Caseflicks

Supreme Court of the United States • 2024

Corner Post, Inc. v. Board of Governors

603 U.S. 799

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Takeaway

In short, Corner Post holds that the APA’s six-year default limitations period begins when a particular plaintiff is injured by final agency action, allowing later-formed or later-injured parties to challenge older regulations.

Background

Congress’s 2010 Durbin Amendment directed the Federal Reserve Board to ensure that debit-card interchange fees are reasonable and proportional to an issuer’s transaction costs. In 2011, the Board promulgated Regulation II, which capped those fees at 21 cents per transaction plus 0.05% of the transaction’s value. Existing retailers challenged the rule soon after its issuance; the D.C. Circuit ultimately upheld it.

Corner Post, a North Dakota truck stop and convenience store, was incorporated in 2017 and began accepting debit cards in 2018. It paid substantial interchange fees and, in 2021, joined trade associations in suing under the Administrative Procedure Act (APA). It alleged that Regulation II permits fees higher than the Durbin Amendment allows.

The District Court dismissed the suit as untimely under 28 U.S.C. §2401(a), which generally bars suits against the United States unless filed within six years after the right of action first accrues. The Eighth Circuit affirmed, reasoning that a facial APA challenge to a regulation accrues when the agency publishes the final rule. Because Regulation II was issued in 2011, the lower courts held that the limitations period expired before Corner Post began operating.

Issues

Issue #1

Whether an APA claim challenging a final agency rule accrues under 28 U.S.C. §2401(a) when the rule becomes final or when the particular plaintiff is injured by that rule.

Holding

An APA claim accrues when the plaintiff is injured by final agency action, not merely when the agency action becomes final.

Reasoning

The APA permits judicial review for a person who has suffered legal wrong or has been adversely affected or aggrieved by agency action, and ordinarily limits review to final agency action. Reading 5 U.S.C. §§702 and 704 together, a plaintiff cannot bring a complete APA claim until final agency action has caused that plaintiff an injury.

Section 2401(a) starts its six-year period when the “right of action first accrues.” Applying the ordinary meaning of accrual, a right of action accrues when the plaintiff has a complete and present cause of action—when the plaintiff may file suit and obtain relief. Because injury is necessary to an APA claim, finality alone cannot start the clock for a plaintiff who has not yet been injured.

The statutory history reinforced that reading. When Congress enacted §2401(a) in 1948, legal dictionaries and precedent treated a cause of action as accruing when a right to sue came into existence, generally when damage occurred rather than when the defendant committed an earlier act that eventually caused damage. Congress retained this familiar accrual language when it made the provision broadly applicable to suits against the United States.

The Court rejected the Board’s effort to treat §2401(a) like a statute of repose running from the agency’s final act. A statute of limitations ordinarily runs from accrual of a plaintiff’s claim, while a statute of repose imposes an outer deadline measured from the defendant’s conduct. Section 2401(a)’s plaintiff-focused accrual language makes it a statute of limitations, not an agency-specific repose provision.

Specific administrative-review statutes, such as provisions requiring review within a stated number of days after an order’s entry or a rule’s promulgation, did not alter the result. Those statutes use materially different language and show that Congress knows how to tie a filing deadline to final agency action when it intends to do so. Section 2401(a) instead refers to when the right of action accrues.

The Board’s proposed rule also improperly depended on whether some other plaintiff could have challenged the rule within six years of promulgation. The Court read “the complaint” and “the right of action” to refer to the cause of action associated with the plaintiff’s own complaint. Traditional accrual doctrine likewise asks when the particular plaintiff had a complete and present claim, not when someone else might have sued.

The tolling provision for persons under legal disability or beyond the seas did not support a contrary interpretation. That provision addresses external barriers that may prevent a plaintiff with an already accrued claim from filing promptly; it does not establish that a claim may accrue before the plaintiff has the injury necessary to sue.

The Court also found that Reading Co. v. Koons and Crown Coat Front Co. v. United States did not support the Board. Crown Coat, in particular, interpreted §2401(a) to begin when the plaintiff was legally entitled to bring a judicial action. Its observation that accrual can depend on statutory context did not authorize assigning the identical phrase in §2401(a) a different, agency-specific meaning divorced from a plaintiff’s ability to sue.

Policy concerns about reopening old regulations could not override the statutory text. In any event, regulated parties may often challenge rules in enforcement proceedings or after petitioning for reconsideration, so a regulation was never completely insulated from challenge merely because six years had passed. The plaintiff-specific rule also serves the APA’s presumption of judicial review and the principle that an injured party should have a day in court. Because Corner Post sued within six years of its injury, its action was timely.

Concurrences

Justice Kavanaugh

Reasoning

Justice Kavanaugh joined the Court’s accrual holding but wrote separately to address remedy. In his view, Corner Post—a merchant that pays interchange fees but is not directly regulated by Regulation II—can obtain meaningful relief only if a court may vacate the rule itself. An injunction forbidding enforcement against Corner Post would accomplish nothing because the Board does not enforce the fee cap against merchants.

He concluded that the APA authorizes vacatur. Section 706(2) directs reviewing courts to “hold unlawful and set aside” unlawful agency action; at the APA’s enactment, “set aside” ordinarily meant to cancel, annul, revoke, or vacate. The same phrase had been used in pre-APA review statutes and was understood to authorize courts to invalidate agency actions directly.

Longstanding judicial practice confirms that interpretation. The Supreme Court and lower courts, especially the D.C. Circuit, have regularly vacated unlawful agency rules rather than merely barring enforcement against the plaintiffs in a particular case. The APA uses the same remedial command for rules and adjudicative orders, supporting the conclusion that both may be set aside.

Justice Kavanaugh warned that the Government’s recent argument against vacatur would eliminate meaningful APA review for many unregulated but adversely affected parties. Competitors challenging favorable treatment of rivals, workers challenging relaxed safety protections, environmental plaintiffs challenging agency approvals, and States challenging downstream harms often cannot obtain relief through a plaintiff-specific injunction. Vacatur is therefore necessary to preserve the APA’s basic presumption of judicial review.

Dissents

Justice Jackson

Reasoning

Justice Jackson, joined by Justices Sotomayor and Kagan, argued that accrual under §2401(a) is context dependent, not governed by a universal plaintiff-specific rule. In her view, the relevant question is when the particular right of action comes into existence. A facial APA challenge alleges that the agency’s rulemaking itself was unlawful, so the claim exists when the agency takes final action and publishes the rule.

The dissent read §2401(a) as a residual limitations provision that starts the clock when “the right of action first accrues,” rather than when a particular plaintiff’s right accrues. The statutory word “first,” Justice Jackson reasoned, points to the earliest time the facial claim may be brought. Unlike a tort or other individualized claim, a facial challenge attacks the validity of a rule on grounds that do not change with the identity of the later plaintiff.

Congress’s treatment of administrative-review deadlines supported this interpretation, according to the dissent. Numerous statutes require challenges to agency orders or rules within a defined period after entry, issuance, or promulgation. That consistent legislative pattern reflects Congress’s judgment that challenges seeking to invalidate agency action should be brought promptly after final agency action, not indefinitely as new affected entities arise.

Justice Jackson also rejected the majority’s reliance on the APA’s injury language. Section 702 identifies which persons may seek review by requiring that they be adversely affected or aggrieved; it does not make injury an element of the claim that an agency acted arbitrarily, capriciously, contrary to law, or beyond statutory authority. Judicial review of such a claim focuses on the agency’s rulemaking record, not on a later plaintiff’s circumstances.

The dissent stressed the practical consequences. Under the majority’s rule, every newly formed entity may receive its own six-year window to mount a facial challenge to a longstanding regulation. Existing organizations may also add a newer plaintiff to revive claims that would otherwise be time barred, as the dissent believed occurred here. That approach undermines repose, permits litigation based on stale administrative records, and destabilizes rules on which agencies and regulated parties have long relied.

Justice Jackson further warned that the decision’s effect would be amplified by the Court’s contemporaneous decision in Loper Bright Enterprises v. Raimondo, which overruled Chevron deference. Together, she argued, the decisions allow new plaintiffs to challenge old regulations under newly favorable legal doctrines, creating a substantial risk of destabilizing the federal regulatory system. Congress, she concluded, may amend §2401(a) or enact a specific APA review deadline to restore a finality-based limitations rule.