A unanimous three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit flatly rejected the Obama administration’s rationale for appointing three members of the National Labor Relations Board (NLRB) while the Senate was on a holiday break.
The issue seems certain to end up before the Supreme Court, which ultimately could clarify a president’s authority to fill his administration and appoint federal judges when a minority of the Senate blocks consideration of his choices.
Although recess appointments have been made throughout the nation’s history, they have been more commonly made by modern presidents who face partisan opposition that has made it hard for nominees to even receive a vote in the Senate.
Additionally, Friday’s decision casts doubt on hundreds of decisions the NLRB has made in the past year, ranging from enforcement of collective-bargaining agreements to rulings on the rights of workers to use social media.
The ruling also raises questions about the recess appointment of former Ohio attorney general Richard Cordray to head the fledgling Consumer Financial Protection Bureau and about the actions taken by the agency during his tenure, including major new rules governing the mortgage industry. Obama named Cordray at the same time as the NLRB nominees, and his appointment is the subject of a separate lawsuit in D.C. federal court.
The White House criticized the court ruling. “The decision is novel and unprecedented, and it contradicts 150 years of practice by Democratic and Republican administrations,” White House press secretary Jay Carney told reporters Friday. “We respectfully but strongly disagree with the ruling.”
Presidents from both parties have made hundreds of recess appointments when the Senate has failed to act on nominations. Ronald Reagan holds the record with 243. Obama’s predecessor, George W. Bush, made 105, and it was during his term that Senate Democrats began holding pro-forma sessions, some lasting less than a minute, when the Senate went on break. They contended that that kept the Senate in session and did not allow Bush to make recess appointments.
Republicans took up the practice when Obama was elected. But Obama decided to challenge it in January 2012, when the Senate was on a 20-day holiday but holding pro-forma sessions every three business days to block presidential action.
Obama moved ahead with the nomination of Cordray, who many Republicans considered overly antagonistic toward business, and three NLRB members — Sharon Block, Terence F. Flynn and Richard F. Griffin Jr.
At the time, the NLRB had only two members and was thus unable to take any official action. Some Republicans were worried that the board under Obama would be too pro-union.
Sentelle, joined by Judges Karen LeCraft Henderson and Thomas B. Griffith, said that the Constitution’s reference to “the Recess” means that appointments are allowed only during the recess between sessions of the Senate, not when the Senate is simply on a break. It was not up to the president to decide what constitutes a recess, Sentelle said.
The ruling noted that another federal appeals court has read the Constitution differently, which adds to the likelihood the Supreme Court will have to settle the issue.
Sentelle and Henderson went where apparently no other court has gone. They said that the president has the authority to make appointments only to vacancies that arise during a recess, which would drastically limit a president’s ability to make use of the recess appointment power.
A senior administration official who was granted anonymity to discuss White House legal strategy said it was unlikely that the White House would ask the full D.C. Circuit court to take up the case. The official said it might be better to wait for other courts around the country to rule on similar cases and then seek Supreme Court review.
Senate Republicans said the decision was a victory for the separation of powers.
“Today’s ruling reaffirms that the Constitution is above political party or agenda, despite what the Obama administration seems to think,” said Sen. Orrin G. Hatch (R-Utah).
Some Democrats said the ruling will encourage Senate Republicans to block Obama’s nominees by refusing to allow them to come to a vote.
“Today’s circuit court decision is not only a radical departure from precedent, it ignores the fact that President Obama had no choice but to act,” said Sen. Tom Harkin (D-Iowa). Harkin said that “throughout his presidency, Republicans have employed unprecedented partisan delay tactics and filibusters” to block Obama’s nominees.
The case was brought by Noel Canning, a company in Washington state that challenged an NLRB ruling by saying the three Obama board members were not properly appointed. The court’s ruling on Noel’s behalf leaves hundreds of decisions in which the three members have participated open to court challenge. Block and Griffin continue to serve. Flynn resigned last year.
NLRB Chairman Mark Gaston Pearce said the board, which now has only three members, will continue with business as usual.
“It should be noted that this order applies to only one specific case, Noel Canning, and that similar questions have been raised in more than a dozen cases pending in other courts of appeals,” Pearce said in a statement on the board’s Web site.
But labor unions were alarmed. “Chaos” is the way Pamela Allen, legal director of National Nurses United, described the effect of the court ruling. She said, “It’s a field day for the employers. This decision will be appealed, but to a [Supreme] Court that hasn’t always been friendly to labor over the years.”
Allen said that hundreds of NLRB rulings might be contested by employers. One example, she said, was a recent ruling to force a rural California hospital to award back pay to union activists and to accept a vote by its nurses to let the union bargain on their behalf.
Charles I. Cohen, a former NLRB member and senior counsel in the labor and employment practice of the law firm Morgan, Lewis & Bockius, said the result of the court ruling was “a cloud” over the NLRB that would “present a quandary for employers about how to comply with the law.”
The work of the Consumer Financial Protection Bureau could also be in jeopardy because the law requires the agency to have a director in place before it can exercise its power to write regulations and enforce them.
In the past three weeks alone, the bureau has issued seven rules changing the way that homeowners interact with the mortgage industry by limiting upfront fees, providing free appraisals and curtailing harmful practices such as interest-only payments, among other things.
“There will be lots of lawsuits, lots of uncertainty about what the rules of the road are, and lots of taxpayer money wasted on things that potentially turn out to be invalid,” said Andrew J. Pincus, an attorney who represents the U.S. Chamber of Commerce.
Cordray’s recess appointment expires at the end of this year. Obama renominated him on Thursday, but GOP leaders have said they continue to oppose him.
Danielle Douglas, Scott Wilson and Alice Crites contributed to this report.
