The authorities at the highest level are analyzing the debit card swipe fee regulation. This scrutiny follows a recent appeal by a North Dakota storefront, the Corner Post, which contends that rules set by the Federal Reserve in 2011 that came into existence after implementing these regulations are unjust to businesses like theirs.
Arguments before the justices started forthwith addressed a critical timing issue. Corner Post's late filing is the controversy at hand - seven years after the Federal Reserve established the swipe fee cap.
Can a New Business Challenge Old Regulations?
The Corner Post, initiating its operations in 2018, faces the challenge of legal deadlines. The store argues that the statute of limitations should not apply as their "legal injury" became relevant upon starting their business - years after the six-year rule for litigation passed.
It falls upon the Court, tendering a conservative-leaning, to determine the scope of agency oversight. The case could see precedents set that would increase the judicial challenges federal agencies may face.
Visa and MasterCard are vital players, dictating the interchange fees with a significant cap of 21 cents per transaction established by the Fed.
Legal Implications for Federal Agency Authority
The complexity of this issue drew the attention of Supreme Court justices from both ends of the ideological spectrum. Justice Elena Kagan voiced concerns regarding the potential chaos from allowing such challenges to decades-old regulations.
Conservative Justice Gorsuch found some merit in the claim that legal injury accrual should signify the start of the limitation period. The resulting legal interpretations could impact cases against federal agency regulations across industries and eras.
The case brings together a conglomerate of conservative and corporate backers, including the influential network owned by billionaire Charles Koch and endorsement from the U.S. Chamber of Commerce.
Chief Justice John Roberts has highlighted the fundamental right to seek justice for legal grievances as a complicating factor in dismissing the Corner Post's challenge outright.
Conversely, Justice Ketanji Brown Jackson reminded the Court of the importance of regulatory stability that businesses have relied upon for long periods.
Impact of Court's Decision on Businesses and Regulation
With the verdict expected before the end of June, financial implications loom. Before the Dodd-Frank Act directed the Fed to impose a swipe fee ceiling, fees could reach 44 cents, heavily burdening smaller enterprises and their acceptance of debit cards.
The legal tussle intensified when the cap was set, as businesses anticipated a far lower benchmark than 21 cents. With the Supreme Court 2015 upholding the cap, businesses found little reprieve until recently when the Fed suggested reducing the cap even further to 14.4 cents.
Corner Post's challenge has rippled across the retail sector as the case against the Federal Reserve's regulation claimed a violation of congressional intent and accused the rule of being capricious under the Administrative Procedure Act. The dismissal at the district court level, supported by the 8th U.S. Circuit Court of Appeals, pinned on the statute of limitations, made a stark statement on the high hurdles businesses face in contesting federal regulations after the fact.
