Background
In July 2016, the Occupational Safety and Health Administration (OSHA) promulgated an interim final rule requiring states administering their own occupational safety plans to adjust their monetary penalties for safety violations to keep pace with OSHA’s inflation adjustments. South Carolina, which had administered an approved state plan since 1972, did not increase its penalty amounts to match OSHA’s new levels, placing it out of compliance with federal regulations. From 2017 through 2020, OSHA flagged South Carolina’s unchanged penalty rates as a “new issue” in annual monitoring evaluations but did not issue a formal finding of noncompliance.
In 2022, OSHA issued a formal finding that South Carolina had failed to comply with the 2016 rule and recommended legislative changes. South Carolina filed suit on March 14, 2023, challenging the 2016 interim final rule under the Administrative Procedure Act (APA), more than six years after the rule’s publication. The district court dismissed the APA claims as time-barred under the six-year statute of limitations in 28 U.S.C. § 2401(a), holding that South Carolina’s cause of action accrued in 2016 when OSHA promulgated the rule, not in 2022 when OSHA issued its compliance finding.
The Court’s Holding
The Fourth Circuit affirmed the district court’s dismissal. The court held that under the plain text of the APA’s statute of limitations, a right of action accrues “when the plaintiff has the right to assert it in court—and in the case of the APA, that is when the plaintiff is injured by final agency action.” Here, South Carolina was injured when OSHA published the interim final rule in July 2016, giving rise to an immediate and complete cause of action subject to pre-enforcement judicial review. South Carolina therefore was required to file its challenge by July 1, 2022, six years after publication.
The court rejected South Carolina’s argument that it suffered no cognizable injury until OSHA issued its 2022 formal finding of noncompliance and presented a “credible threat” of enforcement. The court distinguished the Supreme Court’s recent decision in Corner Post, Inc. v. Board of Governors of the Federal Reserve System (2024), which allowed a newly-incorporated entity to challenge a 2010 rule in 2021, on the grounds that the entity itself did not exist in 2010 and therefore could not have been injured until its formation. South Carolina, by contrast, administered the state plan continuously since 1972 and was plainly injured by the 2016 rule’s requirement that it raise penalties or face revocation of its authority.
Key Takeaways
- The statute of limitations for APA challenges to agency rules runs from the date the rule is published, not from the date enforcement becomes imminent or a formal compliance finding is issued.
- Parties have standing to bring pre-enforcement, facial challenges to regulations under the APA, but they must do so within the six-year limitations period from publication.
- The 2024 Supreme Court Corner Post decision does not extend the limitations period for established entities that were injured by a rule’s promulgation, only for entities that did not exist at the time of injury.
- A regulatory agency’s period of nonenforcement does not restart the statute of limitations or create a “new injury” sufficient to avoid dismissal.
- Parties remain free to challenge the validity of regulations as a defense in enforcement proceedings brought against them, even if pre-enforcement review is barred by limitations.
Why It Matters
This decision reinforces strict temporal boundaries for pre-enforcement review of agency action and has significant implications for federalism. States and regulated entities cannot rely on prolonged nonenforcement as a signal that a regulation is effectively defunct or as a basis to challenge it years later. South Carolina’s argument—that it lacked standing to sue because the threat of enforcement was not “credible” until 2022—failed despite OSHA’s restraint in not pursuing revocation for the prior six years. The court’s reasoning sends a clear message that regulated entities must act quickly to mount facial challenges to new regulations or forfeit the right to pre-enforcement review.
The decision also clarifies the relationship between pre-enforcement review and enforcement defense. Though South Carolina cannot bring a pre-enforcement facial challenge outside the limitations period, it retains the ability to argue in any future enforcement proceeding that OSHA exceeded its statutory authority in adopting the 2016 rule. This balance preserves a meaningful avenue for challenging agency action while maintaining firm deadlines for proactive litigation, reflecting the tension between judicial review and regulatory finality.