SCOTUS Decisions Bring Major Changes to Administrative Law

Announcement

July 1, 2024

Two significant U.S. Supreme Court decisions affecting administrative law were issued within three days of each other.

First, the Loper decision, issued June 28, overturned the Chevron rule by which courts deferred to agency interpretations of ambiguous statutes. The Court reasoned that the Framers envisioned that the final “interpretation of the laws” would be “the proper and peculiar province of the courts.” Accordingly, the judiciary can apply its own independent judgment in deciding whether a federal agency has acted within its statutory authority. It no longer must defer to agency interpretation of the law simply because a statute is ambiguous.

Though overturning Chevron—a foundational rule of administrative law for the last four decades—was significant, the Corner Post decision issued on July 1, is the follow-on decision that Justice Jackson states in her dissent allows “every legal claim conceived of in those last four decades—and before” to be brought back before the courts “unleashed from the constraints of any such [Chevron] deference.”

In Corner Post, the Court examined “when a claim brought under the Administrative Procedure Act ‘accrues’ for purposes” of the six-year default statute of limitations for suits against the United States under 28 U.S.C. § 2401(a). This question arose when Corner Post, a truck stop incorporated in 2017 and open for business in 2018, was displeased with paying hundreds of thousands of dollars in interchange fees for debit card transactions and sued the Federal Reserve Board to challenge “Regulation II.” The problem, however, was that the District Court and Eighth Circuit held that Corner Post’s claim was barred by the 6-year statute of limitation, which accrued in 2011 when the Board first published Regulation II and expired six years later in 2017, before any customer ever swiped a debit card at Corner Post.

Ultimately, the Supreme Court disagreed with the Eighth Circuit, holding that the statute of limitations “begins to run only when the plaintiff has a complete and present cause of action,” which can only occur when the specific plaintiff is “injured.” In Corner Post’s case, it was not injured until a customer swiped a debit card and caused it to incur interchange fees in 2018. This made sense, according to the Court, because it “respects our ‘deep-rooted historic tradition that everyone should have [their] own day in court.”

The Supreme Court therefore held that Corner Post’s claim was not barred by the statute of limitations. To show that its decision did not open Pandora’s box, the Court noted that a federal regulation that “makes it six years without being contested [did] not enter a promised land free from legal challenges” in the first place and that “courts entertaining later challenges often will [still] be able to rely on binding Supreme Court or circuit precedent.”

Together, these two decisions represent a shift in the established practice of administrative law that Justice Jackson foresees will cause a “tsunami of lawsuits against agencies” with “the potential to devastate the functioning of the Federal Government.” While only time will show the extent of these decisions’ impact, two things are clear: judges no longer need defer to the federal agencies’ interpretation of ambiguous statutes and the six-year statute of limitation no longer takes away a plaintiffs’ claim before they have one.

The cases discussed are Corner Post, Inc. v. Board of Governors of the Fed. Reserve Sys., —U.S. —, No. 22-1008 (July 1, 2024) and Loper Bright Enters. v. Raimondo, — U.S. —, No. 22-451 (Jun. 28, 2024).

This summary is provided by the Litigation Practice Group at Lloyd, Gosselink, Rochelle & Townsend, PC. For more information, please contact James Parker at jparker@lglawfirm.com or 512.322.5878.

SCOTUS Decisions Bring Major Changes to Administrative Law

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