Supreme Court Establishes 'Injury-Based Accrual' for APA Claims under §2401(a): North Dakota Retail Association v. Board of Governors of the Federal Reserve System

Introduction

In the landmark case of North Dakota Retail Association v. Board of Governors of the Federal Reserve System, decided on July 1, 2024, the Supreme Court of the United States addressed a pivotal question concerning the statute of limitations for claims under the Administrative Procedure Act (APA). The petitioner, Corner Post, Inc., a merchant operating a truckstop and convenience store, challenged the Federal Reserve Board's Regulation II, which sets maximum interchange fees for debit card transactions. Corner Post contended that Regulation II permits higher fees than the statute authorizes, thereby causing it financial harm.

The core issue revolved around when an APA claim accrues for the purposes of the six-year statute of limitations outlined in 28 U.S.C. §2401(a). The District Court dismissed Corner Post's suit as time-barred, an order affirmed by the Eighth Circuit. The Supreme Court's decision reversed this outcome, establishing that the accrual of an APA claim under §2401(a) begins when the plaintiff is injured by final agency action.

Summary of the Judgment

The Supreme Court held that an APA claim does not accrue for the six-year statutory period of limitations in §2401(a) until the plaintiff suffers an injury from a final agency action. In this case, since Corner Post was founded after the implementation of Regulation II and only incurred its first interchange fee afterward, its claim accrued when it was actually impacted by the regulation, not when the regulation was initially promulgated.

The Court emphasized that the term "accrues" in §2401(a) should be interpreted to mean that the right of action comes into existence when the plaintiff can assert it in court, which, under the APA, requires a concrete injury resulting from final agency action. As a result, Corner Post's legal challenge was timely and not barred by the statute of limitations.

Analysis

Precedents Cited

The Court relied heavily on established precedents to support its interpretation of "accrues" within the limitations period. Notably:

ABBOTT LABORATORIES v. GARDNER, 387 U.S. 136 (1967): Established that §702 of the APA requires plaintiffs to demonstrate actual injury at the outset of a case.
Director, Office of Workers' Compensation Programs v. Newport News Shipbuilding & Dry Dock Co., 514 U.S. 122 (1995): Clarified that §702 requires an "injury in fact" for standing.
Green v. Brennan, 578 U.S. 547 (2016): Affirmed that a right of action accrues when a claim is complete and present.
Crown Coat Front Co. v. United States, 386 U.S. 503 (1967): Supported the interpretation that in administrative contexts, claims accrue upon final agency action.
CTS Corp. v. Waldburger, 573 U.S. 1 (2014): Distinguished between statutes of limitations and statutes of repose, reinforcing that §2401(a) functions as a limitations period.

These cases collectively underscored that "accrual" of a claim is context-dependent, often tied to when a plaintiff can seek court relief, especially in administrative law scenarios.

Legal Reasoning

The Court's reasoning hinged on the interpretation of "accrues" in §2401(a). The majority opinion, delivered by Justice Barrett, contended that:

"Accrues" signifies the point at which a plaintiff has a "complete and present cause of action," aligning with when they suffer an injury from final agency action.
The statute of limitations should commence only when the plaintiff is injured, not merely when the agency action becomes final.
Historical usage and dictionary definitions support that a claim does not accrue merely upon the promulgation of a rule, but rather when there is a tangible injury resulting from the rule.
The Board's argument to interpret §2401(a) as a statute of repose was rejected due to the plaintiff-centric language of §2401(a), contrasting with defendant-centric statutes like the Hobbs Act.

The Court emphasized that amending the definition or establishing an alternative accrual rule would be up to Congress, not the judiciary, reinforcing the primacy of statutory text and original intent.

Impact

This decision has profound implications for administrative law and the enforcement of agency regulations:

Enhanced Access to Judicial Review: Parties harmed by agency actions now have a clearer pathway to challenge regulations within the statute's timeframe once they've been directly affected.
Encouragement of Timely Litigation: Extensions of claims become directly tied to actual injuries, promoting diligence in raising legal challenges.
Uniformity in APA Claims: The ruling harmonizes the accrual rules for APA claims, reducing inconsistencies across different jurisdictions.
Potential for Increased Litigation: Entities that are initially not subject to certain regulations can still challenge those regulations upon subsequent injury.

Future cases involving APA challenges will reference this precedent, often citing it to argue the timely nature of claims based on when actual harm occurred.

Complex Concepts Simplified

Administrative Procedure Act (APA)

The APA governs the process by which federal agencies develop and issue regulations. It provides standards for agency actions and grants individuals the right to challenge agency decisions in court.

Statute of Limitations

A statute of limitations sets the maximum time after an event within which legal proceedings may be initiated. In this context, §2401(a) imposes a six-year limit for bringing civil actions against the United States unless another statute specifies otherwise.

Accrual of a Claim

Accrual refers to the moment when a legal claim becomes entitled to be brought in court. For APA claims under §2401(a), this happens when the plaintiff suffers an injury from agency action.

Facial vs. As-Applied Challenges

Facial Challenge: Argues that a regulation is invalid in all its applications.
As-Applied Challenge: Claims that a regulation is invalid in its specific application to the plaintiff.

This case specifically dealt with a facial challenge, meaning Corner Post was contesting Regulation II in its entirety.

Conclusion

The Supreme Court's decision in North Dakota Retail Association v. Board of Governors of the Federal Reserve System marks a significant development in administrative law. By establishing that APA claims under §2401(a) accrue only upon the plaintiff's injury from final agency action, the Court ensures that legal challenges to federal regulations are timed in alignment with actual harm suffered. This interpretation reinforces the APA's purpose of allowing aggrieved parties timely access to judicial review while maintaining the integrity of agency actions. As regulatory landscapes evolve, this precedent will guide both plaintiffs and agencies in navigating the complexities of administrative litigation.