North Dakota truck stop objects to federal allowance for debit-card processing fees

The Petitions of the Week column highlights a selection of cert petitions recently filed in the Supreme Court. A list of all petitions were watching is available here.

The Administrative Procedure Act is a federal law that governs the procedures by which federal agencies propose and issue regulations. The APA gives anyone who is injured by an agencys action the right to go to court to challenge the action, but plaintiffs must file their challenges within six years after the right of action first accrues. This week, we highlight cert petitions that ask the court to consider, among other things, what it means for an APA claim to first accrue[]: Does it happen when the agency issues the rule, even if the plaintiff is not injured at that point, or does it happen instead when the plaintiff is first injured?

The question comes to the court in a case filed by the Corner Post, a small truck stop in North Dakota that is seeking to challenge the Federal Reserves nearly 12-year-old cap on debit-card fees.

Most consumers who want to use credit or debit cards at mom-and-pop stores are familiar with the minimum-purchase requirements that such stores often impose. The requirements are intended to soften the financial blow on small merchants, who like their larger counterparts lose some portion of every debit- or credit-card transaction to processing fees, the amount of which is regulated by the Fed.

Congress enacted the so-called Durbin Amendment as part of the Dodd-Frank Wall Street Reform and Consumer Protection of 2010 in the wake of the Great Recession. The amendment empowers the Fed to regulate interchange fees to compensate large banks those with over $10 billion in assets for the costs of transferring money out of consumers accounts and into the hands of merchants to complete debit-card transactions. Left unregulated, the companies like Visa and Mastercard who set these fees have an incentive to set the fees as high as possible to compete for banks business.

In 2011, the Fed issued a rule capping debit-card processing fees for large banks at 21 cents per transaction plus 0.05% of the value of the purchase. In April 2021, two North Dakota trade associations went to court to challenge the cap on processing fees. When the Fed filed a motion to dismiss the groups complaint, arguing that the statute of limitations had run because it had issued the rule 10 years ago, the groups amended their complaint to add the Corner Post, a truck stop in Watford City, North Dakota that first opened for business in 2018.

The plaintiffs contended that the Corner Posts claim first accrue[d] for purposes of the APAs six-year statute of limitations when it was first injured by the Feds cap on debit-card processing fees in other words, when the truck stop processed its first debit-card transaction in 2018.

A federal district court in North Dakota dismissed the lawsuit, and the U.S. Court of Appeals for the 8th Circuit upheld that ruling. The court held that the window to file suit under the APA began for the Corner Post at the same time as for the trade groups: when the Fed issued its final rule in 2011. Following the conclusion adopted by a number of other federal courts of appeals, the 8th Circuit ruled that a plaintiffs claim against an agency regulation first accrues when the agency publishes the regulation, regardless of whether the plaintiff existed at the time.

In Corner Post, Inc. v. Board of Governors of the Federal Reserve System, the truck stop asks the justices to grant review and reverse the decision below. The truck stop urges the court to adopt the position of the U.S. Court of Appeals for the 6th Circuit, which unlike the 8th and its sister circuits ruled in 2015 that the APAs six-year statute of limitations begins to run when a plaintiff is first adversely affected by an agency regulation, not when the agency publishes the final rule. A federal regulation that makes it six years without being contested, the 6th Circuit wrote, does not enter a promised land free from legal challenge.

A list of this weeks featured petitions is below:

Rudisill v. McDonough
22-888
Issue: Whether a veteran who has served two separate and distinct periods of qualifying service under the Montgomery GI Bill and the Post-9/11 GI Bill is entitled to receive a total of 48 months of education benefits as between both programs, without first exhausting the Montgomery benefit in order to obtain the more generous Post-9/11 benefit.

U.S. Bank National Association v. Windstream Holdings, Inc.
22-926
Issues: (1) Whether the lack of statutory and constitutional basis for the equitable mootness doctrine, combined with its demonstrated potential for abuse, requires it to be abolished; and (2) whether the U.S. Court of Appeals for the 2nd Circuits rule that an appeal from a substantially consummated bankruptcy plan is automatically equitably moot if the appellant did not pursue a stay, regardless of a stays availability or any other equitable factors, undermines any prudential purpose for the doctrine.

Sauk-Suiattle Indian Tribe v. City of Seattle, Washington
22-955
Issues: (1) Whether the court-created futility doctrine, which allows a federal court to decide a case removed from state court even though it lacks jurisdiction, is repugnant to Article III of the Constitution; and (2) whether application of the futility doctrine contravenes 28 U.S.C. 1447(c), the plain language of which requires remand of the case to the state court from which it was removed.

Thornell v. Jones
22-982
Issue: Whether the U.S. Court of Appeals for the 9th Circuit violated this courts precedents by employing a flawed methodology for assessing prejudice under Strickland v. Washington when it disregarded the district courts factual and credibility findings and excluded evidence in aggravation and the states rebuttal when it reversed the district court and granted habeas relief.

Corner Post, Inc. v. Board of Governors of the Federal Reserve System
22-1008
Issue: Whether a plaintiffs Administrative Procedure Act claim first accrues under 28 U.S.C. 2401(a) when an agency issues a rule regardless of whether that rule injures the plaintiff on that date or when the rule first causes a plaintiff to suffer[] legal wrong or be adversely affected or aggrieved.