of when their right of action “accrues.” The Court held that “[a] right of action ‘accrues’ when the plaintiff has a complete and present cause of action – i.e., when she has the right to file suit and obtain relief.” To support that construction, the Court looked to dictionary definitions, historical precedent, background presumptions, and standard practice. For example, Congress knew how to depart from the traditional accrual rule and instead run a limitations period running the date of the agency’s action, but did not do so here.

The Court rejected the Board’s contrary argument that a facial challenge – that is, a challenge to the rule entirely, rather than simply as-applied to that particular plaintiff – accrues when the agency action is final, instead of when the plaintiff can assert her claim. The majority emphasized that it made no sense to peg the limitations period for this plaintiff’s action to a time-period that had nothing to do with this plaintiff. Moreover, starting the clock on the date of the Board’s final action rather than the date of the plaintiff’s injury could create situations in which no one was injured in time and thus no one could ever challenge the agency’s rule, which makes no sense.

Finally, the majority rejected the Board’s policy concern that this decision will mean agency rules are never functionally final. Most major rules are challenged immediately, and the mere fact that an agency decision is subject to challenge does not mean the plaintiff will win. The majority dismissed the dissenters’ concern that this decision would “devastate the functioning of the Federal Government” as “baffling” and “bizarre,” because this case dealt only with the statute of limitations. And regardless, policy concerns can never override the text. The Court closed by noting that the “ball is in Congress’s court,” as the Congress could always enact a distinct statute of limitations for APA claims with a different triggering event.

Justice Kavanaugh’s concurrence: Justice Kavanaugh joined the majority and also wrote separately to explain his view that Corner Post could only obtain relief in this case because the APA authorizes vacatur of agency rules. The Board’s rule does not regulate Corner Post directly – Corner Post pays transaction fees to the banks regulated by the rule – and so Corner Post would not be eligible to obtain an injunction preventing the Board from enforcing that rule against Corner Post. But Corner Post could obtain meaningful relief through an order vacating the rule. Justice Kavanaugh noted that the Government has recently argued the APA does not allow for vacatur (or the corresponding preliminary relief of a nationwide preliminary injunction), on the theory that the court can only enjoin the agency from enforcing a rule against a particular plaintiff. Justice Kavanaugh stressed that vacatur is supported by the text and history of the APA and longstanding judicial precedent. Moreover, vacatur is a key remedy under the APA; absent vacatur, many types of common APA suits would not be permitted, like suits by companies challenging rules that make it easier for others to compete or suits by unions challenging rules relaxing workplace safety standards. Justice Kavanaugh explained the Government’s contrary arguments against vacatur found no basis in the text, logic, or legislative history.

Justice Jackson’s dissent: The dissent would have found Corner Post’s suit untimely. The dissenters argued that the statute’s six-year period runs from when the “right of action first accrues,” meaning we should use the earliest possibility opportunity. Moreover, “accrues” is flexible and context-dependent, and a right can accrue at the time of final action rather than the time of injury. Thus, courts must look to the plaintiff’s specific claims to determine when they accrue. Congress always runs agency-action-specific limitations periods from the time of final agency action; thus, for APA claims, “a claim accrues at the moment of final agency action.” The six year catchall limitations provision does not displace that background principle in any way. That rule makes sense in light of the APA’s underlying focus on what the agency did, as well as the way that courts review agency action. Courts look at the rule or rulemaking process itself, not what happened to the plaintiff after the rulemaking. The dissenters also argued their rule made more sense, because under the majority’s position, litigation will never end, courts may be called on to review decades old rules, and no agency decision will ever be final. The dissent warned that the majority’s rule will create disastrous results, allowing regulated entities to challenge any old rule – including those “involving the most contentious issues of today,” like workplace safety, toxic waste, or consumer protection. That substantially disrupts reliance interests and runs the risk of manipulation. Indeed, this case was the “poster child” for those very concerns – there was evidence Corner Post was incorporated simply to tee up this issue. The dissenters closed by noting the interaction between Corner Post and Loper Bright, explaining that the Court has now eliminated two foundational administrative law principles in the same term, threatening a “tsunami of lawsuits against agencies” that have “the potential to devastate the functioning of the Federal Government.” The dissent called on Congress to “address this absurdity and forestall the coming chaos” by enacting a new limitations –  period for facial APA challenges that runs from the date of the challenged agency action.

Authored by Sean Marotta and Danielle Desaulniers Stempel.