N. Dakota Retail Ass'n v. Bd. of Governors of the Fed. Reserve Sys.

• Decision Date: 14 December 2022
• Docket Number: 22-1639
• Parties: NORTH DAKOTA RETAIL ASSOCIATION ; North Dakota Petroleum Marketers Association; Corner Post, Inc., Plaintiffs - Appellants v. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Defendant - Appellee
• Court: U.S. Court of Appeals — Eighth Circuit

55 F.4th 634

NORTH DAKOTA RETAIL ASSOCIATION ; North Dakota Petroleum Marketers Association; Corner Post, Inc., Plaintiffs - Appellants

v.BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Defendant - Appellee

No. 22-1639

United States Court of Appeals, Eighth Circuit.

Submitted: October 19, 2022

Filed: December 14, 2022

Counsel who presented argument on behalf of the appellant was Tyler R. Green, of Salt Lake City, UT. The following attorneys also appeared on the appellant brief; Scott K. Porsborg, of Bismarck, ND., Stephanie Martz, of Washington, DC., Bryan K. Weir, of Arlington, VA.

Counsel who presented argument on behalf of the appellee was Joshua Paul Chadwick, of Washington, DC. The following attorneys also appeared on the appellee brief; Yonatan Gelblum, of Washington, DC., Yvonne Facchina Mizusawa, of Washington, DC.

Before SMITH, Chief Judge, BENTON and SHEPHERD, Circuit Judges.

BENTON, Circuit Judge.

The North Dakota Retail Association and the North Dakota Petroleum Marketers Association sued the Board of Governors of the Federal Reserve System, alleging that fees for merchants in debit card transactions violated the Durbin Amendment. The district court¹ dismissed the case, ruling that the claims were barred by the statute of limitations. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.

I.

NDRA and NDPMA filed claims against the Board under the Administrative Procedures Act, 5 U.S.C. § 704. They alleged that the interchange and processing fees paid by merchants in debit card transactions are arbitrary and capricious, contrary to the APA, and in violation of the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Durbin Amendment authorized the Board to regulate "any interchange fee that an issuer may receive or charge with respect to an electronic debit transaction[,]" requiring such fees to be "reasonable and proportional to the cost incurred by the issuer with respect to the transaction." 15 U.S.C. § 1693o-2(a)(1), (2) . The Board then issued Regulation II, setting a maximum interchange fee of 21 cents per transaction and an ad valorem allowance of 0.05 percent of the transaction (to account for fraud loss). See Regulation II, Debit Card Interchange Fees and Routing , 76 Fed. Reg. 43,394, 43,420 (July 20, 2011).

Other merchant associations challenged the validity of Regulation II. See NACS v. Bd. of Governors of Fed. Rsrv. Sys. , 958 F. Supp. 2d 85 (D.D.C. 2013) ( NACS I ). The district court ruled that Regulation II violated the plain language of the Durbin Amendment. The D.C. Circuit reversed, holding "that the Board's rules generally rest on reasonable constructions of the statute." NACS v. Bd. of Governors of Fed. Rsrv. Sys. , 746 F.3d 474, 477 (D.C. Cir. 2014) ( NACS II ). However, the circuit court required the Board to clarify its exercise of discretion in "determining that transactions-monitoring costs properly fall outside the fraud-prevention adjustment." Id. at 493. The Board published its clarification on August 14, 2015 ("Clarification"), which explained its treatment of transactions-monitoring costs without altering or amending Regulation II. See Clarification, Debit Card Interchange Fees and Routing , 80 Fed. Reg. 48,684, 48,685 (Aug. 14, 2015).

On April 29, 2021, NDRA and NDPMA filed the original complaint here, raising a facial challenge to Regulation II as a violation of the APA that is contrary to law, arbitrary, and capricious. The Board moved to dismiss based on the statute of limitations. NDRA and NDPMA amended the complaint, adding Corner Post, Inc. as a plaintiff (collectively with NDRA and NDPMA, "Merchants"). Incorporated in 2017, Corner Post opened for business as a convenience store in 2018. The Board again moved to dismiss for lack of subject matter jurisdiction and failure to state a claim under the statute of limitations.

The district court dismissed, finding (i) the Clarification did not constitute a final agency action to renew the statute of limitations, (ii) the statute of limitations on Corner Post's claims began to run with the publication of Regulation II in 2011, and (iii) the Merchants' claims did not warrant equitable tolling. The Merchants appeal.

II.

The Merchants allege that the statute of limitations renewed when the Board published the Clarification in 2015. This court "review[s] de novo whether a statute of limitations bars a party's claim." Humphrey v. Eureka Gardens Pub. Facility Bd. , 891 F.3d 1079, 1081 (8th Cir. 2018).

"Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review." 5 U.S.C. § 704 . Under the APA, "[t]wo conditions must be satisfied for an agency action to be final." Sisseton-Wahpeton Oyate of Lake Traverse Res. v. Corps of Eng'rs , 888 F.3d 906, 914-15 (8th Cir. 2018). First, the action cannot be tentative or interlocutory in nature and "must mark the ‘consummation of the agency's decisionmaking process.’ " Id. at 915, quoting Bennett v. Spear , 520 U.S. 154, 177-78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997). "Second, ‘the action must be one by which rights or obligations have been determined, or from which legal consequences will flow.’ " Id. , quoting Bennett , 520 U.S. at 178, 117 S.Ct. 1154. "To constitute a final agency action, the agency's action must have inflicted ‘an actual, concrete injury’ upon the party seeking judicial review." Id. , quoting Williamson Cty. Reg'l Planning v. Hamilton Bank , 473 U.S. 172, 193, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985).

The Clarification was not a final agency action. The D.C. Circuit found nothing unlawful in Regulation II. See NACS II , 746 F.3d at 493. Rather, the court upheld Regulation II as "a reasonable interpretation of the statute." Id. ("vacating [Regulation II] would lead to an entirely unregulated market ... we see no need to vacate."). The court ordered publication of a clarification so the Board could "articulate a reasonable justification for determining that transactions-monitoring costs properly fell outside the fraud-prevention adjustment." Id.

The Clarification was not the final "consummation of the agency's decisionmaking process." Sisseton-Wahpeton Oyate , 888 F.3d at 915. It did not modify Regulation II or create any additional rights or obligations on behalf of the Merchants. See id. It did not create a new fee or expand any existing fees, nor did it "inflict[ ] ‘an actual, concrete injury’ upon the [Merchants]." Id. , quoting Williamson Cty. Reg'l Planning , 473 U.S. at 193, 105 S.Ct. 3108. The Merchants' claims relate to the unmodified provisions of Regulation II as originally published on July 20, 2011. The Clarification did nothing to change Regulation II, which remains the final agency action since its publication in 2011.

The Merchants also argue that, even if the Clarification is not a final agency action, it renewed the statute of limitations under the D.C. Circuit's reopening doctrine. See CTIA – The Wireless Ass'n v. FCC , 466 F.3d 105, 110 (D.C. Cir. 2006) ("The reopening doctrine, well-established in [the D.C.] [C]ircuit is an exception to statutory limits on the time for seeking review of an agency decision" when an agency conducts "a later rulemaking," "actually reconsider[s] the rule," or "open[s] the issue up anew." (quotations omitted)). This court has not adopted or even referenced the D.C. Circuit's reopening doctrine. More importantly, the Supreme Court "has never adopted it, and the doctrine appears to be inapposite to the question of final agency action." Biden v. Texas , ––– U.S. ––––, 142 S. Ct. 2528, 2545 n.8, 213 L.Ed.2d 956 (2022). Even if the reopening doctrine has any validity, the Clarification is not a "later rulemaking" and did not "actually reconsider the rule," or "open[ ] the issue up anew." CTIA , 466 F.3d at 110.

III.

The Merchants allege that their facial challenge to Regulation II first accrued when Corner Post opened in 2018, rather than when Regulation II was published in 2011.

Claims arising under the APA are subject to a six-year statute of limitations. See 5 U.S.C. § 704 ; 28 U.S.C. § 2401(a) ("[E]very 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."). See also Izaak Walton League of Am., Inc. v. Kimbell , 558 F.3d 751, 758 (8th Cir. 2009) ("The statute of limitations set forth in 28 U.S.C. § 2401(a) ... applies" to "claims under the [APA]."). "A claim against [the] United States first accrues on the date when all the events have occurred which fix the liability of the Government and entitle the claimant to institute an action." Id. at 759. The "standard rule [is] that accrual occurs when the plaintiff has a complete and present cause of action." Rassier v. Sanner , 996 F.3d 832, 836 (8th Cir. 2021), quoting Bay Area Laundry & Dry Cleaning Pension Tr. Fund v. Ferbar Corp. of California , 522 U.S. 192, 201, 118 S.Ct. 542, 139 L.Ed.2d 553 (1997).

This court has not explicitly addressed whether a plaintiff which comes into existence more than six years after the publication of a final agency action is barred from bringing an APA facial challenge to the agency action. But, in Izaak Walton , this court held that the six-year statute of limitations accrued upon publication of the regulation and barred plaintiffs' facial challenge—although one plaintiff was founded 16 years later. See Izaak Walton , 558 F.3d at 762. The Izaak Walton case did not directly address the issue because the complaint there was not filed until 10 years after plaintiff's founding. See id. The Izaak Walton case did hold that facial challenges to agency actions accrue upon the publication of the agency action in the Federal Register. See id. at 761 ("Wilderness Watch's claims accrued no later than April 4, 1980, when the Forest Service published in the Federal Register the legal description and maps for the BWCAW.").

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