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Supreme Court makes it easier to challenge federal regulations

The Supreme Court made it easier to challenge federal regulations Monday, ruling the six-year statute of limitations clock under the Administrative Procedures Act does not start ticking until a plaintiff is adversely affected by the regulation.

In a 6-3 decision along ideological lines, the court’s conservative majority ruled the statute of limitations under the act does not begin “until the plaintiff is injured by final agency action.”

The Biden administration contended the clock starts as soon as the agency in question issues its rule, a standard that would cut off many possible challenges.

The court’s decision hands a win to Corner Post, a North Dakota truck stop, in its quest to challenge a Federal Reserve regulation issued in 2011 that set a cap on debit card “swipe fees,” which are paid by stores that accept card payments.

The decision reversed a lower court decision to dismiss the complaint as outside the statute of limitations.

Corner Post argued the central bank set the cap higher than the “reasonable” limit directed by the 2010 Dodd-Frank Act. The truck stop didn’t open its doors until 2018 — seven years after the Fed’s regulation — and asserted it should still be able to file suit.

It marks another victory for anti-regulatory interests by dealing another blow to the growing size of the “administrative state.”

Justice Ketanji Brown Jackson read her dissent aloud from the bench, a practice that emphasizes sharp disagreement on the issue at hand.

“Never mind that, in the administrative-law context, limitations statutes uniformly run from the moment of agency action. Never mind that a plaintiff ’s injury is utterly irrelevant to a facial APA claim. According to the Court, we must ignore all of this because, for other kinds of claims, accrual begins at the time of a plaintiff ’s injury,” Jackson said in her dissent.

“The majority refuses to accept the straightforward, commonsense, and singularly plausible reading of the limitations statute that Congress wrote. In doing so, the Court wreaks havoc on Government agencies, businesses, and society at large.”

The National Retail Federation (NRF), which is not a party in the case but has been fighting to bring more competition to the credit card interchange market, celebrated the decision.

“The bottom line is that a small business harmed by a faulty regulation should not be denied its day in court based on a technicality, especially one that has been in dispute,” said Stephanie Martz, the NRF’s chief administrative officer and general counsel. Martz was initially co-counsel on the case.

“The Federal Reserve set the cap far higher than intended by Congress and merchants like Corner Post have paid millions of dollars too much as a result, in turn driving up prices for their customers. That harm is ongoing and hasn’t been changed by the passage of time. The Supreme Court has made the right decision by allowing this lawsuit to be decided on its merits.”

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