Obama Defeat on NLRB Picks a Rare Loss on Recess Power

Jan. 28 (Bloomberg) -- A court ruling that President Barack Obama’s recess appointment of labor board members was illegal in part because the Senate was in session stands against rulings by three sister courts supporting the power, one of which warned that "executive paralysis" would result otherwise. Hans Nichols reports on Bloomberg Television's "In The Loop." (Source: Bloomberg)

A court ruling that President Barack Obama’s recess appointment of labor board members was illegal in part because the Senate was in session stands against rulings by three sister courts supporting the power, one of which warned that “executive paralysis” would result otherwise.

A unanimous panel of the U.S. Court of Appeals in Washington sided last week with Republican lawmakers who claimed the 2012 appointments to the National Labor Relations Board were unconstitutional. The picks, made after Republicans refused to consider Obama’s nominees, were “constitutionally invalid” because the Senate wasn’t in recess at the time, the panel held. The court went further, saying valid appointments could only be made for vacancies that occurred while the Senate was adjourned.

If the Washington court ruling is upheld by the U.S. Supreme Court, then it may mean the Senate has always had the power to block recess appointments, according to Edward Hartnett, a constitutional law professor at Seton Hall University.

“To conclude the D.C. circuit is right you’d have to conclude that presidents dating back to at least James Madison have been wrong,” Hartnett said in a telephone interview. “For a practice that presidents have engaged in since close to founding of our nation, it’s hard to conclude that all acted unconstitutionally.”

First Limits

The Washington court panel was made up of three Republican appointees. It was the first time a federal appeals court ruled the Constitution limits the president’s power to make recess appointments to the period between sessions of Congress, and only if that vacancy arises during that period.

The U.S. Court of Appeals in Atlanta rejected similar arguments in 2004 by Democratic Senator Ted Kennedy when it upheld President George W. Bush’s recess pick of U.S. Circuit Judge William Pryor.

U.S. appeals courts in Manhattan and San Francisco have also approved a more expansive use of the appointment power in rulings involving nominees made by President Dwight Eisenhower, a Republican, and President Jimmy Carter, a Democrat.

“Every once in a while you get a panel of judges who have a different take on the issue, then you have a split,” John Elwood, a former Justice Department official in the George W. Bush administration, said in a telephone interview. “All the judges are very independent on the D.C. Circuit.”

In the near-term, the Jan. 25 ruling, one of about a dozen similar cases pending over the NLRB picks, may be used to undo more than 200 decisions by the board over the past year, as well as regulations by the Consumer Financial Protection Bureau, whose director, Richard Cordray, was named at the same time as the board members. The White House said the ruling won’t affect Cordray and is restricted to the company at issue. Republicans, meanwhile, have demanded the NLRB appointees quit immediately.

Previous Challenges

The split among the circuits makes it more probable that the U.S. Supreme Court will take up the case. The government hasn’t announced whether it will appeal.

In recent years, Democratic President Bill Clinton made 139 recess appointments, while Republican President George W. Bush made 171 and Obama, a Democrat, has made 32, according to the Congressional Research Service.

Legal challenges to the recess power go back a half- century, when a federal appeals court in Manhattan ruled that U.S. District Judge John Cashin was properly appointed by Eisenhower. The 1955 appointment was questioned by a man convicted on drug charges after a trial and sentenced by Cashin.

The three-judge panel found in 1962 that Eisenhower had the power to appoint Cashin even though the vacancy didn’t arise while the Senate was in recess.

‘Executive Paralysis’

A stricter interpretation, like the one adopted last week by the Washington court, “would create executive paralysis and do violence to the orderly functioning of our complex government,” U.S. Circuit Judge Irving Kaufman wrote in a decision at the time.

Kaufman’s decision didn’t discuss whether appointments could be made while the Senate is in session.

In 1985, an expanded, or en banc, panel of judges of the U.S. Court of Appeals in San Francisco reached a similar conclusion when weighing a challenge to Carter’s appointment of Judge Walter Heen to the federal court in Hawaii.

Heen was appointed during a Senate recess in December 1980 after hearings were held on the nomination. That challenge was brought by a defendant convicted by Heen after a bench trial in a drug case.

In a 7-4 decision, the court ruled that the president has the power to fill “all vacancies that exist” during a recess of the Senate.

Recent Conflict

The previous federal appellate case that conflicts with both elements of the Jan. 25 ruling by the Washington-based court is also the most recent. In 2004, Bush made the recess appointment of Pryor to the Atlanta-based U.S. Court of Appeals after Senate Democrats twice blocked his confirmation. Bush said at the time that he was forced to put Pryor on the bench to overcome “unprecedented obstructionist tactics” by Democrats.

At least three challenges were filed claiming Pryor’s rulings were invalid because the U.S. Constitution allows temporary appointments only during the recess between one-year sessions of Congress, not during breaks within a congressional session. Pryor was appointed one business day before the Senate reconvened after a 10-day intra-session holiday adjournment.

When one of the cases came before a panel of 10 members of the appeals court, Senator Kennedy filed a brief making the same arguments and constitutional analysis that the Washington appeals court accepted in last week’s ruling.

‘Unlimited Construction’

“If courts approved this virtually unlimited construction of the Constitution, a president could largely avoid Senate advice and consent for important offices,” according to the filing, whose signatories included Laurence Tribe, a Harvard University Law School constitutional professor, and Marty Lederman, who for a year beginning in 2009 joined the Justice Department’s Office of Legal Counsel. Tribe also became a legal adviser to Obama.

In an 8-2 decision, the Atlanta court ruled the Constitution gives the president discretionary authority to fill a judicial vacancy during “a 10- or 11-day” intra-session recess of the Senate.

“We reject the argument that the plain meaning of the phrase, ’the Recess of the Senate,’ limits the opportunity to make recess appointments to one particular recess: the recess at the end of a session,” wrote U.S. Circuit Judge James Edmondson, an appointee of President Ronald Reagan, a Republican.

The U.S. Supreme Court upheld the ruling the following year when it turned down three separate petitions challenging Pryor’s authority to participate in reviews of their cases.

Collective Bargaining

The Washington appeals court ruling came in a case brought by a soda bottling company over an NLRB decision in a collective bargaining agreement. The company argued that a recess only occurs in the period between one session of Congress and the next, not when members are simply absent and the Senate hasn’t adjourned.

“Allowing the president to define the scope of his own appointments power would eviscerate the Constitution’s separation of powers,” U.S. Circuit Judge David Sentelle wrote in a 46-page opinion -- one that may be cited in challenges to recess appointments throughout the federal government.

White House press secretary Jay Carney, calling the decision “novel and unprecedented,” said it contradicts 150 years of practice by Democratic and Republican administrations.

The government may seek a rehearing by the three-judge panel that ruled, or instead seek a so-called en banc review by a larger panel of circuit judges. It may also move to request the U.S. Supreme Court take up the matter.

The high court may uphold the lower court by barring nominations while the Senate is still in a so-called pro forma session, while simultaneously striking down its more restrictive holding that appointments can only be made for vacancies that occur when the Senate is adjourned.

Was Amazed

Elwood, a partner at Vinson & Elkins LLP in Washington, said he was amazed by the Washington court’s opinion because it contained history and elements from the Kennedy brief that “weren’t really pushed hard” by the plaintiffs.

If the Justice Department seeks en banc review, the government could argue that it should be allowed the opportunity to challenge some of that analysis, he said.

The ruling is the first substantive decision by a federal appeals court in the recent challenges to the president’s naming of three NLRB members Jan. 4, 2012, while the Senate was holding so-called pro-forma sessions. Such sessions sometimes involved a single senator appearing in the chamber every third day.

To prevent Obama from making appointments after Congress started a holiday break in December 2011, House and Senate Republicans refused to formally adjourn as they sought to block the appointment of Cordray, a former Ohio attorney general, as the first head of the Consumer Financial Protection Bureau.

Contested Appointment

Obama put Cordray, who was nominated in July 2011, in his post on the same day as the NLRB board members, an appointment also being contested in a lawsuit in Washington federal court. Obama renominated Cordray Jan. 24.

The court’s decision “casts serious doubt” on whether Cordray’s recess appointment is constitutional, Senate Minority Leader Mitch McConnell said in a statement.

McConnell and 41 other Republican senators filed court papers challenging the NLRB appointments, and McConnell attended oral arguments in the case.

Noel Francisco of the law firm Jones Day, who represented the unit of Noel Corp., the Yakima, Washington-based soda bottler, seeking to overturn the appointments, said anyone subject to regulations by the CFPB would be able to challenge them in Washington.

Carney said the ruling “has no bearing on” Cordray’s appointment and it will have “no direct effect” on the CFPB, according to Moira Vahey, an agency spokeswoman. The Justice Department said in a statement it believes the recess appointments are “constitutionally sound.”

Mark Pearce, the chairman of the NLRB, said in a statement that the board will continue to issue decisions while more than a dozen similar challenges are pending in other courts.

Threatened Rulings

The labor board’s website lists more than 200 decisions issued since the recess appointments. Charles Donnelly, a lawyer who won an NLRB case for the United Mine Workers in September against a unit of Alpha Natural Resources Inc. (ANR), argued those rulings are likely to be sent back for reconsideration once a confirmed board is in place.

The decision by the Washington-based federal appeals court came in two cases brought by Noel Corp. and union members who were seeking to reverse rulings made by the Obama appointees that require the company to execute a collective bargaining agreement

Government’s Argument

In arguments before the panel on Dec. 5, Beth Brinkmann, a Justice Department lawyer, said the Senate wasn’t in session or acting as a legislative body from Jan. 3, 2012, to Jan. 23, 2012, because no legislation was passed, no votes were held and no nominations were considered.

The president used his authority to fill positions that if left vacant would have “substantially impaired the functioning of an executive branch agency,” the Justice Department said in court papers.

In the ruling, the appellate judges said the definition of “the recess” in the Constitution’s Recess Appointments Clause is limited to the period between one session and the next, and that Congress had begun a new session at the time the president made the appointments.

Besides Sentelle, U.S. Circuit Judges Karen LeCraft Henderson and Thomas Griffith were on the panel.

The judges rejected the administration’s position that an “alternative appointment procedure” is available during breaks in the Senate’s business during a continuing session.

The case is Noel Canning v. National Labor Relations Board, 12-1115, 12-1153, U.S. Court of Appeals for the District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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