Corner Post, Inc. v. Board of Governors: A Major Readjustment for APA Claims 

True to form, the Supreme Court saved one of its most important decisions for the final opinion day of the 2023 Term. On July 1, 2024, the Court handed down its opinion in Corner Post, Inc. v. Board of Governors. The cries of anguish from supporters of the administrative state were only eclipsed by the shouts of jubilation from those working tirelessly to curtail the coercive power and barriers to challenges to unlawful actions that have defined the administrative state for far too long.

At issue in Corner Post was whether a claim brought under the Administrative Procedure Act (APA) accrues at the time of final agency action (e.g., when a rule is promulgated) or at the time a plaintiff is injured by that agency action. The latter may not even occur until years later. The Court held that APA claims do not accrue until a plaintiff is injured by final agency action. Only then does the standard six-year statute of limitations begin to run.

At first blush, this may not appear to be all that important. And Corner Post certainly did not elicit the same––or even similar––fanfare or excitement as did other cases affecting the administrative state like Relentless, Jarkesy, or Cargill. So, what makes Corner Post such an important decision? And what reason is there to be excited about a case interpreting the APA’s standard statute of limitations?

In short, this decision is important because Corner Post now means that many unlawful agency actions are no longer perpetually insulated from challenge in federal court, based on nothing more than the fact that they managed to survive in their unlawfulness for at least six years. Prior to Corner Post, if an agency issued a regulation in 2010, for example, and no one had challenged that regulation by 2016, that regulation––no matter how patently unlawful––would cease to be susceptible to a facial challenge in court. Now, if a company like Corner Post, which comes into existence more than six years after the regulation, seeks to bring such a challenge, it would have until six years after it is first injured by the regulation to do so.

To be sure, one could always intentionally violate a rule or regulation and then bring a challenge in response to an agency enforcement action. But such a gamble is inherently risky and could prove disastrous should the challenge fail. Corner Post now obviates this risk and provides a more direct path to judicial review for standard APA claims.

The most obvious consequence of this ruling is that many long-established agency rules and regulations will face new challenges that were previously time-barred by the general statute of limitations. The dissent frets that this new state of affairs could release a “tsunami of lawsuits” against agency rules and could “devastate the functioning of the Federal Government.” But the dissent’s position that the Government will be overwhelmed by having to defend its unlawful exertions of extra-statutory authority and that allowing the Government to be held to account indefinitely is a bridge too far is ultimately overblown. A variety of other statutes of limitations covering agency-specific orders and rules already exist and will continue to apply in those specific circumstances. The Court’s ruling in Corner Post affects only the APA claims that are not covered by those more specific statutes. This is not the infinite universe of claims the dissent makes it out to be.

Nonetheless, we may finally be on our way to correcting many long-standing wrongs wrought by agency rules and regulations that exceed the agencies’ statutory authority, and that are potentially even outside the bounds of the Constitution. Though it remains to be seen how this will manifest in practice, the Court’s recent decision in Relentless and Loper Bright might also intensify the changes brought on by Corner Post. As past rules and regulations face renewed scrutiny and legal challenges, courts hearing these challenges will be unencumbered by Chevron deference for the first time in forty years. The potential outcomes of these cases could lead to significant shifts in the administrative law landscape.

The full effects of Corner Post will take some time to discern, as what remains unknown certainly outweighs what is. But a few things are clear. First, challengers that were previously frozen out under the old interpretation will now be able to have their day in court and seek relief from long-standing unlawful agency regulations. This is particularly important for those who would never otherwise have an opportunity to challenge a regulation in an individual enforcement action, as in many situations an entity might not be directly regulated but suffers the negative consequences nonetheless. Second, agencies are on increased notice that the administrative state is not as free as it once was to run roughshod over civil liberties for the sake of expediency and the fulfillment of selfish interests. And third, both the citizenry and the Court continue to recognize the malfeasance perpetrated under the existing administrative state regime. With the help of NCLA, a long-needed reordering and rectification are well underway.

July 23, 2024