On February 20, 2024, oral arguments will be heard by the U.S. Supreme Court in Corner Post Inc. v. Board of Governors of the Federal Reserve System. On its face, this case deals with the maximum swipe fees retailers can be charged by financial institutions when customers use their debit cards for purchases. At its heart, however, Corner Post is intended to allow a swarm of legal challenges to rules that have protected the American people from bad actors and corporate malfeasance for decades.
Many of these rules and regulations are taken for granted every day by Americans, most of whom are unaware that billionaires and corporations are taking steps to undermine these bedrock protections. The petitioner in this case and the groups that filed supporting briefs claim that the six-year statute of limitations to facially challenge a final action by the federal government—in this case, a rule or regulation under the Administrative Procedure Act (APA)—begins ticking not when the action was finalized but at any time an individual party is injured. This tenuous reading of the law would effectively eliminate statute of limitations (the requirement that a lawsuit is brought within a certain period of time) to challenge federal rules as facially illegal, arbitrary, or capricious, potentially resulting in an unending stream of lawsuits challenging rules that have been on the books protecting and benefiting everyday Americans for decades.
This case is just the latest in a broader conservative effort to dismantle the ability of government to effectively serve everyday Americans and defend them against predatory corporate practices. If the Supreme Court were to reverse the 8th U.S. Circuit Court of Appeals ruling, which upheld the statute of limitations to challenge a regulation as illegal on its face, and side with the petitioner, a flood of moneyed interests could bury federal agencies in lawsuits aiming to defang vital regulatory authorities.
The who, what, and why of Corner Post
Corner Post Inc., the petitioner in the case, is a North Dakota truck stop and convenience store that opened in 2018. Much like the recent Loper Bright case, the specific facts the plaintiffs present were chosen to frame it as a prototypical American small business against big business and the government in a David-versus-Goliath fight. In reality, however, it is massive trade associations propping up a straw man in an attempt to take down regulations with which they disagree.
In addition, trade associations are using this case to take a second bite at the apple, having lost the initial effort in 2014 to strike down the rule before the U.S. District Court for the District of Columbia, which the Supreme Court refused to hear on appeal. The trade associations brought the case again in 2021 and only added Corner Post as a party when the Federal Reserve filed a motion to dismiss on statute-of-limitation grounds. If the trade associations are successful in this case in eliminating the statute of limitations, it could open the door for facial challenges to any and every regulation ever put on the books, so long as the allegedly aggrieved party is newly created.
Groups linked to the Koch network and/or Leonard Leo, including Americans for Prosperity, the New Civil Liberties Alliance, and Pacific Legal Foundation, have filed amicus briefs in support of the petitioner, which is likely in an effort to open a never-ending door of lawsuits against federal regulators. In doing so, these groups are advocating to reshape administrative law for the benefit of corporations and the detriment of working families, potentially ripping up regulations that have protected Americans for decades.
Corner Post is not the story of David versus Goliath but rather the Trojan Horse, where moneyed interests attempt to sneak in their anti-regulation politics under the guise of altruism.
The 2011 Federal Reserve rule at the center of this petition, Regulation II, regulates fees accrued by small businesses processing debit card transactions. This regulation was enacted in furtherance of the Dodd–Frank Wall Street Reform and Consumer Protection Act and reduced the baseline swipe fees charged to retailers from $0.44 to $0.21, plus 0.05 percent of the transaction value. The petitioner is claiming that they are injured by this rule and since they began business in 2018, they are well within the six-year statute of limitations to sue under the APA.
However, nearly every circuit court has held, and the Supreme Court recognized in 2018, that the statute of limitations for facial challenges to regulations begins when they are finalized—in this case, the time began running in 2011. Corner Post is arguing that since the business was founded in 2018 and thus could not have alleged injury during the period when lawsuits were accepted, this is unacceptable, as they would have no chance to sue. The U.S. Department of Justice notes in its response brief that not only would this create a judicial and agency administrative problem; a “challenger-by-challenger” system of accrual would practically mean there is no statute of limitations. This would wholly undermine the intent of Congress to limit such civil challenges to agency actions in the first place.
Corner Post is about more than the specific debit card rule. The case appears to be part and parcel of an expansive legal project to dismantle federal agencies and undermine the government’s ability to protect Americans from the harmful actions of corporations. Just this term, the Supreme Court has heard several cases that could upend the way government has functioned to serve Americans for decades.
In Securities and Exchange Commission v. Jarkesy, for example, the court appeared open to arguments that federal agencies’ enforcement powers are unconstitutional. And in Loper Bright v. Raimondo and Relentless Inc. v. U.S. Department of Commerce, the court is poised to cripple or strike the 40-year-old legal doctrine known as Chevron deference, by which Congress grants expert agencies deference in interpreting their governing statutes. Many of the same ultra-conservative interest groups filed amicus briefs in each of these cases, underlining the concerted efforts of these anti-government, pro-corporate actors.
Federal agencies help stabilize markets, protect vulnerable groups from powerful societal actors, and establish the rules of the road for businesses and our economy. As a coalition of small-business groups, who filed a brief in support of the government, stated: “Businesses across the nation … recognize the value of a stable and predictable federal regulatory structure to small business growth and competition.” While agencies may be imperfect, there is little doubt that they deliver significant benefits, both financially and by providing stability and security to everyday Americans and the industries they regulate. Corner Post is not the story of David versus Goliath but rather the Trojan Horse, where moneyed interests attempt to sneak in their anti-regulation politics under the guise of altruism.