* Ruling invalidates NLRB appointments
* Also calls into question CFPB appointment
* White House says ruling contradicts 150 years of practice
By Aruna Viswanatha and Terry Baynes
Jan 25 A federal appeals court ruled on Friday
that President Barack Obama violated the U.S. Constitution when
he used recess appointments to fill a labor board, in a sweeping
decision that could limit presidential power to push through
The court found that the Senate was not truly in recess, for
the purpose of a recess appointment, when Obama in January 2012
installed three nominees to the National Labor Relations Board.
The nominees were facing stiff Republican opposition, and
the appointments caused an uproar at the time. Republicans
argued that Obama undercut the Senate's power to confirm
nominees because although most of its members were out of town,
the Senate had not formally adjourned.
In a surprisingly broad ruling, the three-judge panel
rejected not only the NLRB appointments but any made while the
Senate is in session but on a break. That could limit recess
appointments to only a few weeks a year.
The U.S. Court of Appeals for the District of Columbia
Circuit also ruled that recess appointments could only be used
for positions that become vacant while the Senate is in recess.
"If the decision stands, it would be a significant reduction
of the president's recess power," said John Elwood, a Washington
lawyer who was deputy assistant attorney general in the Office
of Legal Counsel from 2005 through 2009.
"This is a big, big decision for executive power," Elwood
said. "It is one of the most important decisions in decades."
More immediately, the ruling casts doubt on the ability of
the NLRB, an independent agency that oversees labor disputes, to
conduct its business if it does not have enough members. Its
recent rulings may also be vulnerable to challenge.
The ruling also throws into question the legality of the
appointment of Richard Cordray, the head of the new Consumer
Financial Protection Bureau. Obama used the same type of recess
appointment to install Cordray; his appointment was challenged
in a separate lawsuit.
But the ruling's most profound impact may be its threat to
the now-standard practice of presidents ramming through nominees
that otherwise would get bogged down in the Senate, often
because of unrelated political fights.
White House spokesman Jay Carney called the ruling "novel
and unprecedented" and said it contradicted 150 years of
practice by both Democratic and Republican administrations.
The Justice Department said it is considering its options to
appeal. Legal experts expect the administration will challenge
the ruling, and the case could go to the Supreme Court.
Republican lawmakers, who had joined the legal challenge to
the NLRB appointments, jumped on the ruling as a vindication of
their view that the administration had overreached.
"The D.C. Circuit Court today reaffirmed that the
Constitution is not an inconvenience but the law of the land,"
Mitch McConnell, the top Republican in the Senate, said in a
NLRB Chairman Mark Gaston Pearce said in a statement the
board would continue to perform its statutory duties and issue
decisions. CFPB spokeswoman Moira Vahey said the ruling had no
direct effect on the bureau.
A TEST OF POWERS
The suit started as a routine dispute between soda bottling
company Noel Canning and the labor board, but developed into a
high-profile appeal with the help of the U.S. Chamber of
Commerce and Senate Republicans.
The case was seen as a test of the president's ability to
bypass a Senate vote on nominees. The Constitution allows the
Senate to block nominees, and both Democratic and Republican
presidents have used recess appointments as a way around this
When Obama made the NLRB appointments, the Senate was not
officially in recess. It continued to meet every few days for
minutes at a time with few senators present.
The court's decision, issued by a panel of judges who had
been appointed by Republicans, hinged on what constitutes a
"recess" and whether it includes short breaks while the Senate
is still technically in session.
Presidents have often used these intra-session recess
appointments. Ronald Reagan, for example, made 36 such
appointments, and Bill Clinton made 39, according to data from
the Congressional Research Service.
"Considering the text, history, and structure of the
Constitution, these appointments were invalid from their
inception," the ruling said about the NLRB appointments of
Sharon Block, Richard Griffin and Terence Flynn.
It said the president could not have "free rein to appoint
his desired nominees at any time he pleases, whether that time
be a weekend, lunch, or even when the Senate is in session and
he is merely displeased with its inaction. This cannot be the
Jay Wexler, a law professor at Boston University School of
Law, said the ruling includes "pretty big restrictions" but that
he was most surprised that presidents would only be allowed to
use such appointments when a vacancy popped up during a recess.
Once rare, recess appointments became more common in the
late 1970s as a way to bypass the confirmation process, which
senators have used increasingly to block nominees.
Recent presidents pushed the boundaries. George W. Bush took
the unusual step of filling a judgeship during a recess.
Democratic Senator Ted Kennedy previously challenged the
intra-session recess appointment of William Pryor to the 11th
U.S. Circuit Court of Appeals in 2004 by George W. Bush. The
11th Circuit upheld the right of the president to make the
recess appointment, finding the term "recess" in the
Constitution ambiguous. That decision conflicts with the D.C.
Circuit's decision on Friday.
NLRB, CORDRAY IN DOUBT
Pearce of the NLRB said the ruling would not deter the board
from getting on with its work. However, the NLRB's recent and
future decisions are now on legally shaky ground because without
the three appointments, the board lacks a quorum.
The NLRB has been active this past year in expanding
protections for employees who complain about their employer on
social media like Facebook or Twitter.
It also issued a ruling requiring employers to continue
collecting union dues even after a union contract expires.
Donna Ballman, an employment lawyer and author of "Stand Up
For Yourself Without Getting Fired," said the appeals court
decision would lead to delays in NLRB rulings.
Although Friday's decision did not touch on Cordray, his
appointment to the CFPB was challenged in a separate lawsuit
brought in June by the State National Bank of Big Spring, Texas,
and other institutions.
That suit presented a similar argument that the recess
appointment was invalid because the Senate was technically still
Cordray's appointment followed months of rancorous debate
over the new consumer bureau, which was created by the 2010
Dodd-Frank financial oversight law to police markets for
products such as credit cards and home loans.
Obama on Thursday renominated Cordray to head the CFPB, but
it is unclear how long the confirmation process will take.
Even though the new ruling doesn't deal with the consumer
agency, it could call into question supervisory actions and
regulations it has taken. "The CFPB world has been turned upside
down," said financial services lawyer Richard Gottlieb of the
Dykema law firm.