WASHINGTON – The Supreme Court opened the door Monday to new, broad challenges to regulations long after they take effect, the third blow in a week to federal agencies.
The justices ruled 6-3 in favor of a truck stop in North Dakota that wants to sue over a regulation on debit card swipe fees that the federal appeals court in Washington upheld 10 years ago.
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Federal law sets a six-year deadline for broad challenges to regulations. In this case, the regulation from the Federal Reserve governing the fees merchants must pay banks whenever customers use a debit card took effect in 2011.
The deadline for lawsuits over the regulation was in 2017, the Biden administration argued. A federal appeals court agreed that Corner Post, a truck stop in Watford City in western North Dakota, mounted its challenge too late, even though it didn’t open its doors until 2018.
The company appealed to the Supreme Court. The administration had urged the court to uphold the dismissal because otherwise, governmental agencies would be subject to endless challenges.
Justice Amy Coney Barrett wrote for the court’s conservative majority that the six-year clock didn’t begin to run for Corner Post until it started accepting debit cards when it opened for business in 2018.
The decision could take on new significance in the wake of last week's ruling that overturned the 1984 Chevron decision that had made it easier to uphold regulations across a wide swath of American life. The court also stripped the Securities and Exchange Commission of a major tool to fight securities fraud.
In a dissent joined by her liberal colleagues, Justice Ketanji Brown Jackson wrote, "The tsunami of lawsuits against agencies that the Court’s holdings in this case and Loper Bright have authorized has the potential to devastate the functioning of the Federal Government." Loper Bright is the case that overturned Chevron.
Barrett called Jackson's claim “baffling — indeed, bizarre,” though she agreed with Jackson that Congress could step in to change the time frame for challenging regulations.
Dan Jarcho, a former Justice Department lawyer who has been following the case, predicted that parties like Corner Post would win their cases more often following this term's rulings. "Combined with last week’s decision eliminating Chevron deference, the Corner Post decision will unquestionably lead to more successful litigation challenges to federal regulations, no matter which agency issued them,” Jarcho said.
Chief Justice John Roberts captured the dilemma facing the court when the Corner Post case was argued in February. Agencies could face repeated challenges “10 years later, 20 years later” and “sort of have to create the universe, you know, repeatedly.”
On the other hand, Roberts said, “You have an individual or an entity that is harmed by something the government is doing, and you’re saying, well, that’s just too bad, you can’t do anything about it because other people had six years to do something about it.”
The legal principle that everybody is entitled to their day in court, Roberts said, “doesn’t say unless somebody else had a day in court."
Roberts was part of Monday's majority.