Justice Ketanji Brown Jackson

U.S. Supreme Court Justice Ketanji Brown Jackson attends President Joe Biden's state of the union address on February 7, 2023.

(Photo: Tom Williams/CQ-Roll Call, Inc. via Getty Images)

Justice Jackson Warns New Ruling Could 'Devastate' Federal Regulators

The liberal justice said Congress can remedy the "profoundly destabilizing" decision by passing legislation to strengthen the federal regulatory regime.

As the U.S. Supreme Court dealt yet another blow to the federal government's regulatory authority, Justice Ketanji Brown Jackson on Monday stressed that "the ball is in Congress' court" to enact legislation to "forestall the coming chaos" wrought by the right-wing supermajority's decision.

The justices ruled 6-3 in Corner Post Inc. v. Board of Governors of the Federal Reserve System that the Administrative Procedures Act's (APA) statute of limitations period does not begin until a plaintiff is adversely affected by a regulation. The ruling reverses a lower court's dismissal of a lawsuit filed by Corner Post—a North Dakota truck stop that challenged a U.S. Federal Reserve rule capping debit card swipe fees—because the six-year statute of limitations on such challenges had passed.

Monday's ruling makes it much easier to sue government agencies. As Sydney Bryant and Devon Ombres at the Center for American Progress explained, the decision "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."

"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."

In a dissent joined by fellow liberal Justices Sonia Sotomayor and Elena Kagan, Jackson wrote that "today, the majority throws... caution to the wind and engages in the same kind of misguided reasoning about statutory limitations periods that we have previously admonished."

"The court's baseless conclusion means that there is effectively no longer any limitations period for lawsuits that challenge agency regulations on their face," she continued. "Allowing every new commercial entity to bring fresh facial challenges to long-existing regulations is profoundly destabilizing for both government and businesses. It also allows well-heeled litigants to game the system by creating new entities or finding new plaintiffs whenever they blow past the statutory deadline."

"At the end of a momentous term, this much is clear: The tsunami of lawsuits against agencies that the court's holdings in this case and Loper Bright have authorized has the potential to devastate the functioning of the federal government," Jackson added, referring to last week's 6-3 overturning of the so-called Chevron doctrine, the legal principle under which courts deferred to federal agencies' interpretations of ambiguous laws passed by Congress.

While numerous business advocates welcomed Monday's ruling, a broad range of consumer, labor, and other groups echoed the alarm in Jackson's dissent.

"Americans expect that safeguards will protect us and our families from unsafe food, products, polluted air and water, and dangerous and unfair working conditions. This decision provides special interests, opposed to the safeguards that people rely upon, with more opportunities to challenge and seek to overturn these important protections," said Rachel Weintraub, executive director of the Coalition for Sensible Safeguards.

Weintraub added that the ruling "undermines federal agencies' ability to use administrative courts to impose civil penalties for violating regulatory protections" and "starkly impedes agencies' ability to protect the public."

Bryant and Ombres wrote that "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."

Jackson's dissent states that "Congress still has a chance to address this absurdity and forestall the coming chaos" by "clarifying that the statutes it enacts are designed to facilitate the functioning of agencies, not to hobble them."

"In particular, Congress can amend §2401(a)," Jackson offered, referring to the default six-year statute of limitations, "or enact a specific review provision for APA claims, to state explicitly what any such rule must mean if it is to operate as a limitations period in this context: Regulated entities have six years from the date of the agency action to bring a lawsuit seeking to have it changed or invalidated; after that, facial challenges must end."

"By doing this," she added, "Congress can make clear that lawsuits bringing facial claims against agencies are not personal attack vehicles for new entities created just for that purpose."

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