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POLITICO
Supreme Court opens door to ‘tsunami’ of regulatory challenges
By Victoria Guida,
1 day ago
The Supreme Court's ruling on Monday opened the door for more companies to challenge years-old regulations on procedural grounds | Francis Chung/POLITICO Updated: 07/01/2024 03:09 PM EDT
The U.S. Supreme Court on Monday opened the door for more companies to challenge years-old regulations on procedural grounds, with a 6-3 majority ruling that a North Dakota truck stop could sue the Federal Reserve for a 2011 rule governing debit card swipe fees.
Under the Administrative Procedure Act, which lays out the process by which new regulations must be adopted, there is a six-year statute of limitations on lawsuits. But the store in question in this case, Corner Post, did not open for business until 2018, raising the question of when the clock starts.
The court ruled in favor of the plaintiffs, saying that “an APA claim does not accrue for purposes of [its] 6-year statute of limitations until the plaintiff is injured by final agency action.” Basically, the clock begins running when the firm is first legally hurt by the rule.
The case relates to the so-called Durbin amendment in the Dodd-Frank law, which places a cap on the amount a bank can charge a retailer when a debit card is used, but it has potentially sweeping consequences.
Justice Ketanji Brown Jackson in her dissent argued that the ruling, coupled with a Friday decision that curbed the power of executive agencies, would authorize “a tsunami of lawsuits” with “the potential to devastate the functioning of the Federal Government.”
She called on Congress to “address this absurdity and forestall the coming chaos.”
“Congress can make clear that lawsuits bringing facial claims against agencies are not personal attack vehicles for new entities created just for that purpose,” Jackson wrote.
Reps. Jerrold Nadler (D-N.Y.) and Lou Correa (D-Calif.), who both hold senior positions on the House Judiciary Committee, echoed that sentiment in a joint statement: “We must act now to amend the Administrative Procedure Act to ensure that lawbreakers and deep-pocketed parties cannot use this misguided ruling to challenge the rules that protect all of us,” they said.
The National Retail Federation, which has long battled the banking industry over swipe fees, praised the ruling.
“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 NRF Chief Administrative Officer and General Counsel Stephanie Martz in a press release.
The lobbying group is not a party to the case, but Martz was co-counsel of it.
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