The U.S. Supreme Court has granted the petition for certiorari in Corner Post, Inc. v. Board of Governors of the Federal Reserve System (Board), a case where Corner Post challenges a 2011 Board rule that governs certain fees for debit-card transactions. Specifically, the question presented is whether a plaintiff’s Administrative Procedures Act (APA) claim, for statute of limitations purposes, first accrues when an agency issues a rule or when the rule first causes a plaintiff to be “adversely affected or aggrieved.” The Supreme Court’s decision will resolve an ongoing circuit split on the issue.
The lawsuit stems from a merchant’s dispute of the interchange fee. Whenever a customer uses a debit card to pay for an item, the merchant must pay fees to transfer the money from the customer’s bank account to the merchant’s bank account. The largest of those fees is the “interchange fee” that merchants pay to the banks that issue the debit cards. Under the Durbin Amendment to the Dodd-Frank Act, the Board is tasked with capping interchange fees for banks with over $10 billion in assets at a cost that is “reasonable and proportional to the cost incurred” by the bank. In 2011, the Board set the interchange-fee cap at 21 cents per transaction.
The APA provides that regulated parties can file a challenge to regulations “within six years after the right of action first accrues.” Corner Post is a truck stop and convenience store in North Dakota that opened its doors in March 2018. In 2021, Corner Post joined other plaintiffs in an APA suit in the U.S. District Court for the District of North Dakota challenging the interchange fee rule as not “reasonable and proportional to the cost incurred” by banks for each debit-card transaction. The Board filed a motion to dismiss Corner Post’s claims and the district court granted it holding that “[t]he limitations period under 28 U.S.C. § 2401(a) for bringing a facial challenge to an agency action begins to run at the time of publication of the agency’s action.” Practically, that meant that Corner Post’s statute of limitations expired in 2017, a year before the store was opened. Corner Post appealed the ruling.
In affirming the district court’s decision, the Eighth Circuit joined five other circuits holding that the statute of limitations starts running the day that an agency takes a final action regardless of whether that action harms the plaintiff. In contrast, the Sixth Circuit has held that the clock only starts running when the agency action actually “invades a party’s legally protected interest.”
In its brief filed in opposition to Corner Post’s petition, the Board argued that “[i]n a variety of circumstances, Congress has established deadlines for suit that run from the defendant’s allegedly unlawful conduct, without regard to any circumstances peculiar to the plaintiff.”
As a practical matter, the Sixth Circuit approach would broaden the circumstances where aggrieved parties can launch challenges to agency actions.