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Obama to Ask Supreme Court to Settle Recess-Power Dispute

The Obama administration will ask the U.S. Supreme Court to reverse a ruling by a three-judge panel that the president violated the Constitution by making appointments to the federal labor board without Senate approval.

The National Labor Relations Board, in a three-sentence statement yesterday, said it won’t seek review by the full U.S. Court of Appeals in Washington of a Jan. 25 ruling that President Barack Obama’s 2012 board appointments were unconstitutional. The board said it instead intends to file a petition with the high court by April 25.

“There are scads of other cases now working their way through the courts of appeals and this is a way of putting the matter to rest,” John Elwood, a former Justice Department official now at Vinson & Elkins LLP in Washington, said in an e- mail. “This is what the government did in the Obamacare case as well. Rather than seek rehearing in the 11th Circuit, it went straight to the Supreme Court.”

The labor board picks were “constitutionally invalid” because the Senate wasn’t in recess at the time, the unanimous panel held. Two of the judges went further, saying valid appointments could only be made for vacancies that occurred while the Senate was adjourned.

More Challenges

In the near-term, the ruling may be used to challenge about 600 decisions and orders by the NLRB since January 2012, according to Lafe Solomon, acting general counsel for the board. Hundreds of earlier decisions by other recess appointees could also be attacked, he said.

At least eight cases were put on hold by judges in the U.S. Court of Appeals in Washington while the Obama administration considered its options. A federal appeals court in Philadelphia is scheduled to hear arguments in a labor board challenge on March 19. The U.S. Appeals Court in Richmond, Virginia, has scheduled argument in two cases for March 22 and has one other awaiting argument.

Some courts that have already heard arguments may hold off on issuing a decision while awaiting Supreme Court’s ruling, Elwood said.

The White House has said the ruling applies only to the company in the case, and won’t affect regulations issued by the Consumer Financial Protection Bureau, whose director, Richard Cordray, was named as a recess appointee at the same time as the labor board members. Cordray’s appointment is being challenged in A lawsuit brought in federal court in Washington by a Texas bank and two nonprofit groups whose self-described mission is promoting limited government.

Clinton, Bush

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.

The appeals court ruling came in a case brought by Noel Canning Corp., 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.

Miguel Estrada, a lawyer representing Senate Minority Leader Mitch McConnell and 41 other Republican senators opposing the appointments, said the administration should have made yesterday’s decision in February and sought an expedited review so the court might have ruled this summer.

Administration Motive

“The administration obviously thinks it benefits from playing for time while invalidly appointed board members continue to exercise governmental power, or else the administration is afraid of the answer it will get from the Supreme Court,” Estrada, a partner at Gibson, Dunn & Crutcher LLP in Washington, said in an e-mail.

The Washington ruling stands against decisions by three sister courts supporting the recess-appointment power, one of which warned that “executive paralysis” would result otherwise.

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.

Bush Pick

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 nominations made by President Dwight Eisenhower, a Republican, and President Jimmy Carter, a Democrat.

The split among the circuits makes it more probable that the Supreme Court will take up the case.

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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