(Article from Registered Funds Regulatory Update, October 2024)
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In a 6-3 decision on July 1, 2024, the U.S. Supreme Court significantly expanded a plaintiff’s ability to contest federal regulations by ruling that the statute of limitations for challenging a federal agency action begins when the plaintiff suffers harm from the action as opposed to when the regulation was initially issued.
The District Court of North Dakota initially dismissed the plaintiff’s suit to challenge a federal regulation as time barred given the default six-year statute of limitations applicable to suits against the United States, and the U.S. Court of Appeals for the Eighth Circuit affirmed, ruling that the plaintiff’s challenge was untimely given that the case was filed in 2021, past the six-year statute of limitation that started to run when the regulation was published in 2011. The Supreme Court overturned the Eighth Circuit’s decision to allow the plaintiff to pursue its case, stating that the claim did not accrue for purposes of the six-year statute of limitations until the plaintiff was injured by the final agency action, which in this case was in 2018.
Writing for the majority, Justice Amy Coney Barrett emphasized that plaintiffs have the right to challenge regulations when they experience harm from the agency action, rather than being constrained by the timing of the regulation’s issuance. Barrett argued against the federal agency’s claims of “administrative inconvenience,” stating that such concerns should not override the clear text of the statute.
In dissent, Justice Ketanji Brown Jackson criticized the ruling, arguing that it effectively eliminates any meaningful limitation periods for challenging agency regulations on their face.
Corner Post, Inc. v. Board of Governors of the Federal Reserve System, No. 22-1008 (U.S. July 1, 2024)