One Year After Corner Post, Has the Litigation Tsunami Arrived?

Just over a year ago, the Supreme Court issued its opinion in Corner Post, Inc. v. Board of Governors of the Federal Reserve System, establishing that an Administrative Procedure Act (APA) claim “accrues” under 28 U.S.C. § 2401 when a plaintiff first experiences injury rather than when the agency action occurs. A plaintiff may thus challenge agency action — such as a regulation — more than six years after the agency action is issued, so long as the plaintiff was first injured by the action within the previous six years. We covered Corner Post in a July 2024 Advisory soon after the opinion came down, including Justice Jackson’s warning in dissent that a “tsunami of lawsuits against agencies” would follow. The decision marked a major shift in the law and potentially exposed countless regulations to challenge. But has that shift had major practical effects?

By all appearances, the tsunami waves have yet to hit the administrative law beaches. We canvased district court dockets and identified very few cases involving newcomers challenging longstanding regulations. One example is Texas v. Nuclear Regulatory Commission (NRC), in which a group of states and companies seek to invalidate a 1956 rule promulgated by the NRC’s predecessor, the Atomic Energy Commission. That regulation, known as the Utilization Facility Rule, requires costly NRC licenses for small modular reactors, and the challengers allege that it falls outside the agency’s authority. Two of the plaintiff companies were founded in 2019 and 2023, respectively, meaning that under Corner Post, their injuries likely “accrued” within the statute of limitations. Another clear example is Corner Post itself. On remand, the district court vacated the Federal Reserve Board of Governors’ 2011 regulation limiting debit card interchange transaction fees, granting summary judgment to a business that opened in 2018 and brought suit in 2021. Although a few cases have taken advantage of Corner Post, we have yet to see widespread challenges to the older, foundational   regulatory schemes that govern the daily operations of many industries. This also means Justice Jackson’s prediction that challengers would create “new entities” just to accrue a right of action under § 2401 has not yet come to pass.

This lack of major action in federal courts is at least somewhat surprising. Just days before the Supreme Court issued Corner Post, the Court issued its opinion in Loper Bright Enterprises v. Raimondo, which famously overruled Chevron v. NRDC and dramatically limited the degree to which federal courts defer to agencies’ interpretations of statutes. Under the previous Chevron doctrine, a court considering a challenge to an agency’s action would first ask whether the relevant statute clearly instructed the agency in how to approach a legal question. If not, the court would then ask whether the agency’s approach was reasonable. For decades, these questions formed Chevron’s “two-step” analysis. As we explained in our June 2024 and July 2024 Advisories, the Court decided in Loper Bright that the APA requires courts — not agencies — to decide questions of law, even when the relevant statute is unclear. Many commenters thought that the combination of Corner Post and Loper Bright would render vulnerable many older judicial decisions holding that an agency’s interpretation of an ambiguous statute was reasonable.

Yet important regulations relying on potentially unsettled legal authority have yet to draw significant challenges. For example, some have pointed to the U.S. Food and Drug Administration’s decades-old Generally Recognized as Safe regulations for food additives or the agency’s more recent Deeming Rule, which places e-cigarettes under the agency’s jurisdiction as possible targets. The same goes for regulations promulgated under the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Corner Post affects agencies unevenly, however. The opinion interprets the statute of limitations found within § 2401, yet many agencies’ actions are subject to separate statutes of repose that limit the window during which lawsuits can be brought. Several statutes within the U.S. Environmental Protection Agency’s purview contain such limits, including the Clean Air Act; Clean Water Act; Comprehensive Environmental Response, Compensation, and Liability Act; and Resource Conservation and Recovery Act.  

Open Questions

Further litigation will shed light on lingering questions for potential plaintiffs, the government, and administrative law watchers. Some of the issues we are monitoring are:

1. Procedural Challenges. Corner Post alleged that the interchange fee rule exceeded the Board of Governors’ authority and was arbitrary and capricious, bringing a substantive challenge to the regulation. In footnote 8 of its opinion, the Court left for another day the question of whether a newcomer plaintiff could complain of procedural faults in the way an agency issued the regulation, such as failure to follow notice-and-comment procedures.

2. Vacatur vs. Remand. It remains to be seen whether courts that find agency actions unlawful will more readily vacate the action entirely or instead remand it to the agency for reconsideration while leaving the rule intact in the interim. As we have covered elsewhere, there is ongoing debate over whether the APA even permits courts to declare agency rules invalid as to all parties. In the meantime, lower courts might hesitate to vacate foundational federal regulations without providing the agency with an opportunity to fix its mistakes. For instance, the district court in Corner Post vacated the interchange fee rule but stayed its decision “to prevent interchange transaction fees from becoming a completely unregulated market.” Other courts may take a similar tack.

3. “First accrued.” Although Justice Jackson’s dissent highlights newcomers, the majority opinion in Corner Post does not explicitly limit the holding to plaintiffs that came into being after the agency action took place. It is unclear whether lower courts would allow an existing entity to sue under the theory that it accrued a cause of action at a later date, such as the firm time it must comply with a rule alleged to be unlawful.

Arnold & Porter will continue to monitor developments affecting the scope of relief in challenges to federal government actions. Our team has extensive experience in administrative and regulatory litigation, including challenges to presidential and agency actions. If you have questions, please reach out to one of the authors of this Blog or your regular Arnold & Porter contact.

Bonnie Devany contributed to this Blog post. Ms. Devany is admitted only in Texas; practicing law in the Washington, D.C.  during the pendency of her application for admission to the D.C. Bar and under the supervision of lawyers of the firm who are members in good standing of the D.C. Bar.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.