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U.S. Appeals Court Hears NLRB Recess Appointment Case

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March 19 (Bloomberg) -- A National Labor Relations Board ruling against a New Jersey nursing home should be thrown out because it was made by members President Barack Obama appointed in violation of the U.S. Constitution, the company’s lawyer told a federal appeals court.

New Vista Nursing and Rehabilitation argued today in the U.S. Court of Appeals in Philadelphia that by the time the company made its final request for reconsideration of an August 2011 ruling, three of the NLRB’s five members were improperly installed recess appointees. Obama named them while the Senate was in session, rendering the appointments unconstitutional, Louis Capozzi, the nursing home’s lawyer, said.

“For 150 years everyone knew what ‘in recess’ meant,” Capozzi told the three-judge panel. “Obama nominated these three board members because the Senate wouldn’t act on them.”

The arguments today were the first before a federal appeals court to challenge the recess appointments since the labor board picks were ruled unconstitutional by a three-judge panel of the U.S. Court of Appeals in Washington in January. The Obama administration said earlier this month it would ask the Supreme Court to reverse that ruling.

Bypassing Senate

Obama made the appointments Jan. 4, 2012, bypassing Senate confirmation by asserting lawmakers were in recess and unable to act on nominations. Under the Constitution, a president has the power to make temporary appointments during a recess.

Senate Republicans, who filed a brief supporting the challengers in the Washington case, disagree that the chamber was in fact in recess when Obama acted.

The Washington appeals court panel ruled unanimously Jan. 25 the president exceeded his authority and the appointments were invalid. Two judges on the panel went further, saying valid appointments could only be made for vacancies that arose while the Senate was adjourned.

The Newark, New Jersey-based New Vista nursing home is disputing an NLRB decision dated Aug. 26, 2011, that found the company unlawfully refused to bargain with a union designated as a collective-bargaining representative, according to court papers.

New Vista filed four motions for reconsideration with the board and challenged its authority to act because it lacked a quorum of three legitimate members.

‘Proper Quorum’

The appeals court should remand the case to the board or “stay proceedings until such time there is a proper quorum or adjudicate the case on the merits,” Capozzi said.

Beth Brinkmann, an attorney for the government, countered that the court should only consider the validity of the Aug. 26 order.

“Just because there is some problem with the order doesn’t mean it doesn’t exist,” Brinkmann said.

She argued that the Senate’s break in business at the time gave the president limited authority under the Constitution to make temporary placements.

“Is there any way we can duck ruling on this issue?” U.S. Circuit Judge Franklin Van Antwerpen joked during the hearing.

The NLRB has issued at least 1,041 published and unpublished decisions since Aug. 27, 2011, according to the National Chamber Litigation Center, the last time New Vista claims the board had a constitutional quorum.

On Hold

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.

The U.S. Appeals Court in Richmond, Virginia, will hear arguments in two similar cases on March 22. John Elwood, a former Justice Department official now at Vinson & Elkins LLP in Washington, said earlier this month that some courts that have heard arguments may wait for a Supreme Court ruling before issuing a decision.

The case is NLRB v. New Vista Nursing and Rehabilitation, 12-01936, U.S. Court of Appeals for the Third Circuit (Philadelphia).

To contact the reporter on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net; Tom Schoenberg in Washington at tschoenberg@bloomberg.net

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

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