Supreme Court Ruling Shifts Power Back to Companies, Threatening Thousands of Regulations
In a significant ruling that further cements the conservative majority’s push to limit the power of administrative agencies, the Supreme Court has decided that the six-year statute of limitations for challenging regulations starts when a company is first affected by the regulation, not when it’s initially issued. This decision, impacting numerous industries, marks a significant win for companies seeking to challenge regulations and a potential setback for the Biden administration’s regulatory agenda.
Key Takeaways:
- The court’s ruling in Corner Post v. Board of Governors of the Federal Reserve System overturned a long-standing practice of counting the statute of limitations from the regulation’s issuance date.
- This decision comes hot on the heels of the court’s overturning of the Chevron deference doctrine, which required federal courts to defer to agencies’ reasonable interpretations of ambiguous statutes.
- Environmental advocates warn that these rulings could significantly impact the Environmental Protection Agency (EPA) and its ability to regulate pollution and protect the environment.
- Republican attorneys general, who have championed this strategy to limit federal authority, hailed the ruling.
- The decision could open the door to a wave of lawsuits challenging regulations, potentially leading to increased uncertainty and legal battles.
A Victory for Companies, A Setback for Agency Power:
The ruling in Corner Post involved a dispute over debit card processing fees. A truck stop, Corner Post, argued that because it opened after the regulation went into effect, it shouldn’t be subjected to the six-year statute of limitations, which had already expired. The court agreed, arguing that the clock should start when the regulation actually impacts a company, not when it was first published. While this case focused on debit card fees, the broader impact could be far-reaching, affecting thousands of regulations across multiple industries.
Justice Amy Coney Barrett, writing for the majority, emphasized that “only those fortunate enough to suffer an injury within six years of a rule’s promulgation” could sue under the government’s view. She argued that this system unfairly penalized companies that were not yet operating during the initial six years of a regulation.
However, this ruling has drawn major criticism from Justice Ketanji Brown Jackson and the other liberal justices, who fear this decision, coupled with the overturning of Chevron deference, could “devastate the functioning of the federal government.” Justice Jackson warned that the decision could lead to "a tsunami of lawsuits" which could overwhelm agencies and stall essential regulations.
A Legal Shift with Potentially Dire Consequences:
The decision in Corner Post is part of a larger trend of the Supreme Court’s increasingly conservative majority limiting the authority of administrative agencies. These decisions could lead to a resurgence of companies challenging regulations that have been in place for years, potentially leading to significant legal battles and uncertainty. Environmental advocates are particularly concerned, arguing that the EPA and other agencies responsible for protecting public health and the environment could be severely hampered in their ability to enact and uphold regulations.
This ruling represents a significant shift in the balance of power, favoring companies and potentially hindering the ability of the federal government to effectively regulate various industries. The full implications of this decision remain to be seen, but it’s clear that it will have a substantial impact on the regulatory landscape for years to come.
