Loper Bright and Corner Post – Effect on Texas Businesses and Governmental Entities

by James F. Parker

In the final three days of the U.S. Supreme Court’s term before its summer break, two of the most impactful decisions on federal administrative law in the twenty-first century were announced.

In Loper Bright, the Supreme Court eliminated the Chevron deference requirement.

First, the Loper Bright decision, issued June 28, 2024, overturned the Chevron rule by which courts deferred to agency interpretations of ambiguous statutes.¹ The Court cited the Federalist Papers, reasoning that the Framers envisioned that the final “interpretation of the laws” would be “the proper and peculiar province of the courts.”² The Court also cited the House and Senate Reports from 1946 when the Administrative Procedure Act (“APA”) was enacted, noting that the APA provided that “questions of law are for courts rather than agencies to decide in the last analysis.”³

In anticipation of fears that courts are less equipped to interpret technical statutory questions, the Supreme Court noted that courts “do not decide such questions blindly”—instead, the parties and amici in such cases are “steeped in the subject matter, and reviewing courts have the benefit of their perspectives.”⁴ Accordingly, the Loper Bright decision allows the judiciary to apply its own independent judgment in deciding whether a federal agency has acted within its statutory authority. It no longer must defer to agency interpretation of the law simply because a statute is ambiguous.

Though overturning Chevron—a foundational rule of administrative law for the last four decades—was significant, the Corner Post decision issued on July 1, 2024 is the follow-on decision that Justice Jackson states in her dissent allows “every legal claim conceived of in those last four decades—and before” to be brought back before the courts “unleashed from the constraints of any such [Chevron] deference.”⁵

In Corner Post, the Supreme Court eases time limits under the APA statute of limitation.

In Corner Post, the Court examined “when a claim brought under the Administrative Procedure Act ‘accrues’ for purposes” of the six-year default statute of limitations for suits against the United States under 28 U.S.C. § 2401(a).⁶ This question arose when Corner Post, a truck stop incorporated in 2017 and open for business in 2018, was displeased with paying hundreds of thousands of dollars in interchange fees for debit card transactions and sued the Federal Reserve Board to challenge “Regulation II.” The problem, however, was that the District Court and Eighth Circuit held that Corner Post’s claim was barred by the six-year statute of limitation, which accrued in 2011 when the Board first published Regulation II and expired six years later in 2017. In other words, under the lower courts’ interpretation, Corner Post’s claim expired before any customer ever swiped a debit card.

The Supreme Court disagreed with the District Court and Eighth Circuit, holding that the statute of limitations “begins to run only when the plaintiff has a complete and present cause of action,” which can only occur when the specific plaintiff is “injured.”⁷ In Corner Post’s case, it was not injured until a customer swiped a debit card and caused it to incur interchange fees in 2018. This made sense, according to the Court, because a plaintiff does not have a complete and present cause of action until she has the right to file suit and obtain relief. After all, Corner Post would not have been able to challenge Regulation II until it was injured by the regulation. Additionally, the Court explained that it “respects our ‘deep-rooted historic tradition that everyone should have [their] own day in court.’”⁸
The Supreme Court therefore held that Corner Post’s claim was not barred by the statute of limitations. To show that its decision did not open Pandora’s box, the Court also noted that a federal regulation that “makes it six years without being contested [did] not enter a promised land free from legal challenges” in the first place and that “courts entertaining later challenges often will [still] be able to rely on binding Supreme Court or circuit precedent.”⁹

Together, these two decisions represent a shift in the established practice of federal administrative law that Justice Jackson foresees will cause a “tsunami of lawsuits against agencies” with “the potential to devastate the functioning of the Federal Government.”¹⁰ While only time will show the extent of these decisions’ impact, two things are clear: judges no longer need defer to the federal agencies’ interpretation of ambiguous statutes and the six-year statute of limitation no longer takes away a plaintiff’s federal cause of action before they have one.

What do Loper Bright and Corner Post mean for state and local governmental entities and the businesses they regulate?

Like the federal government, Texas has an APA, which allows actions to be brought challenging the validity or applicability of a statute, rule, administrative ruling, or a rule adopted by a Texas agency.

But while the Texas APA is similar to its federal counterpart, the impact of the Supreme Court’s decisions in Loper and Corner Post on the Texas APA is unclear. For starters, Texas has never expressly adopted the Chevron deference doctrine. Instead, the Texas Supreme Court has said that Texas courts conduct a similar analysis, “generally uphold[ing] an agency’s interpretation of a statute it is charged by the Legislature with enforcing so long as the construction is reasonable and does not contradict the plain language of the statute.”¹¹ Yet while agency interpretations are given “great weight,” courts have held that agency interpretations are “not controlling.”¹²

Moreover, in sharp contrast to the express statute of limitations in 28 U.S.C. § 2401(a), the Texas APA does not contain an express statute of limitations itself—rather, the statute of limitations depends on what agency or rule is being challenged.

Though Loper Bright and Corner Post are the most significant federal administrative decisions of the 21st century, their impact on Texas state agencies and local governmental entities and the Texas businesses they regulate is complex. These decisions also raise many questions. For example, will Loper Bright further reduce the level of deference that Texas courts give to state agencies? Will Corner Post revive claims long thought to be barred? Will Texas state courts experience a “tsunami of lawsuits” as Justice Jackson predicts will happen in the federal courts? And if so, what role will the new Fifteenth Court of Appeals play?

Ultimately, both regulators and regulated parties should be prepared to grapple with this changed landscape in their advocacy before both federal agencies and reviewing state courts.

¹Loper Bright Enterprises v. Raimondo, Nos. 22-451 and 22-1219, 2024 U.S. LEXIS 2882 (June 28, 2024).
²Id. at *2.
³Id. at *34.
⁴Id. at *47-48.
⁵Corner Post, Inc. v. Bd. of Governors of the Fed. Reserve Sys., No. 22-1008, 2024 U.S. LEXIS 2885, at 89 (July 1, 2024).
⁶Id. at *10.
⁷Id. at *22.
⁸Id. at *10.
⁹Id. at *36.
¹⁰Id. at *89.
¹¹R.R. Comm’n v. Citizens Safe Future, 336 S.W.3d 619, 626 (Tex. 2011).
¹²See Quick v. City of Austin, 7 S.W.3d 109, 123 (Tex. 1998) (stating “[w]hile not controlling, the contemporaneous construction of a statute by the administrative agency charged with its enforcement is entitled to great weight.”).

James Parker is a Principal in the Firm’s Litigation and Appellate Practice Groups. If you have any questions or would like additional information related to this article or other matters, please contact James at 512.322.5878 or jparker@lglawfirm.com.