Sunday, October 1, 2023

Update on Supreme Court Deference Case (with Speculation) and New Supreme Court case on General 6-year Statute for Challenging Regulations Interpretations (Without Speculation) (10/1/23)

 Loper Bright (22-451)

The Supreme Court docket for the October Term includes Loper Bright Enterprises v. Raimondo (SEC) (Sup. Ct. Dkt. 22-451 here.) (“Loper Bright”) where the issue for which certiorari was granted is:

Whether the Court should overrule Chevron or, at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.

After being quiet on Chevron for several years (at least in an outcome-determinative sense), the Court appears poised to make some statement about Chevron. As I read the earlier decision in Kisor v. Wilkie, 139 S. Ct. 589 U.S. ___, 2400 (2019) (“Kisor”) (GS, here), where the Court approved so-called Auer deference to reasonable agency subregulatory interpretations of ambiguous regulations text, the Court could not have rendered the decision in Kisor without thinking that Chevron deference was still good law. If that is true, I speculate (correctly or not) the outcome in Loper Bright. (Emphasis on outcome.) I undertook this speculation in preparing a paper where the paper discusses the tax deference opinions before the APA was enacted in 1946 which have been largely ignored in discussing the meaning of APA 5 USC § 706, here [§ 10(e) of the original APA] and how central they were to the shape of the text of §10(e) [§ 706].

I undertook the speculation on the assumption that those voting in the majority to adopt Auer deference as formulated would vote to accept Chevron deference. The Court fine-tuned Auer deference in Kisor and perhaps that may be what happens in Loper Bright

Of course, there have been two key changes on the Court since Kisor – Justices Ginsburg and Breyer, both accepting deference in Kisor, are no longer on the Court and have been replaced by Justices Barrett and Jackson. I infer that Justice Barrett will vote to overturn or severely constrict Chevron deference (E.g., E.g., Jeremy W. Peters, Trump’s New Judicial Litmus Test: ‘Shrinking the Administrative State’ (NYT 3/26/18)); I infer that Justice Jackson will vote to approve Chevron deference, perhaps joining a majority will want to constrict somewhat the sweep of Chevron deference as it did for Auer deference in Kisor.

I assume that the Justices still on the Court who voted to accept Auer deference in Kisor will vote for Chevron deference. Those Justices are Kagan and Sotomayor and perhaps Roberts (although not clear to me). The reverse of that is true as to those Justices voting against Auer deference or constricting it to equipoise. Those Justice are Thomas, Alito, and Gorsuch.  I think Justice Roberts as in Kisor might be persuaded by stare decisis, and Justice Kavanaugh may approve Chevron on the basis he approved Kisor (with rigorous Chevron Footnote 9 interpretation, which, as he articulates it in Kisor, comes close to rejecting deference without formally rejection of Chevron deference except in rare interpretive equipoise where the court cannot determine that the agency interpretation is not best). 

So the lineup I see is:

For deference: Kagan, Sotomayor, Jackson

Against deference: Thomas, Aito, Gorsuch, and Barrett

Can't call: Roberts and Kavanaugh.

Corner Post (No. 22-1008)

On 9/29/23, the Supreme Court accepted cert in Corner Post v. Board of Governors of the Federal Reserve System (Sup. Ct. Case No. 22-1008), here, the question presented (here) is:

DECISION BELOW: 55 F.4th 634
CERT. GRANTED 9/29/2023


Petitioner Corner Post, Inc. is a convenience store and truck stop in North Dakota that first opened for business in 2018. In 2021, Corner  Post sued the Board of Governors of the Federal Reserve System under the Administrative Procedure Act, challenging a Board rule adopted in  2011 that governs certain fees for debit-card transactions.

The Eighth Circuit held that Corner Post's APA claims were barred by 28 U.S.C. §2401 (a)'s six-year statute of limitations. In so doing, it adopted the majority position in an acknowledged circuit split on when APA claims "first accrue[]" under §2401(a). The Eighth Circuit held that Corner Post's APA claims "first accrue[d]" when the Board issued the rule in 2011-even though Corner Post did not open for  business until seven years later. As a result, Corner Post's limitations period expired in 2017-a year before it opened for business. The court did not explain how Corner Post could have "suffer[ed] legal wrong" from or been "adversely affected or aggrieved by" the Board's rule-a  predicate to stating an APA claim, 5 U.S.C. §702- before Corner Post accepted even one debit-card payment subject to the rule.

The question presented is: Does a plaintiffs APA claim "first accrue[]" under 28 U.S.C. §2401(a) when an agency issues a rule-regardless of   whether that rule injures the plaintiff on that date (as the Eighth Circuit and five other circuits have held)-or when the rule first causes a plaintiff to "suffer[] legal wrong" or be "adversely affected or aggrieved" (as the Sixth Circuit has held)?

Recall, that in Hewitt v. Commissioner, 21 F.4th 1336 (11th Cir. 2021), GS here, the Court invalidated a regulation interpreting a tax statute that had been promulgated in 1986. The general statute of limitations for claims against the Government, 28 USC § 2041(a), here, provides, at least generally, a six-year statute of limitations for “every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues.” The question is when the right first accrues. For example, for entities that were not even in existence in 1986 (such as the entity in Hewitt), does that right accrue in 1986 or some later date such as when its conduct was first affected by the regulation. Traditionally tax challenges to regulations have occurred when the IRA applies the regulation to affect some type of tax liability, penalty, or some such against the taxpayer, thus giving the taxpayer one of the traditional post-enforcement methods to contest the regulation. The first enforcement proceedings often occur well over six years after a regulation is first promulgated.

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