Small Businesses Urge the Supreme Court for Right to Challenge Regulations

Date: November 20, 2023

Corner Post v. Federal Reserve concerns when regulated entities can challenge agency regulation

WASHINGTON, D.C. (Nov. 20, 2023)NFIB filed an amicus brief in the case Corner Post, Inc. v. Board of Governors of the Federal Reserve System at the United States Supreme Court. The case questions when the six-year statute of limitations to challenge an agency rule under the Administrative Procedure Act (APA) begins. The majority of courts hold that it begins once the final rule takes effect, regardless of whether a business existed at the time or was subject to the rule’s provisions.

“The current rule under the APA leaves existing and would-be small business owners in an impossible situation,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “Businesses are denied the right to challenge agency regulations that are more than six years old, even if the regulation predates the business itself. However, there is no way to challenge a regulation until you have a business to be affected by it. Small businesses are overwhelmed by a multitude of regulations from the moment they begin operating. This rule enables agencies to enact and maintain harmful regulations without opposition, to the detriment of current and future small businesses. NFIB urges the court to reverse the judgment of the Eighth Circuit and correct the majority rule.”

The brief argues four main points: 1) the majority rule wrongfully runs the statute of limitations for APA claims from the date of final agency action, instead of when the legal injury is suffered; 2) enforcement proceedings are not always a viable option for judicial review of agency regulations, such as when governing agencies target middle entities in the supply chain; 3) the majority rule prevents businesses from challenging the validity of a crushing regulation if more than six years passed between the final rule and the opening of the business, forcing new businesses to acquiesce to burdensome fees and regulations; and 4) a favorable outcome for Corner Post would not require courts to do anything outside of their established duties, nor is there evidence to support that it would lead to litigation abuse.

NFIB filed the brief with the Restaurant Law Center, the Buckeye Institute, and the Manhattan Institute.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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