Decision Alert: Supreme Court Holds That Statute of Limitations Begins To Accrue When Injury Occurs

On July 1, 2024, the Supreme Court held in Corner Post, Inc. v. Board of Governors of The Federal Rsrv. Sys. that under the federal Administrative Procedure Act (APA), the statute of limitations for a claim challenging an agency rule begins to accrue when a party suffers injury, not when the agency rule was finalized. Justice Barrett authored the opinion. Justice Kavanaugh filed a concurring opinion. Justice Jackson dissented, joined by Justices Sotomayor and Kagan.

As summarized in Dykema’s March 2024 edition, Petitioner Corner Post, Inc., a convenience store and truck stop in North Dakota, opened for business in 2018 and accepted debit card payments, as required by law, eventually paying hundreds of thousands of dollars in debit-card transaction fees. Corner Post joined a suit against the Board of Governors of the Federal Reserve System challenging the requirement to accept debit-card payments and the subsequent fees. The Board moved to dismiss the claims as time-barred under 28 U.S.C. § 2401(a), arguing that a six-year statute of limitations bars facial challenges to agency actions. Because the action imposing the transaction fees was undertaken in 2011, the Board claimed that the statute of limitations expired in 2017—even for businesses that did not yet exist. The district court agreed with the Board and dismissed the claim, and the Eighth Circuit affirmed.  

The Supreme Court reversed, siding with Corner Post. Beginning with a description of the relevant APA provisions, the Court explained that, under the backdrop of caselaw, various dictionary definitions, and the statutory text, a right “accrues” only when a suit of action “may be maintained thereon.” The Court noted that its precedent treats this definition of accrual as the standard for statutes of limitations. The Court held, therefore, that Corner Post’s cause of action did not accrue until it was injured by the regulations and not earlier when the agency rule was finalized.

In a concurring opinion, Justice Kavanaugh wrote that Corner Post can obtain relief in this case only because the APA authorizes the agency rules to be vacated. In dissent, Justice Jackson wrote that the majority is misguided in its interpretation of “accrues.” She argued that, in the administrative law context, the limitations period begins when the agency rule is finalized—not when the plaintiff is injured.

Takeaway

• The clock for challenging an agency rule begins not when the rule is enacted but when the alleged injury occurs. This opens the door to lawsuits that may have otherwise been thought to be time-barred, particularly when challenging administrative action.

For more information, please contact Chantel Febus, James Azadian, Cory Webster, Christopher Sakauye, Monika Harris, Puja Valera, or A. Joseph Duffy, IV.